The Regulation of Voice Over Ip (Voip) in Europe: Wik-Consult Final Report

WIK-Consult Final Report
Study for the European Commission
The Regulation of Voice over IP (VoIP) in Europe
Authors: Dieter Elixmann J. Scott Marcus Dr. Christian Wernick WIK-Consult GmbH Rhndorfer Str. 68 53604 Bad Honnef Germany
Bad Honnef, March 19, 2008
Study on the Regulation of VoIP in Europe
Contents
Tables Figures Executive Summary To what degree are the Member States harmonized? What are the impacts on VoIP service providers? What are the impacts on the broader economy? What should be done? 1 Introduction 2 Previous analyses of VoIP regulation in Europe 2.1 Empirical evidence 2.2 History of policy recommendations at the European level 2.2.1 The European Commissions Public Consultation on VoIP (2004) 2.2.2 The ERG Common Statement on VoIP (2005) 2.2.3 The ERGs Common Position on VoIP (2007) 2.2.4 The European Commissions Review Proposals (2007) 3 Status of regulatory requirements regarding VoIP in the European Union 3.1 Authorisation and notification requirement for VoIP services 3.2 Classification of VoIP services 3.3 Calls to emergency services 3.4 Numbering and number portability 3.5 Interconnection 4 Impacts of regulation on VoIP service providers and markets 4.1 General conditions relevant to market entry 4.2 Access to Emergency Calls 4.2.1 Emergency call numbers 4.2.2 Public Safety Answering Points (PSAPs) 4.2.3 Routing of emergency calls to the correct PSAP: the traditional PSTN world III III V VI VII VII VIII 1 7 7 12 12 14 15 16 19 19 21 30 35 37 41 41 42 42 43 44
4.2.4 Routing of emergency calls to the correct PSAP: Approaches regarding VoIP 48 4.2.5 Standards groups and VoIP access to emergency services 50
II
4.2.6 The division of responsibilities among participants in emergency access 4.2.7 Implications of the differing emergency call systems in Europe for a VoIP operator 4.3 Numbering and Number Portability 4.3.1 Ability to get numbers 4.3.2 Geographic numbers vs. non-geographic numbers 4.3.3 Number portability 4.3.4 Wrap-up 4.4 Interconnection 4.5 Lawful Intercept, data retention 5 Impacts of regulatory barriers to the Internal Market 5.1 Policy Objectives and the Commissions Role 5.2 Costs caused by the differences in regulating VoIP 5.1.1 Costs on the level of companies providing VoIP services 5.1.2 Costs on a macroeconomic level 5.3 The role of third-party intermediaries in the provision of VoIP 6 Conclusions and recommendations 6.1 Conclusions 6.2 Recommendations Bibliography Annex I List of acronyms Annex II Member State Regulation Comparison Matrices
53
54 56 56 57 58 59 59 60 62 62 64 64 65 66 68 68 70 73 75 77
III
Tables
Table 2-1: Regulatory treatment of numbering and emergency calls in European Member States (as of 2005) Table 2-2: Differences in regulatory obligations on VoIP in European Member States (as of 2006) Table 3-1: Table 3-2: Table 3-3: Table 3-4: Table 3-5: Table A- 1: Table A- 2: Table A- 3: Table A- 4: Table A- 5: Table A- 6: Rights and obligations for ECS providers Rights and obligations for PATS providers Classifications of VoIP offerings in different Member States Comparison of regulations on emergency calls in different Member States Access to numbers in different Member States Notification requirements for VoIP services Classification of VoIP services Calls to emergency services Numbering and number portability Interconnection Codes of practice and future legislation 10 23 25 30 34 37 79 82 87 96 105 117 8
Figures
Figure 3-1: The implications of ECS, PATS and Universal Service for regulation (stylized view) Figure 4-1: Emergency call system in the UK (stylized facts) 22 47
Executive Summary
This is the Final Report of a study of the regulation of Voice over IP (VoIP) conducted on behalf of the European Commission by WIK-Consult GmbH. Cullen International contributed to the project by conducting detailed surveys of the state of regulation of VoIP in selected Member States. Specifically, we were asked (1) to evaluate the degree of harmonisation (or lack of it) as regards VoIP regulation in the Member States, (2) to consider the degree to which lack of harmonisation might be impairing competitive entry of VoIP service providers and thus causing harm to the broader economy, and (3) to make recommendations as to how the Commission could alleviate any problems that we might identify. Not so many years ago, VoIP was something of an avant garde plaything for hobbyists. There were few service providers in Europe. No more! Today, large and small operators, incumbents and competitors, are converting their networks to Next Generation Networks (NGNs) and are thus betting their businesses on a successful migration to VoIP. At the same time, third party service providers who may not even have a network have developed a firm foothold. IP has become the heart of the telecommunications network. With that evolution, VoIP has become mainstream. These changes in the VoIP milieu parallel the evolving nature of the regulatory environment. In 2004 and 2005, when the European Commission and the European Regulators Group (ERG) held their first public consultations on VoIP, VoIP was much less prominent in the marketplace, and the associated regulatory challenges were not yet fully understood by all of the regulatory levels involved; today, however, VoIP as a regulatory topic is taking centre stage. The earlier examinations of VoIP regulation tended to take an extremely light touch, arguing rightly, in our view that regulation would have been premature, that the technology and the marketplace were still evolving too rapidly. The earlier assessments identified a number of regulatory challenges generally the very same VoIP regulatory challenges that regulators continue to struggle with today but chose not to impose regulatory solutions at the time, in order to allow market players to come forward with solutions.. This light touch approach provided a window of opportunity for market players to attempt to resolve the identified challenges. Today, many of these regulatory challenges still remain. It is now appropriate and timely in our view to take further steps to enhance harmonisation of the regulation of VoIP.
VI
To what degree are the Member States harmonized?

From the first, the Commission and the ERG concluded that, even though most aspects of the regulatory framework were well equipped to deal with the migration to VoIP, there would nonetheless likely be problems in a number of specific areas, including: Numbering and number portability; Access to emergency services; Interconnection; and Lawful intercept.
We attempted to assess harmonisation among the Member States in each of these areas, and others as well, through (1) a detailed survey of regulation and law in ten selected Member States, conducted on behalf of the project by Cullen International, an independent firm that specializes in regulatory surveys; (2) stakeholder interviews; and (3) desk research. What we found was that, in each of the areas noted above, there were significant differences from one Member State to the next. Rules regarding the ability of VoIP service providers to obtain geographic versus nongeographic numbers were highly diverse, and confusing.1 Our interviews suggest that NRAs do not consistently provide timely response to requests for numbers, even though they are required to by the Authorisation Directive. Rules regarding number portability are also diverse. Implementing access to emergency services is a challenge in view of the very different emergency systems2 across Europe. In particular, access to emergency services can be extremely difficult for VoIP-based service providers to the extent that their customers can move (i.e. are nomadic). If the customers location cannot be reliably determined through automated means, it is impossible to complete an emergency call to the proper emergency response unit, and it is also impossible to reliably report the users whereabouts. Technical solutions are improving over time, but gaps are likely to remain for a long time to come.
1 Our interview results suggest that it is even more difficult for a VoIP-based service provider to obtain mobile numbers. 2 The emergency systems in Europe differ e.g. with respect to the actual number of emergency numbers, the regional organisation of PSAPs (Public Safety Answering Points), and the way routing to the correct PSAP is organized.
VII
Many experts anticipated that network interconnection would evolve over time to IP-toIP interconnection, but for a variety of economic reasons this has not yet happened.3 Meanwhile, even in Member States where regulations are reasonably technologically neutral, outdated and inefficient restrictions are often embodied in Reference Interconnection Orders (RIO) that were written for the old fixed network (the PSTN), and that did not consider IP-based interconnection. These restrictions often imply the need to maintain voice switches or physical points of interconnection in-country that the VoIP service provider would not otherwise require. Finally, while lawful intercept was not formally a focus of our study, it came up in interview after interview. In terms of the technology used, Member States seem to be reasonably well harmonised, but in terms of the many procedures used (for initiating an intercept, for example, and for conveying data to authorities) there seem to be substantial differences.
What are the impacts on VoIP service providers?

Impacts on VoIP service providers whom we interviewed were substantial in many cases, but varied greatly as a function of the nature of the VoIP service providers business plan. Most VoIP providers were heavily dependent on the availability of geographic numbers. Uncertainty, delay, or outright unavailability of geographic numbers could lead to a decision not to enter the market in the Member State in question. Lack of harmonisation of requirements for emergency services and lawful intercept came up in most interviews as a source of cost and uncertainty. Some interviewees spoke of obligations to maintain a voice switch or an unreasonable number of points of interconnect in order to obtain interconnect as a barrier. Regulatory obligations seem to be reasonably transparent, but several interviewees spoke of the difficulty in obtaining a clear view of more subtle requirements, including (1) interconnection obligations implied in RIOs, and (2) lawful intercept obligations.
What are the impacts on the broader economy?

There are a wide range of potential impacts. In our assessment, we have attempted to identify those that affect VoIP service providers differently from traditional voice service providers, and to those that are directly traceable to lack of regulatory harmonisation.
3 See Marcus et. al. (2008).
VIII
For VoIP service providers, lack of harmonisation often leads to a decision to enter the market in fewer Member States than would otherwise be the case. The service provider thus foregoes the revenues it otherwise would have achieved in the avoided Member States. The VoIP service provider also misses out on potential economies of scale. The impacts to society at large are harder to directly measure, but potentially much larger. To the extent that there is less competitive entry, this will tend (other things being equal) to imply that consumers have less choice, and that price/performance and quality of offerings available to them are inferior to those that would be available in a market where competition was more fully effective.
What should be done?

