The Spanish Comisión del Mercado de las Telecomunicaciones (CMT) has published a consultation document on "the provision of voice services using IP technologies", containing tangible proposals for a 'light touch' regulatory approach, aimed at fostering the development of innovative VoIP services.
The document is remarkable in many respects, including because it takes a fairly confrontational line with regard to the existing EU directives and the prospects for a harmonised approach at EU level.
T-REGS is therefore providing an extensive summary and discussion of the CMT's proposals.
The deadline for responses to the CMT consultation is 20 August 2004.
The Spanish regulatory authority makes reference to recent consultations of the European Commission, Ofcom in the UK, and Reg-TP in Germany, and points out that, given that the EU directives will not be modified in the immediate future (first review, of the scope of Universal Service, is scheduled for 25 July 2005), action at national level is required to facilitate (and not impede) the development of innovative VoIP services under a stable regulatory framework. This is expressed as follows: "los reguladores en la UE habrían de tomar medidas nacionales, preferiblemente armonizadas a nivel europeo, al objeto de facilitar (y no bloquear) e incentivar el desarrollo de servicios innovadores de VoIP en un entorno regulatorio estable y predecible".
The CMT points out that the use of packet-switched technologies in the context of the provision of voice services has progressively established itself as a solid reality, and that since the end of 2003, announcements have been made of services addressed to end-users which are positioned as a substitute for the traditional circuit-switched publicly accessible telephone service.
It then discusses various categories of VoIP services.
Category 1: "Voice over the public Internet", abbreviated to "VoIPweb". This refers to PC-to-PC messaging applications, Skype, etc. and the CMT concludes that it is not self-evident that these are a substitute for the publicly accessible telephone service (PATS) defined by the new EU regulatory framework. The reasons given are that the providers are not technically able to meet regulatory requirements, in particular in terms of access to emergency and directory services, interoperability, network integrity, etc.
Category 2: "Voice over the public Internet with mixed scenarios", abbreviated to "VoIPweb and traditional network". This refers to services using E.164 numbers and gateways to PSTN/ISDN/Mobile networks, such as Vonage, etc. the CMT raises the question of which types of E.164 numbers should be assigned: geographic telephone numbers, mobile numbers, or a specific number range to support VoIP services. The CMT notes that one provider has formally notified the CMT that it is providing this type of service in Spain.
Category 3: "Voice on the IP networks of operators which are notified to the CMT as voice telephony providers", abbreviated to "VoIPred". This refers to multiple sub-scenarios: (a) Use of IP only in the backbone network, not in the access network (BT Spain and Tele2 Spain use this solution), (b) one of the access networks (originating or terminating segment) uses VoIP, and (c) end-to-end VoIP. In all cases, the calls are using E.164 numbers from the national numbering plan on both ends. The CMT points out that whilst such services MAY BE completely comparable/substitutable for the traditional regulated publicly accessible telephone service (PATS), they may also be more limited, or offer extra features which PATS is not able to offer, for instance nomadic usage ("reubicación o movilidad de acceso en redes fijas").
The CMT goes on to comment that the definition of PATS, as it is contained in the EU directives, is not quite technology neutral, and that none of the currently existing numbering arrangements seem appropriate (including due to tariffing issues and nomadic use). According to the CMT, issues surrounding VoIP will have to be revisited when the EU directives are reviewed, and the CMT then makes the following statement:
"En particular, además de otros conceptos en las Directivas, la neutralidad tecnológica se vuelve paradójicamente impracticable cuando una tecnología como la de IP puede ofrecer un servicio de VoIP percibido por los usuarios como muy similar a la telefonía convencional, aunque presenta importantes diferencias con ella tanto en sentido positivo (pe. menores precios, reubicación, flexibilidad y conjunción con servicios convergentes) como en sentido negativo (actualmente es posible que técnicamente no pudiese cumplir alguna de las obligaciones regulatorias del servicio telefónico disponible al público)".
