Effective Regulation Seminar

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Effective Regulation Seminar

• VOIP and other  Special Cases  such as WiFi

Accra, 4-8 July, 2005
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VOIP

• Principles
• Predictably, as has been occurring in most
  countries, a variety of emerging technologies
  that will lead to a potential erosion of traffic
  and revenues for incumbants in particular
• The most recent such technology is Voice over
  Internet Protocol (VoIP).
• At issue is how governments should define and
  treat VoIP.

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1. VOIP
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VOIP

• Principles
• Although VoIP is a data packet technology, to
  customers, it looks like a voice product and thus
  is treated as a possible replacement for
  traditional circuit-switched phone service
• In the absence of a clearly defined regulatory
  environment, the use of VoIP will create
  difficulties for the regulator, the incumbent,
  the operator providing VoIP as well as for
  consumers
• Grey markets in international VoIP calling have
  sprung up almost everywhere around the world,
  especially in those countries where calling rates
  are high because operators such as ISPs and
  cyber-cafes can offer the calls more cheaply and
  still make a profit. In such instances, policing
  of these services has proved to be difficult.

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VOIP

• Principles
• The application of any regulation and licensing
  in regards to VoIP services should entail a
  justified balance between the policy objectives
  of promotion of competition, the development of
  the market and the promotion of interests of
  citizens.
• Also, regulating and taxing VoIP service has
  proven difficult and this consideration should be
  taken into account in defining a VoIP policy.

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VOIP

• Definition of VOIP
• June 2004 European Union Consultation Paper
• A VoIP offering that comprises provision of a
  product (e.g., a software program to be run on a
  personal computer), with no ongoing provision of
  a service, is not within the scope of the EU
  regulatory framework if it does not entail
  provision of an Electronic Communications
  Service15. This applies even if the VoIP offering
  allows for voice communications between users who
  have purchased the product.
• Corporate private networks, used to provide
  internal communications within large companies,
  are within the scope of the EU regulatory
  framework in that they are covered by the
  Authorization Directive16, but there are no
  specific obligations addressed regarding private
  networks. There are no conditions or
  restrictions on the use of VoIP services that are
  used inside a corporation for the sole use of
  that corporation.

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VOIP

• Definition of VOIP
• June 2004 EU Consultation Paper (cont d)
• The same goes for VoIP technologies that are used
  within a public operators core network and that
  do not infringe on the retail services offered to
  customers nor on the quality of those services
• Publicly available VoIP services, where there is
  access to and from E.16417 telephone numbers, do
  fall under the EU regulatory framework. There
  are many varieties of publicly available VoIP
  service offerings, and the regulatory treatment
  depends on the nature of the service being
  offered. Any classification of those different
  varieties is unlikely to be stable, given the
  pace of technological and market-driven change.
  Hence, there should not be any formal, rigid
  classification of different, publicly available
  VoIP service offerings.

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VOIP

• Classifying VOIP
• Distinguishing between IP Telephony and VoIP
• Some jurisdictions have made a distinction
  between the different forms of IP telephony, thus
  distinguishing between IP telephony and VoIP and
  have crafted their regulatory environment around
  these terms
• In Malaysia, there are currently two ways in
  which VoIP service can be provided
• PC to PC- based or what is known as Internet
  telephony, and
• Phone to phone based through Public Switched
  Telephone Network (PSTN), which involves
  multistage access dialling known as VoIP.
• The Ministry of Energy Communications and
  Multimedia had issued a policy position that the
  provision of PC to PC based Internet telephony is
  not subject to licensing. However, in the case
  of VoIP, provision of the service requires an
  Applications Service Provider (ASP) individual
  licence as stipulated in the Communications and
  Multimedia (Licensing) Regulations 2000. The
  existing telecommunications operators are allowed
  to provide the services under the licence issued
  under the repealed Telecommunications Act

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VOIP

• Classifying VOIP
• VoIP Is Equivalent to Voice
• Some regulators have classified VoIP services as
  being functionally equivalent to other voice
  telecommunications services and therefore subject
  to the same regulatory regime as the incumbent
  operators.
• The Canadian Radio-television and
  Telecommunications Commission (CRTC) issued a
  preliminary view that its existing regulatory
  framework should apply to VoIP services.The view
  was based on the fact that VoIP offers voice
  communication services with the same key
  characteristics as traditional Public Switched
  Telephone Network (PSTN) services.
• In Australia, the ACAs working assumption is
  that most VoIP services will fall within the
  scope of the standard service definition, as
  determined by the Telecommunications (Consumer
  Protection and Service Standards) Act 1999, and
  will automatically attract a number of regulatory
  rights and obligations. Any relief from such
  obligations (or forfeiting of rights) would be by
  way of an exception to service providers or
  classes of service providers if policy
  considerations warranted it.

