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When you call an emergency service using a traditional or mobile phone, your location is immediately registered and verified by the call centre so that services can be quickly dispatched to your location. In an IP network, VoIP is just one of many possible IP-enabled applications, and location information is, at present, typically unavailable. Nortel's Graeme King discusses the implications of regulating VoIP for the provision of emergency and other essential services.

One particular application of VoIP that is rapidly growing in importance is VoIP over Broadband (VoBB), as broadband access uptake increases and provides the infrastructure for residential consumers and small business to access VoIP and other real-time IP services. Broadband access is a prerequisite for VoBB - and VoBB may well be an important driver of broadband network deployment.

In the future, VoIP will be provided over carrier-grade next-generation networks (NGNs) with a high quality of service (QoS), but current residential VoBB services use the public internet and, usually, consumer-grade broadband access, which is not designed to meet the engineering requirements of high quality voice services.

Initially, VoBB services required the calling parties to use PCs with specific VoIP software. In the last two years this situation has evolved. Normal telephone handsets can now be used with adapters (ATAs), allowing users to ring and be rung from the PSTN. Users can also have normal geographic phone numbers. In many countries, service providers are already providing VoBB, with some offering global access.

Regulatory concerns

Putting voice on an IP network is just one of many possible IP-enabled applications that could raise regulatory concerns. This voice application, however, causes the most immediate policy concerns because it competes with, and offers a substitute for, a service that has a history of pervasive regulation and high levels of political and regulatory attention.

VoIP can provide many benefits to users, including use of phone numbers from other countries or geographic areas, nomadic roaming, lower call charges for international and local calls, and other features such as presence, instant messaging and point-to-point file transfer. VoIP can also be integrated with other applications such as online gaming to allow participants to talk to each other or it can be used to direct voice access from web pages to helpdesks.

Already, 'conventional' service providers are responding to the lower call costs of VoIP providers by reducing call charges. Some offer bundled service packages that include many free local calls and reduced cost long distance calls; others, such as BT and Verizon, are providing their own VoIP services. Part of the cost advantage may be lost when monthly broadband fees are included, but consumers largely appear to be ignoring these fees.

A key difference between VoIP and normal PSTN voice services is that the service carriage is undertaken by parties that do not supply the VoIP service. This separation of content carriage and service provision is a fundamental change, and challenges existing approaches to regulation - although it is common to many services provided over the internet, services which are not as demanding as voice or have not been subject to extensive regulation.

For regulators, VoIP raises many issues - although most users would say the benefits far outweigh them - and many are being addressed. These include: that service providers may provide VoIP services from outside the country in which its customers use the service - generally by a different service provider than the ISP providing the broadband access; emergency calling may not be possible and caller location information may not be available; much consumer equipment may not operate during power failures - already an issue with cordless phones; calls to premium service numbers requiring geographic information for correct routing may not work; QoS may vary greatly in terms of voice quality and the percentage of time a service is available; lawful/legal interception may not be as reliable as on the PSTN; security of the call content may be uncertain, partly because of using the public internet; a consumer's own home network can have a significant impact on QoS, as can the broadband access package, the applications, and the various users of the access services and services may be nomadic - and mobile in the future - so their location may change without the service provider knowing.

The lack of consumer understanding of VoIP services and their characteristics can be addressed, to a large extent, by better and consumer friendly information rather than formal regulation. In Australia, the Australian Communications Industry Forum has issued and is developing fact sheets for consumers, as well as guidelines to help service providers identify information they should provide to consumers.

Finding a solution

Unlike mobile (cellular) phone networks, where there's provision for the network to determine the location of a handset, there are generally no reliable national databases of VoIP user locations, and the caller could well be nomadic or even mobile.

