Regulatory Issues Associated with Provision of Voice Services Using Internet Protocol in Australia

Transcription

1 Regulatory Issues Associated with Provision of Voice Services Using Internet Protocol in Australia Discussion paper October 2004 PO Box Law Courts MELBOURNE VIC 8010 Telephone (03) Facsimile (03) TTY (03) ABN

2 Australian Communications Authority 2004 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be produced by any process without prior written permission from the Australian Communications Authority. Requests and enquiries concerning reproduction and rights should be addressed to: Manager Communications Australian Communications Authority PO Box Law Courts Melbourne VIC

3 Foreword The Australian Communications Authority (ACA) is reviewing telecommunications regulation relevant to voice over Internet protocol (VoIP) services. The review will identify regulatory challenges resulting from the increased availability and opportunities offered by VoIP services and the ACA will recommend to the government how those challenges might be met. We hope to draw together a regulatory framework that will assist industry by providing greater certainty. This may show that the principles of the current legislation are still satisfactory, but their regulatory application may need some tailoring for VoIP. The aim of this discussion paper is to look at how well VoIP services fit into the current regulatory arrangements and what adjustments, if any, are required to accommodate this recent technique. The issues to be examined include numbering, emergency call services, consumer safeguards and access for people with a disability. Australian providers of VoIP recognise that current regulatory arrangements for voice services and existing consumer safeguards apply to their services. The good news for Australian consumers is that this new service option will come with proper consideration by many providers of all the consumer safeguards that have been developed for voice services generally. While VoIP is already being used extensively in corporate networks, the increasing popularity of broadband means that some suppliers are now offering VoIP to the residential market. There are impressive reports on the quality of corporate network VoIP services. However, part of the ACA s role is to make sure that general consumers are not left behind. There is no doubt that VoIP services will have consumer benefits and will enhance competition. We are encouraging the exploration of the full potential of VoIP and maintaining a flexible outlook on the regulation of these services. The ACA will also consult with the Telecommunications Industry Ombudsman, the Department of Communications, Information Technology and the Arts and the Australian Competition and Consumer Commission. Where pressing issues for industry are identified, for example in the case of the numbering of VoIP services, consideration will be given to separate and priority treatment of these matters. I encourage industry and public comment on the issues raised in the discussion paper by 31 December The ACA will issue a final report on the matters raised in this paper in the first quarter of 2005 and it is hoped that this will provide a basis to work towards the future with a greater degree of certainty in this new and exciting chapter of telecommunications development. Dr Bob Horton Acting Chairman 3

4 Table of contents 1. Introduction 5 2. Invitation to comment Submission of comments Key issues 6 3. Background Scope Use of IP technology for voice services ACA role Regulatory framework carriage services Regulatory framework standard telephone service 9 4. VoIP services VoIP service delivery processes VoIP environment VoIP service processes VoIP service in the corporate market VoIP service characteristics Migration between VoIP service processes VoIP call set-up and management processes Ease of market entry Implications of the global supply market Numbering Background Role of numbers Numbering section format Numbering options Numbering VoIP by service characteristics Numbering by technology type specifying a number range for IP services Numbering VoIP services using existing service types Summary Customer equipment Customer equipment regulations Customer equipment for VoIP services Customer equipment software or data install and uninstall Quality Quality issues Network Interconnection Access to the emergency call service Access to the emergency call service Location information Calling line identification Origin-dependent routed calls Interception Privacy and other customer obligations Privacy obligations Customer service obligations Customer Service Guarantee Call charging accuracy Pre-selection Pre-selection obligation Exemption from the pre-selection obligation Access for non-voice users Number portability Number portability obligations Exemptions from number portability obligations Portability and the use of ISDN interfaces by VoIP providers Future outlook Regulatory options Conclusion 44 Abbreviations/glossary 4

5 1. Introduction The Internet protocol (IP) is gaining in popularity as a technique for use in corporate networks where it allows the integration of voice, data and other corporate IT services. The availability of IP-based equipment and software to support voice services and the increasing popularity of broadband access has prompted suppliers to offer telephony services based on voice over IP (VoIP) to the residential and small business markets. Recent entrants into the market who are planning to provide a telephony or telephony-capable VoIP product have indicated that the current regulatory arrangements can be met under the provisioning arrangements they have been able to implement. However, it may be that this compliance or the interpretations of the Australian Communications Authority (ACA) may hinder the development of the service or other new implementations that could benefit consumers. This paper seeks input from the telecommunications industry and the community generally on the implementation of VoIP. The role of the ACA is to implement, administer and enforce the government s regulatory policies, including such discretionary powers as are conferred by legislation. The paper necessarily focuses on those regulatory matters that fall within the responsibilities of the ACA. The ACA also has a general responsibility to monitor and report to the government on the performance of carriers and carriage service providers and other associated developments in the telecommunications sector. This reporting is to inform the government in considering the appropriateness of the telecommunications policy and regulatory framework. The ACA is therefore keen to identify and understand the development and implications of voice service offerings using IP techniques. In examining how VoIP services interact with the current regulatory framework, it is possible that wider issues about the appropriateness of the current policy and regulatory framework for VoIP will emerge. Indeed, such issues have been raised recently by the Australian Communications Industry Forum (ACIF) in its Policy and Regulatory Considerations for New and Emerging Services. These are matters for the government and outside the responsibility of the ACA. Where such issues do arise, it is the ACA s intention to refer these matters to the government for consideration. The ACA is working closely with the Department of Communications, Information Technology and the Arts (DCITA) and the Australian Competition and Consumer Commission (ACCC) in examining the issues raised by VoIP. DCITA has been asked by the government to examine whether the overall policy and regulatory framework that is in place is appropriate for VoIP. In approaching its considerations, the ACA is mindful that VoIP services, particularly in the small business and residential markets, are at an early stage of deployment. It may be that the treatment of VoIP needs to evolve over time as the service is taken up. 2. Invitation to comment The ACA seeks written submissions on the issues raised in this discussion paper. These issues relate particularly to ACA (and ACCC) regulatory decision-making. Comment is also sought on any other matters relevant the provision of VoIP or like technologies in Australia. Following submission of responses to this paper, the ACA intends to: place public submissions on the ACA website to provide an opportunity for comment on those submissions; consult as appropriate with industry, the Telecommunications Industry Ombudsman (TIO), DCITA and the ACCC; hold public workshops during the consultation period; issue a report providing preliminary views; and issue a final report. 5

