FCC intends to abolish the Enhanced Service Providers exemption.

From IMHO Conferences & Consulting today:

Back in the days when IBM was a company based on mainframes and we had to teach computers to whistle so that they could talk the government determined that data services were not subject to the same regulatory rules as voice services.

The result was a boom for the computing because it was not necessary for them to pay attention to local regulators and consider themselves a telco when they built wide area networks.

The rule was very simple, if you had an protocol conversion going on or store forwarding the law of the land was you were in a different bracket.

Today, the FCC has indicated that they intend to abolish the Enhanced Service Providers [ESP] exemption.

In effect they will then claim that Internet Access is now subject to telecom regulation. They have also indicated that local governments have the right to tax and regulate.

While my net-head friends think they are exempt because their service is free, the government may not see it that way. In fact they don’t.

Its important that we as industry of application developers and communication services join together to fight these rules. Even if we are not in the jurisdiction of the US. If we expect the service to be used within the US we are subject to local interpretation.

Join me on Thursday for the Squawk Box VoIP Regulatory Call

Needless to say – removing the ESP exemption would create massive new regulatory hurdles – which can be different based on the physical location of the user. If you provide internet based services you should follow up on this and understand how it impacts you.

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