Pulver Sees USF Fees on VoIP as Part of Larger Regulatory Dilemma

Pulver is no “fan” of firms using VoIP to dodge rules traditional carriers face, he said: “If the FCC is sending a message that if you're simply replacing other services with VoIP get with the program and this is the price you have to pay to be in that business today, that is what it is.”

VoIP’s problems stem from past regulatory decisions that saw the FCC classify it as a service, not an application, he said: “In the U.S., the VoIP industry allowed itself to go down that slippery slope. That’s why they're mired in these regulatory hassles. One administration at the FCC may have one opinion. The current administration may have another.”

Though he doesn’t back a numbers-based contribution method for VoIP, Pulver said, he told FCC Chmn. Martin at an FCC meeting years ago that may be the best alternative. But, he added: “The last thing we want to do is send a message to Wall Street, take your services and technologies and go offshore and serve other nations. It doesn’t help anything. It doesn’t help our national economy.”

“We've gone the path where there’s been deregulation of the facility and regulation of the application,” Pulver Gen. Counsel Jonathan Askin said. VoIP providers’ situation harks back to an old joke about selling sex. “We're just haggling over the price,” he said. “It acknowledges that there is an appropriate safe harbor price point. Now we're just haggling over whether that safeguard is 30% or 60% or 100%… We think the universal fee should be attached to the transmission facility not the application.”

Pulver sees no negative implications for VoIP in Vonage’s troubled May 24 launch as an IPO, he told us. The stock, down more than 25% since opening at $17, has spurred a class-action suit by unhappy pre-IPO buyers. “I read that as their bankers did a lousy job of bringing it to the market, nothing more,” he said: “I don’t believe that when it went public the bankers actually supported the stock. Maybe they priced it too high. I don’t know. I have seen IPOs come and ago and the stronger ones have strong sentiment from the institutions that invested and felt good about it… I see this as execution on the day of the IPO.”

Pulver, who has a small ownership stake in Vonage, also sees positives, he said: “I was in fact impressed that a company I was associated with was worth $2 billion. They're close to getting $600 million in revenue. I'm sorry, that’s a lot of money.” -- Howard Buskirk

Innovation Summit Notebook…

Speaking at the opening of Globalcomm’s Innovation Summit, Pulver said he plans to create IP Video content -- “for fun” short term, but also perhaps to make money. He sees the video iPod as “the tipping point” for video viewership, and believes the shared national video experience is near its end, he said. Only the 35-40% of content covering elections, live sporting events and disasters or tragedies will stir a collective live viewing experience, he said. ----

The entire IP video ecosystem requires superior bit rate compression to thrive and evolve, said Steve Magee of Texas Instruments. Following Pulver at the Innovation Summit Tues., he said a slew of new codecs is in early deployment. These include H.264 (also known as MPEG-4 part 10) and Microsoft’s VC1; both are cutting bit rate for delivering a given piece of content by as much as half, he said. The codecs are intended expressly for IPTV, but they're also seeing use over digital broadcast media like HDTV and satellites, Magee said. The entire range of networked video gear will have new, different codecs as IP-based video systems integrate, he said. The Digital Living Network Alliance is writing specifications that will let the range of products interact over the same set of networking protocols, he said. ----

Microsoft’s entire strategy in this arena is to offer software that adds “significant value” by partnering with manufacturers and providers to serve consumers, Ed Graczyk, Microsoft TV dir.-mktg., said. Breaking down the network- based barriers between the “triple play” elements and making them a “single play,” and enlarging the content pie itself, is part of that, he said. A big part of the new content model is freedom, but IPTV isn’t watching streaming video on your PC, or downloading Desperate Housewives on your iPod or best-efforts network video services, Graczyk said, adding that IPTV is competitive service over a managed network, providing full on-demand service, live TV and coverage of major events. ----

Consumers don’t care how the video content arrives, they just want it, Scientific-Atlanta Vp-Emerging Business Paul Connolly said. Infotainment content generated $628 billion revenue in 2004, a figure that’s grown since, he said, and consumers want “a whole experience” from providers. Cable operators are ahead of the game based on their understanding of this fact, he said, especially since no services customers want are “holistic holographic online gambling” or other nonsense futuristic services -- they all exist now. -- IM ----

It would be “premature” for the FCC to adopt net neutrality rules exceeding principles adopted last year, FCC Chmn. Martin said following remarks to Globalcomm late Mon. “Last year the Commission struck a perfect balance,” he said: “I think the Commission has demonstrated they're willing to take enforcement action where necessary and we've got some principles that we've adopted that show a declared direction and I think that we're not seeing widespread abuses in the marketplace… Consumers need to be able to access content on the Internet unimpeded. But at the same time, we understand network operators may offer differentiated tiers and differentiated speeds.” He said Comr. McDowell’s arrival will let the FCC act on issues caught in 2-2 deadlocks, adding that events have proven him correct on deregulatory changes he backed as part of the Triennial Review Order the FCC approved 3 years ago. “We decided that we weren’t going to require line sharing, or high speed access on new broadband pipes,” Martin said: “Several people actually objected to that and said it was going to lead to higher broadband prices. It was one of the contentious things between me and a previous chairman. Actually, we've seen just the opposite happen. DSL prices have come down because the real competition is occurring between DSL and cable modem services.” -- HB ----

Wireless carriers will see significant growth in use of their networks and in revenue if they can exploit new modes of communication, such as Myspace.com and other such sites, Orange CEO Sanjiv Ahuja said: “People want a chance to express themselves, we have seen it in terms of blogging in the fixed environment. If we give them the opportunity just in the mobile arena and extend it in an integrated way to the fixed environment we can truly unleash tremendous activity and in our case, we believe, usage and therefore revenue for us.” In a Globalcomm keynote, Ahuja noted that Myspace.com has become the 4th-most-popular English language website, citing Alexa’s May rankings. “We have an unprecedented opportunity to empower the customer,” he said. ----

The U.S. ranking on broadband rollout holds few concerns for Rep. Issa (R-Cal.), increasingly a telecom activist. “Guess what?” Issa said: “We're in America. We allocate resources based on a free market system based on people taking their disposable income… If members of Congress think that we're going to follow Sweden or S. Korea or Singapore then we follow them to our own peril.”