Voice over Internet Protocol (VoIP) - An Introduction

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1 PITCOM Voice over Internet Protocol (VoIP) - An Introduction Peter Ingram Chief Technology Officer Ofcom 18th January 2005 Ofcom

2 What is Voice over IP? Carrying Voice Traffic on Networks Designed for Data Most data networks, e.g. the internet, are unmetered VoIP may therefore appear to be free Not a new concept Technology now in place which may finally encourage mass adoption From high tech A wide range of interfaces to traditional Ofcom 1

3 Circuits vs. Packets Traditional Voice Switch Switch Switch Voice over IP Circuits Internet Packets Ofcom 2

4 PSTN Traditional Voice Customer Premises Equipment (CPE) Core Customer Premises Equipment (CPE) Narrowband Narrowband Digital Local Exchange Digital Main Switching Unit DMSU DLE Circuits Dedicated resources reserved end-end High levels of redundancy Spare capacity to deal with peaks High reliability Inflexible for non-voice Relatively high cost Ofcom 3

5 PC-to-PC VoIP CPE DSLAM Core ISP CPE DSL or cable modem Broadband Narrowband ISP Internet Narrowband Modem DLE Router PSTN Gateway Narrowband Packets PSTN user Software allows voice calls from one PC to another Different brands of software do not usually interwork Voice is converted to IP packets at PC Works best on broadband Speed, always on - incoming calls Carried like normal data traffic by ISP, usually across public internet Ofcom 4

6 PC-to-PC VoIP e.g. Skype The most popular PC-PC VoIP software Downloaded more than 50m times Over 8m regular users Free PC-PC calling SkypeOut Call PSTN phones for a fee Supports Conference Calling & Chat Ofcom 5

7 Phone-to-Phone VoIP ATA CPE DSL or Cable Modem Broadband VSP Router Core Internet PSTN Gateway VSP Broadband Narrowband CPE VoIP user Circuits Packets PSTN user Use existing telephone with an Analogue Telephone Adapter (ATA) Or use an IP phone Both connect to Broadband modem Called party may be another VoIP user Or, via a gateway, a traditional PSTN customer Ofcom 6

8 Phone-to-Phone VoIP e.g. Vonage One of the most popular hardware VoIP products in the US 400,000 customers Launched a UK service on 6 th January 9.99/month Residential, unlimited UK calls to normal numbers Feature Set-up Analogue Telephone Adapter Online Account Management Billing Ofcom 7

9 VoIP in the PSTN CPE Core CPE Narrowband Narrowband Digital Local Exchange Incumbent-owned private IP network DLE Circuits Packets Many traditional PSTN calls are carried as VoIP in part For efficiency reasons they may travel with other IP traffic Different from other VoIP Invisible to end customer Private IP network, not internet Controlled quality Ofcom 8

10 VoIP in the Corporate Network CPE Leased Line Core Internet CPE VPN Office LAN Data Voice Desks Packets Increasingly common application of VoIP Company may carry their site-site voice as IP over existing leased line or VPN Additionally, a single desk wiring infrastructure (LAN) may carry both data and voice (as VoIP) Voice may stay as IP or be converted to PSTN Ofcom 9

11 International Comparisons Japan leading the way Most successful in terms of market penetration Over 6 million VoIP subscribers PSTN rentals and long distance calls are very expensive compared with UK High broadband penetration USA source of most activity Lots of US VoIP press reports New product launches Should VoIP operators be taxed like other telephony providers Free local calling and expensive long distance gives arbitrage opportunities Allows powerful cable companies to offer voice Fundamental differences between leading VoIP markets, e.g. Japan and US, and the markets found in the UK and the rest of Europe Ofcom 10

12 VoIP Issues PATS Publicly Available Telephony Services Under EU law, all VoIP services are Electronic Communication Services (ECS) With this come a certain set of rights and obligations Publicly Available Telephony Services (PATS) are an important subset of ECS PSTN is an example of PATS 4 core elements that define PATS Available to the public Make and receive national & international calls emergency services Use international numbering plan PATS implies more rights, but more onerous obligations on its operators ECS PATS Rights: Number Portability Directory Listing Obligations: Network Integrity Guidelines Emergency access standards Ofcom 11

13 VoIP Issues PATS & VoIP VoIP operators may offer 4 core PATS elements to attract customers from PSTN E.g. 999 calling Should they therefore be defined as PATS? Will given them rights, e.g. number portability Unlikely to be able to meet obligations, e.g. network integrity guidelines Ongoing discussion in Europe Ofcom approach Don t discourage VoIP offering 999 access Review integrity guidelines Consumer information is key Level of regulation Voice over IP services? Regulation applying to ECS Traditional telephone services Regulation applying to PATS More like traditional telephone services Ofcom 12

14 VoIP Issues Numbering Ofcom Decision 056 number range allocated for Location Independent ECS Geographic numbers may be allocated for new voice services (e.g. VoIP/VoB) Geographic or 056 VoIP operators can apply for either number range Removes a potential barrier to VoIP take-up Ringing a VoIP phone can be just like ringing any other Number shortages Geographic number are a limited resource Number conservation required Number changes may be required if there is a large VoIP demand Ofcom 13

15 VoIP Issues Ofcom Approach to VoIP Regulation Many Potential Issues Numbering Number portability Definition of PATS Availability of emergency calls Location information for emergency calls Network integrity Interconnection Pricing of calls to VoIP Tone dialling Text relay Quality of service Lawful intercept Extra territorial service providers No problem Approach for dealing with VoIP regulatory issues Provide guidance for clarification Identify potential issues Prioritise and identify approach Integrate into existing work Develop policy and consult Numbering 999 availability PATS classification Ofcom 14

16 VoIP Issues Impact on Consumers Cheaper calls On net usually free Off net can be much cheaper Other fixed costs remain in most cases Savings may be limited Variable Typical example for ADSL Broadband Customer Calls Potential Saving Calls Variable Greater choice of providers Lower entry barriers Value added services Virtual numbers & area codes Messaging On line billing, call records etc ADSL PSTN ADSL PSTN Service Bundles Ofcom 15

17 VoIP Issues Summary Broadband enables VoIP to compete VoIP is not new, but needs Broadband to be a serious alternative to PSTN All voice will eventually be carried as VoIP, whether visible to the consumer or not Services are generally not identical to PSTN Consumer education is essential Wide spread take-up will increase importance of main regulatory issues Regulatory classification Numbering Emergency access Universal Service obligations Pressure for naked DSL UK market very different to US may limit residential take-up Business VoIP likely to continue to grow rapidly Ofcom 16

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