U.K. REGULATOR, EUROPEAN COMMISSION FOCUS ON VoIP CONSUMER PROTECTION

Under U.K. law implementing various EC directives, providers of publicly available telephone service (PATS) -- defined as service available to the public for originating and receiving national and international calls and access to emergency organizations -- are more highly regulated than those that provide other electronic communications services, OFCOM said in a discussion paper. VoB providers fitting the definition of a PATS are subject to the same rules as traditional telcos. The “wider debate,” OFCOM said, is the provision of VoB services that don’t offer access to 999 (the U.K.’s emergency number), therefore aren’t considered PATS and aren’t subject to the general conditions.

VoB services can “look and smell” like standard telephony services but may not offer access to 999 and other facilities such as directory assistance or special measures for end users with disabilities, OFCOM said. And while it may be enough to tell purchasers that a service doesn’t offer itemized billing or other traditional telephone services, there’s an argument that all potential users of a service need to be made aware it doesn’t provide access to 999, OFCOM said.

Possible solutions to ensuring consumer protection such as VoB services include industry self-regulation, co- regulation (industry guidelines approved by OFCOM) and formal regulation, OFCOM said. The law now requires stiffer regulation of services providing access to emergency services than of those without such access. The benefit of such an “all-or-nothing” approach might be that where VoB clearly is sold as a secondary service, consumers will be more likely to keep their standard phone lines, OFCOM said. On the other hand, it said, a service with less reliable access to 999 could be better than no access at all. Regulation shouldn’t create artificial constraints on services offered, OFCOM said.

Participants at OFCOM’s Feb. 25 meeting have been limited to potential providers of VoB services and user representatives. Questions for discussion include: (1) Whether all potential users should be notified of the limitations on their VoB service such as lack of access to 999. (2) How VoB providers can ensure consumers are aware of such limitations. (3) Which solution -- self-regulatory, co- regulatory or regulatory -- is best, or whether there’s another solution altogether. (4) Whether nonguaranteed access to 999 is better than none at all.

Four companies now provide VoB services in the U.K. The latest entrant in the field is British Telecom (BT), which in Dec. introduced a service that lets cable broadband customers make phone calls online. BT will be at the OFCOM meeting, said Thomas Kiedrowski, mgr.-operational regulation, BT Group Strategy. Broadband voice services could fall under the new EC e-communications regulatory framework, he said, but it’s not clear at what level. Because such services aren’t at the point where they are considered main telephony services, he said, it’s uncertain whether they should be regulated like the Public Switched Telephone Network (PSTN) or whether it’s possible to regulate them at all. OFCOM’s predecessor took the view that VoIP services should be regulated based on end user expectations, he said. If the services are sold as PATS, they are likely to be regulated as such, he said.

The Royal National Institute for Deaf People (RNID) is “closely following the technical developments and the debate around [VoIP] in general and [VoB] in particular,” RNID Dir.- New Technologies Guido Gybels said. PATS have legal and regulatory duties to meet certain needs of deaf and hard-of- hearing people, including access to RNID TypeTalk, the U.K.’s speech-to-text relay service, Gybels told us. RNID worries that VoB technology isn’t meeting some of the requirements of the deaf and hard-of-hearing, he said, “and we urge all the parties involved to make sure these needs are addressed before such services are rolled out to the public.” If that doesn’t happen, he said, barriers to opportunity and fulfillment for deaf, hard-of-hearing and speech-impaired people “will increase as a result of progressing technology, rather than diminish.”

The Consumers’ Assn. also will have a representative at the meeting, Senior Policy Adviser Allan Williams said. With VoB in its infancy, he said, the group will be looking to see whether this is an issue on which it should focus its attention. The Royal National Institute for the Blind is working on providing greater access to Web sites via traditional landline phones and doesn’t see VoB as a threat to people with sight problems, said Julie Howell, digital policy development officer. “We welcome” VoB, she said.

Some publicly available IP voice and associated convergent services will be regulated as PATS, the Analysys report for the EC said. The question is how to decide which voice and related services are PATS and, therefore, subject to similar regulation -- and considered part of the same market --as existing nondominant PSTN service providers. There are 2 ways in which PATS could be defined: (1) Narrowly: Any VoIP service provider that doesn’t offer access to the emergency services is not PATS, and any that does is. However, the report said, although “clear and simple, this is likely to be a disincentive” to provide access and “may have significant implications for public safety as VoIP becomes more widely adopted.” (2) Broadly: Any VoIP provider that offers a service in direct competition with -- and as a substitute for -- the PSTN is PATS and is subject to the full range of regulations on PATS providers. However, the report said, such a definition could mean saddling with tougher regulations many VoIP providers that weren’t equivalent to the PSTN.

“It is not obvious what approach should be taken,” the EC report said. Clarifying whether a service is PATS is a “serious issue” for regulators and it affects telecom market reviews currently under way by national regulatory authorities (NRAs). “There is no easy answer… and we suggest that NRAs and the EC may wish to form a working group to consider how to resolve it,” the report said. NRAs also should decide how VoIP limitations on emergency services should be explained to end users, it said.

The report also raised concerns about the potential lack of numbers in European Union member states’ national numbering plans to allow access to numbers for many new service providers and services. It said NRAs should consider whether to allocate additional numbering ranges for VoIP services to avoid putting pressure on the existing system.

A further set of issues arises from the fact that many IP-based services will be able to be provided by extraterritorial providers, the report said. Some providers could be outside the European Union and therefore not subject to EC regulations and remedies, it said. Moreover, it said, if a service provider’s network assets are based in a different country from a user, it may be more difficult to ensure continued network and service availability. “These issues are familiar in e-commerce and Internet communications services, but will now appear for the first time in the voice services market,” the report said. It recommended NRAs and member states consider whether to modify or extend current policy to extraterritorial provision of domestic or EU voice services.

VoIP uptake is slower in Europe than in other parts of the world (particularly Japan), the report said. However, it said, “in our opinion, these differences between countries do not mean that VoIP is failing in Europe, or that major changes in regulatory policy are necessarily required -- but they do indicate very different market conditions.”