In the US, the National Emergency Numbering Association (NENA) developed an architecture that it proposed to the FCC, and indications are that the FCC and the Canadian CRTC will endorse the architecture and require it to be rolled out nationally. A VoIP location architecture is essential in North America because of the thousands of emergency call answering centres and the need to route calls to the correct one. The NENA model has also been proposed for use in Europe.

It works like this: the voice service provider has a call server, which provides the VoIP capability to its customers.

The voice service provider knows that someone is placing a voice emergency call but doesn't know where the subscriber is located. With the NENA model, the access provider (the ISP) needs to add a location information service (LIS) function to its network that will interwork with the voice service provider to provide a location of the voice user during an emergency call. It should be noted that this location information could easily be used for many other new revenue generating services.

Implementation of the NENA architecture requires a number of protocols to be developed by the IETF and the construction of the LIS databases will be a major activity. One issue that will need consideration is whether implementation by independent ISPs and broadband access providers should be regulated or not.

The case for VoIP-specific regulation

Current voice services regulation is based on a PSTN rationale. It has evolved over many decades, is intrinsically linked to the engineering and performance of purpose-built voice networks, and has also influenced the development of capabilities of PSTN equipment and networks.

VoIP has different technical characteristics from the PSTN and different operational relationships to it. The most fundamental are the separation of carriage and service provision, and the use of a multimedia data network to carry voice services rather than an engineered end-to-end network. Also included is specification of the performance characteristics of customer premises equipment.

In most countries, this means that existing PSTN regulation cannot and should not be directly applied to VoIP service providers. For example, solutions to provide location information for emergency calling and other purposes are being developed, but they require the consumer's broadband access provider or ISP to add specific capabilities to their networks. Similarly, QoS will be largely under the control of the broadband access provider, not the VoIP provider.

If these and other conditions were to be mandated by law, broadband access providers would be required to invest in capabilities to support services they do not provide and from which they do not directly earn revenue. At the same time, VoIP providers wanting to have these capabilities available for their users would have limited or no ability to ensure they are present or effectively maintained. It follows that industry regulators will need to direct obligations to the parties best able to achieve them.

Regulatory decisions and the market for VoBB

The growing provision of VoBB services has drawn a range of regulatory responses around the world and many countries are currently considering the issues it raises. Overall, we are seeing two types of decisions: 'light touch' regulation aimed at promoting provision of these new services, and a technology-neutral approach based on the argument that VoBB is just another voice service and should be subject to the same regulation as PSTN voice services.

In those countries applying the first type of regulation, or taking a light touch, the main focus has been on VoBB's emergency calling capability.

This has prompted decisions ranging from mandating this capability to having no requirement whatsoever, but still, there is strong encouragement to make the capability available. Countries and regions taking this type of regulatory approach include the European Union, Hong Kong, Malaysia, Singapore and the United States.

The technology-neutral approach has been adopted in Canada. Other countries, like Korea and Japan, have a mixed approach to VoIP services, with PSTN access regulated essentially as normal voice and other VoIP lightly regulated.

Broadbandtrends.com predicts that by 2010 in the Asia-Pacific region (including China) the number of VoBB lines will range from 36 to 59 million, as compared to the region's estimated 647 million PSTN and NGN lines. Globally, the prediction is for 134 million VoBB lines, about 11% of all land lines, with revenues of US$36 billion.

The OECD recently concluded that traditional fixed-line carriers are losing market share to cellular mobile operators. It also found that the growing popularity of VoIP threatens fixed-line revenues of traditional carriers, especially for international calls. In addition, VoIP presents a challenge to mobile telephones, now more numerous than fixed connections in many countries.

For now, VoBB will be lightly regulated in most countries but as VOBB services increasingly substitute for PSTN voice services and NGNs start to be deployed, it is likely that more of the social/consumer regulations that pertain to PSTN voice services will also be applied to VoBB services.

Some may call for the full application of PSTN-like economic regulation but this will need rigorous examination because VoBB and other VoIP services will benefit from a light touch regulation that promotes provision of these new services.

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