CALIFORNIA STATE SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Debra Bowen
Chairwoman

Informational Hearing on Voice Over Internet Protocol

State Capitol, California
Room 4203
January 27, 2004
1:30 p.m.

Comments of TechNet

Chairwoman Bowen. Members of the Committee. TechNet, a national network of over 150 CEOs and senior executives of our leading technology companies, appreciates the opportunity to comment as you examine the development and promise of Voice Over Internet Protocol – VoIP -- technology.

VoIP – the transmission of voice communication over the Internet -- is having a gradual but profound and beneficial impact on how consumers obtain information and communicate. Today VoIP looks and sounds a lot like telephone service, and because of the technological advantages of the IP network, VoIP is reducing the cost of communications. But the real promise of VoIP lies in the fact that it is creating a foundation for broadband communications that have a much greater capability than traditional telephony, including the integration of voice, video, voice-mail, instant messaging and other capabilities, many of which are just being developed.

For example, with VoIP technology you will soon be able to view a PowerPoint presentation on your telephone screen while discussing it with a colleague. Moreover, VoIP may have significant advantages over standard telephone service in providing information to emergency service agencies. These capabilities just scratch the surface.

VoIP represents a vital opportunity for California’s economy. Much of the equipment for VoIP services is produced by companies with operations here in California. The demand for these products and services is creating new jobs and opportunities here. It is helping to spark the turnaround in the technology sector and reinvigorating our economy.

Moreover, by creating compelling consumer applications that require high-speed Internet connections, VoIP will help drive demand for and deployment of broadband services here in California. The aggressive deployment of broadband will fuel even more innovation and job creation here, improve quality of life and enhance our economic competitiveness.

Last year, the director of the Telecommunications Division of the Public Utilities Commission ordered several VoIP providers to submit to regulation as telecommunications providers. In the absence of any demonstrated harm to consumers, TechNet is concerned that burdening VoIP technology with a complex regulatory structure could increase the barriers to entry, slow deployment, and delay the benefits of VoIP to California consumers. For that reason, we requested that the Public Utilities Commission not undertake any enforcement action and instead convene a workshop at which all of the issues associated with VoIP can be discussed.

TechNet believes that VoIP should be allowed to develop without burdensome new regulations -- unless and until clear evidence demonstrates that marketplace constraints are inadequate to promote fair competition and consumer welfare. In recent decades, federal and state governments exercised regulatory restraint in allowing the Internet to develop, a policy that succeeded in bringing consumers products and services undreamed just a few years earlier. The potential rewards of VoIP technology, if allowed to develop, are similarly promising.

We appreciate your interest in this technology and look forward to continuing this dialogue. Thank you for your consideration of our comments.