Originally created 09/05/97

Adviser says government should not regulate Internet phone calls



WASHINGTON - For now, the government should not regulate telephone calls over the Internet despite pleas from some small long-distance companies, the Clinton administration's top telecommunications adviser said Thursday.

"Washington at this point has no need to regulate. We do have a need to understand," said Commerce Department Assistant Secretary Larry Irving, whose National Telecommunications and Information Administration organized a conference here on Internet phone technology.

"We are not holding this forum with any initial steps toward regulation or oversight," he added.

Worried that the new communications may cut into profits, a group of small long-distance companies, the America's Carriers Telecommunications Association, has asked the Federal Communications Commission to order makers of Internet phone technology to stop selling software that allows people to make such calls.

The group also wants the government to regulate Internet phone providers like traditional telephone carriers, meaning they would have to pay fees to support affordable telephone service for low-income and rural people and their services would be subject to state and federal regulation.

The FCC has not yet acted on the petition, filed in March 1996.

International or long-distance calling over the Internet is much cheaper than conventional phone service. Because the call travels over data networks rather than public telephone networks, the caller doesn't have to pay long-distance or international charges, just the price of the Internet service.

Callers with the same Internet phone software can talk to each other over computers, equipped with modems, speakers and headphones or on regular telephones connected to the Net.

Some 60 companies now provide Internet phone service, though the business is still in its infancy, said Larry Flomm, vice president of new business development for Dialogic Corp., an Internet phone provider.

FCC Chairman Reed Hundt also wants the Internet to be used for services that would compete against local phone company services.



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