INDUSTRY SEEMS COMFORTABLE WITH VOB REGULATION, BUT WARY OF DETAILS
Regulation of Voice-over-Broadband (VoB) service is inevitable but it’s unclear how stringent it should be, industry representatives said after a U.K. Office of Communications (OFCOM) meeting on VoB issues. The meeting last week, which focused on regulatory and consumer protection issues (CD Feb 12 p17), drew about 200 people from industries running the gamut from information technology service providers and new operators to ISPs and companies such as Tesco, a U.K. grocery chain, we're told. Participants said they were encouraged OFCOM is making the effort to consult with them before floating any regulatory scheme, but some appeared uneasy about where the regulator may be headed.
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A key issue for the launch here of VoB is how to treat providers that don’t offer access to 999 and other emergency numbers, so they aren’t considered publicly available telephone services (PATS) and subject to their strict requirements. At the meeting, many VoB service providers appeared willing to provide emergency services but considered the associated PATS conditions a barrier to entry into the market, said Thomas Kiedrowski, British Telecom (BT) mgr.- operational regulation. Service providers appeared to favor “stepped regulation,” he said, with a range of options not available under the current rules. There was also consensus that consumers should be educated about VoB services and that a labeling system should be developed to warn consumers emergency services aren’t available on some VoB devices, he said.
BT’s biggest worry is that its VoB service (which it rolled out in Dec.) won’t be allowed to compete with others’, Kiedrowski said. The company wants “symmetrical regulation” of services, he said.
Both OFCOM and industry acknowledge there are areas where regulation will be necessary, said Karen Wray, Cable & Wireless (CW) U.K. mgr.-regulatory strategy. There’s a general recognition that as more non-traditional telecom services emerge, they won’t fit into traditional patterns for telco and telecom regulation, she said. The definition of PATS is quite clear -- if a VoB provider doesn’t plan access to 999 it’s not a PATS -- so if a provider opts out of providing emergency services it becomes a social issue, Wray said. However, she said, there are questions about whether a change in the definition of a PATS is either needed or feasible. CW doesn’t have an opinion at this point, Wray said. “There are shades of gray in this.” CW offers VoIP services to business but not consumers, she said.
AOL U.K. is preparing to launch VoIP services for all its in-country customers at the end of April, a spokesman said. However, he said, because it’s within a closed environment it’s not a traditional Public Switched Telephone Network (PSTN). Service providers that substitute for a PSTN will be regulated as one, he said -- including requirements for provision of emergency services access, uninterruptibility and directory inquiries. It’s “encouraging for us to see OFCOM has jumped on this issue so early” and is open to consultation with industry, the spokesman said. Some sort of regulation is “almost certain,” he said, but whether it will be as stringent as it is for PSTN’s isn’t clear.
The VoIP situation is “less absolute” in Europe than in the U.S., said Energis Dir.-Regulatory & Public Affairs David Stewart. The FCC takes a “black or white” view based on whether a service is telecom or information, he said, whereas the U.K. views the issue as more technologically neutral.
A key issue for Energis -- which sells communications solutions to large corporations and ISPs -- is ensuring that any VoB regulation addresses market power, Stewart said. Rules that hamper competition in the underlying broadband services will also stifle VoB, he said.
Many service providers and operators also expressed concern about OFCOM’s recent proposal to use 056 nongeographic numbers for VoB services, saying the lack of access to geographic numbering would put them at a disadvantage, Kiedrowski said. (OFCOM late last month launched a consultation on the proposed numbering plan).
OFCOM is “on the verge of making an enormous mistake” in proposing that VoB numbers be nongeographical, said Ahal Besorai, CEO of Inclarity, which bills itself as the market leader in U.K. VoB services. Being confined to 056 numbers is a major barrier to market entry, he said, because entrants will be competing with BT’s fixed-line service. Besorai labeled OFCOM’s research into broadband telephony “completely flawed,” saying the regulator erred in finding that broadband telephony isn’t geographically constrained, has no household value and is different from fixed-line telephony.
OFCOM is trying to mix VoIP with VoB and there’s no match, Besorai said. Inclarity -- whose counterpart in the U.S. is Vonage -- runs a service that isn’t mobile, is personal to a consumer’s household, and is geographically constrained, just like traditional fixed-line telephone services but delivered via broadband, not PSTN. If OFCOM orders special numbers for broadband services, it will destroy the industry and protect BT, Besorai said.
Telewest is “monitoring the VoIP area,” a spokeswoman said. However, she said, “as we are still finishing our response it would be inappropriate for us to go into further detail at this stage.”
Issues raised at last week’s meeting will be taken into account when OFCOM considers consumer protection policy for VoB, the agency said. There will likely be a formal consultation as well, it said. It has also asked stakeholders whether they'd be interested in forming a self- or co-regulatory working group for VoB consumer protection.