Whether or not new technologies like VoIP are viable will depend in part on the regulatory framework, which was discussed at a recent European conference

European regulators and network operators recently gathered in Brussels to consider the future regulation of voice over Internet Protocol -- VoIP.

The hearing, held in March, focused on recommendations set out in a study prepared for the European Commission that was published earlier this year. Guidance from the Commission on how the new e-communications regulatory package should be applied to IP-based services is expected to follow. The regulatory treatment of these services will be key to the viability of these emerging new business models.

Context
VoIP describes the use of Internet Protocol to transmit voice calls over the Internet in packets of data (like sending an email) instead of connecting a call conventionally, over a single open circuit. VoIP has been hailed as one of the major applications of broadband Internet. Examples of VoIP services -- which may be based on any one of at least five different business models -- include Kazaa's peer-to-peer service "Skype" and BT's new product due to be launched later this year, BT Communicator. Such services are also referred to as voice over broadband -- or "VoB".

In the United States, where VoIP looks set to take off more swiftly than in Europe, state and federal regulators have begun to consult on the extent to which such services should be regulated as "common carriers". Early indications are that the Federal Communications Commission may adopt a "light touch" approach, but there are concerns over, among other things, the potential loss in tax revenues, and the negative impact on universal service obligations.

Key issues and recommendations
The focus of the recent hearing in Brussels was a recently published report by consultants Analysys, commissioned by the Information Society Directorate of the European Commission. Olswang was among the interested parties represented.

The report, entitled IP Voice and Associated Convergent Services, is addressed to national regulatory authorities and governments. It considers the transition from existing circuit-switched public switched telephone network ("PTSN") to IP-based services and discusses the regulatory, technological, economic and structural implications.

In summary, the report's key findings and recommendations are as follows:

• A transition to IP voice and associated convergent services is taking place. The NRF (New Regulatory Framework) is suitable for handling this transition, but it would be best to address a number of issues before they become significant blocks to future market development.
• The most significant issue is whether -- and under what circumstances -- VoIP is classified as PATS (Publicly Available Telephony Service) (with all the attendant obligations, of which the most important are access to emergency services and network integrity). Early clarification of the policy in this area would prevent confusion amongst service providers and between member states.
• Location and emergency access is an issue that requires clarification. It may not be possible to provide the location of a caller making an emergency call using VoIP; how users are made aware of this or what other steps are needed to provide such location information are matters that merit further consideration.
• VoIP services may not be as robust as the existing PSTN (Public Switched Telephone Network) voice service. The degree to which a network carrying voice calls is expected to be available may need further consideration, especially as any relaxation of requirements could have greater implications in the long run, as more and more voice is carried over IP networks.
• The existing national numbering plans could prove wholly inadequate if VoIP users (and hence service providers) require large numbers of geographic and other types of numbers. The NRAs should consider the implications of such a development now, as numbering requires relatively long-term planning.
• VoIP makes it possible to provide domestic or EU-wide voice services (or components of those services) from other countries. We recommend that the member states and the NRAs explicitly consider whether this merits any change to current policy."

Next steps
The European Commission is seeking written responses to the Analysys study by the end of April, and is then expected to publish some guidelines explaining how the new regulatory framework should be applied in this area.

The UK communications regulator Ofcom held its own discussion group at the end of February to identify and address key issues relating to VoB and is considering forming a working group, to help develop appropriate consumer protection guidelines.

The precise time scale for the shift from conventional telephony to IP-based services -- be it 10, 20 or 50 years -- is still far from certain. What is clear, however, is that this is a critical issue not only for regulators and for broadband providers, but also for end-users who will need to factor the transition into equipment upgrade cycles.

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