December 15, 2003 On behalf of Net2Phone Global Services, LLC., and Net2Phone Cable Telephony, LLC....

December 15, 2003December 15, 2003

On behalf of Net2Phone Global Services, LLC., and Net2Phone Cable Telephony, LLC.

for the Federal Communications Commission

Cherie R. Kiser Elana ShapochnikovMintz, Levin, Cohn, Ferris, Associate General Counsel Glovsky and Popeo, P.C. Net2Phone701 Pennsylvania Avenue, NW 520 Broad StreetWashington, DC 20004 Newark, NJ [email protected] [email protected]


for the Federal Communications Commission


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Consumers Have Benefited from the FCC’s Consumers Have Benefited from the FCC’s “Hands-off” Approach“Hands-off” ApproachConsumers Have Benefited from the FCC’s Consumers Have Benefited from the FCC’s “Hands-off” Approach“Hands-off” Approach

• Since its inception, Net2Phone has provided consumers with a competitive alternative for voice services.

• Net2Phone has been recognized as the first company to bridge the Internet with the public switched telephone network.

• Net2Phone has invested in communications infrastructure by building its own proprietary network and gateways.

• Net2Phone has routed billions of minutes of traffic over its network.

• Since its inception, Net2Phone has provided consumers with a competitive alternative for voice services.

• Net2Phone has been recognized as the first company to bridge the Internet with the public switched telephone network.

• Net2Phone has invested in communications infrastructure by building its own proprietary network and gateways.

• Net2Phone has routed billions of minutes of traffic over its network.

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Overview of Net2PhoneOverview of Net2PhoneOverview of Net2PhoneOverview of Net2Phone

• Net2Phone has established itself as a world leader in delivering voice services over data networks.

• Net2Phone delivers new and innovative communication solutions to retail customers and cable operators worldwide.

• Net2Phone offers services through two subsidiaries:

– Net2Phone Global Services (NGS) offers VoIP services to retail consumers and small- to medium-sized businesses around the world.

– Net2Phone Cable Telephony (NCT) provides cable operators in North America and Western Europe with the toolset to offer residential voice services to their subscribers utilizing their existing cable networks.

• Net2Phone has established itself as a world leader in delivering voice services over data networks.

• Net2Phone delivers new and innovative communication solutions to retail customers and cable operators worldwide.

• Net2Phone offers services through two subsidiaries:

– Net2Phone Global Services (NGS) offers VoIP services to retail consumers and small- to medium-sized businesses around the world.

– Net2Phone Cable Telephony (NCT) provides cable operators in North America and Western Europe with the toolset to offer residential voice services to their subscribers utilizing their existing cable networks.

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November 2003 Net2Phone to Provide Cable Telephony Services for Cequel III’s Cebridge Connections

August 2003 Net2Phone Creates Two Wholly Owned Subsidiaries: NGS and NCT

April 2003 Hughes Network Systems and Net2Phone Develop VoIP Solution Over Satellite

February 2003Net2Phone and Liberty Cablevision PR Begin Billing Cable Telephony Subscribers for Residential Voice Service

June 2002 Net2Phone Launches First Outsourced Voice Solution for Cable Operators

October 2001 Net2Phone Announces New Investor, Ownership Structure

August 2000 AT&T Invests $1.4 Billion in Net2Phone (32% Economic Stake)

July 2000 Microsoft Integrates Net2Phone into MSN Messenger

November 1999 Net2Phone Files for Secondary Offering of Common Stock

July 1999 Net2Phone Completes Initial Public Offering of Common Stock

September 1997 Net2Phone Direct (Phone-to-Phone Over IP) Launched in the U.S.

July 1996 Net2Phone 4.62 Beta -- Half-Duplex Launched

November 1995 Announces Plans to Release First PC-to-Phone Technology

Key Milestones

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Overview of NGSOverview of NGSOverview of NGSOverview of NGS

• NGS offers a variety of VoIP-based products and services. Our centrally managed platform supports a full range of consumer and corporate hardware products and services that enhance quality, lower costs and improve ease of use and management.

• NGS is always evaluating and developing new products and service offerings including:

– VoIP over wireless fidelity (WiFi)

– Integration and interoperability between our VoIP services and mobile devices

– Consumer broadband voice services and devices

• NGS is committed to bringing greater choice in high quality VoIP services to consumers.

• NGS offers a variety of VoIP-based products and services. Our centrally managed platform supports a full range of consumer and corporate hardware products and services that enhance quality, lower costs and improve ease of use and management.

• NGS is always evaluating and developing new products and service offerings including:

– VoIP over wireless fidelity (WiFi)

– Integration and interoperability between our VoIP services and mobile devices

– Consumer broadband voice services and devices

• NGS is committed to bringing greater choice in high quality VoIP services to consumers.

