Legal Issues

by Carlo Longino

The Hidden Costs Of Being A VoIP Provider

from the aflac! dept

An idea that got kicked around when eBay bought Skype and all the talk of "synergies" started was that eBay -- nor Skype, for that matter -- seemed to understand everything that was involved in running a phone company. Skype may have solved the technological angle, but there's a lot more to it than that, particularly dealing with govermental regulation. Just today, Jeff Pulver points to an FCC order dealing with wiretapping on VoIP networks and noticing it will apply to a much broader range of VoIP services than previously thought, including those that don't interconnect to the public phone network. Given the current political climate, this isn't too surprising, but Kevin Werbach points out the bottom line -- that the duck theory is at work again. Since VoIP does sort of the same thing as a phone line, it's going to be regulated like one. For VoIP providers of any flavor, this could mean significant changes in technology to accomodate wiretaps and E911, and the increased costs to accompany them. While eBay may have thought it could circumvent phone companies by buying Skype, it's a little harder to get around the government, particularly when there's an opportunity for taxes.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    dorpus, Oct 14th, 2005 @ 2:14pm


    So it's just like the 1990s, when people swore up and down that telecoms were going to make long distance calls cheaper, and this would somehow also be a "big money opportunity" -- but prices went up instead.

    Will talking to someone over the internet cost $4.75 per minute in the near future?

    Land lines have worked just fine for me when making international calls -- there is no VOIP software that can make phones ring when their computer is turned off.

    reply to this | link to this | view in thread ]

  2. identicon
    thatguy, Oct 14th, 2005 @ 2:23pm

    What's the point though?

    Seriously. Are they planning on having the ability to tap ALL VOIP? Because that's going to be pretty hard task to accomplish.

    Isn't the point of phonetapping supposed to be so they can catch criminals/terrorists and protect people?

    My point is in order for tapping to be useful, they will need the ability to tap ALL VOIP communication. And with all the MMPO games out there with VOIP capabilities, that's not going to be easy.

    What's to stop criminals/terrorists from starting a bot server for Counterstrike (or an even lesser known game for that matter), connecting, and communicating in this way?

    reply to this | link to this | view in thread ]

  3. identicon
    Former Telco Engineer, Oct 14th, 2005 @ 3:08pm

    Re: Aha

    Dude, have you been paying attention at all. Long distance is orders of magnitude cheaper than when the divestiture happened.

    Within the continental US, long distance is basically free. You can get a flat-rate, all-the-US-is-local plan for about what local service cost in the early 80's. And, that's without accounting for inflation.

    We used to pay around $30-40/month for POTS. And, 10-15c per minute for domestic long-distance was cheap. I can get a freakin cell phone with 1000 minutes and no long-distance charges for that.

    reply to this | link to this | view in thread ]

  4. identicon
    Anonymous Coward, Oct 14th, 2005 @ 3:18pm

    Re: What's the point though?

    Ummm if your the cops and investigating suspects who communicate via a game server or teaspeeak for that matter I belive it would be trivial to subpeona thier ISP and just intercept the packets as those in game voice protocols are unencrypted. I belive the real VOIP (adheres to some standerd) has encryption on it (I belive). Or if your paying money for it bloody well better. Now vonage has to be able to provide encryption keys to the feds when requested.....Key escrow all over again.

    reply to this | link to this | view in thread ]

  5. identicon
    Chi, Oct 14th, 2005 @ 3:53pm


    Perhaps I'm a bit on the slow end here, but what about the open source PBX Asterisk? According to my limited research, call monitoring and call recording can be handled by it.

    In addition, word is that with Asterisk you can run VOIP in a manner that allows a great deal of flexibility that normal phone lines can deal with.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, Oct 14th, 2005 @ 4:13pm

    Re: What's the point though?

    OK I guess that makes sense though I know nothing about how sifting through these packets would even work. Hell they could even join a random server that is empty to communicate in. How long would it take to sift through ALL the servers for CS?

    My point is there are lots of sneeky ways to get a message accross...

    And even if I am completely wrong about this idea, at least I know the difference between "your" and "you're" and also know how to use them correctly in a sentence...


    reply to this | link to this | view in thread ]

  7. identicon
    beezle, Oct 14th, 2005 @ 4:30pm

    Re: Aha

    Long distance per minute is cheaper, yes. Phone service per se is not. My last local phone bill -
    long distance is seperate carrier - was $29.95 and
    I have the absolute bare bones cheapest plane. I
    had about 20 minutes of local calls as I was out
    of town. And while cell phones are great when
    outside, service from within my house is piss poor
    on a good day, and I'm in a fairly urban area. For
    anything other than a very quick call, cell phone
    from the house (for me) doesnt cut it

    reply to this | link to this | view in thread ]

  8. identicon
    phone squirrell, Oct 14th, 2005 @ 4:37pm

    E911 and phone taps, caller id

    I guess that noone here has figured out that the users of the phone system financed the upgrades to switches in the name of caller id and that being put in to support 911 service is really all about phone

    There never was any interest in the support of 911 by the government. The phone companies had operated with switches thru the 80's and almost to the 90's that were in some cases running relay logic.