Our recommendations are as follows: Access to numbers: In order to achieve the pro-competitive goals of the Authorisation Directive, bureaucratic hurdles to obtaining numbers need to be reduced if not eliminated. The duration for a response to a request for numbers should not exceed the levels specified in Articles 4 and 5 of the Authorisation Directive, and effective recourse must be available to the ECS provider.4 Geographic versus non-geographic numbers: Numbering plans should be technologically neutral. Geographical numbers for traditional telephony services and geographical numbers for VoIP services (including nomadic services) should share the same number range. In light of the substantial and longstanding inconsistencies in this area, and the significant impact that these inconsistencies already have on VoIP service providers, the Commission should consider reinforcing these aspects of ERG (2007) with suitable technical implementing measures using its existing authority under Articles 10(4), 19(2) and 22(3) of the Framework Directive. Emergency services: The Commission should require Member States to ensure that any providers of a service available to the public for originating national calls through a number or numbers in a national telephone numbering plan provide access to emergency services.5 Such providers should also be required to make caller location information available to authorities handling emergencies, to the extent technically feasible. Reasonable transition periods should be al-
4 The Authorisation Directive permits a service provider to proceed as if authorized in the event that national authorities fail to promptly respond to a Notification. Since the service provider cannot do the same for numbers, an alternative mechanism is needed. 5 The phrasing intentionally follows that of the Commissions proposed amendments to the Universal Service Directive, which are generally appropriate in our view; however, we see no need to impose the obligation on services that are used solely for international calls.
IX
lowed. Such providers should be obliged to clearly inform subscribers about any limitations in the access to emergency services they offer, as compared to that offered by the traditional telephony service. To the extent that location determination depends on the subscribers own actions, it is crucial that the subscriber be educated and informed as to the obligations that he or she must undertake to keep this location information current. The Commission (with the ongoing support of the European Regulators Group (ERG) and the Expert Group on Emergency Access (EGEA)) should continue to monitor developments as regards technical standards and actual deployment in regard to VoIP access to emergency services. In particular, at such time as a deployment of enhanced Public Safety Access Points (PSAPs) is ripe (especially a migration of the PSAPs to IP), some level of European coordination will be necessary and appropriate. Scant attention has been paid to date to nomadic VoIP use from a Member State other than the one for which the service was intended, either with or without the permission of the VoIP service provider. Today, access to emergency services will not work in such an environment; however, in a future world operating under ECRIT standards, access to emergency services could in principle be supported. We view this as an area for future study. Interconnection and call termination: This is a large and complex topic in its own right. Our assessment and our detailed recommendations appear in Marcus et. al. (2008), another report for the European Commission. Lawful intercept: Our interviews suggest problems in the area of lawful intercept (at a procedural level, not necessarily in terms of technical standards). Lawful intercept was not an explicit part of our remit. We think that further study is warranted under the auspices of some organisation with an appropriate charter, possibly ENISA.
Introduction
The replacement of the traditional PSTN (public switched telephone network) by packetoriented TCP/IP (Transmission Control Protocol/ Internet Protocol) network infrastructure causes technical challenges and affects general market development, business strategies, and sector specific regulation. Due to its potential in stimulating competition, reducing operators costs, and furthering new and innovative services for citizens, voice over Internet Protocol (VoIP) takes centre stage of recent debates on the future of telecommunications as it is expected to be able to shape the nature of the whole ICT sector. In this report, we define VoIP as the delivery of voice services over networks based wholly or partly on Internet Protocol.6 This definition allows a variety of business models by means of which these voice services are actually provided. One key distinction between business models is to differentiate between Voice over Broadband (access lines) and Voice over Internet. Roughly speaking, Voice over Broadband (VoB) combines the offering of a broadband access line (e.g. via DSL technology or cable modem) with the provision of voice services by a single company. Voice over Internet (VoI), however, physically requires that the end user has broadband access. From an institutional perspective, the provider of the access line and the provider of the VoI voice services are not necessarily the same. Rather, the provider of VoI voice services offers its services on top of the infrastructure of some other network operator. A slightly different characterization of VoB and VoI is the following: VoB comprises non-nomadic services (sold as bundles with high speed Internet connectivity), while VoI can support nomadic use. Another distinguishing characteristic is whether there is outgoing or incoming access to/from the PSTN. To this end ERG (2006) identifies the following types of VoIP: 1. VoIP services in corporate private networks limited to internal communications within large companies; 2. VoIP services which are used within public operators core networks that do not impinge on retail offers to customers nor their quality; 3. Services or VoIP software from which there is no access to or from the PSTN and where E.164 numbers are not provided; 4. Services where there is outgoing access to the PSTN only and E.164 numbers are not provided;
See ERG (2006).
5. Services where there is incoming access from the PSTN only and E.164 numbers are provided; 6. Services where there is incoming and outgoing access to the PSTN and E.164 numbers are provided.7 All of these models are visible in the marketplace today. VoIP services in corporate private networks (type no. 1) are widely used by multi-national corporations. These services actually might be provided in-house or by a third party (e.g. a carrier) which operates the company network. Many telecommunications carriers are in the process of migrating their core networks to IP (or have already finished). Thus, VoIP services which are used within public operators core networks (type no. 2) are more and more prevalent in the telecommunications market. An example for type no. 3, i.e. services or VoIP software from which there is no access to or from the PSTN, is the original Skype (peer-to-peer) service. Examples for types 4 and 5 are SkypeOut and SkypeIn, respectively. Type no. 6 is pursued by many facilities-based carriers in the telecommunications market. These various business models intersect with the European framework for electronic communications in different ways.8 Corporate private networks (type 1) fall within the scope of electronic communications networks as defined in the Framework Directive, and thus are generally within the scope of the regulatory framework; however, they are not publicly available, and consequently are subject to few if any regulatory obligations. Services in the operators core networks (type 2) are fully covered by the framework under the principle of technological neutrality, they would tend in general to be regulated the same as the PSTN. VoIP products like peer-to-peer Skype that do not access the PSTN (type 3), and for which there is not a true service provider in the normal sense, are largely outside the scope of telecommunications regulation except to the extent that the equipment and software used to implement them might be subject to regulation. Publicly available Voice over IP services, with access to and/or from E.164 telephone numbers (types 4, 5, and 6) tend to fall squarely within the European framework for electronic communications and thus take centre stage in this reports examination of the effects of possibly inconsistent regulation on the diffusion of VoIP in the European Member States. Regarding type 6, it is useful to distinguish between VoB and VoI (as characterized above). A number of recent market definitions and proceedings distinguish between VoI and VoB. This distinction is very relevant in Chapter 3 of this report, where we review the consequences of regulatory obligations on different types of operators.
7 See ERG (2006). 8 See EU-Commission (2004).
As VoIP demonstrates the potential to substitute for traditional telecommunications services, which are subject to a common European regulatory framework, much attention has to be paid on the types and extent of regulations imposed on those operators. This is a challenging task, as regulators face complex trade-offs. On the one hand, they have to ensure a level playing field between existing operators and new entrants against the backdrop of technological neutrality. On the other hand they should strive to avoid overshooting the mark with heavy-handed, disproportionate regulatory intervention that might stifle innovation. As a further complication for the regulator, some obligations that are already well addressed within the fixed network (PSTN) and the mobile network (PLMN) are difficult to implement with VoIP to the extent that the costs are different, an obligation that was proportionate for PSTN operators cannot automatically be assumed to be proportionate for VoIP-based service providers. Conspicuous examples include (1) provision of access to emergency services, and (2) lawful intercept, both of which can be notably more difficult under VoIP. In both cases, solutions have evolved over time, and they continue to improve; however, had NRAs mandated an immediate obligation to implement support exactly identical to that of the PSTN in 2004, the likely result would have been to impair or perhaps to totally preclude competitive entry on the part of VoIP service providers (this "light regulatory touch" approach was introduced back in 2004 when the Commission first examined VoIP regulation in its public consultation and information document). The need to strike the right balance among these divergent goals has led to intense and recurring discussion between the Commission, the national regulatory authorities (NRAs), and the ERG. This challenge is reflected in a number of consultant reports9 and official documents by the Commission and the NRAs.10 In the discussions to date, the following issues should be viewed as the most controversial and critical regarding the regulatory environment for VoIP service provision: Authorisation and notification requirements; Classification of VoIP services; Access to emergency services; Numbering and number portability; Interconnection.
These issues are therefore central to the present report.
9 See, e.g., Analysis (2004), Stratix (2003). 10 See for example EU-Commission (2005), ERG (2007), ERG (2006), ERG (2005).
Several factors suggest that a deeper analysis of differences in regulation of VoIP on the national level and their consequences on the diffusion of VoIP services is appropriate and timely: Increasing broadband penetration, which is a core driver of VoIP usage; Large quality improvements enabling VoIP operators to offer calls at a quality comparable or potentially even superior to that of PSTN based telephony, furthering its market potential; Ongoing technical improvements in the ability of VoIP to conform to regulatory needs such as access to emergency services; Incumbents and facility-based entrants investing large sums in the roll-out of IPbased next generation networks; New VoIP-based applications enabling innovative business models and sources for growth and revenue as well as potential for cost savings; An increasing availability of stand-alone (naked) DSL in the EU Member States11 enabling new entrants to offer VoIP services; The recent review of the European Framework for Electronic Communications scrutinizing existing regulatory obligations in view of changing market conditions and seeking to provide an appropriate framework for the coming years; The political aim to establish a single European market characterised by consistent conditions of competition; Actual experiences gained since NRAs started dealing with VoIP in 2004 allowing interim conclusions on the effectiveness of certain regulatory obligations.
It is fair to state that there is a wide agreement on the potential merits of VoIP in the context of a common regulatory framework. The present report therefore focuses on the current characteristics of VoIP regulation in the Member States. We compare the approaches (classifications and obligations) pursued by NRAs. To the extent that different regimes prevail across the Member States, these inconsistencies could act both as a barrier to market entry and a hindrance on the road to a single market. It is therefore vital to analyse the consequences of different regulatory measures on market diffusion of VoIP services and to identify best practices which can serve as a guideline for policy recommendations. To this end, the present report identifies and assesses challenges
11 As of 2007 naked DSL is available in practice in about half the Western European Member States (usually over bitstream access but not (yet) over shared LLU). Naked DSL is not available in practice in most CEE Member States.
and opportunities for VoIP operators with regard to the VoIP regulation within a Member State and with regard to differing regulatory approaches across Member States. Do these differences constitute barriers to the deployment of VoIP services? Do these differences limit or prevent the proliferation of multi-national operators offering their services throughout the EU, thus hampering competition with its welfare enhancing consequences? What are the costs associated with these regulatory barriers from a macroeconomic point of view? From a methodological perspective the present study is based on three pillars: Desk research of relevant documents published so far; Investigation of the current regulatory conditions regarding VoIP in Member States; Interviews with market participants (mirroring different business models).
The desk research focuses on the examination of official documents from various institutions, such as ERGs 2005 Common Position on VoIP12, ERGs 2006 report on VoIP and Consumer Issues13, the OECDs 2006 report VoIP: Developments in the Market14, ERGs 2007 common position on VoIP15 and relevant material published by the Commission16 and national regulators17. Furthermore, we have evaluated academic journals, company websites and relevant online databases. As a key part of this study, we engaged Cullen International to provide detailed empirical evidence about the current status of VoIP regulation in the Member States. In cooperation with the Commission, we chose ten Member States for a thorough bottom-up analysis: Austria, Denmark, Estonia, France, Germany, Italy, the Netherlands, Poland, Spain and UK. Cullen International has collected and compiled detailed information for each of these countries and has compiled the data into a series of data collection matrices. This basic information serves as a cornerstone of our assessment of the difficulties in establishing and maintaining a VoIP service in a given Member State. The matrices appear in full detail in an annex to this report. The country data collected by Cullen International and presented in the six tables in the Annex was reviewed and commented on by the NRAs in all of the countries surveyed. The Polish regulator, UKE, was the only NRA not to respond.
12 13 14 15 16 17
See ERG (2005). See ERG (2006). See OECD (2006). See ERG (2007). See EU-Commission (2004), EU-Commission (2005a). See e.g. Ofcom (2006), Bundesnetzagentur (2005).
Cullen Internationals role in this study was limited to the collection of country data. It has not been involved in detailed assessment of the data, nor in developing the recommendations presented in this report. In selecting interviewees, we have tried to capture a broad range of market participants whose activities are based on different business models. Interviews have been conducted with Arcor (a national carrier in Germany which is a subsidiary of Vodafone), British Telecom (Germany), Deutsche Telekom AG, Easynet (provider of managed networks, managed hosting, managed Internet and wholesale throughout Europe), Global Crossing (provider of a fully integrated and interoperable suite of IP and legacy services throughout Europe), SipGate (non-facilities based service provider with VoIP activities in Austria, Germany, and the UK), Skype (worldwide), Telefonica (Germany), Truphone (mobile WiFi/GSM operator located in the UK), VATM (the German Association of Telecommunications and Value-Added Service Providers), Verizon (European branch of the American carrier focusing in Europe on business customers and carriers carrier services), and Vonage (non-facilities based service provider with VoIP activities in the UK and the U.S.). We carried out the survey, the interviews and the assessment of the different national regulatory regimes and market entry challenges in different Member States during the period November 2007 January 2008. Thus, all of the empirical information provided in this report provides a consistent picture reflecting the state of VoIP regulation in the selected Member States as of the end of 2007. Our desk research, however, includes some statistics reflecting earlier periods, when VoIP deployment and regulation was less mature. The report is organized as follows: Chapter 2 gives an overview of previous analyses of VoIP regulation in Europe. We present both empirical evidence regarding differences in VoIP regulation and a history of policy recommendations at the European level. Chapter 3 analyses the current regulatory environment regarding the provision of VoIP services in Europe. This chapter in particular provides the results of our in-depth examination of VoIP regulation in the ten Member States. Chapter 4 combines this empirical evidence with the results of interviews with market participants conducted in the frame of the present study. This chapter in particular analyses which specific challenges for the implementation and launch of a multi-national or pan-European VoIP service are brought about by the differences in the regulation of VoIP. Moreover, this chapter addresses the extent to which the differences might act as entry barriers. Based on this analysis Chapter 5 aims at estimating (in a qualitative way) the costs associated with those differences representing barriers for entry and further development. Finally, Chapter 6 contains our conclusions and policy recommendations. Note that the opinions expressed in this study are those of the authors and do not necessarily reflect the views of the European Commission.
Previous analyses of VoIP regulation in Europe
2.1
Empirical evidence
This Chapter focuses on specific international comparisons addressing economic and regulatory aspects of VoIP which have been provided in the past by the OECD and the ERG. OECD (2006) OECD (2006) analysed the development of VoIP services in OECD countries and identifies the classification of the application/service, interconnection, possible market entry barriers, numbering, universal service issues, customer protection, privacy protection, emergency call capabilities, law enforcement issues, and technical safeguards as the relevant issues that need to be addressed.18 However, apart from useful case studies on the development of VoIP in OECD countries, the report makes no recommendations on specific policies or regulations. ERG (2005) In its 2005 common statement, the ERG highlighted differences in the regulatory treatment of VoIP services as regards numbering and number portability as well as access to emergency services across 25 Member States.19 Table 2-1 comprises the relevant information regarding the regulatory treatment of numbering and emergency calls derived in ERG (2005). In 2005, geographic number ranges were available to VoIP operators in eighteen European countries. Seven of them asked VoIP operators to fulfil miscellaneous requirements. Five EU Member States did not allocate geographic numbers to VoIP services. Different regulations applied at the time to the nomadic use of VoIP services. Six European countries allowed VoIP services with geographic numbers from locations differing from their fixed home location. Another group of six countries did not allocate any geographic numbers to nomadic use. In three countries, geographic numbers for nomadic use were partially allowed, while seven NRAs were reviewing the subject. Similar differences could be observed looking at national regulations as regards access to emergency services. 14 out of a total of 17 countries under observation mandated emergency calls to be routed to an appropriate emergency response centre. Furthermore, the provision of the caller location (at least if technically feasible) was mandated in most of them.
18 See OECD (2006), p. 5. 19 See ERG (2005).
Table 2-1:
Regulatory treatment of numbering and emergency calls in European Member States (as of 2005)
Are geographic numbers allocated to VoIP services? Yes, in connection with certain requirements Yes Yes, in connection with certain requirements No (under review) No Is it allowed to use a geographic number for nomadic voice services? Not Allowed Are there legal requirements to route emergency calls to appropriate emergency response centres? Are there legal requirement to provide the location information of the caller?
Country
Austria
Yes (technical and comYes those informamercial possibilities has to tion data, which are be taken into account) processed in a communications network
Belgium Bulgaria
Allowed Not Allowed
Cyprus Czech Republic Denmark
Under Review Not Allowed Yes Yes (Service Providers must terminate calls immediately in the network of the USP, USP delivers calls to the nearest emergency centre) Yes Yes can be based on agreement between USP and emergency authorities
Estonia Finland
No Yes Allowed
No Yes
Yes, if technically possible Yes, if technically possible, with the best accuracy the communications provider provides for business purposes Yes, if technically possible N/A, ordinance and technical directive in preparation
France Germany
Yes Yes
Partially Allowed Under Review
Yes Yes
Greece Hungary Iceland Ireland
Yes Yes Under review Yes
No Interest so far Not Allowed Under Review Allowed No Yes Call is delivered to the nearest appropriate emergency service centre Yes No Yes, if technically feasible
Malta
Yes, in connection with certain requirements (under review)
Allowed
Country
Are geographic numbers allocated to VoIP services?
Is it allowed to use a geographic number for nomadic voice services? Partially Allowed
Are there legal requirements to route emergency calls to appropriate emergency response centres?
Are there legal requirement to provide the location information of the caller?
The Nether- Yes, in conneclands tion with certain requirements Norway Yes
Partially Allowed
Yes
Yes, however, on application, providers of public telephone services may be given time-limited exceptions to the duty to offer origination marking Yes No
Poland Portugal
No Yes, in connection with certain requirements Open, in connection with certain requirements
Under Review Not Allowed
Yes Yes
Romania
Under Review
Yes
The Operator could be obliged to provide the CLI in case of 112 calls, at the request of the authorities, under conditions set out by the Romanian Ombudsman
Slovenia Spain
No Yes, in connection with certain requirements Yes
Under Review Not Allowed
Sweden
Under Review Allowed Allowed
Yes Yes No
Yes, if technically feasible Yes Yes, if technically feasible
Switzerland Yes UK Yes
Source: ERG (2005)
ERG (2005) underlines the principle of technological neutrality. With regard to numbering, the ERG claims that the same number ranges should in principle be available for both traditional voice and VoIP services. Moreover, it is recommended that the conditions concerning number portability should be equal for similar types of voice services.20 Furthermore, the ERG highlights the importance of access to emergency services for the public. Overall, however, it is fair to state that ERG (2005) remains reluctant with regard to concrete policy recommendations, see section 2.2.2 for more details.
20 See ERG (2005), p. 8.
10
ERG (2006) In its 2006 report, the ERG21 examined access to emergency services, numbering and number portability, tariffs, Quality of Service, and cross-border issues for 25 European Member States. Again, large differences on the national level are visible. Some of them are highlighted in Table 2-2. The table shows that a majority of Member States obliged operators to inform their customers of any limitations with regard to emergency services in 2006. In some countries, these obligations were under discussion. Several countries allowed VoIP providers to offer both geographic and non-geographic numbers to end-users regardless of whether the VoIP service is PATS/non PATS or fixed/nomadic. Other countries limited the availability of geographic numbers to certain types of VoIP and offered only non-geographic numbers to those operators not fulfilling the given criteria. Finally, different rules and restrictions pertained to number portability. Table 2-2: Differences in regulatory obligations on VoIP in European Member States (as of 2006)
Obligations on VoIP operators to inform their customers on limitations of their service? Allocation of geographic numbers to VoIP operators? Limited to fixed location Yes For nomadic services Under review Yes Regulation prepared Recommended Yes Under scrutiny Regulation prepared Yes Yes Yes Yes No limitation Recommended No restriction Limited to PATS Non-geographic numbering plan Non-geographic numberOnly PATS ing plan No limitation No limitation No limitation Limited to fixed location No limitation Limited to fixed location No restriction Only PATS No restriction Not imposed yet Only PATS Restriction of Number Portability? Only PATS Only PATS Under review Only PATS
Country
Austria Belgium Cyprus Czech Republic Denmark Estonia Finland Germany Greece Hungary Ireland Italy Hungary Lithuania Malta
Non-geographic number- Only PATS
21 See ERG (2006).
11
Country
Obligations on VoIP operators to inform their customers on limitations of their service?
Allocation of geographic numbers to VoIP operators? ing plan
Restriction of Number Portability?
The Netherlands Norway Portugal Slovenia Spain Sweden Switzerland UK Yes Yes Yes Yes Regulation prepared Yes Consultation ongoing
Limited to fixed location Limited to geographic numbers at fixed locations
Limited to fixed location Limited to fixed location No limitation No limitation No limitation Limited to fixed location No limitation
Not imposed yet Only PATS No restriction Only PATS
Source: ERG (2006)
As regards emergency services and numbering and number portability, the ERG concludes: Despite certain degrees of variance regarding the means - stemming from different legal cultures and nuances in the transposition of the NRF - there seems to be common ground for further integration in the near future in the Principles of Implementation and Best Practice which seems worth exploring.22 Furthermore, it is clear that Member States have had little experience with cross-border consumer complaints.23 However, apart from the useful overview on the status quo in the Member States, the actual policy recommendations of ERG (2006) are rather vague and limited, too. Wrap up These brief snapshots highlight that there were important differences in the regulatory treatment of VoIP services in 2005 and in 2006. This is not surprising given the various changes and challenges associated with the switch-over from a PSTN to an IP-based communications world and the wide scope of regulatory discretion given to the NRAs in the 2002 Framework. The differences in the past underscore in particular the value of an in-depth examination of the current conditions surrounding VoIP in order to be able to reach sound and pertinent conclusions regarding potential policy actions going forward.
22 ERG (2006), p. 6. 23 See Ibid.
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2.2
History of policy recommendations at the European level
The regulation of VoIP has been studied extensively by the European Commission (in 2004), the European Regulators Group (ERG) (in 2005, 2006 and 2007), and by various National Regulatory Authorities (NRAs). The thinking has visibly evolved over time, along with the market and the technology. Nonetheless, there are common threads. Indeed, it is striking that many common themes (including numbering, emergency services, interconnection, and lawful intercept) are visible in the earliest assessments, carry through the intermediate analyses, and continue to be relevant in this report.
2.2.1 The European Commissions Public Consultation on VoIP (2004)

The European Commissions 2004 public consultation on VoIP24 was the first major regulatory exploration of the applicability to the then-new European regulatory framework for electronic communications to Voice over IP.25 The new framework had been crafted with convergence in mind, so VoIP represented an important initial test case for the new framework. The consultation document recognised (as have most or all assessments since) that there are many forms of VoIP, and that it would not be appropriate to impose the same obligations on all of them. It also recognised that some VoIP services would fall within the definition of Publicly Available Telephone Service (PATS), that others would be properly viewed as publicly available Electronic Communications Services (ECS), and still others (for example, those implemented through software running on a personal computer, with no ability to access E.164 telephone numbers) were neither PATS nor ECS. The consultation document explored a number of regulatory issues, including authorisation, universal service, and means to deal with market power. In each of these areas, a straightforward application of the regulatory framework seemed to be reasonably straightforward. For interconnection, the consultation document recognised that arrangements would likely migrate over time to pure IP-to-IP interconnection, but did not identify particular problems.
24 EU-Commission (2004). 25 The Commission had, however, issued brief guidance in 1998 and again in 2000 as to the applicability of the former regulatory arrangements.
13
The areas that required more intense analysis were: Access to emergency services; The ability to use geographic or non-geographic numbers (and to exercise number portability); Integrity and availability of the network; Privacy, security and lawful intercept.
For emergency services, the consultation document identified the issues that regulators continue to grapple with to this day most notably, that the users location (particularly in the case of nomadic users, whose location may change over time) is not reliably and unambiguously known. The document called for obligations in the case of VoIP PATS providers, and to the extent feasible in the case of ECS providers, but in all cases with a clear recognition that regulators should not impose undue or disproportionate burdens. For integrity at fixed locations, the consultation document noted that the Universal Service Directive had not fully considered the possibility that a voice service provider might not control the underlying network, and might therefore have little or no ability to ensure network integrity. It also noted that power outages could effectively impact network access. In the case of access to emergency services, and also in the case of network integrity in the face of power outages, the consultation document sees a role for service providers in informing customers of the degree to which their respective services differ from the traditional networks with which the customer is likely familiar. For numbers, the document encouraged regulators to make geographic and nongeographic numbers available to VoIP service providers who requested them. It noted that the availability of geographic numbers could well be critical to the viability of VoIP service providers. It observed that, under the regulatory framework, only users of PATS had the right to port their numbers. The consultation document noted that security and privacy obligations apply to VoIP services, much as they do to conventional voice services. The document touched only lightly on lawful intercept, inasmuch as this is a matter of national rather than European competence; however, it did note the potential value of common standards.
14
2.2.2 The ERG Common Statement on VoIP (2005)

