IP Voice and Associated Convergent Services

1
IP Voice and Associated Convergent Services

• 15 March 2004

2
Agenda

• 2.30 Opening
• 2.35 David Cleevely introduction
• 2.50 James Allen the New Regulatory Framework
  and voice over IP
• 3.25 Michael Kende the NRF and associated
  convergent services
• 3.45 James Allen summary of issues arising from
  the study
• 4.10 Short commission presentation
• 4.25 Question and answer session
• 5.30 Close

3
Introduction

• David Cleevely

4
Aims of the study
Introduction

• The study aims to identify and explain the
  important issues associated with the transition
  from the existing circuit switched PSTN to
  IP-packet switched networks in providing voice
  and associated convergent services
• these issues encompass regulation, technology,
  economics, and the structure of the telecoms
  market
• The target audience is staff within National
  Regulatory Authorities (NRAs) and governments

5
Context
Introduction

• We are raising issues
• We are working from the current legal position in
  each Member State (i.e. the NRF as transposed
  into national law is a given)
• in keeping with the NRF, we are deregulatory in
  stance
• The opinions expressed in this study are those of
  the authors and do not necessarily reflect the
  views of the European Commission

6
Introduction

• It's probably the most significant paradigm
  shift in the entire history of modern
  communications, since the invention of the
  telephone.
• FCC Chairman Michael Powell
• World Economic Forum in Davos, Switzerland 2004

7
The transition to VoIP will take time
Introduction

• Equipment replacement cycles
• Broadband access network deployment
• Take-up of broadband Internet access byend-users
  
• Attractiveness of the new VoIP service offers
  (strongly affected by existing competition within
  the voice calls market)
• The impact of these factors will vary by country
  and region

8
In January 1994, we asked How long will it be
before you can download a PBX from the Internet?
Introduction
Source VoiSpeed, 2004
9
Nothing less than the demolition of Japans
telecom industry Wired Magazine, August 2003
Introduction
Source http//bbpromo.yahoo.co.jp
10
The New Regulatory Framework and Voice over IP

• James Allen

11
Agenda
The New Regulatory Framework and VoIP

• Definitions
• New Regulatory Framework
• VoIP business models
• Issues that arise from VoIP services under the
  NRF
• Views of other regulators

12
Internet protocol (IP)
The New Regulatory Framework and VoIP
Definitions

• The protocol standards used by the Internet
  (strictly, only the Internet networking protocol,
  but commonly used to include a whole related set
  of protocols)

13
Voice over Internet Protocol (VoIP)
The New Regulatory Framework and VoIP
Definitions

• Used here as a generic term for the conveyance of
  voice, fax and related services, partially or
  wholly over packet-switched, IP-based networks

14
Public switched telephone network (PSTN)
The New Regulatory Framework and VoIP
Definitions

• A synonym for traditional circuit-switched
  telephone networks offered by public
  telecommunication operators (PTOs), as well as
  integrated services digital networks (ISDN), and
  public land mobile networks (PLMN)
• Source ITU World Telecommunication Policy Forum
  report

15
Electronic communications service (ECS)
The New Regulatory Framework and VoIP
Definitions

• A service normally provided for remuneration
  which consists wholly or mainly in the conveyance
  of signals on electronic communications networks,
  including telecommunications services and
  transmission services in networks used for
  broadcasting, but exclude services providing, or
  exercising editorial control over, content
  transmitted using electronic communications
  networks and services it does not include
  information society services, as defined in
  Article 1 of Directive 98/34/EC, which do not
  consist wholly or mainly in the conveyance of
  signals on electronic communications networks

16
Publicly available telephone service (PATS)
The New Regulatory Framework and VoIP
Definitions

• A service available to the public for originating
  and receiving national and international calls
  and access to emergency services through a number
  or numbers in a national or international
  telephone numbering plan, and in addition may,
  where relevant, include one or more of the
  following services the provision of operator
  assistance, directory enquiry services,
  directories, provision of public pay phones,
  provision of service under special terms,
  provision of special facilities for customers
  with disabilities or with special social needs
  and/or the provision of non-geographic services

