IPUrbia

A recent Missouri ruling backed up the Missouri Public Service Commissions attempts to regulate Comcast’s Digital Phone service just as they regulate traditional telephone service. I go back and forth on the whole regulation issue–I tend to think that the FCC’s rulings have generally made sense, although they have much closer ties with the telephone companies than is…prudent for an organization that needs to regulate companies with little entanglement or possible ethics violations. In a near-monopolistic market, regulation can be necessary to keep monopolies from running ram-shod over the consumers–if only the regulation actually acted to encourage competition, then it would generally be a good situation.

In this case, I don’t necessarily feel too badly for Comcast. While I get itchy about government regulating voice over IP telephony, there is a distinction made in the ruling between voice services ala Vonage, which depends entirely on third party infrastructure, and voice services ala Comcast. While it is voice over IP, Comcast in this sense resembles a traditional ILEC–they control the physical infrastructure as well as the service. This is critical because they are essentially leveraging one (near) monopoly–cable service–to build what very well could become a vertical monopoly with the addition of voice (and data) services. In the case of Vonage, etc; government regulation is bad because codifying terms of service leaves little room for the general sorts of innovative applications of voip technology that we’ve seen from the industry over the past couple of years. In the case of Comcast, we don’t really expect to see anything interesting anyway–just POTS delivered over IP. Government regulation is not going to stifle innovation, and Comcast’s ability to leverage their near-monopoly (in their service areas) of cable television means that there is little chance of real competition–more than the telco-cable duopoly–to encourage self-regulation through the market. As bad as it may seem, I think that–in theory–I tend to agree with regulation of cable-provided voice services–even if it they are delivered over IP. In practice, well, stay tuned.

They have all the elements of a traditional phone company–massive physical infrastructure,