The 2005 Common Statement on VoIP26 emphasized the need to seek a balance among different policy objectives (promotion of competition, development of an internal market and promotion of interests of citizens) against the background of a regulatory practice which had historically been focused on a different technology. Consequently, the Common Statement highlights the need to focus on the regulatory principles of objectivity, technological neutrality, transparency, non-discrimination and proportionality.27 Although VoIP was in its early days at the time the statement was published, ERG (2005) already provides some important and wide-ranging recommendations. For its day, the ERG Common Statement of 2005 should be viewed as setting important and forward-looking principles. At the same time, it can also be viewed as a consensus document that stops short of reaching firm conclusions on the more contentious issues. In order to foster competition by stimulating the emergence of new services as well as promoting number portability, ERG (2005) calls for technologically neutral numbering plans based on service descriptions. Consequently, the same number ranges should in principle be available for both traditional voice and VoIP services. Moreover, conditions concerning number portability should be equal for similar types of voice services in order to facilitate consumer choice and promote effective competition.28 The Common Statement arrived at a number of important conclusions with regard to access to emergency calls. The ERG emphasized the importance of access to emergency calls, and therefore recommended that NRAs require VoIP operators to inform end-users about any restrictions in routing emergency calls and in providing caller location information. VoIP emergency calls from fixed locations should be routed to the nearest emergency centre, and caller location information should be provided to the extent technically feasible. Finally, the statement suggested that requirements for nomadic VoIP services related to routing and caller location information should be discussed further after technology and standards have matured.29 Given the relatively immature state of the technology and the marketplace at the time, this restraint was appropriate in our view. As will be shown in Chapter 3 of the present report, the issues addressed in ERG (2005) regarding the regulation of numbering and of emergency calls in Europe are still relevant today.
26 27 28 29
See ERG (2005). See Ibid, p. 4. See Ibid, p. 8. See Ibid, p. 10.
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2.2.3 The ERGs Common Position on VoIP (2007)

In comparison to the earlier reports on VoIP published by the ERG, the 2007 report is more concrete in emphasizing the differences between the Member States and in noting areas where there is room for improvement. It notes that, as VoIP becomes an increasingly central aspect of new networks, the need for harmonisation takes on progressively greater significance. The Common Position specifically advocates panEuropean harmonisation in regard to: Numbering; Number portability; Access to emergency services.
Numbering First, regarding numbering the ERG Common Position presents a clear understanding of the current problem: In this area the result of current regulation is a disharmonised allocation and use of geographic numbers, against the increasing demand amongst consumers to use geographic numbers out of area (nomadic use). In fact, some member states permit out of area use and allocation of geographic numbers while others do not. In addition the use of non-geographic numbers specifically allocated to VoIP services is an option but could not be the primary choice for the market. The Common Position argues that numbering plans should be technologically neutral, based on the service descriptions, and that the same number ranges should be available within those service descriptions. This means that geographic numbers for traditional telephony services and geographic numbers for VoIP services should share the same number range, that is, they should come from a common number pool.30 Number portability As to number portability the ERG Common Position suggests introducing an obligation to port numbers to any service provider which satisfies the conditions of use of the appropriate number ranges.31 Access to emergency services With regard to access to emergency calls, the ERG recommends that all telephony service providers should be obliged to provide access to emergency services; to provide location information to the extent technically feasible; to support the emergency calls with priority, quality and availability to the extent technically feasible; and to provide the
30 See Ibid., p. 20. 31 See Ibid., p. 23.
16
emergency response centre with information on whether the call originates from a fixed or a potentially nomadic user.32 Moreover, telephony service providers should be obliged to clearly inform subscribers about any limitations in the services as compared to the traditional telephony service.33 In particular, the ERG suggests removing the ability to provide access to the emergency services as a factor in the definition of PATS in the Universal Service Directive.34 The circularity of the definition has long been recognised as being problematic.
2.2.4 The European Commissions Review Proposals (2007)

The issues that are relevant in this report were also considered as part of the Commissions overall review of the European regulatory framework. This review commenced in 2006, led to a series of Commission Review Proposals on 13 November 2007, and is expected to be ongoing for quite some time. In the context of the current report, the following issues are of particular importance: The lack of common numbering policies in the Member States; The classification of PATS in the 2002 Universal Service Directive; Access to emergency services; Caller Location Information (CLI); Number portability.
Numbering policies The Commission emphasizes the importance of numbering: the lack of common numbering policies in Member States is a problem that creates a significant barrier to deployment of VoIP on a pan-European basis.35 As a consequence, the Commission proposes to replace Article 11(4) of the Framework Directive with the following text: Member States shall support harmonisation in numbering within the Community where that promotes the functioning of the internal market or supports the development of panEuropean services. The Commission may take appropriate technical implementing measures on this matter, which may include establishing tariff principles for specific
32 Specifically, the emergency response centre must be alerted if the users address or location information is not trustworthy. 33 See Ibid., p. 15. 34 See ERG (2007), p. 15. 35 EU-Commission (2007), p. 70.
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numbers or number ranges. The implementing measures may grant the Authority specific responsibilities in the application of those measures.36 The amended version differs in two ways from the existing Framework Directive. By adding the phrase where that promotes the functioning of the internal market, the Commission emphasizes the importance of unique rules for numbering for the functioning of the internal market. It may make the Commissions authority clearer in regard to services that are trans-national but not pan-European. Equally noteworthy is the second change: which may include establishing tariff principles for specific numbers or number ranges. The implementing measures may grant the Authority specific responsibilities in the application of those measures. Classification of PATS The Commission proposes to change the definition of PATS so as to eliminate the circular dependency on access to emergency services. Specifically, they propose to amend the Framework Directive so as to replace the existing definition with the following text: (c) publicly available telephone service means a service available to the public for originating and receiving, directly or indirectly via carrier selection or pre-selection or resale, national and/or international calls through a number or numbers in a national or international telephone numbering plan;37 Access to emergency services The revised Universal Service Directive would require that: undertakings providing a "service for originating national and/or international calls through a number or numbers in a national or international telephone numbering plan provide access to emergency services" (article 26(2)). Currently, this obligation applies only to providers of publicly available telephone services (PATS); and where contracts are concluded "between subscribers and undertakings providing electronic communications services that allow voice communication, subscribers are clearly informed whether or not access to emergency services is provided. Providers of electronic communications services shall ensure that customers are clearly informed of the lack of access to emergency services in advance of the conclusion of a contract and regularly thereafter" (article 20(4)).
36 Proposal for an amendment of Directive 2002/21/EC, Article 11, No. 4. 37 Proposal for an amendment of Directive 2002/22/EC, Article 2b).
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Caller location information Currently, operators must make caller location information for calls to the single European emergency call number 112 available to authorities handling emergencies, "to the extent technically feasible". In practice, the Commission has needed to pursue infringement proceedings against many Member States where caller location information for 112 calls has not been provided. The reform proposals of the Commission provide a stricter obligation to provide caller location (free of charge) automatically as soon as an 112 emergency call reaches the authority dealing with the emergency (article 26(4-5) of the Universal Service Directive). Number portability Under the current rules, number portability is limited to PATS, which in some cases excludes VoIP providers from the scope. This will be changed: There will be no link to PATS anymore. Instead, all subscribers with numbers from the national numbering plan would have the right to port their numbers (article 30 of the Universal Service Directive).
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Status of regulatory requirements regarding VoIP in the European Union
This chapter is devoted to our findings from the in-depth country evaluations, i.e. we evaluate the actual conditions applied to VoIP service provision and service providers, respectively, in Europe. All statements made and tables shown in the subsequent sections build on Cullen Internationals bottom-up research for the ten Member States. The entire country matrices for the ten Member States appear in the Annex to this report. Section 3.1 is devoted to authorisation and notification requirements. Section 3.2 focuses on the classification of VoIP services. Section 3.3 addresses the issue of access to emergency services. In section 3.4, we present results regarding numbering and number portability. Section 3.5 looks at interconnection issues. Within sections 3.1 3.5, we pursue a consistent approach to organizing the material: We start by highlighting shortly the actual relevant legislation at the European level (this sub-section is called background information), and then focus on its implementation in the Member States (this sub-section is called Empirical findings from the analysis of the ten selected Member States). Thus, this chapter focuses on the status quo of the legal and regulatory market entry conditions for VoIP providers. We note that throughout this chapter we are neither incorporating the Commissions 2007 review proposals nor the ERG 2007 Common Position (both presented in the preceding chapter) into our discussion. We will get back to the Commission review proposals and the ERG Common Position in chapter 6.
3.1
Authorisation and notification requirement for VoIP services
Amending the regulatory framework for electronic communications in 2002, a main objective of the European Commission was to lower entry barriers for new competitors. To this end, traditional licensing regimes in telecommunications markets were abolished. Instead, the Authorisation Directive38 established a system of general authorisations defining rights and maximum obligations connected with the provision of electronic communication services and networks. This Directive aimed at reducing administrative burdens and encouraging new operators to enter the market.
38 Directive 2002/20/EC.
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Background information The ability to impose authorisation requirements on electronic communications networks and services remains with the NRAs, subject to the limits established in the Authorisation Directive. NRAs may require a notification from the prospective service provider. The information that a Member State can require a service provider to submit with the notification is limited to the declaration of intention to start providing services and/or networks and the information necessary to enable the Member State to establish a list of providers of electronic communications networks and services. 39 However, additional information may be required, and additional obligations may be imposed, if the service provider needs telephone numbers.40 NRAs must respond promptly to the notification; should an NRA fail to do so, the service provider can in theory offer service without explicit authorisation (but in practice may be unable to proceed if the service depends on the assignment of telephone numbers). NRAs are entitled to verify whether undertakings comply with the obligations associated with general authorisation (which are explicitly limited by the Directive), and may impose penalties or even withdraw the right to provide electronic communications services if they fail to do so. Empirical findings from the analysis of the ten selected Member States The majority of Member States require a notification to the regulator or the Ministry of Communications (Italy). Denmark and the UK do not practice any notification requirements. Specific notification requirements regarding VoIP service provision are unusual, although some Member States call for a specification or description of the type of service (e.g. Italy, Germany and the Netherlands). In Spain, CMT asks for compliance with a special resolution if operators are seeking to be assigned numbers.41 The time limits within which an operator must notify the relevant NRA or ministry of changes to the services in original notification vary somewhat among Member States. Some examples may substantiate this: In Austria operators must notify changes prior to the change (although one day would be sufficient). In Italy, any change in the information provided in the notification form must be promptly communicated to the Ministry. Spain obliges VoIP operators to notify changes in the ECN/ECS within one month.
39 Directive 2002/20/EC, Art. 3. 40 We discuss the assignment of telephone numbers in section 3.4. 41 See section 3.4 for more detail.
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3.2
Classification of VoIP services
Providers of voice services can be subject to a range of regulatory obligations. The previous section dealt with obligations that might be imposed through the Authorisation Directive. This section deals with other obligations, most of which are relevant to the Universal Service Directive. A provider of voice services may belong to one of more of the following categories, as defined in the Framework Directive and the Universal Service Directive: It may be a provider of a publicly available Electronic Communications Service (ECS); It may be a provider of Publicly Available Telephone Service (PATS); It may be providing PATS service pursuant to a Universal Service obligation; It may be designated as having SMP in connection with the provision of one or more retail and/or wholesale services listed in the Commission recommendation on relevant markets susceptible to ex ante regulation.
The Framework Directive defines Electronic Communications Service (ECS) as: a service normally provided for remuneration which consist wholly or mainly in the conveyance of signals on electronic communications networks.42
The Universal Service Directive defines Publicly Available Telephone Service (PATS) as a service available to the public for originating and receiving national and international calls and access to emergency services through a number or numbers in a national or international telephone numbering plan.43
If a service provider falls in any of these categories, it will tend to be subject to certain obligations and may possess certain rights associated with that category. The obligations for the first three categories are, in effect, cumulative: all providers of PATS are
42 See Directive 2002/21/EC, Art. 2(c). 43 Directive 2002/22/EC, Art. 2 (c).
22
necessarily providers of publicly available ECS, and thus subject to publicly available ECS obligations; all providers of PATS designated as a Universal Service provider are subject to PATS obligations. Figure 3-1 provides a simplified and stylised view of these key relationships. It abstracts away details that could be important in specific circumstances. Figure 3-1: The implications of ECS, PATS and Universal Service for regulation (stylized view)
Not regulated Private ECS ECS (Framework Directive, Art. 2d) PATS (Universal Service Directive, Art. 2c) PATS & Universal Service
Source: Schwarz-Schilling (2004), p. 8
Thus, this figure shows at first glance that regulatory obligations are increasing if one proceeds from the left to the right. Background information In its 2004 staff working document, the Commission provided an informal classification of VoIP services based on the characteristics of the market offering. The Commission identified three types of VoIP offerings: 1. VoIP offerings that comprise the provision of a product (e.g. a software program to be run on a personal computer) with no ongoing provision of a service. To the extent that such services do not constitute an Electronic Communications Service, they are not within the scope of the EU regulatory framework.44
44 Privacy rules still attach to personal data stored or processed, and the associated equipment and software might be subject to obligations even if the service is not.
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2. Corporate private networks are within the scope of the EU regulatory framework in that they are subject to the Authorisation Directive; however, as long as they are limited to private networks, no specific obligations are addressed to them. VoIP technologies that are used within a public operators core network and that do not impinge on the retail services offered to customers nor on the quality of those services are not subject to any additional obligations by virtue of being VoIP. 3. Publicly available Voice over IP services with access to and/or from E.164 telephone numbers, which fall under the European regulatory framework.45 There are many kinds of publicly available VoIP service offerings, and the regulatory treatment depends on the nature of the service being offered. VoIP services provided to the public for remuneration will typically be classified as publicly available ECS. Some of these will additionally be classified as PATS.46 Operators choosing to enter the market as a provider of publicly available ECS are associated with a number of obligations and rights which are shown in Table 3-1.
Table 3-1:
Rights and obligations for ECS providers

Rights for ECS providers Right to provide an ECN or ECS (Authorisation Directive, Art. 3 & 4) Consideration of application to use public rights of way (Authorisation Directive, Art. 4, Framework Directive, Art. 11) Right to negotiate interconnection (Authorisation Directive, Art. 4(2), Access Directive , Art. 3 & 4)
Obligations for ECS providers Notification of the NRA (Authorisation Directive, Art.3(2)) Financing of Universal Service Obligations (Universal Service Directive ,Art.13)
Obligation to make contracts available to end-users (Universal Service Directive , Art.20)
Possible obligations to publish information on the Right to use telephone numbers quality of their services (Framework Directive, Art.10, Authorisation Direc(Universal Service Directive, Art.22) tive, Art. 5) Make available the relevant information for the provision of publicly available directory enquiry services and directories. (Universal Service Directive, Art.25(2)) Provision of access to directory enquiry and operator assistance services (Universal Service Directive, Art.25(3)) Right to apply for the right to offer Universal Service (Authorisation Directive, Art. 4(2), Universal Service Directive, Art. 8(2))
45 EU-Commission (2004). 46 PATS are a subset of ECS; to be classified as PATS it is thus necessary to fulfil requirements of ECS beforehand.
24
Obligations for ECS providers Conditions attached to use of numbers47 (Authorisation Directive, Annex C) The user has a right to place calls to non-geographic numbers where technically and economically feasible ( Universal Service Directive, Art.28) Safeguard security of its services (Directive on privacy and electronic communications, Art.4)) Privacy Obligations (Directive on privacy and electronic communications, Art.5, 6, 7, 9) Source: On the basis of EU-Commission (2004).
Rights for ECS providers
To the service provider, some of these rights are likely to be more important than others. The ability to offer their services at all is obviously crucial. The right to use numbers and the right to negotiate interconnection are vital to most VoIP service providers. Consumers subscribing to publicly available ECS that are not PATS have a right to a contract, but do not necessarily have the right to port telephone numbers from a PATS operator, nor to be listed in a publicly available telephone directory. Notably, providers of publicly available ECS that are not PATS are not obliged through the Universal Service Directive to offer access to emergency calls. Operators entering the market as PATS provider are associated with a number of additional rights and duties. These rights and obligations are listed in Table 3-2. PATS providers are also subject to the obligations and rights listed above for publicly available ECS.
47 See section 3.4 for details.
25
Table 3-2:
Rights and obligations for PATS providers

