Can You Hear Me Now? The Internet, VoIP and Telecom Regulation

Oct 05, 2004


Dr. Jerry Ellig
Senior Research Fellow
Mercatus Center at George Mason University 

Click Here to listen to audio archive.

Voice-over-Internet-protocol, or VoIP, is a new and exciting technology that allows people to make local and long distance telephone calls over the Internet and private data networks. While this breakthrough technology presents many potential benefits to consumers, it also raises important questions for policymakers. Congress and the Federal Communications Commission are now examining various proposals for VoIP regulation.

Traditional telephone companies are regulated by a complex system of standards and price controls at both the federal and state levels. Long-distance telephone companies are generally required to pay access charges for the use of the wires and equipment of local telephone companies. All telecommunications companies are also required to contribute to federal universal service programs that subsidize local telephone service so that every household has access to a cheap phone line regardless of income or location.

VoIP technology converts voice communications into data packets and transports them over a data network to another location, where the technology converts the data packets back into voice communications. This new technology raises important questions about the proper regulatory structure for ensuring the growth of VoIP use and access.

In order to help policymakers assess this issue, the Mercatus Center at George Mason University is hosting a seminar for congressional and agency staff that will address the economic implications of potential VoIP regulation. Staffers will gain a foundation of economic theory and knowledge that will allow them to effectively evaluate this and other complex regulatory issues.

Participation in this program will allow you to better address the following questions:

  • What is VoIP technology and what policy issues does it raise?
  • Does the regulatory structure of traditional telephone services give us any economic evidence of the potential costs and benefits of VoIP regulation?
  • Should VoIP services be subject to economic regulation, pay access charges to local telephone companies, and make contributions to federal universal service programs?
  • What issues does VoIP technology raise regarding the traditional regulation of the telecommunications industry?