Eusebio Giandomenico e.giandomenico a GORGIA.IT
Mar 7 Set 2004 21:59:23 CEST


    *A regulatory framework for VoIP and VoB services*

After more than 100 years of traditional telephone services we are on
the brink of a potentially fundamental transformation in voice services.
New voice services based on voice over Internet Protocol (VoIP) could
deliver substantial benefits for consumers such as:

    * Lower network costs, lower user prices and new pricing structures
    * New features such as integrated messaging, conferencing, video and
      personalised call handling
    * Greater choice of innovative and differentiated services as entry
      barriers fall and competition in the voice market increases
    * More competition in broadband as ISPs will be able to offer
      consumers more compelling propositions combining voice with
      Internet access - for example, by offering Voice over Broadband (VoB)

IP is already playing a larger and larger role in communications markets
and is seen as a key platform for future innovation. Many large
companies already use VoIP services, several network operators have
already deployed VoIP in their core networks and PC-based VoIP services
are being used by residential customers.

More recently, several companies have started to consider taking VoIP
into the mainstream market with some looking to offer them as a
substitute for traditional telephone services. For example, Wanadoo is
considering plans to offer a VoIP service, BT has recently launched its
BT Communicator service and a UK industry group (ITSPA - Internet
Telephony Service Providers Association) has been formed. BT's recently
announced 21st Century Network plans also envisage a far greater role
for VoIP.

Regulation needs to adapt to this rapidly changing world. Regulation
must respond to the new questions posed by new technology to avoid
creating barriers to its deployment and limiting benefits to consumers.

Many of the issues raised by new types of voice services revolve around
regulatory requirements that have developed to reflect the capabilities
of traditional voice services. Traditional PSTN voice services have
readily been able to deliver certain features, and regulation has
required most voice services to provide these features. For example,
current regulations stipulate that certain fixed voice services need to
offer a very high availability 999 service as well as itemised billing
and directory enquiries. Consumers have now come to expect many of these
features to be standard in voice services.

However, some new services may not be able to deliver the features that
consumers expect to the same standard or in the same way. The way that
regulation is currently applied risks preventing new services from
entering the market to compete with traditional voice services. For
example, some services can be used away from the home, potentially using
any Internet connection. However, it might not be feasible to guarantee
the same reliability as a normal fixed line when a service is used from,
say, a Wi-Fi hotspot in a café. If these new services were regulated in
an identical way then this might prevent valuable innovation.

Ofcom is taking action to address these issues within the context of the
EU telecoms framework. The European Commission published a paper in June
2004, but there are still some questions outstanding on the
interpretation of the legal framework, in particular the definition of
"Publicly Available Telephone Service" ('PATS'). The European Commission
has indicated that it will give further clarification on this matter
later in the year. In the meantime, it is important that consumers have
full clarity on the capability of new services and that the right
balance is found between reducing barriers to entry and consumer

Ofcom is today publishing two documents - a statement on numbering for
new voice services and a consultation document covering the overall
regulation of new voice services and appropriate consumer protection. In
particular we are:

    * issuing a statement that makes both geographic number ranges and a
      new 056 number range available for new voice services including
      VoB. This will allow new voice service providers to offer services
      without the need for users to have to use an unfamiliar number
      range. Providers can apply for these numbers immediately.
    * consulting with stakeholders on the appropriate framework for
      consumer protection. The framework could be based on
      self-regulation, co-regulation or formal regulation. We favour a
      co-regulatory approach which effectively balances the need for
      consumer protection with the benefits of less intrusive
      regulation. This approach has been effective in others areas such
      as the Telecommunications Ombudsman.
    * reviewing existing regulation to make sure that it applies to new
      voice services in a proportionate way; for example, we are
      clarifying network integrity requirements to ensure they are not a
      barrier to new voice services.
    * pending clarification from the EC, we are giving interim guidance
      to providers that will allow new voice services to offer 999
      services without having to meet all the other obligations
      associated with traditional telephone services. This will avoid
      creating a perverse incentive for providers not to offer 999
      services at all.

Together, these proposals should remove unnecessary barriers for
operators to offer new voice services, for example, enabling them to offer:

    * services that supplement existing phone lines, using normal
      geographic numbers and providing 999 calls, but without having to
      offer identical features to traditional telephone services
    * services replacing a traditional phone line, that provide 999 and
      other standard features (eg operator assistance, directory
      enquiries), whilst avoiding any technically infeasible
      requirements and allowing the user to keep their existing
      telephone number

The proposals also aim to ensure that consumers are properly informed
about the capabilities of these new services and suitably protected.

Ofcom needs to understand the views of operators, consumers and other
stakeholders on these proposals. The statement and consultation document
can be found at www.ofcom.org.uk <http://www.ofcom.org.uk>. Responses to
the consultation are required by 15 November 2004.

A final statement on these issues will be made in early 2005 following
the conclusion of the European Commission's consultation. A consumer
leaflet has also been published to inform and consult with consumers
about the new voice services entering the market.
Ofcom will continue to work intensively on the wider regulatory
framework for VoIP and VoB in the coming months to create a clear
framework for investment and innovation in new voice services and ensure
that the policy and regulations for new voice services are coherent with
other areas. As well as the documents published today, we will be:

    * Agreeing a new settlement for telecoms regulation through the
      on-going Strategic Review of Telecommunications. The phase 2
      consultation will be published in October and the final statement
      early next year.
    * Reviewing the approach for interconnection and inter-operability
      for VoIP services particularly in light of BT's move to the 21st
      Century Network.
    * Assessing the role for DSL services that allow the consumer to
      have a broadband connection and use a voice over broadband service
      without having to keep their existing fixed telephone line rental.
    * Getting the charges and process right for LLU, as LLU is likely to
      be a key platform that operators use to offer VoIP services. A
      consultation on charges was published in August with the final
      statement in December. The Telecommunications Adjudicator is
      working with the industry on the process issues, including aspects
      closely related to VoB such as number portability.

Collectively, these proposals for new voice services and Ofcom's reviews
of related markets will help to ensure that the UK takes a lead in
future innovation.

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