17
Public telephone network
The New Regulatory Framework and VoIP
Definitions

• An electronic communications network which is
  used to provide publicly available telephone
  services it supports the transfer between
  network termination points of speech
  communications, and also other forms of
  communication, such as facsimile and data

18
The New Regulatory Framework and VoIP

• Definitions
• New Regulatory Framework
• VoIP business models
• Issues that arise from VoIP services under the
  NRF
• Views of other regulators

19
What is the regulatory framework?
The New Regulatory Framework and VoIP
New Regulatory Framework

• The new (2003) directives governing the
  regulation of electronic communications in
  Europe
• Framework
• Authorisation
• Access and Interconnection
• Universal Service
• Data Protection

20
Under the NRF how a service is classified
determines its regulation
The New Regulatory Framework and VoIP
New Regulatory Framework
Unregulated (not electronic communications
services)
Private
Regulated as private electronic communications
services
Regulated as public electronic communications
services
Regulated asPublicly AvailableTelephone Services
Data services e.g. IM and PM
PSTN-equivalentvoice
Convergent services
Public
Looks like data
Looks like voice
21
Summary of the powers of NRAs
The New Regulatory Framework and VoIP
New Regulatory Framework

• General conditions of authorisation for providers
  of
• Private ECS
• Public ECS
• PATS
• PATS at a fixed location
• PATS providers which are USO providers

22
Summary of powers of NRAs beyond general
conditions of authorisation
The New Regulatory Framework and VoIP
New Regulatory Framework

• Certain ex-ante powers (e.g. under Article 5 of
  the Access directive) can be applied to a wide
  set of operators
• A range of proportionate, ex-ante remedies can be
  applied to SMP operators in relevant markets
• the EC has a role in ensuring relevant markets
  and market definitions are appropriate
• Ex-post competition law can be applied

23
The New Regulatory Framework and VoIP

• Definitions
• New Regulatory Framework
• VoIP business models
• Issues that arise from VoIP services under the
  NRF
• Views of other regulators

24
We divided VoIP into five business models
The New Regulatory Framework and VoIP
VoIP business models

• Self-provided DIY
• Voice service independent of ISP Vonage
• Voice service sold by ISP Yahoo!BB
• Corporate internal use
• Carrier internal use

25
Self-provided VoIP DIY
The New Regulatory Framework and VoIP
VoIP business models

• Software available to download from the Web
• might be goods not services
• Use a broadband connection to chat online
• Skype, ichatAV, etc.
• Not simple to use mostly hobbyists
• Not a cost saving on mobile networks
• Free, but no interface to the PSTN
• however, 0800 numbers can now be called from Free
  World Dialup and others

26
Commercial model and implications
The New Regulatory Framework and VoIP
VoIP business models

• I carry my own costs, you carry yours
• Traffic relies on the Internet access you already
  have
• Small amount of revenue may disappear from the
  telecoms market

27
Voice service independent of ISP Vonage
The New Regulatory Framework and VoIP
VoIP business models

• Software download or an ATA
• needs broadband
• Can provide interface to PSTN
• Can provide extra services virtual
  numbers,Blast me
• Can cause big changes in tariffing
• flat-rate national calls
• Hard to guarantee quality due to large numberof
  intermediate players

28
Commercial model and implications
The New Regulatory Framework and VoIP
VoIP business models

• Economics depends on margin between retail voice
  calls and termination costs
• Small, but growing (100k in US)
• Low barrier to entry
• Very similar to indirect access in many ways

29
Voice service sold by ISP Yahoo! BB
The New Regulatory Framework and VoIP
VoIP business models

• Service provider controls access network
• Can guarantee QoS
• With high bandwidth codecs, quality can be better
  than the PSTN
• Typically bundles calls with Internet access
• ATA is integrated into DSL modem
• Yahoo!BB and Fusion in Japan are the best known
  examples (5 million lines)

