Internet Call Termination Rates How is the price of call termination influenced by national internet calling legislation?

Definitions Voice over Internet Protocol (VoIP) is a technology that allows you to make telephone calls using an internet connection rather than a normal (analogue) phone line. (Voice-Over-Internet Protocol, 2008) Call Termination refers to the routing of telephone calls from one telephone company, also known as a carrier or provider, to another. (Call Termination, 2008) In the context of VoIP, call termination is used to describe the point at which the call leaves the internet and is placed over the normal telephone network.

Factors influencing the price of VoIP call termination Telephone connectivity to a region Internet connectivity to a region Demand for call connections to a region Price of traditional international calls to a region Price of local calling within a region Because calls are placed over the internet, the call’s origin region does not play a part in determining the termination cost. The origin for the call is the internet itself.

Types of legislation regarding VoIP Some countries have no legislation regarding VoIP providers yet. – These include: Australia, China, France, Hong Kong, Italy, Japan, Poland, Singapore and Spain. Others have legislation that does not restrict providers in any way. – These include: Brazil, United Kingdom, Germany and Hungary Some of these countries do have legislations that require customers to receive certain types of numbers or notices regarding their service, but do not otherwise restrict providers. (Hedlund, N., n.d.)

Types of legislation regarding VoIP Various countries have legislation that requires providers to meet certain standards. – These include: United States and Greece Some of these legislations may severely limit smaller provider’s abilities to offer services. In some cases they even restrict the sale of the services to businesses. It is also common for a country to require that providers be licensed by the government. – These include: Russia, Israel, Mexico and Taiwan In some areas this license can be more difficult for a smaller provider to obtain than others. (Hedlund, N., n.d.)

Types of legislation regarding VoIP In some cases, legislation may only allow established “traditional” telephone companies to operate VoIP services. – These include: Colombia On top of that, there are some cases where only the government-operated telephone company may operate VoIP services. – These include: Turkey (Hedlund, N., n.d.)

Types of legislation regarding VoIP Additionally, to protect the local carriers, some countries ban the use of VoIP for calling domestically, but permit it for international calling. – These include: India This is a small sampling of various countries and their types of legislation regarding VoIP providers. (Hedlund, N., n.d.)

Wholesale VoIP Termination Rates The call rates listed are the corresponding rates for the countries previously listed with their legislations. (Route 5060 – Buyer Information, 2008)

Comparison of factors This graph demonstrates the correlation between the price of termination. Each blue diamond represents a different country. The previously discussed types of legislations were each given a value of severity which is relative to the other types of legislation. The line indicates the relation between the two factors. The variation in the severity of VoIP legislations explains 34% of the variation in the price.

Conclusions While the price of call termination is influenced by the legislation, this is clearly not the only factor in the cost. We must also consider that it is purely marketing and that the cost is not determined by any specific factors. One or more of the other discussed factors must influence the cost as well.

References Call Termination. (2008, June 28). Retrieved November 27, 2008, from en.wikipedia.org/wiki/Call_termination. Hedlund, N. (n.d.). Global VoIP Policy Status Matrix. Retrieved November 12, 2008, from Route 5060 – Buyer Information – VOIP Termination. (n.d.). Retrieved November 28, 2008, from route5060.com/public/rates. Voice-Over-Internet Protocol (2008, September 9). Retrieved November 26, 2008, from