Rights for PATS operators and subscribers Right to Carrier Selection and Pre-selection on the network of an SMP operator (Universal Service Directive, Art. 19) The subscriber to PATS has a right to exercise Number Portability (Universal Service Directive, Art. 30(1))
Obligations for PATS operators Obligation to provide access to emergency services (Universal Service Directive, Art. 26(1)) Obligation to implement number portability (Universal Service Directive, Art. 30(1), 30(2))
The subscriber to PATS has the right to appear in a Ensure uninterrupted access to emergency services. publicly available directory (Universal Service Directive , Art. 23) (Universal Service Directive, Art. 25(1)) Transparency and publication of information (Universal Service Directive, Art. 21) Obligation to realise entry in the directory if requested (Universal Service Directive, Art. 25(1), Directive on privacy and electronic communications, Art. 12) Source: On the basis of EU-Commission (2004)
The most obvious differences between ECS and PATS are the obligation to offer access to emergency services, and the right to exercise (and the obligation to provide number) portability. Regulators face a serious dilemma in determining whether to classify VoIP operators as ECS or PATS. At the time of the Commissions 2004 consultation, most VoIP operators were not able to offer access to emergency calls, which meant that they should not be defined as PATS (due to the fact that a service must provide access to emergency services in order to be defined as PATS). Conversely, were they to be defined as PATS, the NRA might impose obligations that the VoIP service provider could not realistically fulfil to have done so might have impeded market entry that would have been generally pro-competitive and beneficial. Technical capabilities to provide access to emergency services, including location information, are much improved today; nonetheless, nomadic VoIP services continue to confront serious challenges in regard to reliably identifying the callers location. More recently, voice over broadband (VoB) has been interpreted as a substitute for PSTN-based fixed line telephony in several market definitions followed by NRAs in the course of their market analyses under the EU framework.48 These services are generally not nomadic, and thus could in general support access to emergency services at acceptable cost. It could thus make sense today to classify at least those VoB VoIP services in the same way as those of competing PSTN-based operators, which is to say
48 See RTR (2005).
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to classify them as PATS. This is of particular relevance as a number of key obligations and rights (notably access to geographic or non-geographic numbers, number portability, and the obligation to provide access to emergency services) tend to flow directly from classification as PATS, either in the Universal Service Directive49 itself or in its transposition and implementation in the Member States. Empirical findings from the analysis of the ten selected Member States In the empirical data, we see diverging regulatory classifications of VoIP operators today. Each Member State appears to have started with a specific classification of VoIP services. However, the original classification of VoIP has become progressively more refined and nuanced over time in several Member States. Austria In Austria RTRs publicly consulted Guidelines for VoIP service providers published in 2005, make a distinction between Class A VoIP services (providing access to and/or from the PSTN and that classify as PATS (and therefore as ECS, as well)) and Class B VoIP services (providing voice communication between Internet subscribers without provision of access to the PSTN and that classify neither as ECS nor as PATS).50 This classification is still valid; however, in their recent market analyses RTR concentrates on Class A VoIP operators, e.g. in market definitions of markets 1 to 6.51 These market analyses exclude Voice over Internet (VoI) from the market definition, but include Voice over Broadband (VoB) (which is interpreted as a substitute to the PSTN based telephony). Denmark The classification of VoIP services in Denmark mirrors several stages over time. NITA (the national regulator in Denmark) has finalised a comprehensive analysis of barriers for development of IP-telephony in Denmark in March 2005. At that time NITA has considered five different scenarios of VoIP services. Two scenarios (1 and 2) entail peer-to-peer communication with the use of special software either with or without IPaddress forwarding service, but with no possibility to make or receive calls on public telephone networks. NITA concluded that these two scenarios do not fall within the scope of the electronic communications legislation and should not be classified as ECS. VoIP services provided under types 3 552, however, were considered to fall within the
49 50 51 52
The rights of use for numbers are also addressed in the Authorization Directive. See ibid. See RTR (2007). The three additional scenarios were: Private IP-telephony network with the possibility to make and receive calls on public telephone networks through a gateway (scenario 3); IP-telephony as an application on the open Internet with the use of an IP-telephony server and a gateway, with the possibility to make and receive calls on public telephone networks (scenario 4); IP-telephony over a QoS-secure IP-network with access to public telephone network (scenario 5).
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scope of the electronic communications legislation and therefore were to be classified as ECS.53 A PATS category has not been defined in the Danish legislation. Initially, the concept closest to PATS used in the legislation was the category of voice telephony subject to obligations equivalent to PATS (including access to 112 emergency services). Some further obligations were set in connection to telephony services. NITA analysis concluded that both categories, voice telephony and telephony, were to be understood as technology neutral and applied to VoIP in the same way as to fixed PSTN/ISDN and mobile services. However, NITA stated that both concepts could be misinterpreted and potentially result in discriminatory treatment of VoIP providers. Following NITAs assessment, the definitions used in the Executive Order on the Provision of Communications Networks and Services have been revised with an emphasis on the technology neutrality principle. The amended Order54 sets out the rights and obligations of different categories of ECS providers based on the following classification: public electronic communications networks and services; non-public electronic communications networks and services; and electronic communications networks and services that enable users to make calls to numbers in the Danish national numbering plan. This is a subset of ECS replacing the previously used voice telephony category that is subject to the obligation to provide access to emergency services, calls to the national directive enquiry service and access to a call-based charge advice facility.
Estonia In Estonia, fixed telephony service provided on the basis of VoIP is classified as PATS. France The regulator ARCEP in France distinguishes between VoI and VoB. VoB belongs to market 3-6 while VoI is not regulated. ARCEP strongly encourages VoB operators to register as PATS, which is additionally a precondition to apply for geographic numbers in France.
53 The rights and obligations of different categories of ECS providers are set out in (1) the Act on Competitive Conditions and Consumer Interests in the Telecommunications Market and (2) the Executive Order on the Provision of Communications Networks and Services. 54 Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services.
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Germany In Germany, the Bundesnetzagentur (BNetzA) initially classified VoIP services as telecommunications services, which is the German equivalent of ECS.55 As of today, BNetzA has avoided a clear statement as to whether VoIP is PATS. In Germany, the obligation to provide access to emergency services is postponed until 2009.56 Furthermore, contrary to the Universal Service Directive, the German Telecommunications Law (TKG) does not connect the right/obligation to practice number portability with a classification as PATS. Consequently, until now it has not been necessary to decide whether VoIP is PATS or not. However, in their market analyses BNetzA attributes VoIP calls to national and international fixed networks to markets 3 to 6 and treats VoIP services equal to PSTN in the context of geographic numbers. Italy The regulator AGCOM in Italy distinguishes between PATS57 and nomadic voice communications services. VoIP may be PATS if it fulfils the criteria laid down by the Universal Service Directive, as transposed to Italian legislation. The second category established by AGCOM (provision of nomadic voice communications services) has a distinct general authorisation background58 which implies the same rights and obligations as those applicable to PATS, save some exceptions to the condition that may be attached to general authorisations.59 AGCOM Decision 11/06/CIR, however, specifies that providers must adequately inform end-users, before the signing of a retail contract, of any limitations in conforming with the obligations normally applying to PATS. Netherlands In the Netherlands, the regulator OPTA only regulates VoIP services providing incoming and outgoing telephony to PSTN using E.164 numbers. If the service is subject to regulation, there are some differences based on whether the service can be defined as PATS or ECS. An example is access to emergency services which is only mandatory for PATS. Poland In Poland, the regulator UKE has issued a guide on VoIP at the end of 2006. According to this guide providers of VoIP services are not classified as PATS. Instead, VoIP is subject to the same rules as the provision of telecommunications services, defined as
55 See Bundesnetzagentur (2005). 56 See Section 3.3. 57 In this context, nomadic use means that the location of the terminal may change over time, but is stationary while in use. 58 Autorizzazione generale per la fornitura di un servizio di comunicazione vocale nomadico. 59 Exceptions are relating to e.g. USO funding, network integrity and ensuring communications between the emergency services and authorities in case of a natural disaster.
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provision of services by means of own network, other operators network or reselling a telecommunications service performed by another service provider. The Polish Telecommunications Law does not define ECS. Spain The regulator CMT in Spain concluded on February 3, 2005 that VoIP services should be regulated as publicly available ECS and not as PATS. However, a VoIP service can be considered as PATS if it complies with all PATS requirements in the Spanish legislation, including offering access to emergency services, interconnection and interoperability, ensuring number portability, and being provided at a fixed location non-nomadic.60 Similar to Italy, Spain introduced a specific category for nomadic VoIP, called nomadic vocal services, too, which is subject to the same obligations as non-nomadic VoIP operators classified as ECS. UK In the UK Ofcom identifies four main types of VoIP: (1) peer-to-peer, (2) VoIP Out, (3) VoIP In, and (4) VoIP In and Out. Depending on their individual characteristics, Ofcom considers Type 1 VoIP services are unlikely to constitute an ECS. Type 2 and 3 VoIP services are likely to be regarded as Public Electronic Communications Service (PECS). Type 4 VoIP services are likely to be PECS or, if they meet the four PATS gating criteria61, PATS. Summary In Table 3-3 we summarize the different classifications of VoIP offerings in the Member States which are part of our sample.
60 See CMT (2005). 61 The four gating criteria are: a service available to the public (that is to say, a publicly available service); for originating and receiving national and international calls; through a number or numbers in a national or international telephone numbering plan; access to emergency services, see Ofcom (2006), p. 11.
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Table 3-3:
Country Austria
Classifications of VoIP offerings in different Member States

Classification Class A (PATS) / Class B (not regulated) Peer-to-peer communication with the use of special software with no possibility to make or receive calls on public telephone networks (not regulated). Rights and obligations of different categories of ECS providers based on the following classification: public electronic communications networks and services; non-public electronic communications networks and services; electronic communications networks and services that enable users to make calls to numbers in the Danish national numbering plan. PATS Recommendation to register as PATS; ECS and PATS possible ECS; no statement whether PATS or not PATS / Nomadic voice communications services PATS and ECS Telecommunication services (No PATS) ECS (PATS if VoIP operators fulfil all requirements) / Nomadic voice communications service (ECS) Peer-to-peer (no ECS); VoIP Out and VoIP In (PECS); VoIP In and Out (PECS or PATS)
Denmark
Estonia France Germany Italy The Netherlands Poland Spain UK
Source: WIK/Cullen International (2007)
3.3
Calls to emergency services
Background information According to the Universal Service Directive, PATS providers have to enable access to emergency services and those calls have to be free of charge62. Moreover, PATS providers are required to the extent technically feasible to provide the authorities handling the emergency call with callers physical location. In this context, the operator is required to ensure not only that the call goes to the correct set of emergency responders63, but also that the emergency responders have the information that they need in order to reach the correct address or location.
62 See Directive 2002/22/EC, Article 26 which states that in addition to any other national emergency call numbers specified by NRAs all end users of PATS should be able to call the emergency services free of charge by using the single European emergency call number 112. In addition, Article 23 - dealing with the availability of the public telephone network and PATS at fixed locations in the event of catastrophic network breakdown or in cases of force majeure - requires undertakings providing PATS at a fixed location to take all reasonable steps to ensure uninterrupted access to emergency services. 63 This is to say to the correct Public Safety Answering Point (PSAP).
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For some services, this is relatively straightforward. For nomadic VoIP services, it can be extremely difficult, at least at the present level of technology. The ECRIT standards currently under development by the IETF (and other standards groups) could potentially solve this problem in many cases, but probably not reliably in all cases; moreover, even though the ECRIT standards are maturing rapidly, deployment is likely in our view to be gradual and slow.64 As of now there is no consistent European policy requiring VoIP operators to inform end-users about limitations of their services: Some Member States oblige operators to inform end-users about these limitations, others do not. VoIP services bear risks that are somewhat distinct from those of the fixed and mobile networks. Examples are that the voice access to emergency services will fail if the broadband connection fails, or if power fails.65 The regulatory questions that inevitably arise are (1) what steps, if any, should VoIP service providers be required to undertake to mitigate these risks, and (2) whether they should be subject to an obligation to inform their subscribers about any limitations on access to emergency services or provision of caller location information to emergency services. Empirical findings from the analysis of the ten selected Member States Our empirical assessment is focusing on the following issues: Are VoIP providers required to Ensure access to emergency services (based on PATS, ECS or some other classification)? Transmit Calling Line Identification (CLI) and caller location information to emergency services? Route emergency calls to a particular local emergency call centre? Inform their subscribers about the risks linked to the use of the VoIP service? Provide their subscribers with backup power supply solutions?
64 For more details on ECRIT see section 4.2.5. 65 A power failure could, of course, impact a user of the fixed network as well. For example, many fixed network subscribers have telephones (e.g. DECT phones) and answering machines that depend on external power.
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Except Poland, each country of our sample of Member States obliges VoIP operators to enable access to emergency calls.66 Even those countries that classify VoIP explicitly as not being PATS oblige operators to offer access to emergency services67, which is beyond the obligations mandated in the Universal Service Directive. With regard to the transmission of CLI68 and caller location information, the rules applied vary across the Member States: The Polish regulator does not require VoIP operators to transmit either CLI or caller location information. In Germany, providers of PATS based on new technologies are exempted from those obligations until January 1, 2009. In the UK and Spain, the transmission of CLI and caller location information is restricted to VoIP operators classified as PATS.69 However, in the UK it will be expanded to all providers of PECS (publicly available ECS) with the new rules that come into force on September 8, 2008. Denmark, Estonia70, and Italy require nomadic and non-nomadic VoIP operators to provide caller location information to the extent technologically feasible; however, the European Commission has an open infringement against Italy with regard to the technical realization of caller location information. CLI is a general obligation in these countries. In Austria, all PATS providers must transmit the CLI and must provide caller information on request.71 It is recognized and accepted that VoIP providers cannot always provide correct caller location information. In France, there is no explicit requirement for CLI (implicit). Caller location information has to be provided where the network equipment makes it possible72.
66 In Germany, a new transitional provision ( 150 (9a) TKG) exempts providers of PATS based on new technologies from the access obligations before January 1, 2009 due to the aforementioned technological difficulties. In Estonia ENCB realizes that it cannot enforce this requirement on VoIP resellers. 67 In Denmark the obligation is limited to those ECS providers that enable their users to make calls to the numbers in the Danish national numbering plan. In the UK it is currently limited to PATS, but will be expanded to all PECS with the new rules which come into force on September 8, 2008. See Ofcom (2007b) for details. 68 Caller line identification relates to the transmission of the phone number when making a phone call. 69 However, it will be expanded to all PECS with the new rules, which come into force on September 8, 2008 in the UK. 70 In Estonia there is no separate classification of nomadic or non-nomadic VoIP providers. All numbers in Estonia are non-geographic. 71 When the PSAP needs location information, it calls the operator and the operator must provide location data of the caller and/or the name and address of the subscriber to the extent that this information is available. 72 See ARCEP (2007).
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Regarding the provision of caller location by VoIP providers, a crucial issue is what is technically feasible. In its recently published statement on emergency services and VoIP, Ofcom provides insights into this subject: There was general consensus that the only options that are currently technically feasible are for VoIP users to be flagged on the Emergency Services Database (ESDB) to prompt the operator to ask for the callers location, or for the ESDB to contain the VoIP users registered address and a VoIP flag to prompt the emergency call handling operator to verify that is the callers current location.73 The way routing to emergency call centres is actually managed varies from country to country. In principle, each country has a specific approach to organize access to emergency services. In the near term, VoIP service providers must adapt to these emergency services access arrangements, which were designed for the existing PSTN (generally with no consideration of VoIP access). In our Member State survey, we have in particular addressed the issue whether there are requirements for routing calls to the correct local emergency call centre and whether the Member State provides guidance on which PSAP is the correct one (i.e. is responsible for answering emergency calls from a particular region). These issues are dealt with quite differently across the Member States, as can be seen from the following observations:74 Some Member States do not legally require VoIP operators to route emergency calls to the correct PSAP (e.g. in Poland and in Estonia). In some Member States, correct routing of emergency calls is dealt with within Universal Service Obligations (e.g. in Denmark and in the Netherlands). Consequently, VoIP operators pass emergency calls to the universal service provider, who will then route the call to the correct PSAP. A similar approach is practised in the UK. VoIP providers have to interconnect directly or via a third party with BT, Cable and Wireless or Kingston75, who route the emergency call to the correct PSAP. On the other hand, in some Member States (e.g. Germany, France), VoIP operators themselves have to ensure that emergency calls are routed to the correct PSAP. The information on which emergency centre to use in which area is communicated to operators by the Dpartements in France and by the incumbent in Germany.
73 Ofcom (2007a), p. 50. See also section 4.2 for more detail. 74 The emergency systems in different countries and the issue of finding the correct PSAP is discussed in more detail in section 4.2. 75 Kingston serves only Hull, while BT and C&W provide national coverage.
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Regrading the obligation to inform subscribers about risks of VoIP services, there is no consistent rule applied throughout the Member States of our sample. Some Member States oblige operators to provide information to subscribers about those risks, such as limitations in the caller location information for emergency calls (Denmark, France, Italy, Poland, Spain), while others do not. In the UK all VoIP providers, have to comply with a mandatory Code of Practice which includes obligations to ensure that consumers are informed. None of the Member States in our sample have imposed requirements for the provision of back-up power (e.g. battery back-up).76 In Table 3-4 we summarize the findings concerning the regulation regarding emergency calls. Table 3-4: Comparison of regulations on emergency calls in different Member States
Are VoIP providers required to provide access to emergency calls? Are VoIP providers required to Are VoIP providers transmit CLI and caller location required to inform information to emergency services? subscribers about risks of VoIP service? CLI (yes for PATS), location information on request CLI (yes), location information if technically feasible CLI (yes), location information where possible CLI implicit, location information if technologically possible No
Austria
Yes (PATS) Yes (those who enable calls to the national numbering plan) Yes (PATS) Yes (PATS and ECS)
Denmark
Yes
Estonia France Germany
No Yes No
Yes (PATS), but not before Yes (PATS), but not before Jan. 1st Jan. 1 2009 2009 Yes (PATS and nomadic voice communications services) CLI (Yes), location information to the extent technically feasible (ongoing infringement procedure)
Italy
Yes
The NetherYes (PATS) lands Poland Spain UK No Yes (ECS and PATS)
CLI (Yes, if operator provides it); caller No location information No No (only if PATS) Yes Yes Yes
Yes (currently only PATS CLI (where technical feasible); Caller after Sep. 8, 2008 all Location Information (currently PATSPECS) after Sep. 8, 2008 all PECS)
Source: WIK/Cullen International (2007)
76 Again, this can be viewed as appropriate when one considers that the power supply issue is also relevant to the PSTN.
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3.4
Numbering and number portability
Background information One of the most important rights of ECS operators is the right to use telephone numbers. The Directives do not specifically indicate at European level on what basis geographic versus non-geographic numbers should be assigned to end-users. All subscribers to PATS have the explicit right to exercise number portability (and the NRA may impose an obligation of number portability on any undertaking to which it has assigned numbers77); however, the USD does not explicitly say whether end-users have the right to port their numbers to ECS providers who are not PATS. Empirical findings from the analysis of the ten selected Member States Overall, the evaluation of the actual rules applied in Member States as regards numbering and number portability yield a highly varied picture. Geographic and non-geographic numbers In general, numbering plans differ in the Member States for historical reasons, which is also reflected in VoIP operators access to numbers. Overall, our analysis yields that some Member States provide both geographic and non-geographic numbers to VoIP operators, while others have imposed restrictions. Denmark and Estonia use non-geographic numbering plans; consequently, there is no differentiation between nomadic and non-nomadic VoIP operators with regard to geographic and non-geographic number ranges. Apart from them, all countries surveyed maintain non-geographic number ranges dedicated to VoIP, which are allocated to nomadic operators of VoIP, while geographic numbers are available to non-nomadic providers of VoIP.78
If this system were applied strictly there could be problems to the extent that nongeographic numbers are not guaranteed to be accessible across Member State boundaries. Indeed, to the extent that interconnection agreements do not contemplate non-geographic numbers, the non-geographic numbers might not even be reachable to all callers within the same Member State.
77 Authorisation Directive, Annex, section C. 78 In Spain this is limited to VoIP providers classified as PATS. The German Bundesnetzagentur obliges VoIP operators to verify the users location or address if they plan to assign a geographic number, see below.
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Thus, it is not surprising that most regulators offer geographic numbers to nomadic VoIP operators, too; however, often in conjunction with certain requirements to be fulfilled. Examples of such requirements are restricting the use of geographic numbers by nomadic VoIP operators to the same geographical area (France, Italy, Spain), or requiring the VoIP service provider to confirm that the subscriber has his/her home address in the same area (Germany, the Netherlands)). In Austria, geographic numbers still are limited to non-nomadic VoIP operators.79 Spain is the only Member State that does not allocate non-geographic numbers to nonnomadic VoIP operators; however, there is no strong demand for non-geographic numbers anyway, if there is a chance to get geographic numbers. Number portability With the exception of Spain, where number portability is defined and implemented only for PATS and mobile telephony but not for VoIP, NRAs do not impose restrictions regarding number portability within those number ranges destined for nomadic and nonnomadic use of VoIP. However, with regard to the question who is entitled to benefit from or is obliged to offer number portability, there are some differences. In some Member States of our panel, number portability is limited to those operators classified as PATS (Austria, Estonia, Italy80, Spain). In other Member States, number portability is possible for operators classified as ECS (Denmark, Netherlands, Germany) too. In France, PATS operators are obliged to offer number portability within all number ranges; ECS operators, however, are entitled to offer number portability only for nongeographic numbers.81 In Poland, VoIP operators are entitled to port in numbers, but are not required to port out if customers switch to a competitor. In the UK both type 4 and type 3 VoIP operators are entitled to port in, but all ECS providers are obliged to port out. Table 3-5 provides an overview of the conditions regarding access to numbers in the Member States examined.
79 RTR has published in January 2008 a discussion document in which they show willingness to adopt more flexible rules of numbering. See RTR (2008). 80 PATS and nomadic voice communications services. 81 This is due to the fact, that each numbering assignment decision by ARCEP specifies the services that may be provided. In effect, an ECS provider is not entitled to portability of geographic numbers.
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Table 3-5:
Access to numbers in different Member States