6 In conducting this project, the ACA will be working closely with the ACCC, with which it shares several relevant regulatory functions, and DCITA, which is examining the broader policy and regulatory framework issues raised by VoIP. The ACA understands that depending on the issues that arise during this current consultation and other work by DCITA, further consultation on a broader range of issues may occur. 2.1 Submission of comments The ACA will treat all submissions as public, unless a submitter specifically requests that the submission or part thereof be regarded as confidential. The ACA s intention is for all submissions to be made available to the ACCC and DCITA. Please forward your written comments to: Greg Neylan Manager Industry Operations and Licensing Australian Communications Authority by mail: PO Box Law Courts Melbourne VIC 8010 by victoria.balfour@aca.gov.au by fax: (03) Enquiries about issues raised in this paper should be directed to Greg Neylan on telephone (03) or to greg.neylan@aca.gov.au. The closing date for submissions to the ACA is 31 December Interested persons wishing to raise matters purely relating to the broader policy and regulatory framework for VoIP can also discuss their views with DCITA. The first point of contact on this matter is Ms Tracey Smith of the Emerging Voice Services Project on telephone (02) or to tracey.smith@dcita.gov.au. 2.2 Key issues The following questions from the discussion paper are highlighted here as the key issues in this consultation: What issues need to be considered by the ACA in exercising its existing regulatory powers where the provider of the infrastructure that links an end-user to the national network is unaware of the use of that link for the provision of a carriage service? (Question 4.2) Should the ACA s treatment of the voice or hybrid service differ depending on whether the voice component is only available in combination with the other service/function or is available independently? (Question 4.12) What specific regulatory issues for the ACA will need to be managed if operations and facilities supplying VoIP services in Australia are located outside Australia? (Question 4.23) What VoIP-specific overseas trends or practices are relevant to the exercising of the ACA s existing regulatory powers in relation to VoIP services? (Question 4.30) Should the ACA specify numbers for nomadic services? (Question 5.9) Should the ACA define numbers for specifically IP services? (Question 5.12) Should the ACA allow all VoIP services, including nomadic services, to be provided on geographic numbers? (Question 5.15) What issues, if any, arise when the functions of equipment which, on a stand-alone basis would be subject to the Labelling Notice, are created on a laptop or another such softwarereconfigurable device? (Question 6.3) 6

7 Are the technical regulation requirements for customer equipment, which were designed for traditional telephony services, appropriate for VoIP-based services? (Question 6.5) Are specific industry processes required to ensure data and software are loaded in programmable equipment in a manner that does not make it difficult for end-users to change VoIP providers? (Question 6.6) Is there a need for the ACA to use its regulatory powers to develop additional or alternative quality of service measures for VoIP services? (Question 7.5) What are the implications of requiring all VoIP services to meet emergency call services calling obligations? What are the limitations? (Question 8.1) Are there any significant new issues related to the obligations for interception of communications using VoIP services? (Question 9.1) Are there any other issues related to the privacy of customer information that the introduction of VoIP services could raise for consumers, the telecommunications industry generally and regulators? Please outline. (Question 10.3) Are there any elements in the current consumer protection obligations applying to carriage service providers that could be inappropriate for VoIP providers? Please outline, with reasons. (Question 10.8) How difficult is it for VoIP providers to comply with pre-selection requirements? What issues arise for service providers? (Question 12.1) Should the regulators exercise their discretion and exempt VoIP from pre-selection requirements? What form should any exemption take? What issues would arise from any such exemptions? (Question 12.3) What regulatory compliance issues arise for VoIP providers in the area of access for people with disabilities? (Question 13.1) What is the relevance of individual number portability for end-users and providers of VoIP services? (Question 14.2) Is there a need for any modification to the range of rights and obligations that accompany the provision of carriage services and standard telephone services arising from the extended availability of VoIP services? (Question 16.1) Are their difficulties in complying with the current range of regulations and is this hampering the development of VoIP services offerings? If so, in what way? (Question18.1) Should amendments to regulations affecting VoIP services be undertaken now, or should consideration of VoIP services be delayed until the market has matured? (Question 18.2) 7

