Transcript New Voice Services (VoIP)– Policy Options

VoIP - The Challenge for Regulators
Chris Mulley
30th November 2005
VoIP in The Public Sector
©Ofcom
VoIP – The Challenge for Regulators
• Section 1 – Introduction and Market Background
• Section 2 – Regulatory Principles
• Section 3 – VoB Challenges for Regulators
• Section 4 –NGN Challenges for Regulators
• Section 5 - Conclusions
©Ofcom
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Introduction - VoIP: A Service Level View
• VoIP provides the ability to carry voice over IP networks,
such as the Internet or a Next Generation Network (NGN).
• VoIP is wide ranging
– VoIP does not imply any particular user experience,
service provider, business model or terminal equipment
– The technology spans a wide range of applications
• Some services support interconnection to the Public
Switched Telephone Network (PSTN) to allow subscribers to
talk to traditional telephone users
©Ofcom
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Introduction - VoIP: A Network View
Switch
Switch
Switch
Circuit
• Each call has a dedicated pipe or “circuit” set up across
the network through which all its traffic flows. The circuit
ensures that calls can be made without interruption or
interference
• Traditional voice networks such as the PSTN use “circuit
switching” to get signals across the network
• Packet voice networks, such as VoIP, divide the voice into
small chunks or “packets” and send each separately
• At the far end, the arriving packets are assembled back
into continuous speech
• There is no dedicated path across which the data can travel
- each packet is sent individually by the route which seems
most efficient at the time
• There is no guarantee that the packets will arrive in the
correct order, at the right time, or even that they will
arrive at all
Internet
Packets
©Ofcom
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Market Background - The Challenges of VoIP for the Market
• VoIP provides a number of challenges to the existing voice market
• Increasing competition is impacting the market of traditional PSTN service providers
– Lower Barrier to Entry
– Reducing Costs
– Disruption
“It’s probably the most significant paradigm shift in the entire history
of modern communications, since the invention of the telephone”
Former FCC Chairman Powell
©Ofcom
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Market Background - Challenges for the Consumer
• For the consumer there is an expectation that a telephone service is a telephone
service, however, this is not necessarily the case.
• VoIP services can be provided a part of a bundle of services, for example a “triple play”
bundle, provided by an Internet Service Provider impacting the consumer’s choice of
voice service provider.
“If it looks like a telephone and I use it like a telephone, then it is a telephone”
©Ofcom
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Market Background - Two Key Areas of Regulatory Challenge
There are two distinct areas where the regulation of VoIP are a challenge
Voice over Broadband (VoB)*
NGN - BT 21st Century Network (21CN)
• End-to-end VoIP service provision
• Phone to phone services are now available in the UK
• These should look like a standard telephone service
• VoIP in the core network
• Complete replacement of BT’s network with an IP
to the end user
• But capabilities and reliability might differ from a
traditional telephone service
To what extent should these services be regulated
in the same way as traditional telephone services?
based Next Generation Network (NGN) could
take up to 10 years
• Key decisions about the architecture of this
network are currently underway
What does this mean for the future of interconnection
and the industry structure?
