Voice over IP: Old regulation for new technology or new approach of Broadband telephony ?

1. Voice over IP: Old regulation for new technology or new approach of Broadband telephony ? Thibault Verbiest Attorney and Partner ULYS Law Firm Europa in information society Sibiu, 2 June 2007

2. I. VoIP: evolution or revolution ? Before: Voice telephony through PSTN = Public Switched Telephony Network • Usual way top provide telephony • Network usually maintained by incumbent operators • Low capacity: mainly conceived for voice (not for Internet or other applications) • E.164 Numbers (ITU): international standards for numbering based on PSTN

3. I. VoIP: evolution or revolution ? Evolution to VoIP: Voice through Internet Protocol • Usual way to transfer data (not voice) • Convergence on the internet: voice, data, video,… • Numbering = IP Addressing (not E.164 numbering) • Large band internet access • Free (internet access costs; e.g. Skype) See next table estimate (from Probe Research, 2002)

5. I. VoIP: evolution or revolution ? • Evolution IP vs. PSTN: clear takeover by IP over PSTN • Voice Traffic and revenue is switching from PSTN • This is true for both IP voice transfer between • operators (transit – wholesale market) and • end users (retail) • Terminals for VoIP are now close to the PSTN handsets

6. I. VoIP: evolution or revolution ? • Convergence ? • Handsets proposed are close to the PSTN • Development of the VoB (”VoIP maîtrisée”) or “Controlled Voice over IP” • proposed by the operators, often in an offer like “triple play” (telephony + broadband + TV) • No obvious difference for the end users • Interconnection between VoIP and PSTN: • Possible to call from a VoIP user to a PSTN and vice versa • Attribution of geographic and non geographic numbers for VoIP users • Different users: nomadic or non nomadic use

7. I. VoIP: evolution or revolution ? • Different cases for VoIp use: • Two users calling from one IP address to one IP address (with an appropriate software e.g.) • One user calls the other on his PSTN phone: they will have to pass through a internet service provider, and gateway to interconnect the PST network • The two users are calling with their PSTN phone: the communication goes through IP gateways connected with a IP style connection

8. II. Regulatory aspects in the EU Objective of the EU Regulatory framework • Promote Competition • Innovation • Choice, quality • Liberalization • Simplify market entry • Promote interest of citizens • Protection of citizens • Universal service • Consumer protection • Privacy • Dispute resolution • Promote Single European Market • + technology neutral regulation  Difficult (contradicting ?) goals

9. II. Regulatory aspects in the EU VoIP challenges today’s framework: • Nomadic use of VoIP services is possible • Users and service providers can be located in any country (problems for emergency calls location, numbering,..) • Cost structure is different • Problem for interconnection rate e.g. • VoIP provides for users management, but do not provide the transmission itself  VoIP is not really a “service” • Quality of services is not equivalent to PSTN • Value-added services can be offered (e.g.Video)

10. II. Regulatory aspects in the EU 2 major documents at the EU level: - EU Commission Staff Working Document “The Treatment of Voice over Internet protocol (VoIP) under the EU Regulatory Framework”, 14 June 2004 - ERG (European Regulatory Group) Common Statement for VoIP regulatory approaches, February2005

11. II. Regulatory aspects in the EU Both documents address several issues: • Qualification of the services • Authorization • Universal Service obligations • Numbering • Numbering plan • Portability • Emergency calls • Routing • Caller location • Data protection • Service integrity • Interconnection and interoperability

12. A. Types of VoIP offerings Commission Staff Working Document: some offerings are subject to regulatory framework, some are not : 1. VoIP offering that comprises provision of a product with no ongoing service (e.g. Skype)  not in the scope of EU Framework

13. A. Types of VoIP offerings 2. Corporate private networks used to provide internal communications within large companies 3. VoIP technologies used within a public operators core network (invisible to the end user ; e.g. transit from operator 1 to operator 2)  under authorization directive  but not under specific obligations

14. A. Types of VoIP offerings 4. Publicly available Voice over IP services, where access to and from E.164 numbers  do fall under the EU regulatory framework  treatment depends of the qualification of the service (PATS or ECS –or even US-)

15. B. Qualification ECS (Electronic Communication Service) • service normally provided for remuneration • which consists wholly or mainly in the conveyance of signals on Electronic Communication network PATS (Publicly Available Electronic Communication Services) • Service available to the public • for originating and receiving national and international calls • And accessing to emergency services • Through a number or numbers in a national or international numbering plan( e.g. E.164..)

16. B. Qualification ECS and PATS are both subject to regulation • ECS has less rights/obligations than PATS • PATS is supposed to meet some additional criteria (e.g. offer calls to emergency services) QUESTION: HOW TO QUALIFY ? EU Commission recommends a self qualification as PATS or ECS at the time of notification

17. B. Qualification Impact of the qualification ECS / PATS (non exhaustive): • only PATS subscribers have the right to port numbers from other undertakings providing PATS • only PATS suppliers can request access to carrier selection and pre selection on the network of an operator with significant market power • only PATS subscribers have the right to be listed in a public telephone directory

18. C. Universal Service • Provision of a defined set of services to all end-users at affordable price • Connection to the public network • Access to PATS at fixed location • Directory enquiry services and directories • Public pay phones • Special measures for disabled users