30
Commercial model and implications
The New Regulatory Framework and VoIP
VoIP business models

• Free on-net calls often offered
• Cheap off-net calls (including to other VoIP
  users)
• But why havent big European ISPs done it yet?
• Not such a straightforward cost saving if there
  is vigorous PSTN competition

31
Corporate internal use
The New Regulatory Framework and VoIP
VoIP business models

• Could be self-provided or outsourced
• Uses common IP network with data communications
• Big opportunity through the PBX replacement cycle

32
Commercial model and implications
The New Regulatory Framework and VoIP
VoIP business models

• Can be goods rather than services
• Now economic in greenfield sites
• Early adopters are using it
• Many users worried about resilience
• Opportunity for non-traditional vendors
• IT services outsourcers
• IP equipment manufacturers

33
Carrier internal use
The New Regulatory Framework and VoIP
VoIP business models

• Services continue as now
• End-user is unaware of change
• does not necessarily use an IP device orget
  access to the Internet
• Last mile is unchanged
• Local concentrator, switch are utterly
  transformed
• In mobile networks, depends on adoption of 3GPP
  releases

34
Commercial model and implications
The New Regulatory Framework and VoIP
VoIP business models

• Motivation is cost savings
• one network rather than N networks
• Capex required is very significant
• May take ten years to complete
• May take ten years before it starts!
• Regulatory costing will change
• Interconnection will be a major cause of disputes
  between operators

35
The New Regulatory Framework and VoIP

• Definitions
• New Regulatory Framework
• VoIP business models
• Issues that arise from VoIP services under the
  NRF
• Views of other regulators

36
The business models and how they are classified
under the NRF 1
The New Regulatory Framework and VoIP
VoIP business models

• DIY Maybe not a service, maybe private
  or public ECS
• Vonage Public ECS, maybe PATS
• Yahoo!BB Public ECS, maybe PATS
• Corp. int. use Maybe not a service, maybe a
  private ECS
• Carrier int. use Public ECS, likely to be
  PATS, possibly with SMP

37
The business models and how they are classified
under the NRF 2
The New Regulatory Framework and VoIP
VoIP business models
Unregulated (not electronic communications
services)
Private
Corporate internal use
Regulated as private ECS
DIY
Regulated as public ECS
Regulated asPATS
Yahoo!BB
Carrier internal use
Vonage
Public
Looks like data
Looks like voice
38
Two key questions
The New Regulatory Framework and VoIP
VoIP business models

• Which regulatory obligations will apply to VoIP
  service providers?
• None / private ECS / public ECS / PATS / PATS at
  a fixed location /SMP in relevant markets
• Specifically, when would service providers be
  providing PATS?

39
The New Regulatory Framework and VoIP

• Definitions
• New Regulatory Framework
• VoIP business models
• Issues that arise from VoIP services under the
  NRF
• Views of other regulators

40
Issues arising from VoIP
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• Definition of PATS and its interpretation
• Why this matters
• Obligations of providers of PATS
• Emergency service access
• Network and service resilience
• Obligations of providers of PTNs

41
Definition of PATS and its interpretation
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• Narrow view any VoIP provider which does not
  offer access to the emergency services is not
  PATS, and any that does is PATS (which is clear
  and simple, but will lead to a disincentive to
  provide access to the emergency services)
• Broad view any VoIP provider that provides a
  service in direct competition with (and as a
  substitute for) the PSTN is PATS

42
Obligations of providers of PATS
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• Providers of PATS are subject to additional
  duties over and above providers of public ECS
  under the Universal Service Directive
• These conditions include
• Article 23 All necessary steps to maintain
  proper and effective functioning of network and
  access to services (provided at fixed locations
  only)
• Articles 2627 National and single European
  emergency number access