Access to numbers for VoIP
Country Non-nomadic VoIP Austria Denmark Estonia France Germany Italy The Netherlands Poland Spain UK Yes Not applicable Not applicable Yes
Geographic Nomadic VoIP No Not applicable Not applicable Yes, but limited to use in the same geographical area
Non-geographic dedicated ranges for VoIP? Non-nomadic VoIP Yes Yes No dedicated range for VoIP Yes Yes Yes No dedicated range Yes No Yes Nomadic VoIP Yes Yes No dedicated range for VoIP Yes Yes Yes No dedicated range Yes Yes Yes
Yes* (provider must verify address or location) Yes Yes, as long as nomadic use limited to geographic area Yes, as long as VoIP providers check customers or business address Yes Yes, but limited to use in the same geographical area Yes
Yes Yes Yes, if VoIP is PATS Yes
Source: WIK/ Cullen International (2007)
3.5
Interconnection
Background information Any provider of electronic communications services or networks has the right to negotiate interconnection with - and where applicable obtain access to other providers of public Electronic Communications Networks as interconnection is an important condition for the development of telecommunications.82 Consequently, NRAs must ensure adequate interconnection and interoperability of services in the interest of end-users, especially where commercial negotiations fail and where there are differences in negotiation power. Basically, three types of voice interconnection can be distinguished:
82 In addition to the Access and Interconnection Directive, note Article 4 of the Authorisation Directive.
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Traditional PSTN interconnection, representing the classical world, which currently still is applied in the vast majority of cases; PSTN - VoIP via SS7 interconnection on Media Gateways, which is applied in particular in the migration to NGN technology; IP-IP interconnection for VoIP, which is still in its early days for traditional telecommunications firms; however, newer VoIP service providers frequently connect on an IP-IP basis, and other arrangements are planned in some countries (e.g. among cable operators in the Netherlands).
Empirical findings from the analysis of the ten selected Member States Our empirical assessment is focusing on the following issues: Do incumbent operators at present offer the possibility for IP-IP interconnection for VoIP calls? Are there any requirements for a VoIP provider to have a switch in-country to offer VoIP services or to have a minimum number of PoIs?83 Are non-geographic numbers accessible when calling from a network within the same country or from another country? How are call termination rates for incoming calls on Alternative Network Operators (ANOs) fixed networks regulated? Do regulated termination rates for ANOs differ depending on the number ranges (geographic or non-geographic) used?
IP-IP interconnection for VoIP calls Regarding IP-IP interconnection, as of now there are no regulated offers for VoIP calls provided by incumbents in the sample Member States. Switch in-country, minimum number of PoIs The bulk of Member States within our sample do not formally require a VoIP provider to have a switch in-country to offer VoIP services. In Estonia, however, this is the case. Indeed, the definition of a fixed telephone service (i.e. PATS) requires switching and interconnection.
83 A VoIP provider could locate equipment necessary for the provision of voice services (e.g. a SIP proxy or media gateway) outside of the borders of the country where the voice services are to be offered. In fact, it could be cost-effective to offer VoIP services to all of Europe from a single location, which need not even be within the boundaries of the European Union. Regulatory requirements for a VoIP provider to maintain a switch in-country, or to have a minimum number of PoIs in the country, in order to obtain interconnection could thus represent the imposition of needless costs (and an impediment to competitive entry).
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Some interviewees noted that the use of outdated Reference Interconnection Offers (RIO) by some incumbents could create a de facto practical requirement to have a switch in-country, even in the absence of a de jure legal obligation. In Germany, for example, the Reference Interconnection Offers (RIO) do not explicitly exclude interconnection if the switch is not located in Germany; however, Cullen International did not find any practical example of a company getting interconnection without a domestic switch. With regard to Points of Interconnection (PoI), we notice large differences across the Member States. As with in-country switching, these requirements are often embedded in pre-VoIP RIOs, rather than being visible at the regulatory level. In Austria, the minimum number of PoIs is one. In Denmark, TDCs RIO contain a minimum requirement of having at least one PoI in-country as a prerequisite for interconnection with the incumbent operator. In France, having at least one PoI is a condition for being granted E.164 numbers by ARCEP. In Germany, according to the RIO with DTAG, there must be a PoI, too. Moreover, there is an obligation to migrate to up to 23 PoIs if the traffic out of one of the basic catchment areas assigned to these 23 interconnection areas and into one of these 23 basic catchment areas exceeds 48.8 Erlang. The other Member States of our sample do not oblige operators to provide an in-country Point of Interconnection.. Accessibility of non-geographic numbers With regard to the accessibility of non-geographic numbers, we identified a number of potential opportunities for discrimination. Although national calls to non-geographic numbers are supported in most of the cases84, some operators charge significantly higher retail prices for termination to non-geographic numbers or exclude them from flat rate packages (e.g. in Austria and Germany). Regarding cross-border calls to non-geographic numbers, it is clear that there were widespread problems in the past. The Cullen International country survey did not find any evidence of problems in late 2007 associated with the accessibility of nongeographic numbers from other Member States. At the same time, the VoIP service providers whom we interviewed were by no means of the opinion that this is a solved problem. Given the strong preference of VoIP service providers for geographic numbers, it may be that the absence of problems with non-geographic numbers merely reflects lack of use.
84 In Germany, Vodafone, the second largest MNO, did not offer calls to (0)32 (the non-geographic number range related to VoIP) before October 2007, See Teltarif (2007).
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Regulation of call termination rates, termination charges Call termination rates on alternative operators networks are regulated in most Member States, except Poland.85 Some Member States apply reciprocal termination charges between the incumbent and ANOs (UK, Austria). Others allow termination rates on alternative operators networks which are higher than the corresponding charges into the incumbents network. Often the principle of delayed reciprocity is applied, as e.g. in Italy, France, the Netherlands, and Spain. In most Member States, termination rates for geographic and non-geographic number ranges are equal. Two examples might clarify that there are, however, also exceptions. In France ANOs termination rates for VoIP traffic to non-geographic numbers are lower than for voice calls to geographic numbers. In Germany there is a differentiation between DTAG and ANOs: DTAGs termination rates for calls to geographic and (0)32 numbers differ; this is, however, not the case for termination in ANOs networks.
85 In Spain, CMT has regulated call termination rates only for calls to normal fixed geographic numbers (VoIP geographic (8XY) and VoIP non-geographic numbers (51) are not regulated). So VoIP providers using normal geographic numbers are regulated.
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Impacts of regulation on VoIP service providers and markets
This chapter aims at a deeper analysis of the impact of the different regulatory conditions concerning VoIP on market participants and on the markets at large. In other words, what we are exploring in this chapter are the challenges and impediments that VoIP service providers face if they want to implement a multi-national or even a panEuropean VoIP service strategy. From a methodological point of view, we address these issues based on our empirical material presented in Chapter 3 and also based on a number of interviews with market participants86 on critical issues regarding VoIP regulation. Our interviews reflected a variety of business models in the VoIP market. We have talked to representatives of the old telecommunications businesses (Bellheads) as well as to representatives of new entrants / service providers having their roots in the Internet world (Netheads). We talked to VoB and VoI operators, and explored the needs of facilities-based and nonfacilities-based operators. In order to highlight the most important potential barriers to the deployment of VoIP services in Europe, it is necessary to address the following issues: General conditions relevant to market entry; Access to emergency calls; Access to numbers, number portability; Interconnection; Lawful intercept.
4.1
General conditions relevant to market entry
Several of the market participants that we interviewed explicitly claimed in one way or another that the regulatory differences regarding VoIP in Europe mirror a lack of a common interpretation, implementation, and application of the European Framework at the level of the Member States. This lack works to the detriment of market participants. Thus, market entry is felt to be impeded due to the need to gather and to understand a multitude of country-specific information about the actual conditions for market entry (e.g. with respect to obtaining numbers). Assembling the respective information is viewed as being challenging, especially in light of the different languages in Europe.
86 Chapter 1 contains the names of the companies that were interviewed.
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Moreover, the different organisational and administrative processes applied in the various Member States are viewed as challenging. There are time lags in the basic approval processes even though the Authorisation Directive mandates a quick response to the Notification, and also to requests for numbers, market participants report long delays in regard to obtaining numbers. Moreover, market participants argue that litigation to seek to correct needless delays or perceived unfair treatment by the NRA can be very time-consuming and prohibitively expensive. Market participants also speak to some extent of legal uncertainty. On the one hand, the issue at stake is: Which requirements have to be fulfilled in order to be able to enter the market, i.e. to launch service offerings? On the other hand, once the actual market entry conditions have been clarified and adopted, the risk of changes in the legal and regulatory environment is sometimes viewed as a substantial barrier. Indeed, market participants worry that regulatory changes (e.g. access to geographic/non-geographic number ranges or obligations to offer access to emergency services) might necessitate additional investments.
4.2
Access to Emergency Calls
The ability to make emergency calls is extremely important. We have seen in previous sections that the regulation of access to emergency call services differs greatly among the Member States. However, the challenges regarding access to emergency call services are reflected not only in the regulatory treatment as such, but also in adapting (technologically, organisationally) to the different emergency systems in Europe. In order to better understand the challenges for a carrier or a service provider associated with the obligation to provide access to emergency services, it is therefore useful to highlight the main building blocks of emergency call provision.
4.2.1 Emergency call numbers

The Universal Service Directive mandates support for a single European emergency call number 112, but it does not prevent Member States from supporting other emergency call numbers. Thus, it is not surprising that several Member States support a considerable variety of emergency call numbers, each appropriate to a different kind of emergency. Some examples might illuminate this. In Finland 112, is the standard and only emergency call number. In Germany, there are two emergency call numbers: 110 (police) and 112 (fire brigade, rescue service, medical emergency service).
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In Austria alternative numbers are used e.g. for police (133), for medical emergencies (144), for fire (122), and for alpine emergency (140). In Poland alternative numbers are used e.g. for 984 - river rescue service, 985 mountain/sea rescue service, 986 - municipal police, 991 - power stations brigade, 992 - gas brigade, 993 - heating brigade, 994 - waterworks brigade, 997 police, 998 - fire brigade, 999 - ambulance87.
The actual number of emergency call numbers is of particular relevance as each of these numbers usually has to match a distinct set of specific Public Safety Answering Points (PSAPs). This implies that support for a large number of distinct emergency service numbers tends to have cost implications for voice service providers. A number of stakeholders suggested that it would be better if only the 112 number were permitted. We did not feel that these comments were solely self-serving. At the same time, we are not advancing this idea as a recommendation, because the relative balance of costs and benefits is not clear. We did not attempt to analyse the costs that such a change might imply for Member States that currently support more than one emergency services number.
4.2.2 Public Safety Answering Points (PSAPs)

