IP Telephony

1. IP Telephony ECTRA – APRII MeetingBerlin, September 26-28, 2001 Robert Shaw <robert.shaw@itu.int> ITU Internet Strategy and Policy Advisor International Telecommunication Union The views expressed in this paper are those of the author and may not necessarily reflect the opinions of the ITU or its membership.

2. Agenda • Internet around the world • IP Telephony: • Implications for high, medium and low-priced markets • Country case studies • What are the issues? • World Telecom Policy Forum 2001: IP Telephony • Opinion D • Information resources • ENUM & Convergence

3. Number of Internet host computers, in millions, and annual growth in % Source: ITU, adapted from Internet Software Consortium <www.isc.org>.

4. Top Internet Markets Top 10 countries by number of Internet users (millions), Jan. 2001 Top 10 countries by Internet user penetration, Jan. 2001 Source: ITU, Internet Software Consortium <www.isc.org>, RIPE <www.ripe.net>.

5. 357 Mbit/s USA &Canada 56’241 Mbit/s 19’716 Mbit/s Asia-Pacific Europe 2’638 Mbit/s 468 Mbit/s 171 Mbit/s LatinAmerica & Caribbean Arab States, Africa 127 Mbit/s Inter-regional Internet backbone Source: TeleGeography Inc., Global Backbone Database. Data valid for Sept. 2000.

6. IP Telephony: What is it? • Internet Protocol (IP) Telephony is a generic term describing voice or fax carried over IP-based networks, such as the Internet. • IP Telephony is important: • In the short-term, because it cuts the cost of calls, especially if routed over the public Internet • In the longer-term, because telecoms carriers are migrating their separate voice and data networks to converged IP-based networks • Examples of IP Telephony Service Providers include Net2Phone, Dialpad.com, iBasis etc.

7. IP Telephony Flavours • Often treated differently from policy or regulatory perspective • Carried solely across the public Internet • IP is underlying transport or signalling technology for PSTN services (e.g., using SS7) • IP telephony on full end-to-end “private” IP networks (e.g., using “softswitch technology”) • Combinations of the above with gateways between Internet or private IP-based networks and the PSTN

8. IP Telephony: Four main stages of evolution • PC-to-PC (since 1994) • Connects multimedia PC users, simultaneously online • Cheap, good for chat, but inconvenient and low quality • PC-to-Phone (since 1996) • PC users make domestic and int’l calls via gateway • Increasingly services are“free” (e.g., Dialpad.com) • Phone-to-Phone (since 1997) • Accounting rate bypass • Low-cost market entry (e.g., using calling cards) • Voice/Web integration (since 1998) • Calls to website/call centres and freephone numbers • Enhanced voice services (e.g., integrated messaging)

9. Why is IP Telephony important?IP Telephony traffic, in million minutes 7'000 5.5% 6'000 As percentage of int'l 5'000 outgoing traffic 3.2% 4'000 3'000 1.6% 2'000 1'000 0.2% 0.0% 0 1997 1998 1999 2000 2001 Source: ITU Internet Reports, adapted from TeleGeography Inc.

10. Pricing IP for voice services • In competitive, low-price markets • Main market opportunity for IP Telephony is for value-added services, e.g., unified messaging • In markets in transition to competition • IP Telephony offers a route towards early introduction of competition and creates downward pressure on prices • In high-price, monopoly markets • Where permitted, IP Telephony creates opportunities for low-cost calls • Even if not permitted, IP Telephony is widely used to reduce costs of international call termination

11. Country positions on IP Telephony189 ITU Member States Unregulated, 26 countries Unregulated if not "real- time", 18 Regulated if No policy or No response 98 "real-time" 7 Light regulation 5 Prohibited 35 As of March 2001. Based on responses to ITU regulatory questionnaire and inputs to WTPF-01.

12. Country case studies: IP Telephony legal status Source: Summary of ITU country case studies, available at: www.itu.int/wtpf/casestudies.

13. WTPF 2001 on IP Telephony: What are the key issues? • Technical: • How to define IP Telephony? • Is quality of service comparable? Will it improve? • How to handle numbering/addressing issues? • Economic: • What price and cost savings can be expected? • How quickly will carriers migrate their networks? • Isn’t it just a form of bypass of telecom monopolies? • Regulatory: • Is it voice or is it data? • License it? Prohibit it? Restrict it? Liberalise it? • Should IP Telephony contribute to Universal Service?

14. WTPF 2001 Opinion D: Essential Studies to facilitate introduction of IP Telephony • Invites the three ITU sectors to initiate studies to facilitate the introduction of IP Telephony on: • compatibility and inter-operability of radio access between IP networks and PSTNs, • working definitions of IP telephony and Internet telephony • whether, and to what extent, to require compatibility with the existing international telephone service, including developing appropriate performance metrics and QoS • Whether, and to what extent, IP Telephony can be part of national PSTNs and whether traffic identification and measurement need to be considered • identifying the cost elements of international IP connectivity with respect to the introduction of IP Telephony • Invites the ITU-D to establish a group of experts to: • Prepare a checklist of Factors to be considered; • Advise on the policy impacts in developing countries; • Prepare a report to the next World Telecom Development Conf.

15. Information resources • ITU Internet Reports 2001: IP Telephony • Secretary-General’s report (soleworking document of the Forum) • Chairman’s report (output of Forum) • Website: www.itu.int/wtpf • Country case studies: Canada, China, Colombia, Egypt, Korea (Rep.), Nepal, Peru, Uganda, etc

16. ENUM & Convergence • Problems of addressing calls that pass from one network service to another: • Now widely possible to originate calls from IP address-based networks to other networks • But uncommon to terminate calls from other networks to IP address-based networks • To access a subscriber on an IP address-based network, some sort of global addressing scheme across PSTN and IP address-based networks needed • ENUM may be “glue” solution…

17. Protocol Service Address SIP Sip:whitehouse@xyz.com SMTP Smtp:abc@xyz.com TEL Tel:+1202 456 1414 HTTP http://insite.whitehouse.com Page Page:18001112223334445 ENUM Resolution DNS 4.1.4.1.6.5.4.2.0.2.1.foo.tld +1 202 456 1414 ClientSoftware ENUM converts an E.164 telephone number into a set of service addresses

18. From Secretary-General’s Report to ITU Council 2001 • ENUM potentially renews the question of the appropriate framework for management of naming and addressing in an increasingly converged telecommunications and Internet/IP environment. • It is likely that implementation of ENUM may introduce further review of public policy objectives vis-à-vis the DNS and the E.164 numbering plan at national and international levels.

19. Views of INTUG • Possible that ENUM might have effects on some or all of the following: • integrity of national numbering schemes • competition between service providers • telecommunications network security • number portability • carrier selection • emergency services calls (including the passing of location information) • privacy • control over personal records • control of slamming

20. Thank you…