43
There is a balance between users needs and
disincentives to provide 112
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• In order to avoid becoming PATS, operators may
  exclude access to emergency services
• loss to end users it may cause lives to be lost
  if a user has a telephone that cannot call 112
• work-arounds like plugging into a PATS telephone
  line rather than a DSL ATA are not perfect
• It is undesirable to remove the requirement
  within the definition of PATS for access to
  emergency services, because it would widen the
  PATS category too far

44
Location independence and quality of emergency
service access 1
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• IP access services break the link between network
  address and physical location
• mobile telephony services suffer in a similar way
• End users will need to be educated that the
  quality of access to emergency services provided
  on a VoIP connection will be lower in some
  circumstances

45
Location independence and quality of emergency
service access 2
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• It seems feasible for VoIP service providers to
  provide a form of access to the emergency
  services that is at least as good at that
  provided by existing mobile networks
• This ought to be acceptable as long as the
  reduced quality is made very clear to end users

46
Network resilience 1
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• Providers of PATS at fixed locations are required
  to take measures to ensure the availability of
  services in the case of force majeure and
  catastrophic network breakdown

47
Network resilience 2
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• VoIP service providers, particularly those using
  the public Internet (Vonage) or reliant on other
  operators access networks (a subset of the
  Yahoo!BB model), may not be able to do this
• a broad definition of PATS could place these
  operators in an impossible position
• Seeking to claim IP voice is not provided at
  fixed locations as a get-out will have undesired
  consequences

48
Public telephone networks
The New Regulatory Framework and VoIP
Issues that arise from VoIP services under the NRF

• Providers of public telephone networks are
  subject to similar, additional obligations over
  and above the obligations of providers of public
  electronic communications networks
• The Universal Service Directive defines a public
  telephone network as an electronic
  communications network which is used toprovide
  publicly available telephone services
• Thus, it matters to the underlying network
  providers whether the service provider is
  considered to be offering PATS

49
The New Regulatory Framework and VoIP

• Definitions
• New Regulatory Framework
• VoIP business models
• Issues that arise from VoIP services under the
  NRF
• Views of other regulators

50
Historic position of the Commission
The New Regulatory Framework and VoIP
Views of other regulators

• VoIP was not public voice telephony if it failed
  to simultaneously meet each of the four elements
  of the Services Directives voice telephony
  definition
• voice telephony is offered commercially
• it is provided for the public
• it is provided to and from public switched
  network termination points
• it involves direct speech transport and switching
  of speech in real time, in particular the
  samelevel of reliability and speech quality as
  produced by the PSTN

51
Views of other regulators Ofcom
The New Regulatory Framework and VoIP
Views of other regulators

• The UK regulators historic position is a VoIP
  service should be regulated as PATS if any
  ofthe following apply. The service
• is marketed as a substitute for the traditional
  public telephone service, or
• appears to the customer to be a substitute for
  the traditional public telephone service, or
• provides the customers sole meansof access to
  the traditional circuit switched public
  telephone network
• This is a broad view of the definition

52
Views of other regulators FCC 1
The New Regulatory Framework and VoIP
Views of other regulators

• Telecommunications Act of 1996 classifies two
  services
• TelecommunicationsThe transmission,between
  or among points specified by the user, of
  information of the users choosing, without
  change in the form or content of the information
  as sent and received. (regulated)
• Information services The offering of a
  capability for generating, acquiring, storing,
  transforming, processing, retrieving, utilizing,
  or making available information via
  telecommunications. (not regulated)
• The FCC has not yet classified all types of VoIP
  services

53
Views of other regulators FCC 2
The New Regulatory Framework and VoIP
Views of other regulators

• The FCC recently decided that Free World Dialup
  is an unregulated information service
• ATT has asked the FCC to rule that
  phone-to-phone VoIP is not subject to long
  distance access charges
• Vonage has asked the FCC to rule that its service
  is an information service
• The FCC has announced a Notice of Proposed
  Rulemaking regarding regulatory issues
  surrounding VoIP

