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 Federal  Communications  Commission  FCC  04-  97 
 STATEMENT  OF  CHAIRMAN  MICHAEL  K.  POWELL 


 Re:  Petition  for  Declaratory  Ruling  That  AT&  T’s  Phone-  to-  Phone  IP  Telephony  Services  Are  Exempt  From  Access  Charges,  WC  Docket  No.  02-  361,  Order 
 Today’s  decision  is  correctly  decided  on  very  narrow  grounds.  A  straightforward  application  of  existing  law  places  the  long  distance  telephone  service,  as  it  is  factually  described 
 by  AT&  T,  squarely  in  the  category  of  a  telecommunications  service.  The  carrier  has  long  been  obligated  to  pay  access  charges  for  this  service  and  we  unanimously  confirm  that  it  still  is 
 required  to  do  so. 
 I  have  stated  my  solid  view  that  VOIP  offers  enormous  potential  for  consumers  and  should  be  very  lightly  regulated.  I  remain  staunchly  committed  to  that  position.  VOIP  is  clearly 
 not  your  father’s  telephone  service.  It  represents  a  uniquely  new  form  of  communication  that  promises  to  offer  dramatic  advances  in  the  consumer  experience.  Consumers  can  anticipate 
 greater  value,  greater  personalization,  and  a  wealth  of  features  that  are  only  possible  through  the  convergence  of  voice  and  data  on  a  broadband  network  that  pushes  more  intelligence  to  the  edge 
 of  the  network  and  into  the  hands  of  end-  users.  The  promise  of  such  services  and  the  potential  for  greater  competition  combine  to  justify  a  minimal  and  innovation-  friendly  regulatory  policy. 


 In  that  vein,  the  objectives  of  digital  migration  are  achieved  by  moving  to  networks  and  services  that  empower  individuals.  Therefore,  it  is  important  to  be  guided  by  the  perspective  of 
 consumers  that  are  purchasing  service,  in  determining  how  a  service  should  be  understood.  The  services  that  are  the  subject  of  this  petition  merely  use  IP  technology  in  a  manner  that  does  not 
 offer  consumers  any  variation  in  experience  or  capability.  We  therefore  should  approach  AT&  T’s  request  that  it  not  be  subject  to  the  obligations  of  a  telecommunications  carrier  with 
 skepticism.  The  petitioner  argues  that  its  service  should  be  exempt  from  the  access  charge  regime  because  it  may  use  IP  in  its  transport  system.  Yet,  as  the  Order  notes,  customers  are  in  no 
 discernable  way  receiving  the  transforming  benefits  of  an  IP-  enabled  service.  In  fact,  the  consumer  receives  the  same  plain  old  telephone  service.  To  allow  a  carrier  to  avoid  regulatory 
 obligations  simply  by  dropping  a  little  IP  in  the  network  would  merely  sanction  regulatory  arbitrage  and  would  collapse  the  universal  service  system  virtually  overnight. 


 Carriers  understandably  are  anxious  to  lower  their  significant  access  costs  as  long  distance  revenue  declines.  The  Commission  has  recognized  that  our  intercarrier  compensation 
 system  is  under  severe  stress  in  light  of  technological  change.  We  have  committed  ourselves  to  reforming  the  system  and  I  am  aware  that  carriers  themselves  are  working  toward  solutions.  The 
 appropriate  way  to  address  these  challenges  is  through  intercarrier  compensation  reform  and  we  will  focus  our  efforts  there. 
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