THE FUTURE IS CALLING How VOIP Will Benefit

THE FUTURE IS CALLING How VOIP Will Benefit Consumers & Our Nation… IF Policy Makers Get It Right

THE PACE OF CHANGE IS ACCELERATING The Broadband Revolution Is At Hand Years to 25% U. S. Adoption Source: Mc. Kinsey

BROADBAND REVOLUTION IP-Enabled Services Run the Gamut VOIP is lot more than POTS!

HOW VOIP WILL BENEFIT CONSUMERS & BUSINESSES COST SAVINGS • 40 -60% for consumers (Detroit APPLICATIONS CHOICES • Leverage Convergence • New services • Seamless Relocation • New competitors (Precursor) • Find me / Follow me • Virtuous cycle • $3 -10 B governments (Alexis de • Web-based News) • 1/10 th - 1/30 th for businesses Toqueville Institution)

HOW VOIP WILL BENEFIT OUR NATION PRODUCTIVITY • Cost Reduction • Process Improvement (e. g. Telework) • Efficiency & Reliability (9/11) BROADBAND • KILLER VALUE: BB + VOIP is $8/month cheaper than Narrow band + POTS (Parks Associates) • “KILLER APPLICATIONS” INNOVATION • New firms, new software, new hardware • More flexible open platform onto which developers can add

TWO MODELS COLLIDING Where Should VOIP Go? VOIP at the Crossroads of Digital Convergence Telecommunications Heavy Regulation Slow to Change Monopolistic Subsidized “If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it!” § § Minimal Regulation Rapid Innovation Competitive Market-Driven “Hands off the Internet!” PRICE$ § § Information Technology

VOIP & THE GOVERNMENT UNAVOIDABLE PRIORITIES • CALEA • E 911 • Life Line • Access for the Disabled Though government mandates often hinder more than help!! POLITICAL REALITIES AVOIDABLE MISTAKES • Universal Service • Applying Legacy Redistributions Access Charge Subsidies (Telephonic Protectionism) • Importing Heavy Telecom Taxation (“Remember the Maine!”)

LEGACY RULES WILL HINDER VOIP DEPLOYMENT & ADOPTION § Existing Regulations are disincentives for: § emerging technologies § competitive offerings § rural deployment § Regulatory creep leads down slippery slope: § email tax? IM? § software tax? Xbox? § Broadband tax? § “Hands Off” Bias Adds Pressure for regulatory reform § The World is Watching… and other leaders are emerging

THERE IS A PATH FORWARD § First Do No Harm § Technology is still new, deployment still emerging § “Hands Off” default remains prudent § Revisit Regulatory Regimes of 20 th Century § Less regulation, more centrally administered § Reform access charge subsidy scheme § Review Social Policy Objectives § Fix Universal Service First (before extending to VOIP) § Consider ways to use new technologies to meet goals