19. C. Universal Service • Member States may designate one or more operators to provide different elements of US and/or cover different parts of national territory • No need if US covered • Undertaking with US obligations can use whatever technology is appropriate to meet US requirements  this could include VoIP

20. C. Universal Service US Funding : • Optional for Member States • Via Levies or public funds • Possibility to exempt undertakings which have not yet achieved any significant market presence (turnover below a threshold) • VoIP providers can be contributors to US • VoIP can be part of the US scheme

21. D. Public Protection and Public Safety • Art 23 US Directive: members States ensure that PATS providers at fixed locations tale all reasonable measures to ensure uninterrupted access to emergency services • Will depend upon the implementation in different Member States • EU Commission proposes this obligation only applies to providers of PATS who control or own the underlying network structure •  EU Commission proposes information to the users on this issue

22. E. Emergency services • PATS have the obligations to provide access to emergency service • ECS do not have this obligation  Commission suggests • to inform ECS users on this issue • the National Regulatory Authorities to encourage ECS to do the same

23. E. Emergency services Obligations: Actual provision of emergency calls + Caller location + Routing Emergency Calls to the nearest Emergency Service • disproportionate to impose such obligations an all VoIP providers (cf. Commission) • necessity to know the location of the user to able these services • VoIP providers are encouraged to devise and rapidly implement solutions

24. F. Interconnection 3 types: • Interconnection to the PSTN • VoIP to incumbent: usually regulated (interconnection reference offers) • VoIP to others: may be subject to regulation (new market analysis) • Direct Interconnection between IP Networks • Peering arrangements between ISP • Interconnection between networks via the PSTN • VoIP users can be connected by transiting via the PSTN network • Less quality but usually more simple than direct interconnection or only way possible

25. G. Numbering • Numbering • NRAs may attach specific conditions to the rights of use of numbers • Attribution must be transparent, objective, non-discriminatory • Directive do not stipulate what kind of number are to be granted (geographic or non geographic)  Commission underlines that numbering cannot be discriminatory

26. G. Numbering • Number portability • Only PATS subscribers have the right to port numbers from one PATS supplier to another • Old number of PSTN can be ported to VoIP user if PATS  Useful to declare as PATS to the NRA

27. III. National Examples • France • Numbering: • geographic and non geographic numbers • New prefix “09” for low cost services (e.g. VoIP and converged services) due to consumers perception • For geographic number: prove of fixed location (ex: control of the access line by the operator)

28. A. France • Number portability • Available for VoIP services meeting the portability conditions • Market Analysis • ARCEP decision market analysis on market of access to fixed retail narrowband access : VoIP and PSTN are substitutable and are part of the same market • but no need to regulate VoIP services since they are indirectly regulated through Broadband regulation

29. B. Belgium • Market access: • Both PATS and Nomadic ECS are subject to registration notification • Numbering resources • Both PATS and nomadic ECS have right for numbering blocks including geographic numbers • Nomadic VoIP services geographic numbers are subject to special conditions

30. B. Belgium Conditions for geographic numbers for nomadic VoIP ECS: • precarious exemption by Ministerial Decree • In the telephone zone where the users have their main Internet connection • Prohibition on providing access to emergency services (possible change) • Obligation to inform the users 3 times a year of the differences between PATS and nomadic VoIP ECS (esp. emergency services)

31. B. Belgium • Portability (IBPT consultation): • Right to portability only for PATS • PATS subscribers have the right to port their number to nomadic VoIP ECS but not entitled to use them for nomadic VoIP • Emergency services refuse calls from nomadic users ! • only way to have portability is to have PATS status • But this status is linked to the provision of emergency services !  It seems that nomadic VoIP services cannot be PATS

32. B. Belgium • Emergency services • ECS cannot provide access (by Ministerial Decree) • PATS must provide access to emergency service • IBPT propose a transitional regime where nomadic VoIP service can qualify as PATS since the issue of emergency service is not caused by their own choice • IBPT propose to find a solution for emergency calls and routing from nomadic VoIP

33. B. Belgium • Interconnection – regulation • Belgacom (incumbent) – Telenet (alternative operator) litigation • Telenet termination rates on Telenet’s PSTN are traditionally higher than Belgacom’s rates  dispute 1 • Termination on new Telenet VoIP network are even lower but Telenet asks for the same rates as for PSTN  dispute 2 IBPT Decision Belgacom and Telenet must negotiate in good faith  In the meantime, the (higher) charges of Telenet will apply

34. C. United Kingdom OFCOM has issued a “mandatory industry code” as May 29 2007 (some days ago): • Providers must make clear where access to the emergency services is not offered • Providers must make labels available making clear that emergency calls cannot be made and recommend that this label is fixed on the equipment • An announcement should be played each time the user tries to reach emergency services when there is no “999” access

35. C. United Kingdom • The users should be given the option to receive labels for the equipment which indicate any dependence on home power supply • If user location is available, the user should be required to provide the address of the place where VoIP service will be used and advised to update the information • Providers should inform that directory assistance, directory listings, access to the operator are not available • The provider must inform the user about his ability to keep his number if he chooses to switch providers at a later date

36. CONCLUSION Need for a new approach ? Will it be harmonized (differences between MS) ? Is VoIP to be followed by other new technologies? (technical neutrality of regulation to be respected) Thanks for your attention thibault.verbiest@ulys.net