8 3. Background 3.1. Scope Voice services based on IP are already established in the large corporate sector of the telecommunications market. Some companies are offering VoIP services to the residential market and to the small business sector. Many other companies have expressed an interest in doing so. This paper seeks public comment on whether the provision of VoIP services in any of these market sectors necessitates, or could benefit by, regulatory actions by the ACA. In this context, it is based on the regulatory framework that is currently in place and which the ACA administers and enforces. At the regulatory level, the ACA s chief interests are: whether VoIP services are compliant with existing regulatory arrangements and whether the provision of VoIP services would be assisted by the ACA exercising one or more of its regulatory discretions and, if so, how. To facilitate discussion, some particular regulatory issues are identified in this paper. As noted in the Introduction, consideration of these issues could raise questions about the overall framework, which are a matter for government. The paper also seeks views on the likely development of VoIP and its wider implications. 3.2 Use of IP technology for voice services The growth of the Internet, the increasing use of IP in data networks and the more general availability of suitable equipment have resulted in more extensive use of IP technology for voice services. The process is often referred to as voice over Internet protocol or VoIP and it has moved from a niche component in data networks to a technology of choice for corporate voice services and new entrants into the voice market. The rapidly increasing penetration of broadband access to the Internet for Australian residential customers has suggested to some entrepreneurs that these broadband access links are capable of supporting voice services as well as Internet access. This has led to the current level of interest in new voice offerings in the residential and small business market sectors. As with many new voice service proposals, the use of IP technology for voice services has been developed and tested in the corporate sector before being used for the provision of new services options in the residential and small business market. 3.3 ACA role The ACA has a role in implementing regulation designed to protect end-users and to facilitate industry operation. When necessary, the ACA has some discretion (often in conjunction with the ACCC) to make some adjustments to ensure the desirable growth of new services while continuing to meet overall legislative objectives. An important factor is the expectations of consumers and one aim of this discussion paper is to ascertain expectations of users and providers about such new services. 3.4 Regulatory framework carriage services It is the ACA s working assumption in this paper that under the current framework, VoIP services will generally be carriage services and standard telephone services (STSs) and their suppliers will be carriage service providers. However, this will depend on the precise supply arrangements (discussed in section 4.5). The regulatory framework for voice services comprises two layers. The regulation of carriage services covers a wide range of services and an STS is a specific type of carriage service. 8

9 The Telecommunications Act includes the definition: carriage service means a service for carrying communications by means of guided and/or unguided electromagnetic energy. Carriage services are covered by the Act as long as one point in a connection is located in Australia. A person providing a carriage service to someone outside the immediate circle of the provider is a carriage service provider. A range of obligations flow from the classification of services as carriage services and of their providers as carriage service providers 2. Some of the obligations for all carriage services, including VoIP services, include: comply with the Telecommunications Numbering Plan 1997, provide number related information to the Integrated Public Number database (IPND) manager for directory purposes and to support calls to the emergency operator, protection of the confidentiality of communications, and provide an interception capability and an interception capability plan to the relevant agencies. The obligations of carriage service providers are set out in the legislation and the subordinated legal instruments and may be found at the ACA website. Some particular obligations are singled out in this paper to assist in the discussion. 3.5 Regulatory framework standard telephone service An STS is a specific type of carriage service because, in addition to the underlying rights and obligations of carriage service providers, more specific rights and obligations flow from the classification of a service as an STS. Section 6 of the Telecommunications (Consumer Protection and Service Standards) Act defines an STS and this is reproduced in the appendix to this paper. On the basis that a VoIP service is a carriage service for the purpose of voice telephony (or an equivalent for a person with a disability) and an end-user of the service is ordinarily able to communicate, by means of the service, with each other end-user who is supplied with the same service for the same purpose, whether or not the end-users are connected to the same telecommunications network, a VoIP service would be classified as an STS. As in the discussion of carriage services above, just a few STS issues are noted so as to provide a focus for this discussion. Matters that arise for the providers of include: numbering emergency service call routing; charging and billing requirements; quality of service; the Customer Service Guarantee; pre-selection; and customer equipment standards. 1 Available at 2 For more details, see the ACA brochure, Know Your Obligations Carriers, Carriage Service Providers, Internet Service Providers, which is on the ACA website at 3 See Know Your Obligations Carriers, Carriage Service Providers, Internet Service Providers 9

