Regulatory Implications of VoIP

IP infrastructure development: The availability of IP infrastructure is a precondition for the provision of VoIP services.  The development of IP infrastructures is both a market and a regulatory challenge. The design of an efficient regulatory regime can help development of IP infrastructures and their extension to less served areas. When it comes to rural and less served areas the new wireless technologies play an important role, where a combination of wireless infrastructures and VoIP service can enable a more efficient development of all communications services, including basic voice services.

QoS: In managed VoIP services it is possible to provide measurable QoS. This is the case with incumbent operators who often carry PSTN calls as data over segments of their network, with VoIP on corporate virtual private networks (VPNs) and with peering of VoIP services. For unmanaged, ‘best-effort’ VoIP, QOS depends upon the bandwidth and server capacities available in the end-to-end network.

The important thing is the transparency with regard to the quality of services provided. A best effort service provider has no means to guaranty QoS at the network level. It can offer easy nomadic use or favorable pricing to differentiate its services and attract consumers. However, it is important for the consumers to have knowledge about the different QoS provided.

Another important issue is the willingness of facility based operators to offer access to QoS provision to non-facility based operators. For example, a major debate in Europe and other regions is the lack of QoS provision in the wholesale bitstream access products offered by the PSTN incumbents.  

Given the layered nature of IP networks, and the services and applications that operate over them, QoS for VoIP needs to reflect both the underlying network and the VoIP application.  The ITU is setting international standards for performance objectives in IP networks with a reference architecture (Y.1542) that assigns critical service performance parameters to the various network elements to provide an end-to-end QoS regime for internationally-delivered services.  It is up to national regulatory (and industry self-regulatory) bodies to convert the Y.1542 reference architecture and performance quotas into a national architecture with national network elements, in the form of industry guidelines. The network elements would need to include customers/end-users equipment, access networks and transit/backhaul networks.  A testing and measurement regime could then be defined to permit monitoring and enforcement of the guidelines. 

VoIP peering: Today, the most widely deployed business model is that of a VoIP service provider that offers free telephony services to its own subscribers and charges the customers for interconnection to the PSTN (to recover costs of termination; eg for Skype-out). A connection between subscribers of two different VoIP operators generally goes through PSTN. However several peering initiatives between VoIP operators have been introduced, effectively bypassing the PSTN operator; which reduces costs and improves QOS.

Security and consumer protection: In regular telephony services the security and consumer protection standards have been defined and are generally found adequate. With regard to VoIP services there is no one-to-one relation between the service and the physical infrastructure. VoIP is just another IP service conveyed in the IP networks and anyone with access to the network can tap the signal and actively damage the integrity of the message and the signal. To assure privacy the VoIP provider can implement end-to-end encryption, which is not 100% secure but can establish security levels comparable to those of regular telephony. The encryption will on the other hand prevent the authorities from lawfully tapping the VoIP signal. Different models for a solution to this can be found. But the most future proof solution will connect this type of security issue to IP connections generally, and VoIP will then be a treated as a sub-set of the general solution.

Numbering:  VoIP services will co-exist with traditional public telephony for many years before the transition to all VoIP is completed.  More than half the countries responding to an ITU survey said the use of fixed service (E.164) numbering is permitted. Since VoIP services are not fixed services, this may create a problem for geographic number systems. For example, UK residents may wish to take a UK phone number to Greece. These nomadic VoIP services are now regularly offered in some countries, but prohibited in others. European directives do not specifically indicate the criteria for assigning geographic or non-geographic numbers, or to whom they should be assigned. In Italy, both geographical and non-geographical numbering systems are possible.

Or, a completely different number range for VoIP services can be used.  Hong Kong (China) uses prefixes to distinguish between the different classes of VoIP numbers.

But there are other possibilities. Already, email addresses, ‘Skype’ & ‘Facebook’ names are successfully utilised for a variety of applications including VoIP.  What will be the long term of end users preference is unclear.   

Emergency call and positioning:   The possibility to make emergency calls and to route the call to the nearest authority (fire department, police, hospitals, etc.) has been defined as a core element of Public Available Telephony Services in Europe [1[]. Similar requirements are part of regulationin other countries. Even in countries with well-defined regulatory frameworks, discrepancies are apparent.  For example, in the United  States,  Skype  is  not  required  to  provide  access  to emergency  calling  services (and  does  not  provide access), but Vonage is required to (and does). 

With VoIP it is possible to maintain the positioning and routing information for emergency calls. However this requires use of VoIP services from fixed locations. But, in nomadic use fixed VoIP services cannot be connected to the emergency call.

The situation is better with mobiles. Given the wide spread growth of smartphones and other handheld devices, applications for emergency assistance which provide location information and type of assistance required are being trialled and should be available more universally in the future.  Such applications could replace/complement voice based emergency calls systems. 

Power/Universal Service:  Originally, telephones had a wind-up handle to crank-up a magneto to send communications up the line to the exchange. This came with wall mounted dry-cell back-up batteries.  A major improvement in traditional telephony service came with power delivered over the copper telephone line from the exchange. Back-up power at the local exchange allowed the phone to work in the case of electricity system power failure. VoIP could reverse this.

The current VoIP services/terminals are dependent on a functioning power supply. It cannot come from the exchange in an emergency. Requiring VoIP service to provide battery back-up for each customer for life-line service would put an enormous burden on the VoIP operators and slow development of service to un-served rural areas.  There would also be significant environmental costs to supply and maintain backup power supplies/batteries universally.  Debate on whether any battery back-up model is opt-in or opt-out is likely to continue into the future. 

The role of mobile phones and other wireless devices needs to be considered in any solution. 

Interconnection to legacy networks:  Interconnection to the legacy PSTN networks is essential for the success of VoIP services (eg Skype-out for calls to PSTN numbers). This interconnection is implemented by using gateways and contractual agreements between VoIP providers and PSTN operators. Fair and non-discriminatory conditions for interconnection are a precondition for successful development of VoIP. If fair and non-discriminatory conditions for interconnection are not established in a timely fashion in the marketplace, regulators should intervene following traditional interconnection principles.


[1] For more detailed outline of the European discussion see ‘Communication staff working document on the treatment of Voice over Internet Protocol (VoIP) under the EU regulatory framework, Brussels, June, 2004


GSR 2009 Discussion Paper, Voice over Internet Protocol (VoIP): Enemy or Ally November 2009, P. Biggs

Learn More