Come Together, Right Now Unifying Issues for NARUC and the IP Communications Industry

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Come Together, Right NowUnifying Issues for
NARUC and the IP Communications Industry

• Jeff Pulver, CEO
• pulver.com
• February 14, 2005
• jeffp_at_pulver.com

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Only Nixon could go to China

• -- Mr. Spock, Star Trek VI
• (citing old Vulcan Proverb)

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Laws Collide

• Moores Law (and its effect on computing power
  and capabilities)
• Makes IP capable of delivering voice applications
  equal or superior to traditional
  telecommunications
• Telecom Law (and its effect on the Computer and
  Internet industries)
• And its applicability to Internet communications
  replicating telecom
• The Law of Unintended Consequences (Telecom
  Collides with Computing)
• I, and the other Internet communications
  enthusiasts never asked to be governed by the
  laws governing telecom, but our worlds have
  collided
• I begged to remain an outsider two years ago.
  The FCC agreed, but the capabilities of IP
  communications wont stop and there are ongoing
  intersections, particularly where the IP network
  connects to the PSTN. And to increase the value
  of both platforms, we should encourage
  interconnection.
• The Second Law of Thermodynamics -- Entropy
• (All closed systems tend towards chaos)
• Murphys Law? (Murphy was an optimist)

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My Brief History

• Lifetime Geek.
• Ham radio operator since 1975.
• Unemployed accountant since 1985.
• Started Free World Dialup in 1995.
• Started the VON Coalition in 1996.
• Started producing the trade show for the VoIP
  Industry known as the VON Conferences in 1997.
• Founded the company that became Vonage back in
  1998.
• Provide Thought Leadership in the VoIP Industry.
• - Run several other trade events to drive the
  industry.
• Currently incubating IP-related startups in my
  office.
• Turns out it was all about the same
  thing.building community.

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In 1995, I recognized that Voice is just an
Application

• When properly deployed, VoIP applications can be
  located anywhere.
• VoIP Management tools must be developed which
  enhance enhancements the standard models
  currently used to manage data networks.
• Service providers need not own everything in the
  call path to offer communication services.
• VoIP represents a great opportunity for service
  providers to break away from their traditional
  conception, as they can now rival traditional
  telecommunications providers.
• Deployable from anywhere to anywhere

Applications E-mail, Voice, Video, etc.
Internet
Protocol
IP
Infrastructure WiFi Fiber, POTS, etc.
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I am also a Dad

• I am also A Dad whose almost 11 year old twin
  sons have grown up on the internet since they
  were 3 years old and they remain a major
  influence in the way I look at products, services
  and features.

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What is this all about?

• Its about all our kids
• Always-on Growing up gameboy.
• They navigate intuitively.
• They expect high-speed access wherever they are
• They expect a visual display and navigation
  buttons like a Gameboy. The phone keypad is not
  intuitive.
• They expect instantaneous communications
• Talking does not mean Just Talk anymore!
• We cannot let adherence to legacy thinking and
  legacy rules stifle progress.

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2004 The Year the VoIP Wolf Finally Showed Up

• We had been crying VoIP wolf for 10 years well,
  2004 was the year the Wolf arrived
• 2004Billions of dollars committed to be spent to
  gain 25/month customers.
• 2004VoIP advertising present on TV, radio, the
  Web, and in printaround the world!
• 2004FCC trying to create viable VoIP market
• From the pulver Order to the Vonage Order
• (1st Anniversary of pulver Order coincident
  with Lincolns Birthday and serves as my
  Emancipation Proclamation)
• Governments around the World took notice
• Presumptuous of any Government to attempt to
  regulate an application that can be deployed from
  anywhere to anywhere.

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But 2004 was about Cheap Voice

• For the past two years the press has rambled on
  about how VoIP is just cheap voice that
• Bypasses an incumbent
• Does not pay its fair share.
• Basic Lack of Innovation is a real concern
• Candidly, I can understand their confusion, since
  the most innovative things we are doing are on
  the PSTN networkand Im not impressed.
• When you quack like a duck, people are going to
  think you are a duckand theyre going to think
  you want to be a duck.

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VoIP -- first great driver of Broadband

• Nurture IP, dont chill
• Creation of a Virtuous Cycle VoIP drives
  Broadband which drives IP communications which
  drives Broadband which drives IP Communications
• IP Technology dramatically reduces network costs
• allows for further penetration to high cost areas
• Landline replacement snowballing
• wireless is not yet a regulatory replacement of
  Wireline.