54
The NRF and Associated Convergent Services

• Michael Kende

55
Associated convergent services
The NRF and Associated Convergent Services

• Definitions
• Examples
• Regulatory jurisdiction
• Issues

56
What is an associated convergent service?
The NRF and Associated Convergent Services

• A data service that is convergent with voice
  services because it
• uses common technologies and protocols (e.g. SIP,
  IP), and/or
• has some of the elements of a voice call
  (transmits sound/speech, uses telephone numbers,
  etc)
• Instant messaging is just one example

57
What is an associated facility?
The NRF and Associated Convergent Services

• Associated facilities means those facilities
  associated with an electronic communications
  network and/or an electronic communications
  service which enable and/or support the provision
  of services via that network and/or service. It
  includes conditional access systems and
  electronic programme guides

58
IM and PM as an example of an associated
convergent service
The NRF and Associated Convergent Services

• Instant messaging (IM) is aservice that can be
  used toexchange small, text-basedmessages not
  unlike email,but in near-real-time,
  allowingusers to chat informally
• Both fixed and mobile versions of this service
  are available
• Presence management underlies IM. It is a service
  for finding, retrieving, and subscribing to
  changes in the current status of other users

59
IM and PM within the NRF
The NRF and Associated Convergent Services

• It is not clear, but certainly arguable, that IM
  is a public ECS
• if there were a gateway between voice enabled IM
  and the PSTN, and access to emergency service,
  then it could be PATS
• It is also arguable that PM, specifically access
  to the PM database, is an associated facility
• The Commission has not defined a relevant market
  for IM and PM
• Regulators have limited powers under the NRF

60
Powers regulators have(if they were to need them)
The NRF and Associated Convergent Services

• General conditions on providers of electronic
  communications networks, associated facilities,
  public ECS, or PATS
• Using Article 5 of the Access Directive
• Ex-ante regulation of players with SMP in a
  relevant market (e.g. via Article 12 of the
  Access Directive)
• If there were a relevant market defined
• Other measures, including standardisation
• Ex-post competition law

61
Issues arising particularly from associated
convergent services
The NRF and Associated Convergent Services

• What kinds of facilities are associated
  facilities?
• Clarifying control of access to end users

62
What kinds of facilities are associated
facilities?
The NRF and Associated Convergent Services

• Various regulators believe the DNS may be an
  associated facility
• We have already argued that a PM database might
  be an associated facility
• It would help if there were well understood
  procedures for designation of associated
  facilities

63
Clarifying control of access to end users
The NRF and Associated Convergent Services

• Article 5.1 of the Access Directive could be used
  to impose obligations on certain players even if
  they are not dominant (i.e. potentially all
  players), if they control access to end users
• The question is whether associated convergent
  service providers (or operators of associated
  facilities) are undertakings that control access
  to end-users

64
Summary and Conclusions

• James Allen

65
Summary of issues arising from the study 1
Summary and Conclusions

• Impact on national numbering plans
• Impact of extraterritorial service providers
• Impact on the relevant markets defined by the EC
• Whether VoIP services on fixed networks are
  provided at a fixed location
• Treatment of free services
• Treatment of self-provided services
• Impact on lawful intercept

66
Summary of issues arising fromthe study 2
Summary and Conclusions

• Interconnect to the PSTN
• Interconnect to other VoIP service providers
  networks
• The possibility of commercial barriers erected by
  access operators
• Security issues
• Effects on USO funding
• Changes to regulatory costing

67
Impact on national numbering plans
Summary and Conclusions

• The existing national numbering plans could prove
  wholly inadequate if VoIP users (and hence
  service providers) require significant additional
  volumes of geographic and other types of numbers
• NRAs should consider the implications of such a
  development now