10 4. VoIP services 4.1 VoIP service delivery processes VoIP is a technique used to provide voice telephony using various service delivery processes. Some of these are described here to enable the discussion to focus on some typical processes that attract the interest of regulation in the Australian voice services market. The key issues are whether the provision of VoIP involves the supply of a carriage service and whether it is supply by one person to another outside the first person s immediate circle. 4.2 VoIP environment In some cases, VoIP offerings are stand-alone services such as the PC-to-PC services outlined below. In other cases, VoIP services connect to the circuit-switched portion of the public switched telephone network (PSTN). Before discussing VoIP services, it is necessary to outline the different ways in which VoIP services can be offered to end-users and to indicate the service processes that are not relevant to this discussion. This paper attempts to identify key issues common to a number of VoIP services. It cannot cover all the technical details managed by the providers of VoIP services. IP networking 4 operates on existing telecommunications infrastructure where VoIP providers use existing ADSL-based broadband access services. IP networking can also operate on new links constructed for that purpose. The use of IP techniques to provide voice services requires there to be suitable transmission links to the end-users or else links must be constructed to enable VoIP to be extended to the end-users in question. Cost savings associated with the use of IP techniques are savings in the use of transmission links and should not be confused with the provision of the links themselves. The focus of this paper is on the provision of telephony or telephone-like services to customers where IP or similar techniques facilitate some service features that differ significantly from those that the end-user encounter with the current PSTN. It will consider the regulatory and end-user outcomes for these services. As the regulations are technology-neutral, the focus is on the implications for the end-user and the provider rather than the specific techniques used. IP techniques are often used within the core of a provider s network to provide long distance links without the end-users being aware that such techniques are being used. IP techniques are particularly popular for pre-paid, long distance, or international service providers. As the current Australian industry regulations are technology-neutral, internal network processes including IP network processes that are hidden from end-users are not considered in this paper. Premises wiring xdsl Modem & internet access device at customer s premises Copper pair Process 0 DSLAM in local exchange Public Internet Managed IP network Circuitswitched part of the PSTN Transmission Link Figure 1: Voice on Broadband or Voice on DSL 4 See article on the TCP/IP at and a tutorial at 10

11 The discussion of VoIP services is frequently confused by references to services that are provided over infrastructure that could be used or is used to also provide broadband Internet access or other IP-based services. These services are provided on committed or fixed bit-rate links with no dynamic contention for resources between a voice service and other services on the link. As the services do not use IP processes, the designation Process 0 is used in this paper. At least one Australian company has announced plans to offer voice services using derived circuits on its existing broadband access network. These services can be provided only where the provider has a presence in the immediate vicinity of the end-user. Examples are where the provider has a presence in the local exchange associated with the end-user or has a radio link to the end-user s premises. These voice on broadband or voice on DSL services are simply another type of PSTN service supported by a transmission link to the network rather than by a copper pair connection. These services do not differ from PSTN services that use 2 Megabits per second (Mbit/s) PCM links in the access path other than in the use of more up-to-date equipment in the transmission path. The general discussion of VoIP services relates to these services only in so far as they may be provided with equipment that could also used for VoIP service processes, for example, digital subscriber line (xdsl) links, and in their reliance on power at the customer s premises. As these services are not VoIP services, there will not be a further reference to them in this paper. Figure 2 illustrates the VoIP processes outlined separately in the subsequent paragraphs. C B Public Internet Managed IP networks Circuitswitched part of the PSTN Figure 2: VoIP service access processes Although not shown, it is assumed in Figure 2 that end-users acquire Internet access via an Internet service provider (ISP). For example, end-users may have a direct contract with an ISP providing Internet access when they access the Internet from a home computer. Alternatively, end-users may also access the Internet via an ISP that is contracted to another entity, for example, a hotel or an Internet café. A relevant factor in the discussion of VoIP is whether the end-user or the voice provider can manage arrangements for the VoIP service for the entire IP pathway between the end-user s location and the interface point with the circuit-switched component of the PSTN or the ultimate destination of a call. Some VoIP service providers may use specific protocols to give the voice packets priority over data and other non real-time services supported by the IP networks. Where an end-user who acquires a VoIP service from their broadband Internet access provider and that same provider also arranges connection to the circuit-switched part of the PSTN, then the VoIP service may use managed IP networks throughout for the access to the circuitswitched portion of the PSTN. Outcomes similar to those with a single managed IP network can be achieved if the VoIP provider subcontracts part of the IP pathway while maintaining control over the end-to-end process, to enable the use of specific protocols if needed. The area in the diagram shown as managed IP networks illustrates the situation where an enduser or the VoIP provider may have a contractual relationship with the operators of other IP networks for the VoIP services carried. Session initiation protocol (SIP) interfaces allow VoIP calls 11

12 to be handed over between IP network providers while retaining the essential VoIP networking processes. The routing of VoIP links through managed IP networks can be contrasted with routing via the generic or unmanaged Internet, which could separate managed IP networks. In the case of an end-user who uses their VoIP terminal (usually a PC) from an Internet café or hotel hotspot, the access provider is probably unaware of the extent of management of the connection they provide to create the VoIP connection. The access provider will route the call across the Internet using its upstream ISP to the VoIP service using generic Internet processes. The VoIP provider could collect the packets via its public Internet access and provide the interface to the circuit-switched portion of the PSTN. This is illustrated in Process B in Figure 4. Figure 2 indicates the access to the circuit-switched portion of the PSTN as a single interface. There are two PSTN interface options a common channel #7 (CCS#&) or an integrated services digital network (ISDN). Where the interface with the circuit-switched component of the PSTN is a CCS#7 connection, the provider will have contracts with a number of voice service providers for routing calls. In particular, the other providers will route the calls for numbers allocated to the VoIP provider to the provider s CCS#7 interface point. In the second option, the interconnection with the circuit-switched part of the PSTN is via a regular ISDN service or interface. This ISDN option is favoured by some new entrants to the market because it requires less capital investment. However, because it is a digital interface, the voice quality can be the same as for a CCS#7 interface. Where the VoIP service interfaces with the circuit-switched portion of the PSTN using an ISDN port, the provider of the ISDN service must provide the CCS#7 interface point or points to which calls using the numbers issued to the VoIP end-users can be routed. This provider of an ISDN service also has a key role to play in providing VoIP number portability. This discussion of VoIP processes considers primarily how end-users can gain access to customers on the circuit-switched portion of the PSTN and thus considers calls from an A-party on the left hand side of the diagram to a party on the right hand side of the diagram. In reality, VoIP calls will terminate on a B-party. The diagrams used in this paper are simplified by omitting details of how calls could be routed all the way through to a B-party. When calls are received by VoIP customers, the process would flow in the reverse direction or loop back at some point in the indicative diagrams. 4.3 VoIP service processes A ADSL modem Internet Access Device Premises Ethernet Cabling Copper pair DSLAM at Local Exchange Process A Public Internet Gateway function to ISDN or CCS#7 circuits Circuitswitched part of the PSTN IP network of VoIP provider or service partners Figure 3: VoIP provided on a controlled IP network Process A: Services using Process A use a managed network in the path connecting the end-user to the circuit-switched part of the PSTN. These services may be recognised by the fact that the voice 12

