E911 UPDATE

Most interconnected VoIP providers long since have complied with the FCC’s 2005 E911 requirements, but the effort has left their business models on shaky ground. Nearly 40 percent of companies have restricted service rollouts and expansions because they do not have the protections of liability parity, a statute that already shields wireline and wireless carriers from lawsuits if an emergency call goes bad despite good faith efforts.

Sen. Bill Nelson

Only Congress can grant the assurance of liability protection because it must apply in all states. A proposed Senate bill would do just that for VoIP, but if the act doesn’t pass, operators will remain at risk of onerous lawsuits.

In 2004, the FCC deregulated VoIP, eager to encourage innovation and deployment by staying out of providers’ paths. Then, right around the time a spate of VoIP subscribers could not contact emergency personnel, the agency ordered providers to offer E911 or face penalties that could include license revocation. Up to then, only wireline and wireless carriers had to offer E911, because they were regulated. E911 differs from basic 911 in that it transmits a caller’s number and address to an emergency call center or PSAP. E911 is unlikely to work, however, if a VoIP subscriber takes his or her phone to an unregistered location or if a PSAP cannot or will not accept IP traffic.

Sen. Olympia Snowe

Thus, when VoIP providers were told to deploy E911, they asked the FCC to help them obtain liability safeguards. The commission said it did not see why those carriers needed the protection. It said some VoIP companies already were offering E911, and looking out for themselves by putting disclaimers and other clauses into their subscriber contracts. Cable operators easily met the terms of the VoIP E911 order because their customers’ phones stay in one place. But providers of portable services ran into PSAPs that refused, and still do, to take VoIP calls for fear of being sued if a call doesn’t connect or if location information is wrong.

A November 2006 survey by the National Association of Regulatory Utility Commissioners (NARUC) and the National Emergency Number Association (NENA) found that 38 percent of respondents cited the lack of liability parity as a key barrier in E911 deployments. Despite the challenges, more than 90 percent of VoIP providers in the United States now offer E911 in their service areas.

The largest such carriers get E911 to the majority of their customers. AT&T Inc., in a Feb. 9 filing with the FCC, said 96 percent of its CallVantage subscribers have E911, while less than 1 percent have basic 911. In a Jan. 31 letter, Verizon Communications Inc. told the FCC it offers E911 to more than 93 percent of VoiceWing users. And Vonage Holdings Corp., in a Jan. 29 notice to the FCC, announced 94 percent of its customers have either basic or E911. Nonetheless, the absence of liability protections continues to adversely affect even the most aggressive company’s plans.

Ongoing Barriers to VoIP E911 Deployment Click to Enlarge

Take Vonage, for example. Arguably the most well-known name in consumer VoIP, the carrier has restrained growth because dozens of PSAPs will not take VoIP calls, says Stephen Seitz, vice president of state and local affairs for Vonage. A pending Senate bill, The 911 Modernization Act, would give PSAPs money to upgrade their systems to accommodate IP traffic and alleviate liability concerns. City attorneys often tell PSAPs not to accept VoIP traffic because either the provider or the municipality does not have enough, if any, insurance coverage, Seitz explains. “We have an obligation, yet we don’t have all the tools to achieve that obligation,” he says.

Vonage has suffered highly publicized connection problems, most notably when a Florida infant died in 2005. Her mother could not reach emergency personnel when dialing 911. Instead, she got a recording stating the sheriff’s administrative offices were closed. Vonage would not confirm whether that tragedy occurred in part because PSAPs wouldn’t accept its calls.

RNK Communications is another provider that has changed its plans due to nonexistent liability protection. The facility-based CLEC in Massachusetts was gearing up to offer a wholesale VoIP 911 product to other carriers, says Doug Denny-Brown, general counsel and vice president of regulatory affairs for RNK. “We put that on hold primarily due to liability.”

SunRocket Inc., headquartered in Virginia, takes the “better safe than sorry” approach. Because of liability and public safety considerations, the company will not accept any subscribers in areas where it cannot offer E911. CTO Mark Fedor says SunRocket even cancels customers if they somehow were able to sign up, then are found to live in a region where the provider can’t supply E911.

Sen. Hillary Clinton

And, blaming 911 regulations, Primus Telecommunications Inc.’s VoIP subsidiary, Lingo, has curtailed its marketing and rollouts in the United States. In its third-quarter 2006 earnings release, Primus said 45 percent of Lingo’s subscribers did not have E911 service and the company could be exposed to “significant liability” resulting from that noncompliance.

But help may be on the way. A key Senate bill, The IP-Enabled Voice Communications and Public Safety Act, co-sponsored by Sens. Bill Nelson, D-Fla., Olympia Snowe, R-Maine and Hillary Clinton, D-N.Y., would give VoIP providers liability protection. Trouble is, the bill has made the rounds twice before, under the same name. Both times, in 2005 and 2006, the proposal got so bogged down with amendments that it never passed. At press time, the bill had been accepted by the Senate Commerce Committee and awaited further action.

The push for liability assurances is a “true consensus item” among VoIP providers, their associations and public safety organizations, says Greg Rohde, executive director of the E9-1-1 Institute in Washington, D.C. While Democratic and Republican lawmakers have sponsored and support the act, the challenge now is to keep the proposal from sinking under the weight of irrelevant additions, says Staci Pies, president of the VON Coalition and vice president of regulatory and governmental affairs for PointOne Inc. The bill did not advance last year because lawmakers kept attaching language on controversial topics including net neutrality.

At least two groups also are trying to future-proof liability safeguards. NENA wants protection to apply to all devices and services that do, and will, connect to 911, says government affairs director Patrick Halley. He says 911 centers soon will be able to accept text and IMs, adding that NENA is lobbying for such services to be covered under liability parity law. The VON Coalition hopes to have IP-enabled relay services, such as video, included as well.

For more information on how incumbent telcos weigh in on pure-play VoIP providers' E911 problems, visit www.xchangemag.com/addedinsight.