Business and Society 9th Edition by Archie Carroll,Ann Buchholtz

Exercise 2

The VOIP Regulatory Dilemma
Voice over Internet Protocol (VOIP) enables users to make telephone calls by using the Internet. As such, it provides regulators with a dilemma-is it a "telecommunications service," due to the fact that a phone call is being made or is it an "information service" because it uses the Internet? The decision has ramifications because, in the United States, telecommunications services are regulated and information services are not. VOIP services have grown in popularity because they are less expensive to operate. With their rise, the use of traditional telephone services has declined. In the United States, that decline in traditional telephone usage has decreased the amount of money in the Universal Services Fund (USF), a fund that provides subsidies for low-income individuals and access for schools, libraries, and rural areas. The growing use of VOIP is also problematic for 911 services because VOIP calls do not provide the caller's location. A controversial concern is whether VOIP should be included in CALEA, the Communications Assistance for Law Enforcement Act, and be required to facilitate government wiretapping and surveillance.
Opponents of VOIP regulation consider it a threat to Internet freedom. They believe that regulating VOIP will stifle innovation and slow the advancement of emerging technologies. Proponents of VOIP regulation argue that a lack of oversight will lead to monopolies and limit affordable access, hurting poor people, small companies, and startups. At present, U.S. regulation of VOIP is a "crazy quilt" of different rules for different types of VOIP in different states.
1. What are the ethical issues in this case? Who are the stakeholders and what are their stakes?
2. When dealing with VOIP, how do you decide between freedom and protection when enhancing one diminishes the other? On what basis are you making your decision?
3. If you were responsible for regulating VOIP, what would you recommend? What trade-offs would you make? What type of industrial policy would your decision be advocating? Be specific.