13 service is provided by the provider of broadband Internet access and the term access associated VoIP services may be used to describe these services. In services using Process A, calls are routed using SIP or other IP-interfacing protocols through to the circuit-switched portion of the PSTN on networks where the VoIP provider could have a service level agreement with the other parties that participate in routing calls. Such contracts and arrangements allow the VoIP provider to initiate and maintain processes to control the resources available for VoIP calls. There are some Australian VoIP service providers using the Process A service configuration and this is the configuration for many large corporate services with IP PABXs. These providers can offer these services to customers over a wide area. In general, the services can be offered in any location in the area where the provider or a service partner can offer broadband access to the end-user and that broadband access can connect directly to an IP network that the VoIP provider controls. B ISP s IP network Process B Handover from VoIP provider to upstream internet access provider Gateway Public Internet DSLAM at Local Exchange Handover from ISP to upstream internet access provider VoIP provider s IP network Circuitswitched part of the PSTN Figure 4: VoIP using the internet in the access network Process B: For simplicity, the diagram for services using Process B omits the equipment at the customer s premises and the copper pair to the local exchange. It concentrates on the part of the access path from the DSLAM at the local exchange and shows how the end-user has access to the Internet via one IP network, for example, its own ISP, and acquires VoIP services from a separate entity. The IP packets that form the VoIP calls are routed by the end-user s ISP across the public Internet to the VoIP provider, which assembles the packets and connects the calls to the circuit-switched part of the PSTN. Process B differs from Process A services in that the VoIP provider cannot contract or make service level agreements for quality of service with other participants in routing calls and cannot manage the connection from end-to-end. The end-user s ISP may not even be aware that VoIP services are being carried on their network. Consequently, the quality of the voice connection would be in part determined by the performance of the public Internet and of the network of the ISP of the end-user. Some VoIP services using a Process B configuration are also planned for Australia. A VoIP provider that intends to use this configuration can offer its service to customers of other broadband access providers. It can market its services nationally to end-users with broadband access and is not required to have a network presence close to its end-users. Question 4.1: Do existing arrangements enable Process B VoIP providers to operate competitively, independent of broadband access providers? Can they do so on a basis that allows them to provide a reasonable quality of service? 13

14 C One ISP s IP network Process C Public Internet Other ISP s IP network Access to ISP 1 Handover to upstream internet provider Handover to upstream internet provider Access to ISP 2 Circuitswitched part of the PSTN Figure 5: PC to PC VoIP Process C: Some VoIP services are simply the interconnection of two parties that are connected to the Internet by their ISP. These services do not provide interconnection through to PSTN customers using E.164 numbers. Process C services are referred to as PC-to-PC services because in their simplest form these connections may not require the use of a traditional handset. They could even use the built-in microphone and speaker of, for example, a PC or Internet game terminals. PC-to-PC voice connections can vary in the sophistication of the terminal equipment used and in whether or not there is a provider of the service. Where the PC-to-PC connection is set up by two end-users who have bought compatible software and ascertained personally their ability to make or receive calls, then the VoIP connection may be a private arrangement between the parties. If a third party has a role in supporting call set-up, then a service is possibly being provided to the parties and, if the A or B parties in the connection are located in Australia, that third party will be subject to relevant parts of the Telecommunications Act. Question 4.2: What issues need to be considered by the ACA in exercising its existing regulatory powers where the provider of the infrastructure that links an end-user to the national network is unaware of the use of that link for the provision of a carriage service? Question 4.3: Are there other service models that should be considered by the ACA that have implications for exercising its regulatory powers? If so, please outline these models. 4.4 VoIP service in the corporate market At present, there is a high degree of interest in providing VoIP services to residential customers or the small business sector. These services may use the same techniques that are used to provide IP PABX functionality in the large corporate market sector. In the large corporate sector, IP resources such as those that manage call set-up may be dedicated to a specific customer, while for the residential or small business market sector, economies of scale may require that the same or equivalent IP resources are shared across multiple users. Some service features that will be new to the residential sector are already being provided to the corporate sector. While VoIP services in the corporate market are usually Process A services, it is not unusual for individual corporate users to be able to log on to the corporate network using a remote Internet access and operate remotely as individual Process B end-users. The current market interest in the provision of VoIP services relates to the use of IP technology to provide services in the residential market. While customers in the corporate sector can use their market power to influence the nature, reliability and quality of the services provided, this does not apply in the residential sectors where customers must choose between ready-made 14