Most Member States apply a regional organisation of PSAPs, meaning that each PSAP covers a specific geographic area. Moreover, the regional PSAP organisation within a country depends on the specific emergency call numbers. In other words, the mapping of coverage areas of the PSAPs associated with emergency call number A (e.g. police) may differ from the respective mapping of coverage areas of the PSAPs associated with emergency call number B (e.g. fire brigade). It is therefore not surprising that the number of PSAPs varies among the Member States, and ranges from one (Malta) to several hundred (Germany). This variability reflects differences in geography, in population, and in the way that a particular Member State organises its emergency services.
87 See ERG (2005).
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4.2.3 Routing of emergency calls to the correct PSAP: the traditional PSTN world
The preceding sub-sections have made clear that securing countrywide access to emergency services in effect requires an operator to take account of different routing information for each emergency number. The system that we are describing here is the current system, which was designed for the traditional fixed network, the PSTN. In the future, one might hope that the entire system of PSAPs and of routing arrangements to them might be replaced with a more modern system a system designed from the ground up with the Internet in mind. Unfortunately, this is not a realistic prospect in the near to medium term. Call routing arrangements for emergency calls in todays fixed and mobile networks are not uniform across the EU there are significant differences from one Member State to another. VoIP service providers must deal with these differences. Basic approaches Of course, the inherent logic of the system requires that an emergency call is routed to that specific PSAP that is responsible for the particular caller placing the emergency call. This is particularly challenging if the access network operator of the caller (the originating network operator) and the network operator providing access to the PSAP (the terminating network operator) are not the same. The crucial issue is the division of labour between the originating and the terminating network, or in more detail: Who (the originating or the terminating network) has to technologically enrich an emergency call with suitable information in order to secure that the call is routed to the appropriate PSAP? In principle there are two alternatives. Alternative 1: The terminating network takes on the burden of matching the specific caller location and the location of the appropriate PSAP. In this case the originating network only transmits the emergency call to the PoI with the terminating network (whereby of course the number of the caller is part of the information that is exchanged). However, the originating network may be obliged to provide additional information to the terminating network e.g. in case a customer has changed the operator and has made use of number portability. If there are changes regarding the number, location, and area responsibility of the PSAPs the termination network takes on the burden of adapting the routing tables in a suitable way. This alternative is particularly used in those countries that have chosen to include the termination of emergency calls in their Universal Service Obligations.
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Alternative 2: The originating network already establishes the appropriate PSAP before the call is exchanged with the terminating network. In this case, the originating network needs full information about the PSAPs in a country and the assignment of its local/ regional access areas to the PSAPs, respectively. Whenever there are changes (number, location, area responsibility) of the PSAPs the originating network has to make the necessary adaptations in its network routing tables.
Approaches currently employed in Member States It is obvious that an alternative 2 regime is much more challenging for the originating network than an alternative 1 system. Several Member States use Alternative 1. In Denmark, the designated universal service (US) provider (currently TDC) must ensure correct routing of emergency calls to the relevant local emergency call centres. Public ECS providers only must ensure that emergency calls are terminated without delay on the US provider network. Non-public ECS providers must ensure that emergency calls are terminated without delay on a public electronic communications network from which the calls must be terminated without delay on the US provider network.88 This means that the originating party (e.g. a VoIP operator) need not maintain information on the geographical distribution of PSAPs for the different emergency call numbers. Similar procedures to those in Denmark are implemented in: The Netherlands: all calls are routed to KPN as the current US provider, who will terminate the call; The UK: VoIP providers interconnect directly or via a third party with BT, Kingston Communications89 or Cable & Wireless, each of which provides emergency answering services; see below.
Germany implements Alternative 2. Similar arrangements can be found in Spain, the Czech Republic, and Hungary. In Austria, market participants have a choice between the different alternatives for the termination of their emergency calls, i.e. either alternative can in principle be applied within the same country:90
88 Public ECS providers are required to ensure that the relevant caller specific information necessary for the US provider to correctly route the emergency call is made available to the US provider. This is in particular relevant in case of a number that has been ported. 89 Kingston provides access to emergency services only for Hull; BT and C&W provide national access. 90 See Telekom Austrias standard interconnection treaty, electronically available: http://www.telekom.at/Content.Node/meta/geschaeftsbedingungen.php
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Option 1: If a user dials an emergency call number the originating carrier prefixes to the called number the area code of the user and passes the call to Telekom Austria. The incumbent then identifies the appropriate PSAP corresponding to the location (i.e. the area code) of the user. Option 1 is the standard routing process for emergency calls in Austria. Option 2: If a user dials an emergency call number the originating carrier prefixes to the called number the area code of the correct PSAP corresponding to the calling party and then the call is passed along to Telekom Austria. The latter routes the call to the PSAP specified by the originating network operator.
Country example: BT and the emergency call system in the UK91 In the UK, BT plays a central role in the handling of emergency call services. In order to better understand the essentials of the emergency call system in the UK, the following figure provides an overview of the main actors/actions involved. In case of (traditional fixed PSTN-based) emergency calls, an operator who wants to offer access to emergency services has to provide specific information to BT before actually launching his service.92 Once the service has been launched, and whenever a user places an emergency call, the operator must convey this call to BT at an agreed BT switch connection and in the specific format 999 III: 999 identifies the call as an emergency call, and III is the code notified to the operator by BT which identifies the call as a fixed-originated emergency call from an operator customer.93 Moreover, the operator must convey emergency calls to BT with full CLI.94
91 The following thoughts are based on NCC Standard BT-Emergency System in the UK (as of 26/09/07), Annex C, Schedule 225; see www.btwholesale.com/content/binaries/service_and_support/contractual_information/docs/nsia/nsch225.rtf. 92 Section 8.1 of the aforementioned document specifies this to be the telephone number, customer name, installation address (including post code) in an agreed format and by an agreed method of EDI. 93 See section 8.2 of the aforementioned document. 94 See section 8.3 of the aforementioned document.
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Figure 4-1: Emergency call system in the UK (stylized facts)
BT Emergency Centre* BT Emergency Centre*
Customer
Operator
BT Telephone operator
Emergency Services Database (ESDB)
Emergency organisation requested by the operator customer Appropriate emergency organisation
Agreed BT switch connection
Connect to Number Two way voice-telephony
* BTOCHC (Operator Call Handling Centre)
Source: WIK-Consult
The emergency call is then terminated at a specific BT Emergency Centre in which BT staff are handling the incoming calls. After that, the call is forwarded to the (appropriate number of the) actual emergency organisation requested by the customer (PSAP). To this end, BT uses a specific Emergency Services Database. Communication between the BT Emergency Centre and the PSAP is based on two-way telephony. Country example: Germany Germany uses two different emergency call numbers (110 for police, 112 for rescue service and other emergency services). The PSAPs associated with 110 are operated by police entities/staff. Each regional district in Germany (e.g. towns, cities, counties) is allocated to a specific regional policy entity (Kreispolizeibehrde) responsible for the district. Each of these regional police entities operates at least one PSAP (Einsatzleitstelle).95 PSAPs associated with 112 are operated by specific entities/staff either of counties (Landkreise), or of big cities that are not subordinated to a county (kreisfreie Stdte). In particular, there has been a tendency in recent years to merge regional (112-) PSAP entities in adjacent rural areas. The network that terminates calls to the PSAPs is mainly operated by DTAG. When a caller in Germany dials an emergency call number, the short number is translated into a special routing number used to route the call through all concerned net-
95 Big cities like e.g. Cologne have more than one PSAP (Einsatzleitstelle).
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works to the destination PSAP. In more detail, the originating network prefixes the local area code of the appropriate PSAP to the specific emergency call number (110 for police, 112 for rescue service etc.).96 To this end, DTAG maintains and distributes to its interconnection partners a list that maps local access areas (Anschlussbereiche) to the respective target PSAP numbers.
4.2.4 Routing of emergency calls to the correct PSAP: Approaches regarding VoIP
It is fair to state that there are problems associated with access to emergency calls in an IP world which still remain unsolved, in whole or in part. Our focus in this section is on VoIP services that enable the user to place calls to E.164 telephone numbers. For services that do not enable the user to place calls to domestic E.164 telephone numbers (types 3 and 5 in the taxonomy of ERG(2006)),97 we assume that access to emergency services is inapplicable. Conversely, for services that enable the user to place calls to domestic E.164 numbers but not to receive them (type 4 in the taxonomy of ERG (2006)), we assume that access to emergency services is applicable, but with the caveat that Calling Line Identification (CLI) may be inappropriate (because the service does not provide the user with a telephone number). Caller Location Information for nonnomadic calls In practice, both of the PSTN alternatives sketched out above work adequately for nonnomadic VoIP calls. Indeed, e.g. in the UK (see preceding sub-section), the processing of an emergency call is the same if the calling partys location can be sufficiently identified: BT connects the call to the Connect to Number on the BT Emergency Services Database shown for the emergency organisation requested by the customer. To this end, VoIP operators have to provide BT with relevant customer information in time98. Moreover, the VoIP operator has to provide BT with an indicator that the call is a VoIP-originated emergency call.
96 In addition a hexadecimal digit is added in order to mark this call as a specific call: The reason is that a caller of 110/112 should only be able to reach his/her appropriate local PSAP, i.e. it should not be possible to reach a PSAP in other parts of the country by simply putting another area code before the three digits 110 or 112. Thus, technically an emergency call in Germany virtually is forwarded by the originating network as a usual PSTN call to a geographic number. 97 For a summary of the types of VoIP as described in ERG (2006), see the Introduction to this report (Chapter 1). 98 In the case of non-nomadic use this information relates mainly to the telephone number that may be used to call the customer and the customers name and installation address (incl. post code) for each network termination point.
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Caller Location Information for nomadic calls It is, however, technically difficult or impossible to reliably determine the location of the caller if the VoIP service is used nomadically. Without reliable location information, it may not be possible to reliably identify the correct PSAP, much less to route the call to the correct PSAP. Even assuming that the call has been placed to the correct PSAP, the location information that is conveyed to the PSAP operator may still be unreliable. In this case, the VoIP service provider does not automatically know the end users whereabouts. This makes it difficult to fulfil requirements for emergency calls irrespective of whether the terminating or the originating party is obliged to provide the necessary information to route the call to the correct PSAP. As of today, most NRAs have tolerated the inability of VoIP operators to reliably provide correct location information for nomadic users who initiate their service from a place other than their home address. Ofcom (2007a, section 5.9) discusses some options how it is possible for a VoIP service provided over a xDSL, cable modem or Wi-Fi broadband connection to provide its location or location of its associated broadband access network termination point. This information could then be passed directly to the emergency operator service. Overall, Ofcom discusses five alternatives: The originating operator requests location information when the call is received. They could be prompted to do this in the case of a 999 / 112 call by use of a flag that highlights that the call is from a VoIP service. Ofcom views this to be the simplest approach. Users are asked to input location details prior to using the VoIP service. This approach is e.g. also discussed by German operators. The location details provided by the user could then be matched against the E.164 number when a call is received by the emergency operator.99 It is obvious that this approach requires the user to input location information at each new location they are at where the service is used in a nomadic manner (i.e. there are multiple locations that the VoIP service is being used from). Ofcom underlines that this could be facilitated by the VoIP service provider requesting their customer to periodically update the location at which they are using the service, or for the VoIP service provider to monitor the customers IP address and request revised location information when the IP address changes.
99 Ofcom continues to state that for this approach to be effective location information would need to be obtained from the VoIP user prior to calls being made and this information would need to be populated in the emergency operator database and matched against the E.164 number received. In addition the E.164 number could be flagged as being from a VoIP service which could prompt the emergency operator to confirm the location with the caller. See Ofcom (2007a, section 5.9; no. A5.83).
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Use of the IP network and IP addressing to provide location information. With respect to this option, Ofcom notes: The granularity of such a solution could reach the targets required by emergency services but only if ISPs collaborate in providing IP address and topology information to a central database. It would be of interest to understand how granular can location be made based on IP v4 addressing. Ofcom understands that such a solution would be constrained by the use of private addressing and NAT. However, it is likely that that future NGN deployment will largely use IPv6100 so that a higher level of granularity could be achieved.101 Incorporation of GPS/A-GPS or other GNSS (such as Galileo) receivers in the broadband adaptors which provide connectivity for the voice service.102 Technically, all 999 / 112 calls are made from a PSTN line (in the case where a PSTN line remains in place). Ofcom points out that this could be done by using intelligence in a broadband adaptor (when using xDSL service) to force all 999 / 112 calls to PSTN line. This solution enables the continued provision of location to the emergency services based on the PSTN network termination point and associated service location.
4.2.5 Standards groups and VoIP access to emergency services

Going forward, standardisation efforts on ECRIT in the Internet Engineering Task Force (IETF) and in other standards groups are well advanced. ECRIT (Emergency Context Resolution with Internet Technologies) is internationally relevant (unlike the U.S.specific NENA standards103), and potentially addresses a number of gaps in current practice. The determination of location could be progressively better automated over time for example, by DHCP servers that convey the geographic location (as understood by the service provider) to the end-users IP-based telephone or personal computer. Technical solutions can progressively narrow the problem, but there will probably
100 Ofcom assumes here that NATs will no longer be used when IPv6 is fully deployed. This is by no means assured. it is entirely possible that NATs will continue to be widely used, thus impacting the effectiveness of this solution. 101 Ofcom refers to the following cases: Location based solutions are used in the commercial world in particular with respect to control of TV content rights and ecommerce. The BBC uses software which locates an IP address down to city/country level in the UK. They use this to be able to restrict access to certain content rights (e.g. where the rights are for UK only) and users are only allowed to view the content if their source IP address matches part of the IP address range assigned to UK. In the US similar software and topology information is used to stop baseball matches being shown live to internet subscribers living near baseball grounds with granularity achieved down to zip code level. See Ofcom (2007a, section 5.9; no. A5.85). 102 Ofcom notes, however, that GPS receivers suffer from the limitations that indoor coverage is problematic, that not many users would attach an external antenna, and that CPE cost would increase. 103 The U.S.-based National Emergency Number Association (NENA) has an Interim VoIP Architecture for Enhanced 9-1-1 Services initiative to provide a relatively near term capability for VoIP services to access existing PSAPs. NENA also has a longer term Next Generation 9-1-1 (NG-9-1-1) initiative to upgrade U.S. PSAPs to a much more sophisticated IP-based infrastructure.
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always be cases where the users location is not reliably known this implies that users need to understand the risks and gaps in emergency access better than they do today. ECRIT is the IETFs ambitious initiative to develop an overall protocol architecture to enable VoIP (and other IP-based services) to access emergency services. The ECRIT family of standards appear to be making good progress, but there is still much work to be done. ECRIT is fully international, but it is distinctly long term.104 It provides a fully general means of transmitting location information to an end-users device (whether a handset or a personal computer), placing an emergency call to an IP-based PSAP, and automatically conveying the end-users location to the PSAP. ECRIT is primarily oriented toward an IP-based PSAP. Evolving the PSAPs from the current (rather primitive) PSTN orientation to an IP basis will take substantial time and effort. ECRIT standards can also support traditional PSTN access to the PSAP,105 which is likely to be essential as an interim measure. The concern that must be raised about ECRIT (and also about the NENA initiatives) is that none of them really provides a complete and bullet-proof solution to the most basic problem: determining the location of the end-users workstation or PC.106 This is the weak link in the chain. The ECRIT standards generally envision the following possible solutions: The standards implicitly support the case where the user configures the address into the workstation. The end-users workstation determines its own address using e.g. A-GPS or Galileo. The ISP (e.g. broadband provider), or operations management for a university or corporate campus, sends a civic or coordinate address to the end-users workstation, which the workstation then uses and transmits if it subsequently needs to place an emergency call. Equivalently, the location is provided by a server or a proxy when needed.
104 Many of the technical standards are nearly mature enough to support deployment today. Service provider deployments could perhaps take place over the next three to five years. Other aspects of deployment for example, deployment of IP-based PSAPs, and replacement of current NAT/routers with devices compatible with ECRIT might take much longer. 105 ECRIT is designed to return a Uniform Resource Identifier (URI) that encodes how to reach the PSAP. Normally, this URI would be a Session Initiation Protocol (SIP) URI that would be used to initiate a VoIP session. Per IETF RFC 5012, Requirements for Emergency Context Resolution with Internet Technologies (January 2008), Since some PSAPs may not immediately support IP, or because some user equipment (UE) may not initially support emergency service identifiers, it may be necessary to also support emergency service identifiers that utilize less-preferred URI schemes, such as a tel URI in order to complete an emergency call via the PSTN. 106 Indeed, in the case of NENA i2 specification, this problem is explicitly treated as being out of scope. See NENA, Interim VoIP Architecture for Enhanced 9-1-1 Services (i2), NENA 08-001, Issue 1, 6 December 2005,page 10: This document does not include specifications for the methods used to determine location nor how the endpoint actually receives location.
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The first scenario, where the user provides his or her address, is not ideal. Users will incorrectly enter their own address, or will forget to enter the address, or will forget to change it when they change the location of the VoIP-capable workstation. Experience tells us that users are frequently unable to properly identify their address.107 Again, the work is promising, but it is not clear that it will work reliably in all cases. The GPS/satellite based (second scenario) approach is a good solution, and has worked well for mobile phones in North America; however, it does not always work. It assumes, first, that the vendor has suitably equipped the calling workstation; and second, that it is possible to receive GPS or similar at the location from which the end-user is initiating the call. GPS works poorly inside of buildings. The third scenario, where the ISP sends the location to the end-users equipment, is promising. The location would in the most common case simply be transmitted with other DHCP information when the users workstation is initially configured to use the broadband access link. Assuming that the broadband provider unambiguously knows the end-users location, and is willing and able to provide it, this might work well. This approach, which would typically be implemented at the Ethernet (MAC) layer, is especially suitable for large corporate or university campuses. Operations management for the campus is likely to unambiguously know the users real location. Indeed, this may function better for a large campus than current PSTN arrangements, where it is frequently the case that the PSAP retrieves an administrative address for the university or corporation and not the address of the office from which the call was placed. For residential end-users, Network Address Translation (NAT) devices could pose a problem. Home networks frequently interpose a router/NAT device between the endusers computer and the network. The end-users PC engages in a DHCP exchange, not with the ISPs server, but rather with the home router/NAT. These devices are not designed today to propagate location information through to the end-users PC. A technical solution would be trivial, but the deployed devices which tend to be simple and reliable might easily be around for many years.108 Work is ongoing in the IETF to develop an equivalent approach that would operate at the Application Layer rather than at the Ethernet (MAC) DHCP layer. Such an approach could transparently traverse the router/NAT, and thus avoid the problem noted above; however, some have expressed concerns that such an approach might entail additional complexity for the network service provider in comparison with a DHCP approach. The ECRIT work is of very good quality, but the complexity of the system, and the length of the value chain, are causes for concern. For the third scenario described above (where the ISP provides the users location), for example, the system will work if
107 New York Times, An S O S for 911 Systems in Age of High-Tech, 6 April 2007. 108 Some experts assume that NAT will disappear as soon as IP version 6 (IPv6) is fully deployed. We consider it more likely that NAT will be around for a long time to come.
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broadband ISPs instrument their systems so as to provide location information to VoIP service providers, which will often be different and competing companies. The system potentially suffers from high economic transaction costs and network externalities effects. A transaction cost is the cost of performing a transaction. If each VoIP provider needs to make its own commercial arrangements with each ISP, transaction costs will be high. Network externalities are found where a service increases in value as more people or firms use it. In this case, a VoIP service provider would derive little benefit from a system that depends on the ISP until most ISPs are capable of supporting it. And the router/NAT issue adds another layer of complexity to the problem. IP-based systems with these network externalities / transaction cost characteristics often deploy much more slowly than desired, if they deploy at all.109 Examples of slow deployment in recent years include IP version 6 (IPv6), DNS security (DNSSEC), and inter-provider differentiated Quality of Service (QoS). With that in mind, it is possible that public policy intervention might be appropriate to ensure proper deployment of automated VoIP emergency services capabilities once the technology is sufficiently mature.110 A related problem is that the ISPs may not be motivated to cooperate with independent VoIP service providers in the absence of an explicit, relevant mandate. Their interests are not necessarily aligned with those of independent VoIP service providers in fact, they may be competing for the same customers. It is too early to think about regulatory action to remedy this particular defect, but this is an area that regulators will need to watch carefully going forward. For today, these challenges have not yet emerged, and perhaps might not.
4.2.6 The division of responsibilities among participants in emergency access