Nomadic
NI
Head Office
Branch Office
Internet
* VoB encompasses IP voice over the Internet, Intranets and cable networks
©Ofcom
Data Centre
Multiservice
access
node
Metro
node
Core
node
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VoIP – The Challenge for Regulators
• Section 1 – Background
• Section 2 – Regulatory Principles
• Section 3 – VoB Challenges for Regulators
• Section 4 – NGN Challenges for Regulators
• Section 5 - Conclusions
©Ofcom
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Ofcom’s Key Regulatory Principles
Regulatory Impact Assessment
• Ofcom’s principle duty under the Communications Act
2003 is to further the interests of citizens in relation to
communication matters and further the interests of
consumers in relevant markets, where appropriate by
promoting competition
• Ofcom also has duty to protect consumers against
detriment and the promotion of consumer awareness
1. Define
Market
5. If
necessary,
determine
remedies
2. Determine
if Significant
Market Power
3. Determine
if Abuse
4. Determine
whether
intervention
is necessary
Regulatory Withdrawal
©Ofcom
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Regulatory Background for Voice Services
• A set of legal obligations and rights for service providers is defined by the General
Conditions of Entitlement (GCoE)
• Implemented to be in line with EC Communications Directives
• Referenced by s45 and s46 of Communications Act 2003
• GCoE consist of 21 conditions some or all of which must be met depending on the
category to which a provider wishes to belong
– Based on the obligations and rights they wish to have
• All providers of Electronic Communications Networks/Services (ECN/ECS) fall into one
of three categories defined under GCoE:
– Providers of ECN/ECS
– Providers of Publicly available ECN/ECS (PECN/PECS)
– Publicly Available Telephone Services (PATS) providers
Provider of ECN/ECS
Provider of Publicly available ECN/ECS
PATS Provider
©Ofcom
Increasing number
of applicable
conditions
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Obligations and Rights under GCoE
Category
Characteristics
Provider of Electronic
Communications
Network/Services
(ECN/ECS)
All providers of electronic Conditions: 1.2/1.3, 2, 6, 7,
communication
17, 18, 19, 20
networks/services, both
public and private
networks, mobile and fixed,
voice telephony, data and
internet, as well as service
Providers of Publicly
Available Electronic
Communications
Network/Services
(PECN/PECS)
This category excludes
those providers of networks
and/or services which are
not available to the public
All of the conditions
applicable to providers of
ECN/ECS plus:
Conditions: 1 (all parts), 9
11.1/11.2, 14, 21
Providers of Publicly
Available Telephone
Services (PATS)
This category applies to
those providers which
enable the public to make
and receive phone calls.
All of the conditions
applicable to providers of
PECN/PECS plus:
Conditions: 3, 4, 5, 8, 10,
11, 12, 13, 15, 16
©Ofcom
Obligations
Rights
The right to request
number portability from
another network/service
provider.
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VoIP – The Challenge for Regulators
• Section 1 – Background
• Section 2 – Regulatory Principles
• Section 3 – VoB Challenges for Regulators
• Section 4 – NGN Challenges for Regulators
• Section 5 - Conclusions
©Ofcom
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Issues Identified So Far
Reviews
Stakeholder
Input
Disputes
Identify
potential
issues
Many Voice over Broadband
regulatory issues identified but some
more significant than others
Consultation
No
problem
•Numbering Arrangement
•Number Portability
•Availability of Emergency Calls
•Location Information for Emergency Calls
©Ofcom
Provide guidance
for clarification
•Network Integrity
•Line Powering
•Interconnection
•Retail pricing of calls to VoB
•Tone Dialling
Integrate into
existing work
Develop policy
and consult
•Naked DSL
•Text Relay
•Quality of Service
•Lawful Intercept
•Extra territorial service providers
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Numbering Arrangements
• VoB is location independent, while geographic numbering is location
dependent
• Ofcom received applications from several VoB service providers towards the
end of 2004 for large quantities of geographic numbers on a nationwide basis
• VoB services have low barriers to entry and are not geographically
restricted to physical points of connection
• This is having an impact on number allocation and availability
• Consequently, Ofcom consulted on Numbering Arrangements for VoB
Services
• The allocation of geographic numbers (01 and 02) to VoB Service
providers was allowed.
• An additional new 056 number range was introduced for use by VoB
service providers
• Making available numbers to support innovative services whilst ensuring
adequate consumer protection is part of Ofcom’s numbering strategy
• Germany and Spain have followed a similar approach to the UK. France and
Italy have followed a different strategy
©Ofcom
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Emergency Calls and PATS Providers
• The PATS provider category is where the regulation of VoB is most significant. Why?
– Because they it can provide a direct replacement for PSTN service.
– Other forms of VoB service are second line services, provided by PECN/PECS
category of providers. The consumer still has assured access to Emergency Calls
via their existing PSTN service.
– A consumer replacing their existing PSTN service with a VoB service expects a
similar set of capabilities to their previous PSTN service.
• Following the “If it looks like a telephone and I use it like a telephone, then it is a
telephone” philosophy
– The most significant of these capabilities being Emergency Call access
– VoB does not easily support PSTN “like” Emergency Call capability
©Ofcom
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Emergency Calls and Policy Objectives
Following Ofcom’s New Voice Services – Consultation and Interim Guidance of Sept. 2004,
when VoB was still considered a nascent technology, Ofcom took an “Interim” approach to the
provision of Emergency Calls on VoB services.
