Free Dialing on the Net

The voice on the other end of the line is faint but unmistakably cockney.I'm using a new Internet telephone chat program to call London, England, and talk to Ben, a young musician who proceeds to play me some music he's just recorded. This long-distance conversation ends up lasting over half an hour, yet neither of us has spent a cent -- except for our respective Internet service provider fees, of course.Needless to say, this rerouting around the phone company has long-distance carriers -- at least south of the border -- furious. In March, America's Carriers Telecommunication Association (ACTA), a group that represents 130 long-distance carriers, including MCI and Sprint, petitioned the U.S. Federal Communications Commission (FCC) to halt the sale of Internet telephony hardware and software."You cannot permit the telecommunications network and infrastructure to simply be changed overnight by something like the phenomenon of Internet telephony, which does not pay its fair share and contribute fully to the cost of maintaining that network," says ACTA's general counsel, Charles Helein (reached by regular telephone)."I don't care how new the technology is and how great it is, you're not going to see AT&T and these big companies watch their revenues and their futures destroyed simply because there's a better way of doing it."Internet telephony -- as it's called -- has been around for a while but has largely remained a novelty, since it requires not only a computer and modem but also a sound card, microphone, speakers and a special software program that turns PCs into telephones that operate over the Internet.NOT RELIABLEThis is accomplished by digitizing a caller's voice at one end of the line and decoding it at the other. Demo versions of phone software can be downloaded for free, with the fully registered products available for about $50. Mind you, the software doesn't provide the best quality sound, and connections aren't always reliable.Most surfers wishing to gab on the Net find each other by logging into special Internet phone servers, and most conversations take place between complete strangers, organized by subject category -- not much different from local phone chat lines, but on an international scale.The Internet telephony stakes were raised earlier this year with the formation of Free World Dial-up, an interface between the Net and the traditional telephone network that allows Internet users to call ordinary phones across the globe by logging into a computer in another city and placing regular phone calls to anyone in the local area, bypassing local, long-distance and international carriers and allowing for calls to be made for virtually no cost.There are only a handful of places with this service -- Long Island, New York City, Vancouver, Moscow, Guam -- and the availability is intermittent, but volunteers are being sought to help bring the project to every town in the world that is connected to the Internet.UNFAIR DAMAGEACTA argues that it's unfairly damaged by the technology because Internet service providers don't have to pay the taxes or access fees that carriers must pay to do business. Long-distance and international carriers must be approved by the FCC to operate and must file tariffs before both the FCC and state public service commissions."If (Internet telephony) technology drops everbody's cost, we don't care," says Helein, "so long as our (profit) margin is just as big. What we can't stand is somebody coming in not paying all the costs we pay and giving away long-distance service until we're destroyed."Helein says the FCC should assert authority over the new technology just like it has with other technologies in the past. "They've got to address it somehow."Helein's arguments hold little water with Jeff Pulver, however. Pulver is publisher of NetWatch, an online publication that chronicles the progress of telephone-like voice transmissions on the Net.When ACTA filed its petition demanding telephony software be outlawed, he sprang into action and founded Voice on the Net (VON), a grassroots coalition representing the collective voice of these fledgling telephony software companies."ACTA is, in effect, attempting to eliminate outside competition by banning emerging technologies," says Pulver.HEAVY SUPPORTMore recently, computer giant Microsoft upped the ante when it added its support to the VON coalition, after developing its own phone software. Blake Irving, of Microsoft's Internet platform and tools division, says comparing Net telephony with regular long-distance calls is like comparing apples and oranges."It becomes increasingly evident the moment you start using the products," he says. Indeed, using your computer as a phone is an awkward affair at best -- only one person can speak at a time, with a noticeable time lag in between responses, not all that different from ham radio.Irving adds that firms have to work hard to attract the interest of millions of non-techno users. "If all telephony software is going to do is replicate what happens on the phone lines today, there's very little value there," he says.But Irving points out that Microsoft's latest offering, NetMeeting, allows not only voice communication but also exchange of multimedia data, with up to three other people at the same time, even if they have different software.It's now possible to link up Web browsers together so people can surf the Net while they're talking. Irving adds, "I can open a word-processing document, you can take the cursor and edit the document that's on my workstation, share that with three other people, etcetera.''In Canada, phone companies and the Canadian Radio-Television and Communications Commission (CRTC) appear surprisingly unconcerned by this latest development on the Net.John Peck, spokesperson for Bell Canada, says, "We still haven't noticed any significant impact on our long-distance business from Internet long-distance telephony. It still isn't quite there in terms of reliability and convenience. We don't see it as a threat to our long-distance business at this time.''Stuart MacPherson, executive director of telecommunications for the CRTC, admits he's very much a "techno-peasant" on all this, but says, "If the network is being supported by the end-user community and not artificially subsidized, then I don't think we would be wanting to reach out and muck about with it."MacPherson adds, "If two consenting adults with computers undertake to talk to one another over this public facility, if that's something that modern technologies are affording people, then I say, That's where we're heading."Subjecting all these new technologies to old rules is not the way to go, agrees Microsoft's Irving. "To impose regulation on this marketplace would never allow it to advance to the state where it would be an interesting technology," he says.PETITION OPPOSEDMembers of the VON coalition have filed a number of briefs in response to the ACTA petition, and it's now up to the FCC to determine the fate of this new technology.FCC spokesperson Audrey Sevack says, "The commission is addressing other issues right now -- local phone service and monopoly -- and so it's not an issue that will be taken up any time soon." As a hint about where the agency stands on the issue, however, Sevack refers me to a speech by FCC chairman Reed Hundt in which Hundt said, "The right answer is not... to subject Internet telephony to the same rules that apply to conventional circuit-switched voice carriers."Hundt's comments are merely election-year political rhetoric, says ACTA's Helein. "The software lobby, the Microsofts and Intels of this world, have very strong ties to the administration," he says, "and they're not going to get stepped on by the administration making any statements at this stage."A final decision by the FCC isn't expected until after the U.S. presidential election in November. "If the FCC continues to stick its head in the sand past the elections, then we'll go to Congress," vows Helein. "When people really start realizing it's going to affect their bottom line, we're going to get more attention."VON's Pulver is equally confident that Net telephony is here to stay and that a laissez-faire attitude will prevail in Washington. Whatever side of the fence one is on, the challenge presented by Internet telephony is raising profound questions about the future of the telecommunications infrastructure, and how people view the Net.At the CRTC, MacPherson says the debate over Net telephony is "great fun to observe at the moment."

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