1. Voice over IP The EU Regulatory Perspective 17 May 2005 - Reykjavik Alain Van Gaever DG Information Society & Media European Commission

2. 2 3 Challenges 3 For Industry For Industry For Consumers For Consumers For Regulators For Regulators “ There are two risks for consumers, one of confusion and the other that the choice is lost to a simple bundle tied up with broadband Internet access from the incumbent operators ” “ There are two risks for consumers, one of confusion and the other that the choice is lost to a simple bundle tied up with broadband Internet access from the incumbent operators ” (INTUG in response to EC Consultation on VoIP) “It's probably the most significant paradigm shift in the entire history of modern communications, since the invention of the telephone.” (former FCC Chairman Powell) (former FCC Chairman Powell)

3. 3 Promote Competition Promote Competition  Foster innovation  Offer more choice, quality,...  Liberalisation of market  Simplify Market Entry Promote interest of citizens Promote interest of citizens  Protection of Citizens  Universal Service  Consumer Protection  Privacy  Dispute Resolution 3 Challenges 3 for Regulators + Technology Neutral Regulations Objectives of the EU Regulatory Framework Promote Single European Market Promote Single European Market

4. 4 IP Space Planet PSTN Q : Does VoIP need to be regulated ? A : It depends … Q : Does VoIP need to be regulated ? A : It depends …

5. 5 Some issues with Voice over IP VoIP cannot deliver exactly the same services as traditional PSTN VoIP cannot deliver exactly the same services as traditional PSTN e.g. Emergency Service access & routing (nomadic) e.g. Emergency Service access & routing (nomadic) Regulations perfectly sensible for PSTN, sometimes an issue for VoIP Regulations perfectly sensible for PSTN, sometimes an issue for VoIP e.g. in-line powering e.g. in-line powering------------------------------------------------------------------------------------- Consumer expectations aligned to traditional PSTN type services Consumer expectations aligned to traditional PSTN type services e.g. in-line powering, access to emergency services e.g. in-line powering, access to emergency services Ensuring level playing field (competition) Does VoIP need to be regulated ?

6. 6 Direction of Regulation “ Light Regulatory Touch” Vivianne Reding, EU Commissioner for Information Society & Media “I intend to strongly promote an open, pro-competitive approach to Voice over IP in all 25 Member States of the European Union” “I am convinced that, as the market develops, the European Commission and national regulators will jointly ensure that throughout the EU, the roll- out of new IP-based services will not be hindered by regulatory hurdles.”

7. 7 Overview Regulation of VoIP in EURegulation of VoIP in EU Types of Regulation Types of Regulation Rights & Obligations Rights & Obligations Telecom Markets & VoIPTelecom Markets & VoIP What has been done & What is on the horizonWhat has been done & What is on the horizon

8. 8 3 Broad Regulatory Issues: Application of the EU Regulatory Framework to VoIP Application of the EU Regulatory Framework to VoIP   VoIP Consultation Document issued 14 th of June 2004 Regulatory safeguards needed to ensure fair competition; Regulatory safeguards needed to ensure fair competition;   European Regulators’ Group ongoing work on Remedies; The impact of VoIP based services on the definition of relevant markets. The impact of VoIP based services on the definition of relevant markets.   Revision of Commission’s recommendation on relevant markets (end 2005). Also : Naked DSL Data Retention Mobile Termination Universal Service Review … Types of Regulation

9. 9 What type of VoIP is regulated in the EU ? Publicly Available IP Telephony Publicly Available IP Telephony  PATS  ECS EU Framework applies, conditions depend on precise service offered EU Framework applies, conditions depend on precise service offered Self Provisioned Self Provisioned Corporate/Internal Use Corporate/Internal Use EU Framework does not apply if no EU Framework does not apply if no provision of a “service” provision of a “service” EU Framework applies, but EU Framework applies, but no specific conditions no specific conditions PATS : Publicly Available Telephone Service ECS : Electronic Communication Service

10. 10 PATS / ECS distinction PATS / ECS distinction relates to rights and obligations relevant to market entry Note : PATS/ECS definition differs in EU 25 ECS : Electronic Communication Service PATS : Publicly Available Telephone Service PATS vs. ECS

11. 11 Notification of NRA Universal Service Financing Contracts to Consumers Quality of Service - publishing Directory entry information & access Conditions ~ use of numbers Security & Privacy Emergency Services Number Portability Integrity & Availability Publication of price & tariffs Directory Notification of NRA Universal Service Financing Contracts to Consumers Quality of Service - publishing Directory entry information & access Conditions ~ use of numbers Security & Privacy ECS PATS * For complete and accurate list of obligations see Directives. see Directives. Obligations : PATS vs. ECS

12. 12 Numbering Numbering Number Portability Number Portability Interconnection Interconnection Access to emergency services Access to emergency services Rights & Obligations

13. 13 Numbering Numbering ranges available for VoIP suppliers ? All providers of VoIP that are classified as ECS or PATS have a right to numbers (Geographic and non-Geographic) All providers of VoIP that are classified as ECS or PATS have a right to numbers (Geographic and non-Geographic) Procedures must be open, transparent and non- discriminatory Procedures must be open, transparent and non- discriminatory