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today

• 2005 - the year every major carrier will offer
  (or claim to offer) VoIP
• Frankly, Carriers that have not adopted a VoIP
  strategy by 2005 might not be around in 2007.
• Every Internet Application provider could offer
  VoIP services
• Everyone can become a Broadband Parasite
• This should be happening on global basis
• Fear Will the unaffiliated VoIP providers be
  considered free riders and discarded like the
  UNE-P players?
• Differentiate IP Applications dramatically
  increase the value of the network it is not
  merely cheaper POTS

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Bottom Line for 2005End-To-End IP Is Happening

• EndtoEnd IP is fundamentally different than
  existing legacy networks. It affects
• Consumer-to-Consumer Enterprise-to-Enterprise
  Carrier-to-Carrier
• End-to-end IP could be the Telco Killer -
  International Carrier Disintermediation
• Soon Communication Servers can be as popular as
  Web Servers and eMail servers.
• Also, End-to-End IP is a key component in the
  inevitable migration to an Open Source World
  (Asterisk is here!)
• - Or do the proprietary solutions, like Skype,
  win?

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Consumer Experiences The IP Revolution Might be
Incremental

• Franchises/ chain stores / motels, restaurants
• People want predictable experiences
• Walking into a store you expect the same look and
  feel.
• Voice services may need to follow the same
  expectations
• My Coffee experience
• Dunkin Donuts they fix my coffee for me.
• Starbucks / 7-Eleven I get to self empower
  myself with milk/cream.
• today consumers have the choice to self empower
  their own communication services or continue to
  get their hand held.

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Some Current Trends

• Gaming (Sony PSP, Nintendo DS)
• Nextgen games become widespread leaders in WiFi
  VoIP services
• Do you really want to regulate VoIP in games?
• Enterprise Communication Convergence
• Roaming from Cellular to Enterprise Wi-Fi and
  back again.

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Gadgets / Devices

• 2005 will see next generation IP phones in the
  sub 50 pricepoint
• One day the 10 Princess IP phone will become
  available.
• Video becomes more real.
• 'Voice enabled' becomes part of the internet user
  experience

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music telecom we are more than music on hold

• The Advent of Ringtones has given birth to
  content licensing in Telecom. This is going to
  intensify with ringback tones and video
  capablilities
• We are seeing the effects of Moores Law on the
  Communications sector
• Smart answering machines will happenpersonal
  central office services can happen too!

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Look to the Future

• To date, VoIP has, unfortunately, been about
• Arbitrage
• Cheap Voice
• Replication
• If were talking about the future, we should be
  talking about the future of talking
• Look to our children and try to create what they
  will need/want to communicate
• Build on what we have
• But dont be afraid to introduce the new

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Policy Structure for IP Communications
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The Zax by Dr. Seuss

• Stalemates between
• industry and regulators
• Federal Regulators and State Regulators
• The technology will not stop while the regulators
  try to get it right
• Weve been relatively cautious, but others,
  particularly those offshore, have not.

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Accounts of our Divisions are Seriously Overstated

• Mistaken belief that there is a big divide
  between the IP-based communications industry and
  the state regulators
• States will play an essential role promoting
  broadband, ensuring innovation and promoting
  competition some states are trying to tax VoIP
  today.
• Promote Broadband Build-out
• States have dominion over the facilities needed
  to deliver IP-based applications and services
• Build-out or encourage Municipal BB - wifi
• Access to Rights-of-Way
• Layer 0 unbundling
• Creating Inviting Regulatory/Legal/Business
  environment
• Consumer protection
• Interconnection (including PSAPs)
• Number access?
• Encourage Innovation

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Does IP Allow for Reasonable Middle Way after 10
years of Head-Banging?

• IP paves the way for a new regulatory model
• Disintermediates Application from Transmission
• Not overly intrusive on Bells
• Allows for parity across platforms
• Minimal oversight when an entity wields excessive
  market power or monopoly control over captive
  consumer
• Ensure Consumer Empowerment and Net Freedom

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Net Freedom and Consumer Empowerment(Chairman
Powell and Commr Copps have both Championed)

• Freedom to Access Content
• Freedom to Access Application
• Freedom to Attach Personal Devices
• Freedom to View Service Plan Information
• QoS guarantees
• Nondiscriminatory rates, terms and conditions
• Access providers cannot discriminate against
  customers (including ASPs)
• Operating System cannot thwart consumers ability
  to access applications of the consumers choice
• Eviscerates need for overly intrusive wholesale
  unbundling rules

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Finding our Common Ground and Shared Goals

