Free toll voip

Many competitive telcos see VoIP as the way to gain market share. The incumbent telcos, of course, won't give up the market without a fight and that fight will be affected by how VoIP providers are regulated. So why all the fuss about VoIP regulation?

VoIP has the ability to bypass the local telephone exchange and cut the telcos out of voice call revenue. Companies that use VoIP on a VPN are seeing significant cost savings and, due to the internal nature of the system, are not subject to the extensive regulatory obligations imposed by various governmental authorities. No fuss there.

It's the VoIP offerings to consumers and businesses that are creating the current fuss. There are issues to consider from both the telco industry's and the regulator's perspective. The fundamental debate surrounds what types of regulation are required to manage the VoIP market without stifling innovation.

VoIP companies want to enter the market free from regulatory burden, claiming they should be considered as part of the (relatively) regulation-free Internet. Some regulators have taken the view that VoIP services should be regulated in accordance with existing regulations affecting telephone services. Asian trends suggest that regulation will be cautiously implemented to promote the growth of VoIP services. Many believe VoIP, if only to ensure consistency, requires specific regulation.

VoIP operators around the world face a number of common regulatory issues, such as call interception (tapping), numbering plans, QoS and access to emergency services.

Law enforcement concerns could be the most difficult to resolve due to the nature of the Internet. VoIP providers are being asked to determine how to best prevent their networks and facilities from being used to commit or organize criminal acts; provide the authorities with reasonable support in enforcing laws and safeguarding national security; and ensure that a network can intercept a communication passing over that network.

The challenge is where does taw enforcement "tap" the wire, how many packets need to be captured and how does that happen when packets take multiple paths to the destination. Another problem arises when voice packets are encrypted. It has been suggested that the regulators should require that a governmental body hold the decryption keys to allow law enforcement to decrypt all messages. Undoubtedly there will be heated argument about who holds those decryption keys. This also raises a host of privacy considerations. This could all be even more complicated with recent developments in unbreakable quantum computing cryptology.

In addition, a VoIP service available in a certain country can be run from a location outside that country's law enforcement jurisdiction, thereby making it impossible to tap the service. This will make compliance impossible both in terms of allowing law enforcement access and tracking down those behind the service.

Number allocation

Another problem for VoIP operators is how VoIP fits within existing numbering plans that do not cater for IP addresses, which in most cases are dynamic numbers assigned to the user when logging onto the Internet. Numbering plans, which specify the numbers used with public telecoms services, generally provide number allocations for mobile numbers, geographically fixed numbers and geographically wide numbers.

Calling line identification, emergency services and number portability are being considered in the context of applying to the numbering plan. Regulators are currently considering how numbering plans will apply to VoIP numbers, and it appears likely that a dedicated range of numbers will be assigned to VoIP services.

The VoIP industry relies on the strength of its data algorithms to cope with packet loss, jitter and latency and provide consistent QoS, which does not seem like a big issue for VoIP providers.

VoIP services are not yet able to offer 99.999% up time. Generally, it offers 99%, and this could lead to multi-tier call charging similar to the Indian regime. Asian trends suggest that QoS is not important to the emerging VoIP market, and imposing a "five nines" type of obligation upon a VoIP provider could stifle the younger companies.

Access to emergency services via standard telephones is almost a universal regulatory requirement. The question is do VoIP providers need to comply with the regulations in relation to emergency telephone services? To comply with regulations, VoIP providers may need to ensure that their packets give caller location details to assist emergency services.

A secondary complication is that VoIP services do not take power from the local exchange. In the event of power failure, VoIP services will not be able to operate.

VoIP customers will also want access to operator and directory assistance services. A likely solution is for the company to provide this services itself or to arrange for a third party to provide them.

A final issue is that regulations often require providers to provide itemized billing for each call. It is not entirely certain how a VoIP provider will comply with itemized billing when providing bundles of minutes to a customer.

Global perspective

To put the Asian experience into context, it is worthwhile to examine how countries outside the region are dealing with this quickly emerging technology.

In the US, initial court decisions have found that VoIP is an "information service" rather than a "telephony service"--Vonage Holdings vs Minnesota Public Utilities Commission (MPUC). An information service brings VoIP into the Internet space that in the US is unregulated. The US Congress has left the Internet unregulated for competitive and developmental reasons.

The court ignored MPUC's "quacks like a duck" argument, which suggested that VoIP offers voice telephony just like a standard regulated telephone service. The court held that VoIP is an information service and consequently kept this relatively new industry within unregulated space.

The FCC's position is that VoIP services should be subject to some regulation, especially universal service and emergency call services. The FCC inquiries continue while the US VoIP market remains in a state of confusion.

A bill being considered by Congress calls for banning state governments from regulation or taxing VoIP. Connecting to the PSTN may require VoIP providers to adhere to the Communications Assistance for Law Enforcement Act (and assist with wiretaps). The bill would impose a universal service levy that would go to providing discounted phone service to low income and rural Americans. The hearings into the bill have also touched on 911 services.

In Canada, Primus introduced a VoIP service and Bell Canada filed a complaint with the Radio, Television & Telecommunications Commission, claiming the Primus service did not comply with relevant regulations, including emergency call services and QoS obligations, The results of this are not yet complete, but it appears that Canadian regulations focus on the service attributes rather than the technology (ie PSTN vs Internet), and therefore it is likely VoIP will fall to be regulated in the same fashion as standard telephone service.

Forging new ground

VoIP is likely to be specifically regulated in some manner throughout the Asian region once the market matures. Given that, there are a number of common obligations that will apply to the VoIP provider. These currently vary Greatly from country to country.

One factor behind the popularity of South Korea's broadband s a regulatory regime that allows the resale of VoIP services to stimulate competition. The country originally offered free VoIP in order to capture market share, although charges have now been implemented.

Foreign ownership restrictions have been completely removed, opening the VoIP services market further.

VoIP providers in Korea are classified as special service providers (SSPs) when providing VoIP services via the public network and as value-added service providers (VSPs) when providing PC-to-PC VoIP services.

These companies must go through a process of notification (for VSPs) and registration (for SSPs). SSPs must also hold standard technology qualifications that demonstrate the capability for providing VoIP service and also must prove financial viability before launching any VoIP service.

In India, the Telecom Regulatory Authority implemented a two-tier QoS system in January for VoIP service. The first tier (toll quality) requires the VoIP service quality to be comparable to landline services. Recognizing that VoIP service quality is not perfect, the second tier allows for a lower charge for services below toll quality.