15 offerings. The ACA is interested in the service packages that could be offered in the residential sector, even though similar services may have been offered in the corporate sector. The telecommunications regime already provided for some differences in regulation according to market segment. For example, the Customer Service Guarantee and access to the TIO scheme are effectively limited to residential and small business customers, while the untimed local call obligation only applies to residential and charity customers. Question 4.4: Should regulation of VoIP services by the ACA depend on whether they are to be supplied to corporate, small-to-medium enterprise, residential or some other market segment? If not, why not? If so, how could these market segments be identified for separate consideration? Question 4.5: What issues would the ACA need to consider in exercising its existing regulatory powers if there were to be different regulatory treatment of VoIP services in specific market sectors. For example, how could the different market sectors be identified for regulatory purposes? Question 4.6: What other issues arise in relation to the extension of VoIP services from the corporate sector to other market sectors? 4.5 VoIP service characteristics Service characteristics introduced by VoIP are as follows: Nomadicity VoIP services may offer a nomadic service feature by enabling end-users to make and receive calls at numerous locations nationally and internationally, generally with the same service number (for example, the customer s ability when travelling to make and receive calls at various locations providing broadband access, such as airports and cafes providing WiFi access). The ability to offer nomadic VoIP services breaks the nexus between a person s telephone number and their location, which characterises fixed telephony services. Nomadic VoIP services also differ from mobile telephony services because they do not involve inter-cell handover. The Numbering Plan does not currently include appropriate numbering arrangements for nomadic services. An important issue for numbering is how important or feasible it is to identify the location of the caller or called party when using nomadic services. A specific example and implementation of the flexibility of VoIP services is when VoIP customers log on through an Internet access port other than that where their service is nominally located. When doing so, the service may still be accessible through the same service number or address. The service is then being used in a nomadic manner from a remote location (discussed further in the numbering chapter). With this feature, customers are provided with two associated functions. The first function is the automatic diversion of calls to the remote location of the customer, which could occur without the knowledge of the party making the call or their service provider. This results in users that make calls to the VoIP customer being charged as though the VoIP customer was at the nominal location of the service. The second function is the ability to make calls from that remote location. Where the VoIP customer makes a call from a remote location, call charges and any number presented by a calling number display feature will be under the control of the VoIP provider. An example of nomadicity is a customer s ability to use VoIP through a WiFi hotspot. Question 4.7: When a VoIP customer makes a call, are there significant issues for the recipient of the call about the actual location of the VoIP caller and any location that may be signified by the number issued to that VoIP customer? 15

16 Question 4.8: When a VoIP customer receives a call, are there significant issues for the caller about the actual location of the VoIP customer and any location that may be signified by the number issued to the VoIP customer? Differential call charging Call charges may be based on: whether the call originates and terminates on the same network (on-net) or on different networks (off-net); the quality of service provided; the volume of data sent; or a flat access fee. The offering of additional features, such as video-calling, may also affect the call charge. Although the Numbering Plan is not a price-setting document, the definitions of services offered using each specified number range do provide a framework for charging arrangements and some understanding of call rates. For example, calls to geographic numbers used for fixed services are either untimed or timed, calls to mobile services are timed (although carriage service providers offer a variety of calling plans) and special services are provided at free, local or premium rates. This information is often used by consumers to estimate the likely cost before making a call. The ACA is therefore mindful of, but not necessarily driven by, the charging arrangements, and expectations, of end-users associated with the existing number ranges and the information that could be conveyed by a new number range. Question 4.9 How important is it that VoIP numbering does not undermine current arrangements that give some indication of likely call costs? Increased functionality VoIP may be offered as part of a basket of services, with access also being offered to additional IP-supported services, for example, video-conferencing, electronic voic , call logs and multimedia communications. The ability to access additional services that cannot be accessed by single line PSTN telephony, such as video-conferencing, may be a consideration when determining what numbering arrangements are most appropriate for VoIP services. As mentioned, with the increasing convergence of technologies, it may be possible to offer a suite of IP services including VoIP, using a single telephone number. Alternatively, a device may be associated with more than one number, which indicates the type of service being utilised at a particular time. Question 4.10: Would the introduction of new features that can be associated with VoIP be facilitated by the use of a specific number range for VoIP services? IP networks and the Internet are not function-specific and can support a variety of services. Interactive voice connection can be added to certain connection types, for example, phone in connections to video conferences. For these situations, it is important to separate the voice component from the other services when considering the regulatory implications. If a multimedia session connects to a PSTN service using an E.164 number, the multimedia connection may need to adjust to or be adjustable to allow a party on a regular telephone instrument to participate comfortably in the connection. Internet gaming is another case that merits particular attention because real-time voice connections are now a feature of the popular Internet gaming platforms. The voice connections can be created without initiating a game and can be used as a voice network with other subscribers to the same game platform. On game platforms, other gamers are contacted using tags or noms de guerre. On initial registration, the platforms check that these tags are unique. These platforms allow voice communications independent of the E.164 numbering process. In these situations, the question arises as to whether these combined or hybrid services are in whole, or the voice component of them, STSs within the meaning of the Telecommunications Act. Given the historical light-handed treatment of value-added services and the general absence of regulation for services other than simple voice in the current regulatory scheme, it could be argued that it is not intended that such hybrid services be regulated as STSs. The Telecommunications Act appears to contemplate that an STS is essentially a voice service 16