Access to emergency services involves a multitude of players, both public and private. The migration to VoIP complicates the value chain associated with access to emergency services. Moreover, to the extent that the migration to VoIP presages an eventual upgrade of the PSAPs to an IP-based model, one could anticipate different arrangements before, during and after that transition. This implies a complex transition, and a risk that the transition might break down in the absence of public policy intervention. At the same time, it is still too early to predict the outcome of that process.
109 See Marcus (2004). 110 As a related point, one of our interviewees suggested that the US FCC might have obtained a better result with their VoIP emergency services deployment if they had project managed the process, mandating deployment dates for all of the involved parties (including PSAPs and wired incumbents) rather than just for VoIP service providers.
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The arrangements and requirements among the public safety community are described in EGEA (2007). The description of interfaces in section 1.2 of part 2 of the document is particularly helpful. The document focuses primarily on specifying the functional requirements of the interface from the network or service provider to the PSAP. The PSAPs and their associated Emergency Control Centres (ECCs) are maintained at a Member State, rather than European, level; nonetheless, any eventual upgrade of the technical realisation of this PSAP interface to an IP basis would need, in our view, to be carefully coordinated at European level. Under VoIP, the service provider is not necessarily the same organisation as the network provider. This change in the value chain, while generally beneficial to consumers, also complicates the access to emergency services. For example, an independent VoIP service provider may have only limited ability to ensure the uninterrupted access to emergency services mandated by Article 23 of the Universal Service Directive. Going forward, there are scenarios where the service provider and the network provider would need to cooperate in order to provide reliable location information for emergency services. As we noted in section 4.2.5 above, there is some risk that they might not be motivated to cooperate, inasmuch as they might be competing for the same end customers. We also see a possible need for enhancements to end-user devices, either to provide location information (for example, by means of GPS or similar) or to allow location information to transit the device (in the case of router/NAT devices). In this case, commercial incentives might not be sufficient to motivate a rapid upgrade and replacement of these devices (see again section 4.2.5). How should these complexities be addressed? We think that a comment of one well placed US interviewee contains a valuable hint: This respondent felt that the US FCC might have gotten a better roll-out of VoIP access to emergency services had they taken it on themselves to project manage the process, rather than imposing obligations on only one link in the value chain. We think that it is still a bit too early to define a full centralised project plan to migrate VoIP services to a fully IP-based scenario; however, we see definite merit in ensuring that the Commission, supported as appropriate by the ERG and the EGEA, has the ability to monitor developments and to coordinate at European level as need be.
4.2.7 Implications of the differing emergency call systems in Europe for a VoIP operator
Based on our interviews, VoIP service providers are proceeding to implement whatever access to emergency services may be relevant to the services that they provide under the rules established by the respective Member States in which they operate. Nonetheless, VoI providers underscored that the differences among national regulatory require-
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ments regarding the provision of access to emergency services pose substantial challenges to a trans-national business model. Furthermore, some providers emphasised the considerable investment outlays associated with the specific obligations already in place or envisaged by particular NRAs. Some expressed concerns that becoming familiar with the different regimes at the national level is time-consuming and resourceintensive. Furthermore, there is no possibility to realize learning curve effects in a world of national regulatory environments that differ so greatly from one another. We learned from our interviews that even companies with an established market presence feel overstrained with the regionalised emergency call systems in some Member States. At the same time, interviewees claimed that some Member States use emergency systems which are antiquated from a technological point of view, and which really should be viewed as being overdue for modernisation. A number of the VoI operators that we interviewed depend on a third-party provider to perform most aspects of access to emergency services. Often, these third-party wholesale providers are facilities-based telecommunications competitors that have had to implement access to emergency services in support of their own existing competitive circuit-switched telephony services. This is a sensible approach all around, and helps to facilitate competitive entry of VoIP service providers. The operators (VoI and VoB) that we interviewed acknowledged the necessity of providing access to emergency calls; however, at least one of our interviewees raised concerns that obligations might be inappropriately extended to VoIP services that are not intended to be true substitutes for PATS, and that such obligations might be unduly burdensome in that context (and might also lock in a technologically antiquated view of emergency access). This view is akin to a rhetorical question that the U.S. expert Kevin Werbach raised at an FCC hearing a few years ago, in connection with the voice communications used by interactive gamers: Do I really need to call emergency services to say, Help, Ive been stabbed by an orc!?
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4.3
Numbering and Number Portability
Several issues have been addressed regarding numbering and number portability by the market participants to whom we have talked in the frame of this study. The main issues are: Ability to get numbers; Geographic numbers vs. non-geographic numbers; Number portability.
4.3.1 Ability to get numbers

The ability to get numbers, i.e. steady and quick access to numbers, is one of the most important issues before the launch of any VoIP related business model which is based on E164 numbers. Market participants have reported two main issues which are crucial for the establishment of a viable business case: Understanding the specific numbering conditions in the Member States (Which rights do I have / requirements do I have to fulfil in view of my particular business model?). The uncertainty as to the duration between the application for numbers/number ranges and the actual final decision. In this context, several market participants reported delays of months which threatened their entire business case (for a specific country).
Several of the VoIP companies interviewed do not get their numbers directly from the regulatory agency, rather, they use third parties as a vehicle. Nonetheless, also in this case some market players underscored that there is the risk of time lags if the third party is not able to provide the VoIP provider with the particular sort of numbers they are asking for (dial codes). Moreover, the argument was used that even though there are national intermediaries with whom a VoIP provider can cooperate (which in some cases are active even in several Member States), in effect there are no true panEuropean intermediaries with regard to the provision of numbers.
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4.3.2 Geographic numbers vs. non-geographic numbers

The vast majority of our interviewees has underlined that customers virtually are demanding only geographic numbers, i.e. there is little demand for non-geographic numbers. Market participants provided mainly two reasons for this. Prices and costs: Interviewees pointed out that calls to non-geographic numbers are often associated with higher wholesale termination fees and higher retail prices than calls to local geographic numbers. Moreover, it was emphasized that they are often excluded from flat rate plans. Thus, interviewees argued that if consumers face uncertainty about the costs associated with a service, they will be reluctant to take up the service.111 Accessibility of non-geographic numbers: Market participants have referred to cases in different countries where in the past non-geographic VoIP numbers have not been accessible from all (local, regional, mobile) operators.112 In our analysis of the ten Member Countries in chapter 3, we have not found any current examples of problems associated with accessibility of non-geographic numbers in Europe. Our interviews also provide no current examples of problems; however, the interviewees make little or no use of non-geographic numbers. Market participants have expressed their concerns that what has happened in the past might occur also in the future, especially with regard to accessibility across national borders.
Several interviews with market participants have also and in particular focused on specific marketing aspects. Some interviewees have underlined that a consistent availability of geographic numbers across all Member States is of high importance for VoIP providers planning to offer their services in several countries. The argument is that inconsistencies in this field are associated with diseconomies of scale, which in particular may result in increased marketing expenses due to the differences in the numbering regimes. Otherwise stated, it becomes more difficult and more expensive to establish a pan-European brand.113
111 In addition, PSTN-based operators in particular claimed in interviews that VoIP operators are charging termination fees at a level which is related to termination in the PSTN. However, so the argumentgoes, from a technical perspective they do not provide such termination services at all, and they are thus charging fees without incurring the corresponding costs. 112 Two examples might underline this: In Germany the 032 number range was not available for customers from some city carriers. In the UK the 056 number range was not available for customers of NTL. 113 Some interviewees have claimed that numbers should be accessible from anyone without any restrictions and they were in particular focusing on out of area use. To substantiate this claim they were referring to the business segment: Suppose there is a small company from country A that wants to do business in country B. This company benefits if there is a possibility to get a geographic number in country B as potential customers will be less reluctant in trying to call a country B number instead of calling a country A number (with a foreign country code).
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Some operators engaged in the non-nomadic VoB business have gone a step further: They suggested that differing number ranges (non-geographic and geographic) could be used as a signalling instrument to distinguish between managed VoIP services (with high Quality of Service) versus best-efforts VoIP services (which they presume to have lower Quality of Service). This reasoning, however, seems to us to be unpersuasive. First, it is not clear that Quality of Service differences between managed and unmanaged services will actually be large enough to matter to the user; second, if they are large enough to matter, the users will presumably be able to hear them anyway; and third, while Quality of Service is important to the party that procures the service, it is not clear that it is so important to the caller (not the purchaser) as to require being signalled through the numbering plan.
4.3.3 Number portability

Number portability is an important element affecting consumers switching costs. If customers are unable to retain their numbers, they may be reluctant to switch to a different service provider because of the inherent transaction costs caused by the need to inform all of their contacts about the new number. Service providers that we interviewed had different views of number portability, largely as a function of their respective business models: Some VoI providers called for unrestricted number portability in all directions; Other service providers argued that the more portability becomes market reality, the less transparency exists for end-users regarding the price of the call and the Quality of Service to be expected.
With regard to the implementation of number portability, some interviewees have pointed out that central number portability databases (like that established in Belgium, for example) provide transparency; however, they are also viewed as expensive. Other interviewees have favoured the forwarding solution applied e.g. in the UK. Interviewees have pointed out that in the UK operators typically choose BT as a transit partner, which is cheaper in comparison to connecting with each alternative network operator. Thus, calls to the ported number are forwarded to the alternative network operator by BT. The forwarding solution might be viewed as an alternative for ANOs which is cheaper in its initial implementation costs than contributing to a database solution; however, it implies ongoing payments (typically per minute114) that can be substantial and that impact long term competitiveness. Preferences for the systems may therefore change over time when operators succeed in establishing a larger customer base.
114 In the case of the UK, BT charges per minute.
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Some interviewees have also pointed out that the process of porting a number and number portability between new entrants might be a challenge for them. With regard to the former they claimed that in some Member States the process of porting a number is dealt with by fax technology, which is time consuming. As to the latter the argument was that there are cases (like e.g. in Italy), where regulation has established rules governing the porting processes between the incumbent and ANOs, however, there is a lack of rules for porting processes between ANOs.
4.3.4 Wrap-up
Overall, it is fair to say that market participants consider differences in the numbering regimes across the Member States to be to the detriment of their respective businesses. If new entrants face different conditions in terms of numbering and number portability across Europe e.g. if they face disadvantages in comparison to PSTN-based operators this will tend to create barriers to entry. This is true of any service provider that attempts to operate in more than one Member State, but it is even more the case for service providers that seek to offer a true pan-European service. VoIP service providers underscore that if their services are to be perceived as a substitute for existing voice services, they need to have access to the same numbering ranges as PSTN operators. Otherwise, customers will perceive those services as something different, and adoption and diffusion would be hampered. Nomadic VoIP operators would like to be allowed to assign national geographic numbers in all EU Member States. It is clear from the discussion in chapter 3 that any VoIP business model focusing on nomadic use and on geographic numbers currently faces substantial constraints because there is no specific European regulation on the availability of geographic numbers. These service providers presumably do not attempt market entry in those Member States which do not assign geographic numbers to nomadic use.
4.4
Interconnection
Several interviewees emphasized the need to take action with regard to IP interconnection. An important topic that has been addressed is the lack of a pertinent regulatory environment for the migration to NGN/All-IP. In this context several issues have been raised which can be wrapped up as follows:
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Interconnection on a service layer and/or on an infrastructure layer in an NGN; Applicability or inapplicability of Bill and Keep; Appropriate interconnection pricing regime for the migration period (where old and new networks are operated in parallel).
The migration to IP undercuts most of the rationale for existing call termination arrangements. The decline in operating costs, coupled with the de-coupling of the network from the service, implies that call termination either should be eliminated or should at least be much lower than is the case today.115 This is a large and intricate topic in its own right. For a more extensive discussion, see Marcus et al. (2008).
4.5
Lawful Intercept, data retention
Lawful Intercept Different national obligations as regards lawful intercept are a concern for all of the VoIP operators that we interviewed. Not only do these obligations vary among Member States, but market participants expressed concerns that the requirements are also increasing over time. They underlined that this is a large cost factor with consequences on technical and business processes. Although lawful intercept is of great importance, operators complain that the establishment of common rules has not yet been realised in the European Union. The issue does not seem to be primarily a technical standards matter; one interviewee noted that the ETSI standards provide a reasonable level of technical consistency across the EU, and no interviewee suggested otherwise. The problem seems to be everything else. We infer that the difficulties of dealing with different national administrations, different processes whereby law enforcement justifies an intercept, and different procedures for conveying intercepted information to the appropriate national authorities may be at issue. Moreover, interviewees underscored that lawful intercept measures can be associated with significant net costs depending of the concrete compensation system. Some Member States require operators to make ex ante investments in the necessary equipment; however, the operators are paid only according to the actual number of requests. In particular, VoIP providers with a focus on business customers reported that the number of cases that they dealt with in the past was very low. Thus, they claim not to be remu-
115 See Marcus et. al. (2008).
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nerated enough in view of their up-front investment costs. Some interviewees spoke favourably of lawful intercept arrangements in the UK, where they are not arbitrarily required to make ex ante installations; rather, they receive case-by-case support with respect both to installation of required facilities and to financing. Some interviewees have also addressed the following issue: Suppose the VoIP service is offered in country A and the call processing software is located in country B. Consequently, two jurisdictions with a priori different rules are affected. Thus, if another country is involved jurisdictional problems might arise. It seems to us that lawful intercept is a real impediment to pan-European services, but it is difficult to study, and difficult to identify the appropriate means of resolution. Information is hard to come by, first because there is no uniform European assessment (because this is a matter of national rather than European competence), and secondly because the national governments choose not to make much information available for obvious reasons. Interviewees were understandably reluctant to discuss arrangements for lawful intercept. Data retention Unlike lawful intercept, our interviewees agreed that data retention does not represent a serious problem for them. They were outlining that most customer call data records are already stored for internal (billing) use. Thus, data retention issues are negligible as long as operators and service providers are only obliged to retain data that are already generated and saved for the operators own business- and operational processes. However, some of our interviewees told us that data retention might become a problem if operators were obliged to retain other data (e.g. IP data) as well.
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Impacts of regulatory barriers to the Internal Market
The preceding discussion has demonstrated that varying circumstances require VoIP service providers to operate differently in various jurisdictions. In this section, sub-section 5.1 discusses the policy objectives that the Commission should be striving to achieve in regard to harmonisation of VoIP regulation, and the role ascribed to the Commission under the regulatory framework for electronic communications. Sub-section 5.1 then proceeds to review the different kinds of costs associated with lack of harmonisation the direct cost to service providers are only the tip of a much larger iceberg. In sub-section 5.2 we digress briefly to explain the role that third party intermediaries play in enabling VoIP services.
5.1
Policy Objectives and the Commissions Role
The economic rationale for harmonisation of regulation flows from the needs (1) to ensure that Europe is fully competitive with other regions of the world, some of which enjoy a large, relatively homogeneous market, and (2) to maximise societal welfare, and especially consumer welfare. Lack of harmonisation, in regard to VoIP or for that matter for nearly any electronic communication service, typically implies a number of potential welfare losses: Operators that offer services in multiple Member States incur higher economic transaction costs, which may deter some operators from attempting entry in some Member States. Competitive entry is consequently inhibited, thus denying consumers the potential benefits that competition would yield (in terms of price, quality, and choice). Operators do not make potential profits in the countries where it is not costeffective to enter, and lose the scale economies that would have come with panEuropean operation. Enterprise customers may lose the scale and scope economies that would have flowed from having a single provider that could make a pan European service offer. Electronic communications is a key enabler of all forms of commerce; consequently, there can be large spill-over effects. To the extent that electronic communications are more expensive and/or less efficient than could otherwise be the case, everyone loses. European enterprise as a whole is less efficient than it could be, and less competitive with enterprise in other regions.
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Lack of harmonisation thus has the potential to negatively impact network operators, service providers, enterprise customers116 and individual consumers.117 At the same time, it is necessary to strike an appropriate balance. The regulatory framework for electronic communications has sought from the first to promote harmonisation of Member State regulation, but not absolute uniformity. There are legitimate differences among the Member States, especially in terms of the degree of market competition, that need to be reflected in the regulation that they respectively impose. From a legal perspective, the Commissions explicit objectives in regard to harmonizing VoIP regulation flow directly from Article 8 of the Framework Directive. Article 8 recognises the value of (1) ensuring that users derive maximum benefit in terms of choice, price and quality; (2) of ensuring that there is no distortion or restriction of competition in the electronic communications sector; (3) of encouraging efficient investment in infrastructure, and promoting innovation; and especially (4) of removing remaining obstacles to the provision of networks and services at European level. The regulatory framework recognises (in Article 19 of the Framework Directive) the need for the Commission to be able to take appropriate action to ensure harmonisation. The Commission has explicit authority to issue recommendations on the harmonized application of the regulatory framework, and Member State NRAs are to take utmost account of those recommendations. Specifically in regard to numbering, the Commission has direct authority to take appropriate implementing measures where necessary to support the implementation of pan European services (Articles 10(4) and 19(2) of the Framework Directive).
116 In this context the reader is referred to Basalisco et al. (2007, p. 1). This report comes to the conclusion that there is strong evidence. that advanced services, based upon communications networks, have a major and even a disproportionate effect upon the growth performance of national and supranational economies. This implies that a failure by Europe in the field of regulation of corporate telecommunications services can have effects quite as grave as a failure adequately to regulate the supply of services to householders and SMEs. 117 In this context it is interesting to note that differences in regulation in Europe have also played a vital role at the informal meeting of the competitiveness ministers in Jyvskyl, July 10-11, under the Finish presidency : Regulations shape the innovation environment of firms with a major influence on the
course and speed of innovation. In Europe, regulations still differ considerably among Member States, which disperses market demand. This increases the level of market concentration and makes it difficult to reap the benefits of economies of scale, both of which decrease the intensity of competition in the markets. Consequently, innovation yields fewer rewards. Moreover, meeting a plethora of national regulatory requirements entails multiplying the cost to innovators of introducing new products, particularly in comparison to the equivalent costs in the United States and, increasingly, China. This further dampens firms incentives to innovate in Europe. Finally, regulations can be unnecessarily burdensome or prescriptive, thus discouraging innovation. For all of these reasons, if market demand is to be conducive to innovation, cross-border convergence and lightness must form the key guiding principles when designing a regulatory framework for Europe. See Finlands EU Presidency (2006).
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5.1
Costs caused by the differences in regulating VoIP
The critical issue is the degree to which these differences in regulatory treatment lead to costs for providers, for consumers, and for society at large. To this end we address both costs to the (potential) players in the communications market itself and costs on a macroeconomic level.
5.1.1 Costs on the level of companies providing VoIP services