    They were only forced to upgrade to support the capability of your gooverment to spy on you. There was a handy tax, (which has not expired BTW) that supports 911 service on current copper regulated telco's.

    The are just burning to get the same crap dumped on VOIP.

    As to actually tapping VOIP conversations, sap phones, which are open source and such tools as Asterisk pretty much mean that is meaningless if you can write code to encrypt the data stream. All you need to do is bridge any VOIP termination into something like Asterisk, and you can do anything you like with it, including your very own

    So what will they do to stop that?

    reply to this | link to this | view in thread ]

  9. identicon
    dorpus, Oct 14th, 2005 @ 5:56pm

    Re: Aha

    I pay more for POTS now than I used to in the 1980s -- there are lots of funny fees that jack up the price to twice what it used to be. Cell phones remain prohibitively expensive to make international calls, sometimes not allowing you to make calls at all. I use email as much as possible in my communications.

    reply to this | link to this | view in thread ]

  10. identicon
    James Tucker, Oct 14th, 2005 @ 7:21pm

    Costs of Running a VoIP Company

    Other problems, such as the Telecommunications laws in Bermuda for one example, forbid the populous from providing anyone (including themselves) license to provide overseas telecommunications without a license. As Skype, and now eBay are the providers, eBay is essentially operating against Bermudian law at present.

    reply to this | link to this | view in thread ]

  11. identicon
    Anonymous Coward, Oct 14th, 2005 @ 11:37pm

    Re: Aha

    There's nothing to make phones ring when the power's off either; that's why the telco has back-up power.

    What, you thought your phone was magically powered by fairy dust?

    In other news, trees are wood.

    reply to this | link to this | view in thread ]

  12. identicon
    Ben McNelly, Oct 15th, 2005 @ 8:26am

    No Subject Given

    Ok, I understand the need for 911 services if these are going to be primary phone lines for people, but once the government gets their foot in the door on that nothing is a streach. So I don't realy have too much of an argument about mainstream companies, but it would be very uncool for all VOIP to have to deal with this. I can "call" any of my msn messenger friends/family anywhere in the world just as easy as chat, and that could be my only way of making a "call" but does that mean they should HAVE to provide 911 services? No. And I think people should have a choice of a VOIP with or without it.

    reply to this | link to this | view in thread ]

  13. identicon
    DMajors, Oct 15th, 2005 @ 11:35am

    Re: Aha

    As a VoIP customer, I know that the computer doesn't have to be on to make and receive calls.

    As for the Techdirt article, it referred to E911 and wiretapping ability and the costs associated with it. Not international calls.
    The very fact that VoIP providers aren't your major carriers keeps them from being regulated in the same manner. They are different, cheaper and better.
    Check out these international prices:

    reply to this | link to this | view in thread ]

  14. identicon
    Allen St. John, Oct 16th, 2005 @ 12:09am

    Re: E911 and phone taps, caller id

    I have been playing recently with asterisk as a voip system, and it will be very hard to wiretap voip in some configurations. Any one who has an idea on how sip works knows that voip can be peer to peer. All your call signeling such as caller id, hold mute, transfers and all your normal PBX like functions passthough asterisk, but the actual voice datastream can go from one sip device to another sip device. This makes wiretapping very hard if all you see is just signeling and no voicedata. Of course you can also configure sip to pass its voice traffic though the server as well, but I would not expect this to be standard practice in all situations... I think it is going to be very difficult to expand on what can be done with voip if it is forced to comply with current wiretapping laws as current laws will reduce VoIP service to be the same as POTS service but with one or two extra features as far as the end users are concerned. The way I see it wiretapping realy asumes that voice traffice will flow though a central location (the telco) but VoIP in its full implementation accross the globe is very decentralized.

    reply to this | link to this | view in thread ]

  15. identicon
    Cluless, Oct 16th, 2005 @ 6:38am

    Ebay VoIP

    Aren't E-bayers as notriously fanatic on line as most of the gaming community? Couldn't Ebay have bought Skype simply to have an in house voice system like Microsoft Live?

    reply to this | link to this | view in thread ]

  16. identicon
    Pauldy, Oct 16th, 2005 @ 10:43am

    Re: Aha

    VOIP has reached a level where many times computers are no longer in the loop. There are phones now under 70 dollars that are voip only and even phone adapters that will connect into your home wireing so as to be a transparent replacement for your phone company. So it is very possible to ring a voip user in another country whose computer has nothing to do with their voip service.

    reply to this | link to this | view in thread ]

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