The following chapter of the CMT document puts forward that, today, only Category 3(a) is to be assimilated with PATS, because, it is is the only one that fully meets the definition of PATS and, from a demand perspective, it is the only modality which is completely indistinguishable for the end-user. The CMT also suggests that, whilst the Spanish market review under the EU regulatory framework is still pending, other categories of services might be considered to be emerging markets, and hence, in principle, should not be subject to ex-ante regulation.
T-REGS note: This statement is made without explicitly distinguishing economic regulation from the regulation of market access, numbering, consumer protection regulation, etc.
In Chapter 7, the CMT makes detailed proposals for 'light touch' regulation of the various identified categories of VoIP services in the short term, as regards:
- access to emergency services
- access to directory services
- interconnection and interoperability
- lawful interception
- numbering (the CMT proposes to dedicate a NEW numbering range)
- number portability
- network security and integrity
- contracts, quality of service, information for consumers
- public payphones
- minimum service quality
- control of expenditure (itemised billing, disconnection)
- services for the disabled
- other aspects
In Chapter 8, the CMT briefly discusses VoIP interconnection, and invites comments from interested parties, and in Chapter 9, brief remarks are made, and questions raised, about VoIP in mobile networks (GPRS, 3G) and in relation with WiFi. Chapter 10 contains an overview of international regulatory practice for VoIP, covering the United States, Japan, and for Europe: Finland, the UK, Spain, Norway, Austria and Denmark. Chapter 11 briefly addresses the impact of VoIP on universal service, on subscription fees, unbundling/bitstream, interconnection, the extraterritorial nature of certain VoIP services, and the multiplication of the amount of telephone numbers.
Chapter 12 sets out the context of the consultation, emphasizes that all forms of VoIP are liberalised in Spain, and that most VoIP services are different from the traditional voice telephony service, in terms of access modalities, service types/levels and pricing. The CMT confirms its opinion that minimal regulation of VoIP is appropriate, so as to promote aggressive competition based upon the exploitation of technological innovation, whilst recognising that equality of opportunities between established and new operators must be preserved. The CMT also commits itself to closely monitor the development of VoIP-based services, and in particular the so-called collateral effects, such as the shifting of traffic patterns, effects on universal service financing, subscription tariffs, and wholesale unbundling/bitstream and interconnection charges. The CMT also emphasizes its awareness of consumer protection issues, and recognises the distinction between services positioned as a secondary telephone line (under the assumption that consumers retain their traditional telephone line) and services positioned as a primary telephone line. In addition, the CMT makes clear that European-level harmonisation may be desirable, but that it may be necessary to adopt measures at the national level, in anticipation of modifications to EU directives or the introduction of other EU-level measures, which can only be expected in the longer run.
The following specific questions are put out for public consultation:
1. Does it make sense to consider VoIP services as "differentiated" from traditional regulated telephony? Which other approach would be more appropriate?
2. Is the categorisation of VoIP services put forward by the CMT adequate? Which other classification would be preferable?
3. Is it necessary to define a specific numbering range for VoIP services, so as to differentiate VoIP services from traditional telephony? If so, should numbers be assigned in the short term and without awaiting possible European harmonisation?
5. Is it appropriate not to regulate the VoIPweb configurations whereby no telephone numbers are used? Which obligations or conditions could be imposed and how should they be applied? How should one interpret, in the context of VoIP, the provisions in the EU directives relating to emergency services and location information for emergency services "insofar as it is technically feasible"?
6. Which obligations should be imposed for VoIPweb and VoIPred configurations, which require specific numbering resources? In particular, should all VoIP service providers support access to emergency services and lawful interception?
7. Is it necessary to provide incentives for direct IP-level interconnection? How?
8. Which implications are to be expected from the provision of VoIP services by making use of mobile equipment? What are the possible consequences for the market for access and call origination on mobile networks (Market 15 of the European Commission's Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation)?
9. In the context of "collateral effects" (see above), which effects (listed above and others) can be expected from the increased provision of VoIP services? Will these effects be mitigated in some ways? How?
10. Which effects can be expected from the extra-territorial provision of VoIP services?
11. Is it appropriate to react rapidly at national level to service provider requests which are already occurring, or is it preferable to wait and rely on a harmonised position of the European Commission?
For a detailed discussion of the CMT's proposals, please contact Yves Blondeel.