Policy Objective
• Not stifle innovation – allow a range of
business models to be tried/tested
– Avoid excessive obligations on VoB
services
– Allow access to number portability
What we did – ‘Liberal’ Approach
• PATS Policy in Sept 2004
– Providers had flexibility to
• Not offer 999 services and so
• Encourage max availability of good
quality 999
– Remove disincentive to offer 999
©Ofcom
–
avoid PATS obligations
• Offer 999 services but Ofcom
would forebear from the other
obligations
• Have number portability if PATS
criteria met in full
Approach reduced disincentive to
offer 999 services
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Emergency Calls and Consumer Protection
Policy Objective
What we did – ‘Liberal’ Approach
• Ensure consumer well protected
– … expectation that if the service
• Consumer Protection
– Consumers to be advised by VoB
–
–
©Ofcom
looks like a phone should behave
like a phone … (unless customer
clearly informed otherwise)
No expectation of Emergency
Access provision, if it is not
available
Well informed buyers and users
–
–
providers of the constraints when
using a service is not equivalent to
PSTN expectations
Industry guidelines drawn up by
Internet Telephony Service
Providers Association
Critical to have strong consumer
policy to ‘allow’ more liberal policy
approach
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Other Key Issues
• Network availability and line powering are two areas which also impact the provision
of emergency calls
– VoB service capability may differ greatly from those of PSTN service provision
– PSTN telephones are powered from the copper local-loop, whereas VoB telephones
require mains power for terminal adaptors and modems
– Current Regulatory Position
• A VoB provider falling into the PATS category is required to meet the network
availability requirements, unless the service is not offered at a fixed location
• Line powering is not feasible for VoB services
• Additional consumer guidance is essential to draw attentions to the
difference in capability between PSTN and VoB services
• Naked DSL is an up and coming issue
– Some VoB providers want to offer a broadband product to their
customers where the customer does not have to pay for
narrowband line rental
©Ofcom
Internet
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VoIP – The Challenge for Regulators
• Section 1 – Background
• Section 2 – Regulatory Principles
• Section 3 – VoB Challenges for Regulators
• Section 4 – NGN Challenges for Regulators
• Section 5 - Conclusions
©Ofcom
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Challenges for Regulation - Next Generation Networks
Different economic characteristics of Next Generation
Networks will mean new challenges for regulation
Network functionality layers of BT 21CN
• Technical and economic characteristics of ‘Next
Generation Networks’ are likely to be very
different from traditional PSTN networks:
• Voice services are implemented as VoIP
• Networks will be converged multi-service
Customer handling
Service assurance
Account functions
Network management
Service fulfilment
Service
management
platforms
• Network functions can be dispersed into
Intelligence
different layers and potentially to the
network edge
• Economics of each function may have
very different economic features, e.g.
barriers to entry and economies of scale
compared to traditional networks
• Costs will be reduced
• Rapid service innovation and product
diversity will possible
• Regulatory Challenge
• Ensuring Equivalence of Access at all
Multiservice
core
Multiservice
access
areas of the network which form economic
bottlenecks
©Ofcom
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VoIP – The Challenge for Regulators
• Section 1 – Background
• Section 2 – Regulatory Principles
• Section 3 – VoB Challenges for Regulators
• Section 4 – NGN Challenges for Regulators
• Section 5 - Conclusions
©Ofcom
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Conclusions
• VoIP is a disruptive technology that provides challenges for the market, consumer and
regulation.
• While VoB was considered a nascent technology Ofcom took an “interim” position to its
regulation. Ofcom now needs to develop regulation beyond this “interim” position as VoB
becomes more pervasive.
• A key area of this policy development is:
– To maximise the availability of 999 access to consumers and awareness of the difference in
the capabilities of some VoB services and traditional PSTN 999 services.
• Further policy development will depend on two approaches:
– Further consultation and guidance on the provision New Voice Services (Voice over IP) and
possible consultation and updating of the General Conditions of Entitlement
• NGN are raising a whole new range of issues for regulators
– Ofcom has been consulting on these issue in our Next Generation Networks Consultation
and Next Generation Networks: Further Consultation
– The main challenge for regulation of NGNs is ensuring Equivalence of Access
©Ofcom
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