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Overview of NGS Overview of NGS (cont’d)(cont’d)Overview of NGS Overview of NGS (cont’d)(cont’d)

• Enterprise Solutions. This suite of services permits small and medium-sized businesses to use their existing broadband connections to place calls among their corporate offices and primary business contacts. Several other services permit businesses to make low cost, high quality VoIP calls to anywhere in the world.

• Calling Cards and Prefix Dialing. Customers buy disposable or rechargeable calling cards that can be used to make low cost calls through Net2Phone’s VoIP platform.

• Broadband Voice. NGS sells devices that can be plugged into a high speed connection anywhere in the world to allow users to be reached at the telephone number assigned to their specific device. These devices also allow users to access Net2Phone’s VoIP platform to make high speed connections to anywhere in the world.

• Satellite VoIP. NGS offers VoIP products and services to satellite broadband providers that allow them to offer voice service in conjunction with their high speed data offerings. NGS has improved voice quality over satellite by implementing voice packet prioritization and working with third party device manufacturers such as LG Electronics and Hughes Network Systems to create devices that can be easily installed on existing equipment.

• Carrier Services. NGS sells excess capacity on its retail VoIP routes to other carriers for the transport and termination of VoIP traffic.

• Enterprise Solutions. This suite of services permits small and medium-sized businesses to use their existing broadband connections to place calls among their corporate offices and primary business contacts. Several other services permit businesses to make low cost, high quality VoIP calls to anywhere in the world.

• Calling Cards and Prefix Dialing. Customers buy disposable or rechargeable calling cards that can be used to make low cost calls through Net2Phone’s VoIP platform.

• Broadband Voice. NGS sells devices that can be plugged into a high speed connection anywhere in the world to allow users to be reached at the telephone number assigned to their specific device. These devices also allow users to access Net2Phone’s VoIP platform to make high speed connections to anywhere in the world.

• Satellite VoIP. NGS offers VoIP products and services to satellite broadband providers that allow them to offer voice service in conjunction with their high speed data offerings. NGS has improved voice quality over satellite by implementing voice packet prioritization and working with third party device manufacturers such as LG Electronics and Hughes Network Systems to create devices that can be easily installed on existing equipment.

• Carrier Services. NGS sells excess capacity on its retail VoIP routes to other carriers for the transport and termination of VoIP traffic.

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NGS: Multiple Services – One PlatformNGS: Multiple Services – One PlatformNGS: Multiple Services – One PlatformNGS: Multiple Services – One Platform

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Overview of NCTOverview of NCTOverview of NCTOverview of NCT

• Building on Net2Phone’s expertise in the VoIP arena, NCT has developed a fully outsourced PacketCable compliant VoIP solution for cable operators. NCT’s solution enables cable operators to offer the “triple play” of voice, data, and video to their consumers.

• NCT targets small to mid-sized cable operators in the U.S. and operators of all sizes in Europe and Latin America. These cable operators may not have the significant technical and financial resources required to develop a self-provisioned cable broadband voice solution.

• Implementation of a viable cable voice service requires the expenditure of significant resources such as:– Personnel to support network operations– Engineering– Project management– Significant capital expenditures for VoIP elements– Costs to manage interconnection process

• Building on Net2Phone’s expertise in the VoIP arena, NCT has developed a fully outsourced PacketCable compliant VoIP solution for cable operators. NCT’s solution enables cable operators to offer the “triple play” of voice, data, and video to their consumers.

• NCT targets small to mid-sized cable operators in the U.S. and operators of all sizes in Europe and Latin America. These cable operators may not have the significant technical and financial resources required to develop a self-provisioned cable broadband voice solution.

• Implementation of a viable cable voice service requires the expenditure of significant resources such as:– Personnel to support network operations– Engineering– Project management– Significant capital expenditures for VoIP elements– Costs to manage interconnection process

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Cable Voice Operations

Support Systems(CVOSS)

•Business process development•Solutions assurance•Network & systems engineering•Billing & provisioning integration•Systems deployment

•Business process development•Solutions assurance•Network & systems engineering•Billing & provisioning integration•Systems deployment

•Network management•OSS & service management•24 x 7 NOC

•Network management•OSS & service management•24 x 7 NOC

•Infrastructure management•Local and long distance bilateral

termination•Emergency support services

•Infrastructure management•Local and long distance bilateral

termination•Emergency support services

•Call agent and signaling•Announcement server•Class 5 feature support•411, 611 and voice mail•Trunking gateways

•Call agent and signaling•Announcement server•Class 5 feature support•411, 611 and voice mail•Trunking gateways

NCT Offers Full Outsourcing for Cable-NCT Offers Full Outsourcing for Cable-Provided VoiceProvided VoiceNCT Offers Full Outsourcing for Cable-NCT Offers Full Outsourcing for Cable-Provided VoiceProvided Voice

Planning and Deployment

Real-Time Assurance

Voice Services Management

Call Management Server

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NCT Makes Cable-Provided Voice WorkNCT Makes Cable-Provided Voice WorkNCT Makes Cable-Provided Voice WorkNCT Makes Cable-Provided Voice Work

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Freedom from Regulation for VoIP Freedom from Regulation for VoIP Services Promotes the FCC’s GoalsServices Promotes the FCC’s GoalsFreedom from Regulation for VoIP Freedom from Regulation for VoIP Services Promotes the FCC’s GoalsServices Promotes the FCC’s Goals

• Goal # 1 – Investment– Commissioner Abernathy at VoIP Forum: any regulatory

regime for VoIP must promote investment.