17 (except where an equivalent is required by a person with a disability) in that additional purposes must be specified by regulation (see section 6(3) of the Telecommunications (Consumer Protection and Service Standards) Act 1999). Hybrid services might be best not considered as STSs or, at a minimum if feasible, the voice component may need to be considered separately from other service functionality. Question 4.11: Should the ACA treat voice telephony provided in combination with another service or as part of a hybrid service as an STS for regulatory purposes? If not, why not? Question 4.12: Should the ACA s treatment of the voice or hybrid service differ depending on whether the voice component is only available in combination with the other service/ function or is available independently? Question 4.13: What other issues arise in relation to the provision of voice services as an adjunct to other services?? Question 4.14: What issues should regulators consider for real-time voice services that can be easily incorporated in more generic information systems? Different quality of service As discussed later in this paper, there are quality of service issues associated with the introduction of VoIP services and some of these have potential implications for numbering. While VoIP is capable of voice quality equivalent to or better than that of circuit-switched telephony services, there are methods of supplying VoIP at considerably lower quality levels than the levels with which consumers are familiar and expect. Services supporting lower quality of service may be offered more cheaply than higher quality services. An issue for the ACA to consider when allocating numbers is whether the potential for providing for a range of service quality, determined by price or available bandwidth, merits specifying a new number range for VoIP services. Question 4.15: Should quality of service issues be considered when determining numbering arrangements for VoIP services? Different consumer awareness and protection Most consumer protection arrangements in Australia are based on whether a service is an STS as defined in the legislation, which is technology-independent and can apply equally to VoIP services or to circuit-switched telephony services. There is significant consumer awareness of the features and cost of calls made using existing local, mobile and special service numbers. It is important that the numbering arrangements chosen for VoIP services either reflect consumer expectations of services provided using those numbers or indicate that unique service features and protections may apply. Question 4.16: How much weight should the ACA give consumer understandings and protection arrangements in determining numbering arrangements for VoIP services? Presence advice Until the advent of CCS#7, circuit-switched PSTN services were generally unable to ascertain the status of the B-party until a connection was almost completed. With VoIP services, it is often easy to check that the B-party is available. Usually, when a user of a VoIP service connects to the network, their equipment will signal to the VoIP provider s system that they are available to receive calls. An orderly disconnection of a VoIP service from the network may involve advising the VoIP provider s system that the end-user is no longer available. This process of maintaining an up-to-date record of the current status of end-users is known as the presence management process. This is a particular requirement in VoIP services where the end-user s equipment may not have a fixed IP-address, because the service may allow the end-user to log in from any location through any suitable IP access point. Presence information may be commercially significant in networks that could route calls to an end-user either cheaply with an IP connection or more expensively through the circuit-switched portion of the PSTN. Networks with access to the presence information for an end-user may be 17

18 advantaged if they can route calls through an IP network rather than use the more expensive circuit-switched network. Question 4.17: What are the issues for different VoIP providers sharing information on the availability of their end-users to accept calls using IP networking? Question 4.18: Are there privacy issues if VoIP providers share information on the availability of their end-users to accept calls using IP networking? What are the privacy implications if users may test for the presence on the network of other users or for their availability to accept calls? Personalisation Access through a VoIP telephone number may be to a particular person, rather than a particular location, similar to how a mobile phone number is associated with a person. Numbers for VoIP services could be issued to individuals, rather than households or types of service. The issues for numbering arrangements include the importance of this development through to how to allocate numbering resources in an efficient and equitable manner given the potential for a sizeable increase in demand. A related, and perhaps long-term issue, is the relationship between VoIP and ENUM, a standard that is being developed to map traditional telephone numbers to Internet addresses. Some commentators consider ENUM to be a crucial component in the adoption of VoIP because it aims to provide global interoperability between domain addresses and telephony addresses. Question 4.19: How important are VoIP numbering arrangements for the move towards personalisation of telecommunications services? 4.6 Migration between VoIP service processes IP services are provided over programmable devices and it is relatively easy to change the nature of services provided. For example, access to the circuit-switched portion of the PSTN can easily be added to PC-to-PC services to convert them to Process A or B services. In the same fashion, many VoIP services that use Process A can be designed to permit the enduser to log on through a distant Internet access port with which the VoIP provider does not have a direct connection or contractual relationship. In this way, Process A services can easily convert into Process B services. This ease with which VoIP services can change in nature is a factor in any discussion of VoIP regulation. Question 4.20: How should VoIP services that can easily change in key features, such as the inclusion of access to end-users based on E.164 numbers, be treated by the ACA from a regulatory perspective? For example, should their treatment depend on how they are used on a call-by-call basis or according to their multiple potential uses? Question 4.21: What other issues arise in respect of services that can be easily re-configured? 4.7 VoIP call set-up and management processes The call set-up and management processes of some VoIP systems are implemented in systems that may be remote from the end-users. A feature of many VoIP services is that the initial connection may involve direct communication between both parties and a call management system. However, once the connection is set up, communication is directly between the two parties in question, with only an occasional intervention of the call set-up and management process to manage billing of other feature requests and the clearing down of the call. As the call setup process is through IP connections, it can be performed remotely and can be shared across a large number of end-users. While locating the call management process remotely and sharing it between end-users may have economic attractions, it has regulatory implications because it could be located outside of Australian jurisdiction. However, local market obligations, such as the Numbering Plan and charging requirements, would still apply and need to be enforceable. The provision of call service through equipment in another market or jurisdiction can be an occasional feature of a VoIP service, even if it is not a regular part of an end-user s service. Overseas-based VoIP 18

