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Toronto Computer Lawyers Group Regulatory Framework for VoIP in Canada

2. Regulatory Framework for VoIP. It's wrong, just plain wrong to not recognize the potential of VoIP, or to see it through the lens of the old telephone network regulatory model. VoIP is a data application and as such has all the hallmarks of the Internet itself."Michael Powell, Former FCC Chairm

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Toronto Computer Lawyers Group Regulatory Framework for VoIP in Canada

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    1. Toronto Computer Lawyers Group Regulatory Framework for VoIP in Canada Lorne Abugov and Phil Rogers January 17, 2006

    2. 2 Regulatory Framework for VoIP “It’s wrong, just plain wrong to not recognize the potential of VoIP, or to see it through the lens of the old telephone network regulatory model. VoIP is a data application and as such has all the hallmarks of the Internet itself.” Michael Powell, Former FCC Chairman, to the Voice on the Net Conference, Boston, October 19, 2004. “The Commission determines that local VoIP services should be regulated as local exchange services…” - CRTC Decision on the Regulatory framework for VoIP at para. 194.

    3. 3 Regulatory Framework for VoIP Framework established by Telecom Decision CRTC 2005-28 (May 2005) The CRTC decided that local VoIP services should be regulated as traditional wireline local exchange services (i.e. local phone service). Economic Regulation Local VoIP services will be subject to price regulation when they are provided by an incumbent (e.g. Bell or Telus) in that incumbent’s service territory. When an incumbent provides a customer with a telephone number within that incumbent’s territory, it must file a tariff and receive prior approval of the price it intends to charge for the VoIP service, just as it does when it provides traditional local telephone service.

    4. 4 Regulatory Framework for VoIP Economic Regulation (cont’d) New and potential entrants, including the cable companies, Vonage, Skype, AOL, etc. are free from any price regulation in their provision of VoIP Resellers Local VoIP service providers not operating their own transmission facilities (i.e. resellers like Vonage or Skype) must register with the Commission as resellers as a condition of obtaining services from a Canadian carrier or TSP. Facilities-based service providers, such as cable companies, are eligible to receive universal service subsidies (where applicable). Resellers are not eligible for subsidies.

    5. 5 Regulatory Framework for VoIP Access to Numbers and Local Number Portability Local Exchange Carriers providing VoIP services must implement local number portability. Facilities based carriers will maintain the right to directly access numbers from the Canadian Numbering Administrator (CAN), as well as the LNP database. Resellers have no direct access. Directory Listings Incumbents (telco’s) must continue to provide a comprehensive printed directory of telephone numbers in each local calling area. New carriers (like cableco’s) must provide the telephone numbers of their subscribers to the telco’s for that purpose. Resellers have to pay tariffed rates for the inclusion of the telephone numbers of their subscribers in the local phone directory.

    6. 6 Regulatory Framework for VoIP Directory Listings (cont’d) Directory listings for local VoIP services should appear in the local directory where calls to and/or from that number are local calls, regardless of the geographic location of the customer’s service address. Note customer may be located in Montreal but have a VoIP number that is “local” to Toronto. Winback Rules Incumbents are prohibited from attempting to winback a customer for a period of 12 months after that customer’s primary local exchange service or local VoIP service has been completely transferred to another local service provider unless the customer first calls and advises the telco that they intend to change local service provider. (Rule is subject to current legal challenge by Bell in Federal Court.)

    7. 7 Regulatory Framework for VoIP Access for persons with Disabilities and Message Relay Service (MRS): Special committee struck by CRTC to assess the accessibility needs of persons with disabilities and to report back to the Commission by January 31, 2006 identifying relevant issues, potential solutions and a plan for implementation of those solutions. (Committee has failed to agree on the scope of its mandate.) Local VoIP service offerings must function with the existing MRS system and related equipment as soon as is technically feasible.

    8. 8 Regulatory Framework for VoIP Other VoIP Regulatory Obligations: VoIP services providers must ensure the availability of privacy safeguards as soon as is technically feasible. VoIP providers must ensure the availability of basic 9-1-1 equivalent service now, and implement Enhanced 9-1-1 services as soon as is technically feasible. Major issues with 9-1-1 emergency community (still dealing with cellular problems). FCC threats to disconnect.

