http://www.wired.com/news/politics/0,1283,62420,00.html?tw=wn_techhead_2 WASHINGTON -- Just as people are discovering voice over Internet protocol technology as a cheap alternative to phone-company service, a senator wants to give states the right to pry open consumers' wallets to pay for it. At the Senate Commerce Committee's first hearing on the future of voice over Internet protocol technology yesterday, Lamar Alexander (R-Tennessee) took the stance that states should have the right to tax Internet telephony. Otherwise, VOIP service providers, such as Vonage and pulver.com, could cost state and local governments more than $10 billion in annual taxes they would have collected on telephone services. "(VOIP) is a wonderful innovation coming down the track like a speeding freight train," Alexander said. "I am here today to help make sure that our state and local governments aren't tied to the tracks ahead of this train." Federal Communications Commission chairman Michael Powell argued just the opposite: Too much regulation stifles innovation. "Restraining from regulating the economics of Internet applications has served us well," he said. "The creativity of the marketplace has been breathtaking and dynamic, bursting at the seams with entrepreneurial spirit. There is little compelling evidence that heavy economic regulation is warranted." The hearing drew a standing-room-only crowd that included lobbyists, lawyers, regulators and technology analysts. Many were so intent on getting a seat that they hired homeless people for up to $75 to hold their place in line overnight. The inaugural VOIP hearing was an educational forum, an opportunity for heavy-hitter panelists to present their takes on regulation and innovation. Glen Post, chief executive of CenturyTel, which provides telecom services in rural communities, urged Commerce Committee chairman John McCain (R-Arizona) and other members to make universal service a priority. He said he wants all voice-service providers, including pulver.com and Vonage, to contribute to universal service funding. Panelists went back and forth with committee members about regulatory issues, universal service and how VOIP technology works. But some topics that people waited hours in line to hear were scarcely broached, such as 911 calls over VOIP technology. Recently, a 911 call made from Houston through a VOIP provider was routed to Nashville, about 800 miles away. The Association of Public-Safety Communications Officials had sent McCain a letter about the incident as an example of his concerns that 911 calls from VOIP telephones will be lost, delayed or misrouted. Changes can be made now, while VOIP is still developing, and Yucel Ors, legislative affairs manager for the association, wanted to hear whether the committee might consider mandating that as part of future legislation. It was the reason he came to the hearing. "I was disappointed, but I know it will come up eventually," he said. "Maybe at the next hearing."