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VOIP

• Classifying VOIP
• IP Telephony as a Service or a Technology
• Others have made a distinction between IP
  Telephony as a service and as a technology and
  have chosen to be more or less restrictive in the
  regulation of the technology and the service.
• In Bahrain, for example, the TRA is neutral with
  respect to the technology used by a licensed
  operator. The TRA has determined that IP is a
  perfectly acceptable means of carrying voice
  traffic. However, the TRA makes the point that
  it is an acceptable means for carrying traffic if
  operators have an appropriate licence. This
  means that, irrespective of technology used,
  voice services may be delivered only by holders
  of either (or both of) a national fixed services
  licence, or an international services licence.
  The TRAs position is that the IP protocol cannot
  be used as a means of bypass. Hence, the
  delivery of telephone calls by licensees other
  than those previously stated is not permitted.
  Specifically, this means that voice calls must
  not be made available by an ISP unless such
  licensee also holds either of the appropriate
  licences.
• In Singapore, prior to the liberalization of the
  telecommunications market in April 2000, only
  SingTel could provide IP-based telephony service.
  The only exception was computer to computer
  telephony calls between two Internet users.

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VOIP

• Attitudes Towards VOIP
• Outright Bans
• In a number of countries (mainly developing
  nations), VoIP is banned outright with exceptions
  usually granted only to existing licensed public
  telephone operators. This is generally the case
  in most countries where the incumbent still
  enjoys exclusivity and/or are still the dominant
  operator in the market. The implied fear by
  governments in restricting VoIP is that consumers
  may discover it to be an inexpensive and
  convenient alternative to mobile or land based
  phones.
• Note Even where banned outright, it is apparent
  that IP telephony takes place to varying degrees
  either through calls made, or received using a
  PC-to-Phone service like Dialpad or Net2phone.
  The majority of IP-based traffic, is however,
  inbound. The ITU notes that this occurs because
  offshore IP telephony companies can negotiate
  with domestic ISPs who have their own
  international gateways, for instance over VSAT
  satellite dishes. The IP telephony companies
  provide ISPs assistance for purchasing equipment,
  allowing them to route international calls coming
  in over the Internet to the public telephone
  network.

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VOIP

• Attitudes Towards VOIP
• IP Telephony Permitted without Restrictions
• In the European Union, VoIP is defined as a
  technology that can be used to provide a range of
  electronic communications services. Under the EU
  Framework, players are free to enter the market
  for electronic communications services without
  prior authorization, provided they abide by the
  conditions set out in the general authorisation
  applicable in each Member State. The general
  authorisation sets out rights and obligations for
  the providers of publicly available electronic
  communications networks and services. There are
  additional rights and obligations for providers
  of publicly available telephone services and for
  those providers that have universal service
  obligations

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VOIP

• Attitudes Towards VOIP
• IP Telephony Permitted with certain restrictions
• In Hong Kong, IP Telephony is permitted for the
  operation of networks and services within Hong
  Kong and for communications between Hong Kong and
  the rest of the world. Hong Kong has adopted a
  technology-neutral approach in licensing of
  networks and services and therefore considers
  that all forms of IP Telephony are permitted,
  including PC-to-PC, PC-to-Phone and
  Phone-to-Phone. An interesting fact is that in
  Hong Kong, operators of external
  telecommunications services have the obligation
  of sharing the cost of providing universal
  service of the domestic telephone network in
  accordance with the volume of traffic handled
  with this obligation being independent of the
  technology used.
• Colombia, argues that VoIP constitutes voice
  services and that such voice services can be
  provided only by international long distance
  providers that have a licence.

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VOIP

• Attitudes Towards VOIP
• VOIP Permitted with Restrictions
• Some countries have seen that a liberal approach
  to VoIP can meet various goals.
• With a small loan from the World Bank and a
  progressive initiative, a Togolese company
  established the first VoIP call centre in Africa.
  Contrary to most African countries that either
  ban outright the practice of making phone calls
  via the Internet or impose strict regulations on
  VoIP service, Togo has taken a more liberal
  approach. Togos innovative call centre permits
  its practitioners to tap into a rapidly growing
  and lucrative trend of call centre outsourcing.
• In other cases, a special VoIP licence may be
  created which generally restricts VoIP services
  from competing directly with established voice
  telephony providers, by specifying the types of
  connections that may be made by a VoIP service or
  by classifying the services in a different manner
  than established fixed or mobile networks.

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VOIP

• Attitudes Towards VOIP
• VOIP permitted with certain restrictions
• Mauritius allows a Network Applications Service
  Provider to secure a licence to provide Internet
  Telephony Service as long as no call that takes
  advantage of VoIP services terminates on a
  traditional fixed or mobile telephone in
  Mauritius. Mauritius has authorised the
  provision of three IP Telephony/VoIP services,
  and moved towards a licensing regime. Two types
  of licences for operators exist in Mauritius - a
  fixed line license and a VoIP operator license.
  Operators are allowed to charge different rates
  for the connection and users are often willing to
  pay premium rates for fixed line calls, which are
  perceived to be of a better quality.

