VOIP Regulation - Part II
Just a few more thoughts about VOIP regulation following my posting yesterday about David Colville, who headed up the CRTC's telecommunications policy for 14 years.
Let's make a couple assumptions about the VOIP market's potential in Canada: there will be a level playing field with every service provider free from regulation, and the residential market reaches 1.1 million lines by 2007 (based on research by NRI/Michael Sone Associates). Given there were 12.9 million local lines in 2003, 9% of the market will using Internet telephony within three years. This would work out to about $1-billion in revenue. Let's assume, the incumbent carriers get 50% of the market, while cablecos and third-parties such as Vonage get the rest. That would mean the incumbent carriers would lose $500-milliion in revenue.
That's a big chunk of cash but you balance that off with whatever revenue the carriers will get from increased high-speed access business as consumers look to get VOIP, and sales from IP-TV. Maybe the whole VOIP thing will be a financial wash from the carriers. Part of this thesis is based on my belief whoever controls the IP “pipe” is extremely well positioned to benefit from VOIP or any other IP application.
In a bit of seagway, it will be iinteresting to see how the Federal Communications Commission handles VOIP regulation. A few months ago, FCC chair Michael Powell said VOIP “s “is not a telephone service, it is a voice application, completely indistinguishable from any other kind of application that can run on an IP network.” We'll see if his view does within the political landscape. (For more on Michael Powell, check out Om Malik's posting following the FCC's ruling that VOIP regulation is a federal mandate.)