19 services, especially using Process B and C, are already accessible from Australia over the Internet. The location of facilities and operations that are supplying carriage services provided to Australian end-users may require increased cooperation with overseas regulators. Question 4.22: What are the factors that might influence the decision to base VoIP operations and equipment, for example, billing and call or customer management systems, outside Australia as part of a long-term service solution? Question 4.23: What specific regulatory issues for the ACA will need to be managed if operations and facilities supplying VoIP services in Australia are located outside Australia? Question 4.25: What specific regulatory issues for the ACA, if any, would need to be managed if operations and facilities used to provide VoIP services to end-users outside Australia are located in Australia? Question 4.26: Will the potential requirement to seek assistance from overseas regulators have implications for any regulations applicable to Australian VoIP services for which critical equipment or systems are located overseas? 4.8 Ease of market entry VoIP presents an opportunity for some service providers, such as small ISPs or overseas providers, with minimal infrastructure and physical presence, to enter the voice market using IPbased services. These providers can offer voice services and can arrange for gateway connection of traffic (even for international calls) to the PSTN. Numbering arrangements chosen for VoIP could result in barriers to the market entry of these services and service providers. This is particularly the case if consumers are reluctant to accept service on an unfamiliar number or change numbers as part of service provision. Difficulties may also arise if technical and commercial arrangements need to be developed for services on the new numbers. Both of these factors could substantially limit the take up of VoIP services, particularly in the short term. Question 4.27: What is the potential impact of numbering arrangements of VoIP services on service take-up? Question 4.28: Would there be benefit in regulatory options whereby a provider could choose between using familiar numbers with the usual limitations, or unfamiliar numbers without limitations? Question 4.29: What issues are created for industry regulators by a reduction in the upfront cost of providing real-time voice services? 4.9 Implications of the global supply market The VoIP equipment and systems used to supply voice services in Australia are part of a global market for IP equipment. VoIP services were initially offered to Australian end-users by suppliers without a physical presence in Australia and accessible over the Internet. The use of equipment sourced from a global market will result in some overseas practices and business models being considered or implemented by suppliers targeting the Australian market. The ACA is seeking information on how it should respond to VoIP services that are currently being offered to Australian customers. It is also seeking information on future trends that arise from the relative facility with which service solutions available on the global market can be offered in Australia. Question 4.30: What VoIP-specific overseas trends or practices are relevant to the exercising of the ACA s existing regulatory powers in relation to VoIP services? Question 4.31: Should calling number display processes present domestic network numbers in the +61x xxxx xxxx format to facilitate the exchange of number information between end-users internationally and global supply? 19

20 5. Numbering 5.1 Background The ACA is required, under Part 22 of the Telecommunications Act, to make a plan for the: numbering of carriage services in Australia; and the use of numbers in connection with the supply of such services. This plan is the Telecommunications Numbering Plan 1997 (the Numbering Plan) 5. The objects of the Numbering Plan provide detailed guidance on the manner in which numbering issues are regulated. The objects include: i. establishing a framework to specify, allocate, use and port numbers used for carriage services; ii. facilitating any-to-any connectivity; iii. ensuring sufficient numbers are available, and are issued and used efficiently; iv. ensuring sufficient numbers are available to facilitate the introduction and supply of carriage services, access or connection by end-users to these services, and proper routing of calls; v. ensuring call charges and associated services are clear, transparent and comprehensible to end-users; vi. accommodating the capabilities and usage of different telecommunications technologies and terminal equipment; and vii. recognising and supporting the actual and potential role and contribution of the telecommunications industry in the management of numbers. The numbering arrangements for new services, including VoIP services, are one of the key regulatory issues that must be examined in the context of these objects. The Numbering Plan must also be compatible with the other legislative obligations placed on carriage service providers and recognised international standards. In particular, telephone numbers are formatted according to ITU-T Recommendation E.164. This provides significant flexibility for different countries to develop appropriate numbering arrangements, while ensuring the uniqueness of phone numbers and facilitating calls between networks in different countries. Under the Telecommunications Act, when varying the Numbering Plan the ACA must allow the public 90 days in which to comment on the variation (section 460) and must consult with the ACCC (section 461) Role of numbers Numbers used for voice telephony generally have considerable network and user significance, and serve multiple purposes: as a network address; as a name, for example personal or corporate identifiers (ENUM 6 may extend this); for routing calls; as a means of indicating charge zones for call charging; and as a device to inform end-users about the type of service (fixed, mobile, other special services), the geographic location of the called party (local services) and a broad indication of the call charge (local, free or premium). 5 The Australian Numbering Plan is on the ACA website at 6 ENUM allows telephony numbers to be mapped into domain names by reversing the order of digits, placing dots between the digits, and adding an.e164.arpa suffix. For example, the number becomes the domain name e164.arpa. The IETF believes that the application of ENUM is not limited to voice; it could also be used to address fax machines, pagers, modems, clients, and text terminals for the hearing impaired. An ENUM trial is currently under way in Australia. 20