VoIP is popular - so let's now regulate and ruin it

The US Federal Communications Commission has taken the first step towards deciding whether to regulate internet telephony, a move that could increase the amount of money customers pay each month for such services and radically transform the fast-growing industry.

FCC Chairman Michael Powell said he would create a working group to investigate what, if any, regulations on VoIP technology would be necessary. Powell and other commissioners said they had reached no final conclusions yet, but yesterday were locked in a public briefing with speakers from companies including Cisco Systems, Time Warner Cable and Level3 to educate them about VoIP technology and business models.

Powell said: "Moving more communications to IP networks is in the public interest. Internet-based services create more choices for consumers, more competitors, lower prices and lots more flexibility to personalise your service."

Federal regulators should borrow the credo of the medical profession, Powell suggested, and "first, do no harm."

At the heart of the issue is money. As more conversations begin to flow through unregulated VoIP links instead of the heavily taxed public switched telephone network, federal and state governments stand to lose billions of dollars. It is this loss of revenue which will likely govern future decisions on the extent of regulation.

Declan McCullagh writes for News.com