The challenges of classification: Emerging VOIP regulation in Europe and the United States

Internet telephony –or Voice over Internet Protocol (VOIP)– has the pote ntial to transform the world of voice communicati ons more profoundl y than anything since the inv ention of the telephon e itself. As tele communications incumbents and a range of new entrants begin rolling out commercial VOIP services, policymakers around the world are grappling with the regulatory implications. In the United States and t he European Uni on, the two largest potential VOIP markets, efforts are under way to fit VOIP into ex isting regulatory frameworks. This process of “re gulatory classification” is b y no means a purely administrative act. A lot is at stake and different interest groups have therefore mobilized to shape the respective outcomes. B ecause legacy regulatory systems in Eur ope and the United States differ, the regulatory treatment of VOIP in the two markets is beginning to dif fer as well. Ye t in both markets there is a substa ntial danger that fitting VOIP into e xisting classifications will force VOIP to look more lik e regular telephony, thereby limiting its innovation potential. Instituto de Empresa Business School Serrano 105 28006, España Spain [email protected] University of California, Berkeley Institute of International Studies Berkeley, CA 94720 USA [email protected] IE Working Paper DE8-121-I 12 04 2005