Musings on funding

1
Musings on funding

• Henning Schulzrinne
• Columbia University

2
Funding many different facets

• Easy to talk past each other
• People talk about
• incremental investment for supporting VoIP (as in
  wireless)
• note if number of wireless analog subscribers
  stays roughly constant, total 911 call volume
  unlikely to change much
• on-going support of operational costs
• as landline and wireless revenue decreases
• making VoIP users pay for 911
• fairness, long-term sustainability, slowing down
  competition,

3
Some general ideas

• Avoid technology-specific funding models
• wireless vs. wireline vs. VoIP
• converging long-time ? dont want to re-do every
  few years
• long regulatory lag
• may be necessary for transition period
• Dont assume VoIP wireless
• VoIP carrier doesnt have to exist
• every mid-to-large size business is likely to be
  its own VSP
• VSP may be outside the United States
  (particularly if regulatory compliance becomes
  expensive)
• Many more VSPs than the few national wireless
  carriers
• Avoid systems that invite fraud and padding
• see e-stamp program for schools and libraries
• Keep collection costs reasonable
• already, taxes approaching 20 of phone bills
• tempting since costs are borne by consumers,
  not 911 system

4
Make it easy to do the right thing

• Even small VSPs are likely to have customers in
  many, if not most, states
• Dont force every VSP to send 13.75 monthly
  checks to 3,000 counties or 6,000 PSAPs
• worse with different rates, line-count cut-offs,
  etc.

5
The design space

• Look at all options, not just existing familiar
  ones
• state/local taxes
• VSP fees
• ISP fees
• utility (water, electricity) fees
• equipment charges
• 911 as service

• State or local taxes
• already fund police, fire, ambulance
• already fund large parts of 911 in some states
• existing collection mechanisms
• (mildly) progressive
• other mechanisms penalize large families, for
  example
• but easy to forget about niche needs

6
Source VSP and ISP charges

• VSP
• may have sparse customer population
• unlikely to be regulated
• may be outside the US
• may be difficult to map customers to tax regions
• users could have any number of VSPs (particularly
  if they offer different services, on-demand
  international dialing, etc.)
• ISP (facilities-based)
• generally, more regional (or large, like ILECs
  and MSOs)
• has knowledge of physical location of customer
• usually, finite number of ISPs per customer
• but penalize users with multiple ISPs
• or users that dont use their ISP for emergency
  calls or VoIP at all
• charge modem users, too?
• ISP (resale)
• common for modems ? few ISPs own their own
  infrastructure
• resell dial-in access using shared equipment
• similar problems as VSP

7
Source Utilities

• Other utilities (water, gas, electric)
• most households have at least electric service
• and usually one of each
• regulated utility
• already collects franchise fees and similar
  locality-based taxes
• knows customer service location
• you need electricity to place a VoIP call ?

8
Source equipment fee

• Collected when purchasing VoIP devices
• Similar to tape and CD-R charges today
• Avoids tax collection problems
• Problems
• assumes only voice as service (not bad for
  mid-term)
• assumes few softphones
• if fees are large, encourage black imports
• but shipping charges discourage shipping phones
  from Europe and Asia one by one
• estimate 50c/month ? 24 for expected 4-year
  lifetime

9
911 as service

• Even if VSP or ISP does not offer 911 service,
  user could separately subscribe to specialized
  VSP that offers only emergency calling service
• relatively easily implemented technically
• but more difficult with locked down equipment
• Probably only a transition scenario
• 911 service for 9.95/year we take Visa and
  MasterCard
• service then sends money to 911 system
• credit card address as first-order approximation
  to service location
• probably need some kind of certification that
  service is legitimate

10
Conclusion

• New technology new chances for a more rational
  design of funding
• Need solid estimates of incremental costs
• Dont penalize jurisdictions that fund via
  general revenue