In case you didn’t hear, The FCC will likely force VoIP providers to contribute to the Universal Service Fund (USF), a program that helps subsidize telecommunications services in rural, “non-profitable” regions of the country, as well as in schools and libraries.

Specifically, FCC chairman Kevin Martin said “We need to move to collection for the Universal Service Fund that is technology-neutral,” at a question-and-answer session hosted by Comptel, a group representing communications service providers.

Many VoIP companies are already contributing to the USF either directly through payment to the USF, or indirectly by payments to the telephone companies, which in turn contribute a portion of that revenue to the fund. Packet8 I know started collecting $1.50 “regulatory recovery fee” in anticipation of having to contribute to the USF. Some users were even a little peeved since they claimed at the time Packet8 was simply collecting the money and not giving it to the USF. Regulators are concerned that as VoIP gains popularity the fund could shrink since the providers aren’t mandated to contribute.

Ok, maybe I’ll buy that argument. But what about how VoIP came to the rescue in the aftermath of Hurricane Katrina? Rescurers, FEMA, and other agencies, and even businesses setup shop quickly using VoIP.

I recall a WSJ article where cell towers went down the day before Katrina made landfall and then the wireline went down after the storm made landfall. They then had issues with satellite phones since they only worked for a short time before batteries ran out and could not be recharged. Officials spent two days without any means of outside communication until they found they could use the Internet access within the makeshift command center in a hotel. They signed up for a Vonage account and were able to get eight lines and even receive a call from President Bush from his phone on Air Force One.

The time and money saved by VoIP and possibly lives saved cannot be calculated. This issue shouldn’t just be about how much money we should tax and pour into the USF blackhole. We really need to consider the advantages that VoIP bring to all Americans and figure out if it makes sense to continue the legacy of charging a tax for any type of phone communications. I would argue that IP communications and specifically Voice over IP communications is much different than the legacy TDM network. If we are going to tax “voice over IP”, why not tax “email over IP” or “video over IP” or even simply tax Americans on a per-byte basis? We’ll call it the “Byte Me” Tax. There’s one way to punish the heavy Internet users for downloading gigabytes of music and movies, right? We can take the “Byte Me” (per byte) Tax and give it to the Hollywood movie distributors and record studios to subsidize them as they continue to have declining revenue numbers. Although I jest, I wouldn’t be surprised if this happens one day since the ISPs are working on tiered levels of Internet access.

Don’t get me wrong, the USF is an important fund to ensure all Americans can inexpensively have telecom services, I just don’t think taxing VoIP is right way to fund the USF. Sure, VoIP is typically cheaper than landline phones, but many people won’t switch from legacy landlines and switch to VoIP unless there is considerable cost savings. Most people hate switching providers, no matter whether it’s their cell phone provider, cable/satellite provider, etc. So by adding a tax this could cause VoIP penetration to slow and lag behind other countries.

In fact, the American government should be enticing people to switch to VoIP, not discourging it with a tax. For one thing, VoIP by its inherent “IP” nature is more fault tolerant than landlines which will aid FEMA and other government agencies, as well as ordinary American citizens to quickly regain communications. Who wouldn’t want that? For instance, any home or business that gets its landline knocked out cannot easily migrate that current phone number to another location, but if you use VoIP, you can be up and running with the same phone number just as soon as you find a replacement ATA or VoIP gateway and an Internet connection. Businesses lose revenue each day customers cannot call them at their known published number and the government loses an resultant tax revenue. So wouldn’t it make sense that the U.S. government would want to have a regional economy hit hard by some disaster to be up and running quickly? Finally, let me just point out that the Internet was originally designed to help make the government’s IP communications “nuclear proof”, why shouldn’t that same level of communication be granted to all American citizens?

One approach to getting VoIP distrubted round the building.

Broadband service providers of all types have begun to roll their VoIP services out to a wider audience within their customer base – providing services to both residential and business customers. This isn’t big news – VoIP, of course, has been happening for several years – but the big players (RBOCs, cable MSOs and other national service providers) are moving ahead at a rapid pace these days.

As consolidations and acquisitions (like SBC’s integration of AT&T) are finalised, expect this trend to continue and even quicken. And triple (quadruple? Sextuple?) play services, of course, are increasingly built around VoIP – with architectural decisions (like the forthcoming Gigabit PON (GPON) RFP) assuming that VoIP will be a primary means of provisioning voice services.

There’s still a lot to figure out in the VoIP arena though – dealing with emergency calls, providing lifeline services, dealing with power issues, etc. One area that is perhaps the greatest sticking point is dealing with in-home distribution of VoIP. Getting a multi-line VoIP service from the network interface device (NID), or the optical network terminal (ONT), and around the home shouldn’t have to require truck rolls and inside wiring changes, but it often does.

Use a cordless phone?
Most existing VoIP services recommend that their customers use a cordless phone system to handle this distribution. There’s a lot to be said for that approach, and we’ve tested numerous multi-line, multi-handset POTS phones that would do the job well.

