VoIP Funding & Regulatory Issues

The current funding model for 9-1-1 service has maintained its regulatory nature, but the perception of 9-1-1 service by the public has changed from an optional service to an expected public good. The public expects to have 9-1-1 service on a VoIP or mobile phone with the same level of reliability as the 9-1-1 service they have on their wireline phone. However, the current funding model is obsolete. It is based on an outmoded regulatory system. It would be a flawed and damaging approach to try to impose the same regulatory system onto Voice over Internet Protocol (VoIP). The 9-1-1 network is migrating from an entirely regulated operation to a dual system of telephony and call center processing components.

The conundrum is how policy makers should develop both a legal and public policy framework for 9-1-1 service that will accommodate a variety of communication services, irrespective of their regulatory classification or legal definition. The solution is a new construct. The funding methodology for this framework should mirror direct IP telephony, recognizing the data-centric migration of the nation’s 9-1-1 network. The creation of a market-oriented paradigm that better reflects the dynamics of the telecommunications industry may be an appropriate backdrop for the new regulatory framework.

A complementary and reciprocal dialogue between the Federal Communications Commission (FCC) and Emergency Services1 should determine the regulatory framework for 9-1-1 interconnection by VoIP providers. Public Safety Answering Points (PSAPs) may assess the financial impact of VoIP by analyzing the collection and distribution of 9-1-1 service fees and by identifying short-term and long-term operating costs. Understanding the relationship between 9-1-1 service fees, the allocation of those fees, and VoIP providers’ business models is also important.

Any new 9-1-1 infrastructure should be built on Internet Protocol (IP) technology.2 Today’s enhanced 9-1-1 funding model is based on assumptions that are no longer applicable in today’s telecommunications market. The Telecommunications Act of 1996 introduced competition in the local exchange market, but it also had the unintended consequence of limiting the amount of capital to invest in 9-1-1 infrastructure. Finally, the business plan for an IP based 9-1-1 infrastructure needs to provide both capital and operating funding, and from a service provider’s perspective, have an acceptable rate of return.

Finally, it is imperative that a universal service mechanism for rural and low-income support areas be included in a VoIP funding model to implement 9-1-1 in areas currently without 9-1-1 service.