    9. 9 Regulatory Framework for VoIP Other VoIP Regulatory Obligations (Cont’d) All carriers that provide local VoIP service, including the cable companies, must fulfill CLEC requirements such as “equal access” choice for long-distance calling. (No “equal access” obligation for resellers like Vonage or Skype). VoIP services revenues will be assessed charges for contribution or universal service support (except for VoIP calls that stay On-Net i.e. no connection to telephone network.)

    10. 10 Pouring New Wine Into Old Bottles “In the Commission’s view, the fundamental purpose of circuit-switched local exchange services is to provide two-way, real-time voice communications to and/or from anyone on the PSTN. The Commission considers that the fundamental purpose of local VoIP service […] is the same.” CRTC Decision on the Regulatory framework for VoIP at para. 113. “We cannot dumb down the Internet to match the limited vision of the regulator. The Internet has characters [sic] and attributes that should be recognized and accepted, not ignored or brushed aside as inconvenient, or irrelevant. To regulate the Internet in the image of a familiar phone service is to destroy its inherent character and potential.” - Michael Powell, Former FCC Chairman, von magazine, Vol. 2, No. 5, Sept/Oct 2004 at 24.

    11. 11 Developing Issues for 2006 Net Neutrality/Open Access The Telecom Policy Review Panel cautioned that “this scenario where “a thousand applications bloom” is premised on an open access, open standards approach to IP networks.” – Telecom Policy Review Consultation Paper Network intelligence allows dominant players to prioritize their own packets and/or block or degrade those of other service providers that rely on integration with the dominant player’s underlying network. Though parties in the VoIP proceeding proposed that open access conditions be imposed on access providers and ISPs to safeguard against discrimination, the CRTC did not establish a prohibition on packet preferencing.

    12. 12 Developing Issues for 2006 FCC’s Net Neutrality Principles (Aug. 2005) 1. Consumers are entitled to access the lawful Internet content of their choice; 2. Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement; 3. Consumers are entitled to connect their choice of legal devices that do not harm the network; 4. Consumers are entitled to competition among network providers, application and service providers, and content providers. Q: Will Canada apply such principles, at minimum, where broadband network access is publicly funded?

    13. 13 Developing Issues for 2006 Tensions Between IP Technology and Regulation Equal Access obligations for “long-distance” calls – VoIP calls don’t start at a voice switch; E 9-1-1; Basic 9-1-1; Emergency response community concerns; lengthy delays re cellular 9-1-1; Privacy and Do Not Call regulation – focussed now on public telephone networks;

    14. 14 Developing Issues for 2006 Tensions Between IP Technology and Regulation (cont’d) Contribution/universal service funding: to date, Internet services have been exempt but VoIP now must pay (1% of what?); Lawful access/security issues: Federal government intent to impose obligations on all forms of electronic communication (Bill C-74); Disability/access issues: message relay; visual impairment; telecom and computer equipment not regulated; Jurisdiction: what jurisdiction over non-Canadian service providers?

    15. 15 Current Policy and Political Developments Telecom Policy Review Panel: Report due end of January Recommendations possible: Net neutrality Broadband funding New legislation Foreign ownership Cabinet (Governor in Council) Appeals pending; Change in Government?

    16. 16 Future Developments All voice/data applications on integrated IP platform; no separate voice network. All features and functions (Eg. voicemail; conference calling) software defined and managed by the user. What is the price or market value of “voice” service in such an environment? Voice as ancillary to other services: eBay/Skype Google Talk; Yahoo In/Out AOL IM and voice WiFi integrated with VoIP Sustaining/incenting investments by broadband access providers. History of forecasting of telecom changes – directional change; timing; prices; market share.

    17. 17 Regulatory Framework for VoIP Lorne Abugov Osler, Hoskin & Harcourt LLP 1500 – 50 O’Connor Street Ottawa, ON K1P 6L2 Direct Line: (613) 787-1019 Email: labugov@osler.com Phil Rogers Osler, Hoskin & Harcourt LLP 1500 – 50 O’Connor Street Ottawa, ON K1P 6L2 Direct Line: (613) 787-1113 Email: progers@osler.com

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