Such liberalisation comes the risk of these new entrants conducting less than ethical business practises that were impossible for a state controlled monopoly; and so with liberalisation comes a new wave of regulation.
A fact of the telecom’s industry is that all new entrants have had to resell all or part of the incumbent monopoly’s infrastructure. However, by using the Internet and the unbundled local broadband loop, VoIP is a technology that will allow a new breed of telecom operator that has no recall to the incumbent monopoly other than to interconnect with it to pass traffic between each other.
VoIP, therefore has attracted the attention of regulators, and from a European-wide perspective, the issue is that this attention varies from country to country. Each National Regulatory Authority has a different view.
According to a recent survey conducted by networking technology company Spirent Communications, the International Engineering Consortium and Total Telecom magazine, twenty per cent of European telecoms executives said that government regulation is the biggest threat to VoIP, meanwhile 84 per cent believe the technology is ready for widespread deployment.
According to a Gartner report in January 2006, no common approach has so far been adopted among National Regulatory Authorities (NRAs) for the delivery of voice over Internet Protocol (VoIP) across Europe. In some countries, the service is treated as being equivalent to a regular circuit-switched telephone connection, while in others, it is considered more as a data service. Until a common approach is implemented, VoIP service providers will be unable to deliver common service platforms across multiple countries, removing one of the key opportunities enabled by the underlying technology — that of cross-national competition.
The survey found that NRAs have resisted developing specific policies or regulations concerning VoIP. While no one has an appetite to aggressively regulate this technology, changes will need to happen to accommodate the rapid move in consumer and business use patterns. Gartner believes that with VoIP and other IP-enabled or electronic communications service (ECS) maturing, end users are often unaware that protection and statutory rights are not the same with VoIP services as for switched voice.
Therefore, Gartner concludes, VoIP will force broad regulatory changes, because voice telephony is being redefined. IP not only affects the pricing of voice services, but also changes the way voice services and features are ordered, provisioned, delivered, marketed and regulated. As a result, the inevitable regulatory changes will add cost to the provisioning of IP-enabled services, thus closing the end-user price advantage currently enjoyed by VoIP services.
As regards the UK market specifically, under the Communications Act of 2003 Ofcom’s primary regulatory control on the VoIP market is to police a code of conduct for providers of a pubic telephony service – over whatever technology – to consumers and small business. (As for big business, caveat emptor.) This code of practise deals with the business process as opposed to the underlying technology and, as far as the consumer is concerned, is all that is required.
To quote from Clause 52 of The Act itself:
(2) Those matters are-
(a) the handling of complaints made to public communications providers by any of their domestic and small business customers;
(b) the resolution of disputes between such providers and any of their domestic and small business customers;
(c) the provision of remedies and redress in respect of matters that form the subject-matter of such complaints or disputes;
(d) the information about service standards and about the rights of domestic and small business customers that is to be made available to those customers by public communications providers;
(e) any other matter appearing to OFCOM to be necessary for securing effective protection for the domestic and small business customers of such providers.
VegaStream’s position regarding regulating the VoIP industry is similar to that of OfCom’s. The application is straightforward – the ability to enable people to talk to each other over a telecommunications network. With VegaStream gateways this network can contain both IP and TDM elements and that fact is completely transparent to the end. Regulators should therefore continue to refine their ability to protect the consumer against bad business practise and ensure that the innovators within the VoIP industry can bring the full benefits of this technology to business and consumers alike.