*Pages 1--6 from  Microsoft Word - 43484.doc*
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 Fortunately,  the  FCC  was  mindful  of  this  reality  when  we  launched  the 
 rulemaking  on  IP-  Enabled  Services  earlier  this  year.  Notably,  we  did  not  call  this 
 proceeding  the  VOIP  rulemaking.  Instead,  we  focused  on  IP-  enabled  services  generally, 
 recognizing  that  many  of  the  same  arguments  favoring  regulation  or  an  absence  of 
 regulation  will  apply  irrespective  of  whether  a  packet  transmits  voice,  data,  or  video. 
 To  be  sure,  we  have  paid  special  attention  to  voice  applications,  because  the 
 legacy  of  extensive  regulation  of  POTS,  or  plain  old  telephone  service,  raises  a  number  of 
 complex  questions  about  how  to  approach  IP  telephony.  On  the  one  hand,  many  rural 
 LECs,  some  state  regulators,  and  others  have  expressed  the  view  that  any  substitute  for 
 POTS  should  be  subject  to  some  or  all  of  the  legacy  common  carrier  regulations,  such  the 
 access  charge  regime.  In  their  view,  since  VOIP  walks  and  quacks  like  a  duck,  it  must  be 
 a  duck.  On  the  other  hand,  from  the  standpoint  of  many  in  the  IP  community,  there  is  no 
 principled  reason  to  treat  voice  packets  differently  from  other  kinds  of  packets,  and 
 carrying  forward  legacy  rules  would  be  needlessly  burdensome,  economically  inefficient, 
 and  a  barrier  to  investment  and  innovation.  In  a  few  moments,  I’ll  share  some  of  my 
 thoughts  on  these  issues,  but  for  now  I  want  to  emphasize  that,  as  important  as  these 
 questions  are,  we  should  avoid  falling  into  the  trap  of  thinking  that  the  IP  debate  is 
 simply  about  extending  or  not  extending  common  carrier  telephone  regulations  to  VOIP. 
 Rather,  we  need  to  recognize  that  the  IP  revolution  will  have  consequences  for  all  legacy 
 regulatory  structures,  not  just  the  utility  regulations  that  apply  to  telephone  services. 
 Take  IP  television,  for  example.  This  is  an  exciting  new  application  that  has  the 
 potential  to  reshape  the  market  for  multichannel  video  programming  services.  As  local 
 exchange  carriers,  software  companies,  and  others  begin  to  introduce  IPTV  services, 
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 Most  importantly,  where  the  justification  for  legacy  rules  was  an  incumbent  provider’s 
 market  power,  it  is  counterproductive  to  apply  such  rules  to  entities  that  lack  market 
 power.  Regulatory  parity  is  an  important  long-  term  goal,  but  it  should  be  achieved  by 
 lifting  legacy  restrictions  on  incumbents  once  new  platforms  have  emerged,  rather  than 
 extending  those  rules  to  the  new  platform.  This  approach  is  most  faithful  to  Congress’s 
 call  for  a  pro-  competitive,  deregulatory  framework,  and  it  also  accords  with  my 
 experience  that  fully  functioning  markets  invariably  do  a  better  job  of  maximizing 
 consumer  welfare  than  regulators  can  hope  to  achieve. 
 My  belief  in  the  Nascent  Services  Doctrine  is  one  of  the  reasons  why  I  have  been 
 a  strong  proponent  of  regulating  IP-  enabled  services  primarily  at  the  federal  level.  Some 
 state  regulators  have  argued  that  we  should  use  the  states  as  laboratories  to  test  a  variety 
 of  different  regulatory  approaches.  The  argument  seems  to  be  that  states  can  experiment 
 with  either  heavy  handed  regulations  or  a  light  touch,  and  the  nation  will  eventually 
 decide  what  works  best.  While  state  experimentation  is  a  time-  honored  conservative 
 principle  that  makes  sense  in  many  contexts,  I  believe  it  would  be  disastrous  if  applied  to 
 IP-  enabled  services. 
 IP-  enabled  services  are  inherently  interstate  because  of  the  architectural 
 configuration  of  the  Internet.  The  routing  of  packets  over  the  Internet  without  regard  for 
 state  or  even  national  boundaries,  together  with  the  ability  of  subscribers  to  log  onto  the 
 Internet  on  a  nomadic  basis  from  locations  throughout  the  country  or  even  abroad,  makes 
 it  impossible  to  separate  most  IP  communications  into  interstate  and  intrastate 
 components.  Accordingly,  efforts  by  a  single  state  to  craft  an  individualized  regulatory 
 regime  would  not  only  apply  in  that  state,  but  would  necessarily  apply  to  all  IP 
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