14. 14 Number Portability Can VoIP suppliers benefit from number portability ? In almost all EU countries the right to numbers is linked with the right (& obligation) to number portability* In almost all EU countries the right to numbers is linked with the right (& obligation) to number portability* In some countries, the right to porting in numbers from another provider, is limited to PATS. * :

15. 15 Interconnection Applicable rules to VoIP interconnection All public network operators have a right and a duty to negotiate interconnection All public network operators have a right and a duty to negotiate interconnection Interconnection with PSTN operators with SMP (significant market power) is regulated * Interconnection with PSTN operators with SMP (significant market power) is regulated * IP- IP interconnection is commercially negotiated IP- IP interconnection is commercially negotiated * : Should a standard VoIP interconnection protocol (e.g. SIP) be imposed ?

16. 16 Access to Emergency services Not able to handle emergency calls ? Not able to handle emergency calls ?  No classification as PATS possible  Has impact on ability to port-in numbers in some countries Clear description required of services offered, in contracts & marketing materials Clear description required of services offered, in contracts & marketing materials In some countries it is required to have access to emergency services, as soon as a VoIP service gives access to the PSTN Note :

17. 17 Overview Regulation of VoIP in EURegulation of VoIP in EU Types of Regulation Types of Regulation Rights & Obligations Rights & Obligations Telecom Markets & VoIPTelecom Markets & VoIP What has been done & What is on the horizonWhat has been done & What is on the horizon

18. 18 Market defintions and VoIP National Regulatory Authorities (NRA) National Regulatory Authorities (NRA) Investigate & Define separate ‘product markets’ Once markets defined … Once markets defined … NRA determines if operator has SMP (significant market power)  Price controls, interconnection obligations,... What about VoIP ? What about VoIP ? Likely to be included in some markets...

19. 19 Market defintions and VoIP Market Analysis vs. PATS/ECS Market Analysis vs. PATS/ECS When analysing the 18 markets in the Recommendation, NRAs apply competition law principles of supply side and demand side substitutability, regardless of any labels attached to an offering (ie PATS or ECS)

20. 20 Overview Regulation of VoIP in EURegulation of VoIP in EU Types of Regulation Types of Regulation Rights & Obligations Rights & Obligations Telecom Markets & VoIPTelecom Markets & VoIP What has been done & What is on the horizonWhat has been done & What is on the horizon

21. 21 Situation in the EU What has happened What has happened June 2004 : E.C. Information & Consultation Paper Feb 2005 : ERG Common Statement on VoIP What is happening What is happening Q2/Q3 2005 : Member States publish national guidelines : Follow-up of VoIP by ERG and Commission What will happen... What will happen... (If needed) Commission will publish additional guidelines (End 2005)

22. 22 “The application of the European regulatory framework may vary between Member States. These differences are recognised by the ERG – also the fact that therefore barriers to market entry specific to certain Member States may be experienced. Member States should commit to addressing barriers to market entry if they arise and in accordance with the European regulatory framework.” Situation in the EU Differences or Barriers ?

23. 23 Numbering & Number Portability Numbering & Number Portability... Emergency Access Emergency Access... Nomadicity Nomadicity... Situation in the EU

24. 24 Overview Regulation of VoIP in EURegulation of VoIP in EU Types of Regulation Types of Regulation Rights & Obligations Rights & Obligations Telecom Markets & VoIPTelecom Markets & VoIP What has been done & What is on the horizonWhat has been done & What is on the horizon Questions ?

25. 25 Documents & Contact Information Information & consultation document http://europa.eu.int/information_society/topics/ecomm/useful_information/library/commiss_serv_doc/index_en.htm Regulatory framework http://europa.eu.int/information_society/topics/ecomm/all_about/todays_framework/index_en.htm Contact information infso-b1@cec.eu.int (note “1” is the number one) Disclaimer : The information in this presentation is provided on an informal basis and does not necessarily reflect the official position of DG Information Society or the European Commission. The Commission accepts no responsibility or liability whatsoever with regard to any information or data referred to in this presentation.

26. 26 ECS PATS US Electronic Communication Service (ECS) Electronic Communication Service (ECS) Service (normally) provided for remuneration Consists wholly or mainly in the conveyance of signals on Electronic Communication Networks Public Available Telephone Service (PATS) Public Available Telephone Service (PATS) = Public Available Service = Originating & Receiving (inter)national calls = Access to Emergency Service (112) = E.164 numbering scheme Universal Service (US) Universal Service (US) Services to be made available to all end-users in territory Designated by National Regulatory Authority Annex ECS vs. PATS

27. 27 Licensing / authorisation Licensing / authorisation Numbering, number portability Numbering, number portability Access to emergency services, caller location, in-line powering Access to emergency services, caller location, in-line powering Interconnection Interconnection Universal service Universal service Integrity, availability, quality of service, Integrity, availability, quality of service, Extra-territorial supply Extra-territorial supply Traffic data retention, legal interception Traffic data retention, legal interception Issues covered in E.C. information & consultation document (14/06/2004) Annex