But many (and soon most) of the homes that will be served by VoIP already have a wireless system that can do the job even better – Wi-Fi. Why create a secondary wireless infrastructure in the home for voice when an existing Wi-Fi network can work?

The customer enterprise and networking vendors are already making moves here. Companies like UTStarcom and ZyXEL have been shipping feature-rich and well-performing VoWi-Fi handsets for a year or more. But there are a few issues that need to be ironed out before we can all ditch our existing phone systems.

Wi-Fi is too fiddly
Today’s systems require more configuration and integration than we think most consumers (and many small businesses) will want to put up with. They work, and work well, but once you start requiring users to deal with Service Set Identifiers (SSID) and encryption keys to get their phone working, you’ve lost them. Networking vendors have a hard enough time getting their customers up and running with laptop PCs and Wi-Fi, but mixing in a (relatively) tiny phone keypad with this process just makes things too hard.

Security concerns
Security is an issue too. Consumers and small businesses have compelling reasons to lock down their Wi-Fi networks. A recent case in Florida involves theft of Wi-Fi services, and could result in a felony conviction. And Westchester County New York officials have recently floated an ill-advised but not entirely ludicrous proposal to require security measures for any Wi-Fi users in the county.

Security isn’t just good for the end user either, service providers don’t want every Tom, Dick and Harry in a neighborhood jumping onto a neighbor’s unsecured access point and using their facilities to carry VoIP phone calls. And security of the calls themselves – both the user authentication/provisioning and the security of the actual call data – is something that carriers need to worry about.

Performance anxiety
Finally, performance issues can crop up for VoWi-Fi, just as they do with any of today’s Wi-Fi applications. While 802.11e gear is going to be available soon, today’s products simply don’t offer any true QoS mechanisms.

As a service provider, you can do one of two things: you can wait it out, and let the access points, handsets and routers used by your small business and residential customers catch up to emerging technical standards; or you can take a more proactive approach.

Here’s one answer
We recently spoke with the folks at Intoto – they build the software that runs many popular Wi-Fi routers and residential gateways – about how they fit into this latter approach. They’ve put together software within their residential gateway platforms that can solve all three of these VoWi-Fi problems without any huge changes in the hardware itself.

There are a couple of elements to this approach. First the residential gateway or wireless router uses two SSIDs – one that is set up for traditional data networking, and a second, hidden, SSID that is used just for the Wi-Fi handsets. The phones themselves are shipped pre-configured for this secondary SSID, providing an “it works out of the box” solution for end users.

Security is handled with a combination of Wi-Fi airlink security (WEP or WPA ) and also by using IPSec VPN connections between the phones and the service provider’s Softswitch or gateway – providing security for both the provider (authentication and call control data) and the user (voice packet security).

Finally, packet prioritisation is applied in the residential gateway or wireless router. This, combined with the virtually separate Wi-Fi network for the handsets, keeps the latest Microsoft operating system security patch download from intruding on that all-important phone call.

Could it solve the problem?
We think that this kind of approach can make VoWi-Fi a workable and attractive solution for a service provider – making it easy for a provider to offer something truly differentiated while reducing the need to spend hours and hours inside a customer’s home or office reconfiguring POTS wiring. Intoto has even been working with Intel on a reference design for a “small office in a box” communications device which incorporates these concepts and more – something we think will be truly compelling when it hits the streets (and which we’ll discuss more when its closer to shipping).

Nokia Corp plans to launch a phone for the consumer market with a SIP client on the device, enabling users to access VoIP services that comply with that protocol and potentially reducing their bill for mobile voice calling.

Rauno Toivonen, director of voice solutions product marketing at the Espoo, Finland-based vendor’s enterprise solutions division, said the consumer handset division is looking at launching a phone in the first half of next year for such services. The SIP compliance would preclude Skype, which uses a proprietary protocol, but would enable VoIP calling using services from ISPs and CATV companies.

Toivonen’s division is working with networking vendor Cisco Systems Inc and enterprise telephony vendor Avaya Inc in three areas: IP PBX, hosted IP PBX, and IP Centrex. In all three cases, the plan is to launch Nokia phones with VoIP clients on them (in Avaya’s case, SIP compliant, and in Cisco’s, using the SCCP or “Skinny SIP” protocol) so that PBX functionality such as four-digit calling, single-number access across multiple devices, conferencing, and call forwarding is extendable to the mobile phone.

The phones will be dual-mode cellular and WLAN, and in the first half of 2006 the PBX extension will be over a WLAN only. Later in the year that functionality will also reach the cellular network, Toivonen said. Nokia does not, however, envisage the enablement of roaming between the two network types in either phase. “That’s for the future,” he said.

Call handover is technically possible today, and companies such as the Norwegian developer Birdstep Technology ASA would claim to have been enabling it for several years. If anything, the real issue is a business rather than technical one, in that a call made over the WLAN would be free whereas a cellular would not, so operators will have to decide whether they are happy to bill only for the part of a call that traverses their network or also charge for enabling the handover, regardless of whether it is exiting or entering the cellular domain.