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VOIP

• Attitudes Towards VOIP
• VOIP permitted with certain restrictions
• South Africa and Zambia, for example, have opened
  the door to restricted use of VoIP in rural areas
  in order to reduce the cost of communications in
  these low-teledensity areas.
• In Egypt and Uganda, licensed telcos are
  authorised to provide IP telephony on the basis
  that it is a voice service for which incumbent
  operators have an exclusive license. In Egypt,
  the incumbent also has an agreement to deal with
  US IP telephony carriers to provide voice through
  a direct private IP link with the US.

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Situation of VOIP in Africa
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Situation of VOIP in Africa
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Situation of VOIP in Africa
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Situation of VOIP in Africa
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WiFi
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WiFi

• From a regulatory standpoint, there are two
  issues.
• The first is related to the use of the frequency
  itself and has several aspects. One is whether
  to treat the ISM band as unlicensed. If so, then
  WiFi should be permitted provided its
  transmitting characteristics fall into those
  designed for that band.
• However, in some countries, the 2.4 GHz frequency
  is considered licensable.
• In others, the frequency has been allocated to
  other users. For example, in the Philippines,
  the electrical utility was authorized to use the
  2.4 GHz band while in Singapore, the Land
  Transport Authority used the band for its
  electronic road pricing scheme.
• Another spectrum-related problem is interference
  caused by equipment operating in excess of the
  standard. Nigeria has found that although the
  band is unlicensed, there were numerous
  violations of the conditions for the bands use
  and this is not an isolated example

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WiFi

• The second issue is not related to the WiFi
  technology itself, but to whether an entity
  providing a public hotspot service needs to be
  licensed or authorized.
• For example, does the entity subscribing to an
  ISP service and reselling or providing its
  Internet access to the public for free in a
  limited zone need to be licensed or authorized.

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WiFi

• Regulatory Approach Many regulatory authorities
  are taking a hands-off approach to regulation of
  public WLANs as long as they are operated within
  certain broad technical parameters.

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WiFi

• In Malaysia, for example, the provision of
  wireless LAN activities (such as hotspot areas)
  is localized and would not require registration
  with or application to the MCMC provided that the
  business (or the service provided) is not
  involved in any of the following categories as
  defined by the Law
• (a) Network Facilities Provider (NFP)
  activities
• (b) Network Services Provider (NSP) activities
• (c) Applications Services Provide (ASP)
  activities
• Prospective providers of wireless hotspot
  Internet services who arrange with a licensed
  Internet Access Service Provider (IASP) for
  access to the Internet would not require
  licensing under the CMA 1998. However, as this
  is not an Internet ASP (IASP) service, users
  would not be protected by any Quality of Service
  Determinations. It will be up to said providers
  to compete to provide the best service they can.

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WiFi

• Existing users of the ISM band in Singapore were
  migrated to other frequencies thereby enabling
  the regulator to free it for unlicensed Wi-Fi
  use.
• In Hong Kong SAR, where the WiFi market had been
  unlicensed, the regulator has required a class
  licence from January 2003. The licence, which
  does not require approval, is automatically
  granted upon registration of the name, contact
  details, location of the service and frequency
  band used
• Providers of public WiFi access in South Africa
  must be registered ISPs and must record the names
  of users and retain that information for at least
  six months. There, the regulator noted that a
  WiFi hotspot is functionally no different than
  Internet cafés (which have not been licensed in
  that country). Therefore, in the interest of
  preserving technology neutrality, the regulator
  determined that hot spot providers were exempt
  from licensing provided they offer the service
  within their customer premises.

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WiFi

• The European Commission adopted a Recommendation
  in March 2003 that called upon EU Member States
  to facilitate the use of public WLANs.
• It recognized the importance of WLANs as an
  alternative platform for broadband access to
  information society services and suggested that
  it was now desirable to promote a harmonized
  approach for the provision of public WLAN access
  throughout the Community.
• To that end, the Recommendation advises that the
  provision of WLAN access on a commercial basis
  should be allowed under the least onerous system,
  i.e., to the extent possible without any specific
  conditions.

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WiFi

• The European Commission (contd)
• The Framework Directive also lays down the
  principle of technologically neutral regulation,
  so that there should be no discrimination between
  the various WLANs and other technologies giving
  access to communications networks and services.
  As an example of how the recommendation has been
  applied, France does not require any licence for
  the provision of WLAN services.
• Private WLAN use or its provision by an already
  licensed public operator is allowed without the
  need for any regulatory notification a simple
  declaration is requested for those who are
  providing public WLAN access and do not have a
  public network licence