• Universal Broadband
• Encourage build-out of Broadband Networks
• Encourage take rate of Broadband
• Encourage take rate of IP-enabled services
• Promote social good
• Promote competition and innovation
• Taxing (municipal/state)?
• Should the nascent industry be a net payor or net
  recipient of public funds?
• Municipalities and states attempt to tax my
  FREE service!
• Administrative burden alone will chill my
  deployment

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States Still Control the Pipes,the
Conduits,the Rights-of-Way --the tele in
communications,if not the communications
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Dont Kill the Canary

• The IP innovators have been thrown into the cave
  (regulated telecom) from the outside (the
  unregulated Internet)
• The IP innovators are experimenting with
  communications and transforming for the better
  the way people communicate.
• Trick is to learn to make the Canary survive in
  the cave not to kill it.
• The Canary cannot survive in the old cave
• Regulators have to transform the cave

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IP-technology the Great Disrupter

• Finally, IP technology allows for the
  disintermediation of the application/service from
  the transmission medium
• Engineers recognized in establishing protocol
  stack
• FCC recognized this split between applications
  and transport 40 years ago in Computer Inquiry
• But now it really means something

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Transport vs. Application

• IP-based communications applications are
  communications
• IP-based communications providers do not
  necessarily provide tele needed to transport
  communications
• Layered Regulatory Model
• No regulation of applications (unless clear
  demonstration of monopoly control
• Oversee telecom facilities within State
• Ensure no one may exert monopoly control over
  captive consumer

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Universal Service

• Why do we prop up the narrowband PSTN?
• Curbs consumer adoption of Broadband
• Who will buy BB, when the narrowband pipe is
  subsidized?
• USF funding would be better utilized if it were
  targeted for Broadband deployment and uptake

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Intercarrier Comp

• Patchwork of rates for the same function is
  absurd
• Need to move to peering arrangements
• Ive been reluctant to deploy connected IP-PSTN
  services because Im afraid of the potential
  access charge bill

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Regulation

• VoIP is a global phenomenon
• Presumptuous of any government to think it can
  regulate
• The new divide will emerge between
• those governments that embrace IP
• those governments that shun IP
• Together we can make sense of all of this!

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Getting the Right Policies in Place Today will
Seed the Future

• Essential to Establish a Favorable Regulatory
  Environment for IP Communications
• Those states that invite innovation,
  entrepreneurship and competition among IP
  applications, while promoting broadband
  deployment, will become havens for IP
  Communications and their residents will see the
  promise and future
• Those states that discourage IP communications
  within their borders will become wallflowers at
  the IP Revolution

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The Future is not about dialing

• Numbers were a great idea 120 years ago. These
  days we can do so much better.
• We should be calling people, not locations.
• Already implemented by the Mobile generation.
• Dialing-by-alias is used in Instant Messaging.

• You Know My Name (Look up the Number)
• by Beatles
• You know my name, look up the number
• You know my name, look up the number
• You, you know, you know my name
• You, you know, you know my name

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The Immediate Future is about Presence

• I cannot predict the long term future (when IP
  becomes ubiquitous), but in the short term, its
  about Presence
• Commercializing Presence is the next
  multi-billion dollar opportunity inside of the IP
  Communications space.
• Increasing call completion will be a key to the
  future of communications.
• We have the basic building blocks already in
  place, now someone just has to connect-the-dots
• Without fear of regulation

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Adaptation and Network EvolutionThe IP
Revolution must evolve from what already exists

• In a perfect world, we wouldnt have the
  limitations of
• copper in the ground
• mere 10 digit numbers
• What if the musical scale only had three notes
• what if our communication devices only had ten
  digits oh right, they do
• Misallocated spectrum
• Different rules for different platforms
• Multiple regulating jurisdictions with rules
  written for the old world
• We work with what we got and incorporate change
• Wright Brothers built the airplane with bicycle
  parts
• What if we miraculously evolved a 6th finger and
  we were stuck with 5-fingered gloves? Is IP the
  6th finger in a 5-fingered glove? useless in a
  5-fingered glove, but invaluable for 6-fingered
  gloves.
• What if the Egyptians failed to introduce 0 to
  mathematics? Is IP the equivalent of 0 which
  will transform communications the way 0
  transformed math?

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IP Technology wasnt invented to provide Voice

• It just happens that IP works great for voice
• (among other applications)

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Thank You!

• State Regulators are invited to attend my VON
  events. The next VON is March 7-10 in San Jose.
  Details at www.von.com
• Lets pursue our common ground there.
• Please visit my blog http//pulverblog.pulver.com
  
• Please make contact.
• Jeff Pulver, jeffp_at_pulver.com
• Questions?