08 Sep 2004 13:37
VoIP has been hailed as one of the major applications of broadband Internet. 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. Examples of VoIP services -- which come in different guises -- include Kazaa's peer-to-peer service "Skype" and BT Communicator. US provider Vonage recently announced plans to launch a service in the UK.
Such services are also referred to as voice over broadband -- or "VoB". Elsewhere, notably in the United States, where VoIP looks set to take off more swiftly than in Europe, regulators are also grappling with the issue. The UK regulator Ofcom is already consulting with industry in the forum of its recently formed VOB group.
Why are new guidelines needed?
The European Commission has issued guidance on VoIP in the past. This needs to be revisited in the light of the new e-communications regulatory framework, which came into effect in July 2003. The new framework, consisting of five directives, is designed to promote competition in the market for electronic communications services. The rules are intended to be as "technology-neutral" as possible. The question addressed in the Commission's document is how the various different types of VoIP offering should now be regulated. Compared to traditional fixed-line telephony, VoIP raises special issues, for example the ability of the emergency services to trace a 999 call to a particular location.
The consultation document acknowledges that VoIP services come in many "different flavours" and that new models are constantly evolving. A rigid classification for regulatory purposes is therefore inappropriate -- the regulators' approach will therefore need to focus on the nature of the service being offered. At one end of the scale are VoIP offerings which consist of, say, a software program to support voice communications on the users' PC (unlikely to be subject, on its own, to regulation). At the other end of scale there are services more akin to traditional telephony services. In between are different "shades" which would be subject to regulation to a greater or lesser extent.
What are the issues?
Put simply, the obligations faced by a provider of VoIP services will depend on whether its offering falls within certain key legal definitions. A "Publicly Available Electronic Communications Service" will be subject to a number of conditions, including notification to the regulator, quality of service, and numbering obligations. A service which is classed as a "Publicly Available Telephone Service" (known as a "PATS") will be subject to further "universal service" obligations: the provision of defined minimum standards to all end users at an affordable price. VoIP providers may also be subject to a number of public policy requirements relating to, among other things, integrity and availability of the network, access to emergency services, privacy, interception and numbering.
The document sets out specific proposals on certain issues while on others, for example interconnection and interoperability between different services, it seeks views on the issues which new VoIP models are likely to raise. One area which all VoIP providers (whether regulated as PATS or not) are likely to need to address, is how to handle emergency calls and enable users' locations to be traced.
What is the significance of these guidelines?
The consultation gives Internet businesses the opportunity to comment on the specific approach proposed to the issues outlined above, as well as any other issues relevant to VoIP. Once adopted, the Commission's guidelines, whilst non-binding, will influence the approach taken by national regulators, such as Ofcom. The bottom line is that businesses wishing to exploit new opportunities in voice services need to know what regulatory obligations they are likely to face.
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