Our survey identified many costs that VoIP service providers incur when they attempt to operate in multiple Member States. Some of these are more relevant to our study than others. There are costs that are relevant neither to regulation, nor to the choice of circuit switched versus IP-based technology. For example, firms need to have marketing and customer care in the languages of the customers that they serve. There are also costs associated with providing any service in Multiple Member States (registering as a business, paying taxes and social insurance). These costs may represent a real difference between Europe and other regions, but they can not be viewed as a cost of lack of harmonisation of VoIP regulation. There are costs that any provider of electronic communications would incur in providing any service in multiple Member States, but that are largely independent of the choice of circuit switched versus IP-based technology. For example, the service provider must familiarise itself with procedures in each Member State, and establish necessary contacts with the NRA. These costs may be competitively neutral among operators of similar size, however, the relative financial burden to bear these costs is presumably higher for small and new companies than for big incumbent companies. Thus, these costs are nonetheless somewhat relevant to this study to the extent that they impact competitive entry. There are the direct costs associated with compliance with electronic communications regulation within a single Member State, assuming that obligations are similar for providers of VoIP and of circuit switched voice. For a provider of VoIP, depending on the business model, these might be either higher or lower than corresponding costs for a circuit switched voice provider.118 These differences may be interesting, but to a first order they do not represent a policy issue. To a first order, these costs are just a normal market force they are reflected in the price of the service, which influences the pace of adoption relative to circuit switched voice. They are relevant to the extent that they may imply that it is in-
118 For example, the cost of performing lawful intercept, or of providing a location reliably for emergency services, might possibly be higher for a VoIP service provider.
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appropriate to carry over certain obligations unchanged from the circuit switched world to the VoIP world. There are direct costs associated with compliance with electronic communications regulation in multiple Member States. These costs appear to be much greater than the cost of compliance in a single Member State, but less than the product of the cost per Member State times the number of Member States. These costs are directly relevant to our study. There are costs to operators and service providers associated with (1) higher transaction costs in dealing with multiple Member State regulatory obligations; (2) loss of potential profits due to the inability to enter some Member States, or the inability to provide the offering that would be most profitable; (3) loss of potential economies of scale that would otherwise have been obtained. These indirect costs are much harder to assess, but they are directly relevant to our study.
5.1.2 Costs on a macroeconomic level

The issue at stake is: to what extent are there welfare losses on a macroeconomic level due to the fact that there is less trans-national or pan-European market entry.119 The main consequences for the economy at large can be expected along the following dimensions: Prices; Investments; Private consumption; International competitiveness.
Less market entry by VoIP providers means less aggressive competition and therefore (ceteris paribus120) less pressure on prices in the communications sector. The first effect might relate to price structure. In the absence of other market entry barriers there would be less pressure on erasing cross-subsidization regarding voice communications in the market, i.e. prices to reflect marginal costs. The second effect is on price levels in the voice communications sector, which could be lower.
119 One could also address this issue the other way round: What would happen if there were a greater proliferation of (new, innovative) VoIP services in Europe. 120 Ceteris paribus means other things being equal.
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For the discussion that follows, suppose arguendo121 that current practices continue, implying that prices are higher than would be the case in an ideal world with consistent regulation. To the extent that prices for voice communications services are higher than they could be, and to the extent that these prices reflect input costs in other sectors of the economy, output prices in other sectors of the economy might also be higher than they could be. Market entry of VoIP providers in particular means investment activity by these providers. Thus, to the extent that there is less market entry, the overall investment level in the economy is (ceteris paribus) lower than it could be. Moreover, it is plausible that a considerable increased market entry of VoIP providers leads to pressure on incumbent market participants also to invest (more, and faster) in IP technology. Private consumption might be affected in several ways. There are losses to end-users because they could not purchase services that otherwise would have been available to them. They may instead have purchased services that were inferior in price or quality, or that lacked useful features. Moreover, there is less incentive in the private household sector to buy new (future proof, i.e. IP based) terminal equipment. These costs could easily dwarf the direct costs to service providers, but they are difficult to assess. Regarding international competitiveness, one could argue that there is the regional impact on Europe of having an overall electronic communications system less functional than it otherwise might have been. Europe thus becomes less efficient as a whole, and less competitive with other regions. These costs are perhaps hardest of all to assess, but they could be quite significant.
5.2
The role of third-party intermediaries in the provision of VoIP
Several VoIP service providers, especially those offering nomadic VoI services, have chosen to collaborate in specific Member States with a domestic partner. Thus, although the end-user obtains a comprehensive voice service from the retail service provider, it is not the retail service provider itself that provides these services; rather, the retail service provider purchases these services at wholesale from some third party service provider. These third-party service providers are often facilities-based competitors to the incumbent telecommunications company. These companies (with their roots in the facilitiesbased telecommunications segment) are familiar with dealing with the regulated environment and its institutions. Thus, it is not surprising that their wholesale offerings to
121 Arguendo means for the sake of argument.
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other service providers comprise not only physical infrastructure, but also services to address regulatory requirements. Examples are the sub-allocation of geographic and non-geographic numbers, the negotiation and management of interconnection with incumbent operators, and the ability to call emergency services. Relying on the inputs of a third party provider of these services at wholesale can be cost-effective for a VoIP service provider, and also for the third party provider. In effect, it represents a different kind of economies of scale and scope the third party provider benefits by offering the regulatory compliance services to multiple service providers within a Member State. These economies of scale and scope thus operate within a Member State, rather than across Member States. How these intra-Member-State economies of scale compare to the inter-Member-State economies of scale is an empirical question that we have not studied; however, it is clear that their presence somewhat mitigates the diseconomies of scale associated with the lack of harmonisation of VoIP regulation across Member States. The fact that service providers choose to use them strongly suggests that individual service providers find the third-party providers to be more cost-effective than services that they themselves provide on a stand-alone basis.
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Conclusions and recommendations
This Chapter is devoted to our final conclusions (in sub-section 6.1) and recommendations (in sub-sections 6.2).
6.1
Conclusions
Our study evaluates the impact of non-uniform regulatory obligations in the Member States on VoIP diffusion in the European Union, and explores the costs to the internal market associated with this development. Our analysis highlights differences in the regulation of VoIP throughout the EU Member States, and identifies resultant costs and barriers to entry and to further development. Our empirical research substantiates that there are still substantial differences regarding VoIP regulation in Europe. That is perhaps not surprising these services are still quite new. Nonetheless, we view these differences as being problematic, and the Recommendations that we present in the next sub-section of the report reflect our belief that the time is now ripe to deal with them. Differences in the implementation and application of the European Directives at Member State level are in fact cost drivers in terms of expenses associated with the adoption of different processes on the Member State level. It is beyond the scope of this report to quantify exact numbers for the costs associated with inconsistent regulation of VoIP in the EU; however, our research provided clues on costs resulting from differences in the application of the regulatory framework regarding VoIP on the Member State level. The challenge that came up most consistently in our interviews were differences regarding the allocation of telephone numbers. Numbers seem to represent an important signalling mechanism and consequently, the type of number an operator is enabled to assign to his customers represents an important part of the operators brand. Consequently, VoI operators are reluctant to offer VoIP services in Member States where they do not have access to geographic number ranges, i.e. where there is the risk that demand for non-geographic numbers is not enough to cover expenses associated with a market entry. The lack of geographic numbers is thus a barrier to market entry. Several interviewees complained of unbounded delays in obtaining numbers. These delays appear to be thwarting the procompetitive intent of the Authorisation Directive.
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Further costs are associated with access to emergency services, especially in conjunction with nomadic VoI. Different Member States have different regimes for routing emergency calls. There are countries where the originating network provider has to implement its own routing tables ensuring that emergency calls are forwarded to the correct PSAP, i.e. the PSAP corresponding to the customers location. This is challenging for VoIP operators. First, there may be different national numbers for different kinds of emergency calls, each potentially with its own allocation of PSAPs.122 Second, the routing tables have to be updated regularly. Third, the efforts are complicated if VoIP providers plan to enter the market in several Member States at the same time, due to the high specificity of the emergency call issue on the Member State level. As a separate matter, once the correct PSAP has been determined, it is still necessary to provide the callers location, which in the case of nomadic VoI will not necessarily be reliably known. Finally, all the many regulatory differences among the Member States hamper the development of learning curve effects and economies of scale, and instead cause transaction costs. Lawful intercept was not an explicit focus of our study, but our interviews suggest that procedural inconsistencies in this area also lead to needless cost and to entry barriers. This seems to us to be an area that needs further study by an appropriately chartered body, possibly by ENISA. The effect of inconsistent regulation of VoIP is straightforward: There are many VoIP providers who choose not to enter specific Member State markets. From a public policy point of view, market entry should be welcomed, and lack of market entry lamented. From an economic point of view, competitive market structures are best ensured by a large number of market participants with their well-known benefits to the public: the furthering of innovation and the increase in competition. Market entry seems necessary from a broader public policy point of view as well. Despite the goal of a European single market, the Digital Divide between those with effective access to digital and information technology, and those without access to it, has increased over the last years. VoIP availability is one aspect of that Divide. On the one hand, VoIP is an important driver for broadband demand; on the other hand, VoIP could potentially serve as a driver for new applications as well. In this respect, additional potential benefits could be unavailable to those on the wrong side of the Digital Divide in some Member States. A geographically uneven development due to regulatory inconsistencies should be avoided in any case.
122 In the course of our study, some have suggested that these national numbers have outlived their usefulness. We note that their use is a matter of national competence.
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A wide diffusion of VoIP throughout the EU could contribute positively to the Lisbon Strategy as well123.The acceleration of the broadband roll-out as well as the provision of new content are both strongly associated with a wider diffusion of VoIP, which should not be hampered by inconsistent regulation. The lack of a common interpretation and implementation of the European Framework on the level of the Member States is especially a problem for VoIP-based new entrants with a pan-European focus who find themselves confronted with many country-specific idiosyncracies, many of which exist only for historical reasons. As a result, the European regulatory system as a whole is less comprehensible than it should be to these firms, and thus more of a barrier to these VoIP-based would-be competitive entrants.
6.2
Recommendations
An appropriate and consistent regulatory environment for VoIP would tend to reduce costs and promote efficiency, and thus benefit all operators who aim to provide their services throughout the Union. It would tend to result in greater choice, and in services with better price/performance, thus benefiting EU consumers. As a result, a harmonised regulatory environment would tend to enhance European competitiveness in comparison to other areas of the world. The Commission looked at these issues in 2004, and the ERG in 2005.124 The time was not yet ripe to implement a comprehensive, robust, but minimally intrusive regulatory approach to VoIP. The services were too new, the technology too unsettled, the market too immature. The Commission and the ERG resolved some policy issues, but intentionally left other areas open in the hope that market players might come up with solutions. That was then; this is now. In 2008, it is appropriate to move forward to greater European regulatory harmonisation of VoIP. We strongly emphasize the importance of a coherent numbering policy and harmonized rules governing access to emergency calls to remove an obstacle to the establishment of trans-national or pan-European business models in VoIP. Based on our research, we think that the recommendations of ERG (2007) are directionally appropriate, and we support the Commissions suggestion to change the problematic PATS definition and to remove its linkage to requirements to provide emergency calls and right to number portability.
123 See the Kok Report and the i2010 initiative. The latter includes an explicit broadband objective, and the notion of a Single European Information Space; see EU-Commission (2005a). 124 See EU-Commission (2004) and ERG(2005).
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More specifically, we recommend the following concrete measures: Access to numbers: In order to achieve the procompetitive goals of the Authorisation Directive, bureaucratic hurdles to obtaining numbers need to be reduced if not eliminated. The duration for a response to a request for numbers should not exceed the levels specified in Articles 4 and 5 of the Authorisation Directive, and effective recourse must be available to the ECS provider.125 Geographic versus non-geographic numbers: Numbering plans should be technologically neutral. Geographical numbers for traditional telephony services and geographical numbers for VoIP services (including nomadic services) should share the same number range. In light of the substantial and longstanding inconsistencies in this area, and the significant impact that these inconsistencies already have on VoIP service providers, the Commission should consider reinforcing these aspects of ERG (2007) with suitable technical implementing measures using its existing authority under Articles 10(4), 19(2) and 22(3) of the Framework Directive. Emergency services: The Commission should require Member States to ensure that any providers of a service available to the public for originating national calls through a number or numbers in a national telephone numbering plan provide access to emergency services.126 Such providers should also be required to make caller location information available to authorities handling emergencies, to the extent technically feasible. Reasonable transition periods should be allowed. Such providers should be obliged to clearly inform subscribers about any limitations in the access to emergency services they offer, as compared to that offered by the traditional telephony service. To the extent that location determination depends on the subscribers own actions, it is crucial that the subscriber be educated and informed as to the obligations that he or she himself must undertake to keep this location information current. The Commission (with the ongoing support of the European Regulators Group (ERG) and the Expert Group on Emergency Access (EGEA)) should continue to monitor developments as regards technical standards and actual deployment in regard to VoIP access to emergency services. In particular, at such time as a deployment of enhanced Public Safety Access Points (PSAPs) is ripe (especially a migration of the PSAPs to IP), some level of European coordination will be necessary and appropriate.
125 The Authorisation Directive permits a service provider to proceed as if authorized in the event that national authorities fail to promptly respond to a Notification. Since the service provider cannot do the same for numbers, an alternative mechanism is needed. 126 The phrasing intentionally follows that of the Commissions proposed amendments to the Universal Service Directive, which are generally appropriate in our view; however, we see no need to impose the obligation on services that are used solely for international calls.
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Scant attention has been paid to date to nomadic VoIP use from a Member State other than the one for which the service was intended, either with or without the permission of the VoIP service provider. Today, access to emergency services will not work in such an environment; however, in a future world operating under ECRIT standards, access to emergency services could in principle be supported. We view this as an area for future study. Interconnection and call termination: This is a large and complex topic in its own right. Our assessment and our detailed recommendations appear in Marcus et al. (2008), another report for the European Commission. Lawful intercept: Our interviews suggest problems in the area of lawful intercept (at a procedural level, not necessarily in terms of technical standards). Lawful intercept was not an explicit part of our remit. We think that further study is warranted under the auspices of some organisation with an appropriate charter, possibly ENISA.
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Bibliography
Analysis (2004): IP Voice and Associated Convergent Services, Final Report for the European Comission, Brussels, Luxemburg. Arcep (2007): Code des postes et des communications electroniques, 30/05/2007, Paris, available at: http://www.arcep.fr/fileadmin/reprise/textes/lois/cpce-decrets.pdf Basalisco, B., Cave, J., Cave, M., Davies, A., Henten, A., Richards, P., Steele, R., Tarrant, A., Vonk, E., White, N. and B. Williamson (2007): The Economic Benefits from Providing Businesses with Competitive Electronic Communications Services, study sponsored by BT plc, June ; available at:
http://www.btplc.com/Thegroup/Regulatoryinformation/Consultativeresponses/BTdiscussionp apers/Electronic/index.htm
Bundesnetzagentur (2005): Eckpunkte der regulatorischen Behandlung von Voice over IP (VoIP), Bonn. CMT (2005): Consulta publica sobre la provision de servicios de voz mediante tecnologias IP (VoIP), