The regulation of Voice over IP in Europe: Impacts of regulation on VoIP service providers and markets

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1 The regulation of Voice over IP in Europe: Impacts of regulation on VoIP service providers and markets Dieter Elixmann J. Scott Marcus Dr. Christian Wernick Workshop Brussels, March 11,

2 Introduction Agenda 10:00 h European Commission's introduction 10:10 h Introduction and Overview Dieter Elixmann 10:20 h Status of regulatory requirements regarding VoIP in the European Union James Thomson (Cullen International) 10:40 h Impacts of regulation on VoIP service providers and markets Dieter Elixmann 11:00 h Impacts of regulatory barriers to the Internal Market Dieter Elixmann 11:20 h Conclusions and policy recommendations J. Scott Marcus 11:40 h Wrap-Up and discussion 1

3 Interviewees Interviews conducted with Arcor (D; Germany) BT Germany (D; multi-national) DTAG (D; multi-national) Easynet (UK; Europe) Global Crossing (USA; EU MS) SipGate (D; Germany, UK, Austria) Skype (LUX; worldwide) Telefonica Deutschland (D; Germany) Truphone (UK; EU MS) Vonage (USA; UK) Verizon (USA; worldwide) 2

4 Main issues Most important issues regarding VoIP diffusion, best practice, and costs associated with them - General conditions relevant for market entry - Access to emergency numbers - Access to numbers, number portability - Interconnection - Lawful intercept 3

5 General conditions relevant for market entry Regulatory differences regarding VoIP in Europe - mirror a lack of a common interpretation, implementation, and application of the European Framework at the level of the Member States - work to the detriment of market participants Thus, market entry is felt to be impeded due to the - need of gathering and understanding a multitude of country specific information about the actual conditions for market entry - different organisational and administrative processes applied in the Member States Time lags in the basic approval processes even though the Authorisation Directive mandates a quick response, market participants have experienced long delays in regard to obtaining numbers Litigation can be very time-consuming and prohibitively expensive Legal uncertainty; concern: changes in operator status might be associated with new requirements and, thus, additional investments 4

6 Access to Emergency Services (I) Challenges for a carrier or a service provider in view of specific national characteristics - Number of different emergency call numbers Large differences across Member States - Number of Public Safety Answering Points (PSAPs) Most MS apply a regional organisation of PSAPs depending on the specific emergency call number - Routing of emergency calls to the correct PSAP: the traditional PSTN world Crucial issue: division of labour between originating and terminating network 5

7 Access to Emergency Services (II) Routing of emergency calls to the correct PSAP: Approaches regarding VoIP (Ofcom (2007a, section 5.9)) - Originating operator requests location information when the call is received; use of a flag that highlights that the call is from a VoIP service - Users are asked to input location details prior to using the VoIP service - Use of the IP network and IP addressing to provide location information; ISPs have to collaborate in providing IP address and topology information to a central database; issue: how granular can location be made based on IP v4 addressing? Ofcom admits that private addressing and NAT might constrain this alternative; yet, future NGN deployment and use of IPv6 might lead a higher level of granularity - Incorporation of GPS/A-GPS or other GNSS (such as Galileo) receivers in the broadband adaptors which provide connectivity for the voice service - Technically, all 999 / 112 calls are made from a PSTN line (in the case where a PSTN line remains in place); this could be done by using intelligence in a broadband adaptor (when using xdsl service) to force all 999 / 112 calls to PSTN line; solution enables the continued provision of location to the emergency services based on the PSTN network termination point and associated service location 6

8 Access to Emergency Services (III) Standards groups and VoIP access to emergency services: ECRIT - Provides a fully general means of transmitting location information to an end-user s device placing an emergency call and automatically conveying the end-user s location to the PSAP - Primarily oriented toward an IP-based PSAP; evolving the PSAPs from the current PSTN orientation to an IP basis will take substantial time and effort; ECRIT standards can also support traditional PSTN access to the PSAP, which is likely to be essential as an interim measure - Yet: ECRIT does not provide a complete and bullet-proof solution to the determination of the location of the end-user s workstation or PC - ECRIT standards generally envision the following possible solutions: User configures the address into the workstation End-user s workstation determines its own address using e.g. A-GPS or Galileo The ISP (e.g. broadband provider), or operations management for a university or corporate campus, sends a civic or coordinate address to the end-user s workstation, which the workstation then uses and transmits if it subsequently needs to place an emergency call; equivalently, the location is provided by a server or a proxy when needed ECRIT = Emergency Context Resolution with Internet Technologies 7

9 Access to Emergency Services (IV) The position of market participants - Overall, interviewees acknowledged the necessity of providing access to emergency calls - Yet, access to emergency services is likely to be associated with substantial implementation costs; arguments: Becoming familiar with the different regimes at the national level time-consuming and resourceintensive Considerable investment outlays associated with the specific obligations already in place or envisaged by particular NRAs Differences in Europe pose substantial challenges to a trans-national business model (VoI providers) No possibility to realize learning curve effects in a world of regulatory environments that differ so greatly from one another Some MS use emergency systems which are antiquated from a technological point of view; overdue for modernisation - VoI operators using (facilities-based) third-party wholesale provider: sensible approach, helps to facilitate competitive entry of VoIP service providers - One interviewee raised concerns that obligations might be inappropriately extended to VoIP services that are not intended to be true substitutes for PATS; such obligations might be unduly burdensome 8

10 Access to Numbers, Numbering and Number Portability: Main issues (1) Ability to get numbers: two main issues crucial for the establishment of a viable business case - Understanding the specific numbering conditions in the Member States - Uncertainty as to the duration between the application for numbers/number ranges and the actual final decision; several market participants reported delays of months which threatened their entire business case (for a specific country) - Time lags also if third party is not able to provide the VoIP provider with the particular sort of numbers they are asking for (dial codes); moreover, no true pan-european intermediaries exist with regard to the provision of numbers Geographic numbers vs. non-geographic numbers - Demand for non-geographic numbers virtually low/non-existent - Access to geographic numbers: important obstacle for establishing a VoIP service; consequently, differences in access to geographic numbers within the EU represent a particular important impediment for a harmonized market 9

11 Access to Numbers, Numbering and Number Portability: Main issues (2) Number portability: Service providers had different views, largely as a function of their respective business models - Some VoI providers call for unrestricted number portability in all directions - Other service providers underlined: the more portability becomes market reality, the less transparency exists for end-users regarding prices and QoS - Central number portability database provides transparency; however, viewed as expensive - In some Member States, no central number portability database; calls are, in effect, forwarded by the operator that controls the number range; process is easier for new entrants initially, but implies ongoing payments (typically per minute) that can be substantial and that impact long term competitiveness 10

12 Interconnection Several interviewees emphasized the need to take action with regard to IP interconnection Lack of a pertinent regulatory environment for the migration to NGN/All-IP; issues raised - Interconnection on a service layer and/or infrastructure layer - (In)applicability of Bill & Keep - Appropriate interconnection pricing regimes for the migration period (where old and new networks are operated in parallel) 11

13 Lawful Intercept & Data Retention (1) VoIP operators face difficulties similar to those of PSTN operators Lawful intercept - Different national obligations frequent concern; arguments Requirements varying across countries, might be increasing over time Different national rules calling for different procedures; large cost factor with consequences on technical and business processes Issue primarily not a technical standards matter; one interviewee noted that the ETSI standards provide a reasonable level of technical consistency across the EU; problem seems to be everything else 12

14 Lawful Intercept & Data Retention (2) Lawful intercept (cont d) - Likely that there is a real impediment to pan-european services - But: difficult to study and difficult to identify the appropriate means of resolution - Information hard to come by Data retention There is no uniform European assessment National governments choose not to make much information available for obvious reasons - Does not represent a comparable problem - Most customer call data records are already stored for internal (billing) use - However, might become a problem if operators were obliged to retain other data (e.g. IP data) as well 13

15 WIK-Consult GmbH Rhöndorfer Str Bad Honnef Germany Tel +49 (0) Fax +49 (0) Cullen International s. a. Rue Saint-Jean, Namur Belgium Tel Fax

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