68
Extraterritoriality of service providers
Summary and Conclusions

• VoIP makes it possible to provide domestic or
  EU-wide voice services (or components of those
  services) from other countries
• this may make it hard for NRAs to take action as
  their jurisdiction may not apply
• We recommend that the Member States and the NRAs
  consider whether this merits any change to
  current policy

69
Impact on the relevant markets defined by the EC
Summary and Conclusions

• Presence management in combination with voice
  services could, in certain circumstances, create
  a link between the fixed and mobile wholesale
  markets for voice termination, or indeed between
  different networks (Markets 9 and 16 of the EC
  Recommendation)
• the fixed and mobile termination markets would
  still be distinct in some circumstances (e.g.
  when the user is away from their desk or home)
• This potential linkage will complicate the
  regulation of these relevant markets, because it
  means that the monopoly of termination to
  customers on a network may no longer exist

70
Whether fixed network VoIP services are provided
at a fixed location 1
Summary and Conclusions

• Providers of PATS at a fixed location are subject
  to additional obligations
• VoIP service providers could argue that the
  services are not provided at a fixed location
  because they are substantially location
  independent

71
Whether fixed network VoIP services are provided
at a fixed location 2
Summary and Conclusions

• Regulators might seek to consider only some VoIP
  network architectures as provided at a fixed
  location. Such an approach is dangerous, as it
  will be very difficult to draw this distinction
  without causing distortions in the market
• Consequently, all types of VoIP provided over
  fixed networks should probably be considered as
  provided at a fixed location

72
Treatment of free services 1
Summary and Conclusions

• It is unclear whether a free service, such as
  AOL IM or Skype, is included in the definition of
  an ECS
• Case law shows
• a bundle of services can be considered as
  provided for remuneration even if some of the
  services are free
• the remuneration does not have to be paid by the
  end user of the service

73
Treatment of free services 2
Summary and Conclusions

• As a result,
• AIM would probably be considered a service
  provided for remuneration, because it is provided
  to some users as part of a bundle of paid-for
  services
• whereas it remains unclear whether a peer-to-peer
  application, which is truly free, is currently
  a service at all

74
Treatment of self-provided services (DIY and
Corporate internal use)
Summary and Conclusions

• Though unclear, it seems very likely that a
  self-provided service is not a service normally
  provided for remuneration at all
• If it is not a service normally provided for
  remuneration, then it is not subject to the NRF.
  For example, it would not be subject to general
  conditions of authorisation
• The fact that paid-for equipment and software are
  used may be irrelevant as these are goods, not
  services

75
Impact on lawful intercept
Summary and Conclusions

• Lawful intercept of voice telephony using IP
  couldtake place at a variety of locations within
  the network
• We recommend that some form of common approach
  between legal interception agencies (e.g.
  location of intercept, format of intercept) would
  help minimise the cost to service providers, in
  particular, pan-national service providers). This
  would help reduce barriers to entry in providing
  voice services
• We note that the usefulness of lawful intercept
  may be decreased once VoIP calls use strong
  end-to-end encryption

76
Interconnect to the PSTN
Summary and Conclusions

• We expect NRAs will be drawn into difficult
  arguments about
• interconnect SLAs and pricing
• costing for operators who are dominant and are
  undertaking major network transformations
• These are just part of the normal operation of
  telecoms regulation
• VoIP affects these arguments because it is the
  cause of the major network transformations, and
  can cause increased competition

77
Interconnect to other VoIP service providers
networks
Summary and Conclusions

• Analysys expects three models for interconnect
• via the PSTN
• VoIP peering (free of payment, with conditions)
• VoIP termination (paid-for)
• At this stage, we recommend that regulators need
  only monitor the emergence of the new forms of
  interconnect, bearing in mind that interconnect
  disputes are almost certain to arise

78
The possibility of commercial barriers erected by
fixed access operators
Summary and Conclusions

• Operators who have a vested commercial interest
  can make VoIP commercially unattractive
• Fixed broadband access providers cannot do this
  given the very low incremental price per bit on
  almost all wholesale broadband tariffs, and the
  nature of the relevant market (which means it is
  very likely to be ex-ante regulated)