– VoIP investment has flourished under the “hands off” approach as the FCC predicted in the 1998 Report to Congress.

– The FCC’s 1998 findings still apply today: “As an empirical matter, the level of competition, innovation, investment, and growth in the enhanced services industry over the past two decades provides a strong endorsement for [a deregulatory] approach.”

• Goal # 1 – Investment– Commissioner Abernathy at VoIP Forum: any regulatory

regime for VoIP must promote investment.

– VoIP investment has flourished under the “hands off” approach as the FCC predicted in the 1998 Report to Congress.

– The FCC’s 1998 findings still apply today: “As an empirical matter, the level of competition, innovation, investment, and growth in the enhanced services industry over the past two decades provides a strong endorsement for [a deregulatory] approach.”

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Freedom from Regulation for VoIP Freedom from Regulation for VoIP Services Promotes the FCC’s GoalsServices Promotes the FCC’s GoalsFreedom from Regulation for VoIP Freedom from Regulation for VoIP Services Promotes the FCC’s GoalsServices Promotes the FCC’s Goals• Goal # 2 – Rural Deployment

– Commissioner Adelstein at VoIP Forum: “all Americans, whether urban or rural, should have access to high quality services at reasonable rates.”

– Using NCT’s end-to-end solution, smaller cable companies will have the ability to upgrade their networks to have the capability to offer voice services to their existing subscribers.

– These cable companies serve predominantly in rural and suburban areas.

– VoIP will provide these subscribers with competitive choices for residential voice service typically found only in urban areas.

• Goal # 2 – Rural Deployment– Commissioner Adelstein at VoIP Forum: “all Americans,

whether urban or rural, should have access to high quality services at reasonable rates.”

– Using NCT’s end-to-end solution, smaller cable companies will have the ability to upgrade their networks to have the capability to offer voice services to their existing subscribers.

– These cable companies serve predominantly in rural and suburban areas.

– VoIP will provide these subscribers with competitive choices for residential voice service typically found only in urban areas.

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Freedom from Regulation for VoIP Freedom from Regulation for VoIP Services Promotes the FCC’s GoalsServices Promotes the FCC’s GoalsFreedom from Regulation for VoIP Freedom from Regulation for VoIP Services Promotes the FCC’s GoalsServices Promotes the FCC’s Goals

• Goal # 3 – Provision of “Social” Services– Chairman Powell at VoIP Forum: the FCC must protect its

critical initiatives, such as public safety, security, and consumer protection.

– Specific regulations and technical requirements are not necessary at this time:

– NCT has a 911 solution in place today.

– The VoIP industry is independently pursuing voluntary solutions to the technical issues raised by 911, CALEA, and disability access.

– In light of the competitive nature of the VoIP market, VoIP providers must tailor their service offerings to meet consumer demand for certain service features.

• Goal # 3 – Provision of “Social” Services– Chairman Powell at VoIP Forum: the FCC must protect its

critical initiatives, such as public safety, security, and consumer protection.

– Specific regulations and technical requirements are not necessary at this time:

– NCT has a 911 solution in place today.

– The VoIP industry is independently pursuing voluntary solutions to the technical issues raised by 911, CALEA, and disability access.

– In light of the competitive nature of the VoIP market, VoIP providers must tailor their service offerings to meet consumer demand for certain service features.

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ConclusionConclusionConclusionConclusion

• Consumers have benefited and will continue to benefit from a “hands off” approach.

• Freedom from regulation promotes:– Greater investment in infrastructure and networks

– Incentive to offer competitive alternatives to traditional providers

– Development of new and innovative service offerings tailored to meet customer demand

– Deployment of advanced services to rural areas

• Social policy concerns can be addressed by the VoIP industry without the imposition of burdensome regulation.

• Consumers have benefited and will continue to benefit from a “hands off” approach.

• Freedom from regulation promotes:– Greater investment in infrastructure and networks

– Incentive to offer competitive alternatives to traditional providers

– Development of new and innovative service offerings tailored to meet customer demand

– Deployment of advanced services to rural areas

• Social policy concerns can be addressed by the VoIP industry without the imposition of burdensome regulation.

December 15, 2003December 15, 2003





December 15, 2003 On behalf of Net2Phone Global Services, LLC., and Net2Phone Cable Telephony, LLC....

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