79
The possibility of commercial barriers erected by
mobile access operators
Summary and Conclusions

• Mobile operators do not generally offer flat-rate
  pricing for data services with access to the
  Internet. Consequently VoIP over mobile networks
  rarely offers a substantial cost saving for end
  users (which suits the mobile operators)
• Competition should ensure a wide range of
  competitive mobile data tariffs and services,
  although we do not expect these to lead to
  widespread take-up of VoIP on mobile networks
  except for carrier internal use

80
Security issues
Summary and Conclusions

• End users expect their calls to be secure and
  their bills accurate
• This is not just a matter for those operators
  providing PATS providers of ECS are also obliged
  to have accurate bills, end-user data privacy is
  protected by national data protection laws, and,
  in particular, the Directive on Privacy and
  Electronic Communications (2002/58/EC)
• Regulators will need to support efforts to build
  a service that meets users needs and
  expectations for privacy, and may also have a
  role in educating the public about the security
  of the system

81
Effects on USO funding 1
Summary and Conclusions

• Changes to the telecoms market arising from VoIP
  will change the net cost of providing universal
  service. Three effects contribute to this
• long-distance and international voice call
  profits will be reduced
• access network costs will be spread over fewer
  lines
• there will be a loss of revenue as a result of
  free services

82
Effects on USO funding 2
Summary and Conclusions

• Regulators will need to monitor these effects,
  all three of which are relatively small in
  Europe. In the medium term, these effects will
  gradually increase pressure on the funding of USO

83
Changes to regulatory costing
Summary and Conclusions

• IP-based voice technologies may change the
  underlying costs of providing certain regulated
  telecoms services (e.g. voice termination)
• this implies that in cases where the costs are
  used to set regulated prices (e.g. as a result of
  long-run incremental cost (LRIC) models), a
  forward-looking costing based on modern
  equivalent assets could, in some cases, use IP
  technologies
• In Analysyss view this is not a new issue,
  although it may create considerable work for the
  regulators economists

84
Overall conclusions 1
Summary and Conclusions

• A transition to IP voice and associated
  convergent services is taking place
• The NRF is suitable for handling this transition,
  but it would be best to address a number of
  issues before they become significant blocks to
  future market development

85
Overall conclusions 2
Summary and Conclusions

• The most significant issue is whether and under
  what circumstances VoIP is classified as PATS
  (with all the attendant obligations, of which the
  most important are access to emergency services
  and network integrity)
• early clarification of the policy in this area
  would be useful

86
Matters that merit further consideration 1
Summary and Conclusions

• It may not be possible to provide the location of
  a caller making an emergency call using VoIP
• Is this acceptable?
• How should users be made aware of this?
• What other steps are needed to provide such
  location information?
• VoIP services may not be as robust as the
  existing PSTN voice service
• To what degree is a VoIP network carrying voice
  calls expected to be available?

87
Matters that merit further consideration 2
Summary and Conclusions

• The existing national numbering plans could prove
  wholly inadequate if VoIP users (and hence
  service providers) require significant additional
  volumes of geographic and other types of numbers
• NRAs should consider the implications of such a
  development now

88
Matters that merit further consideration 3
Summary and Conclusions

• VoIP makes it possible to provide domestic or
  EU-wide voice services (or components of those
  services) from other countries
• we recommend that the Member States and the NRAs
  consider whether this merits any change to
  current policy

89
Commission Presentation
90
Question and Answer Session
91
James Allen, Michael Kende, David Cleevely,
Margaret Hopkins Analysys Consulting Limited 24
Castle St Cambridge CB3 0AJ www.analysys.com jame
s.allen_at_analysys.com michael.kende_at_analysys.com da
vid.cleevely_at_analysys.com margaret.hopkins_at_analysy
s.com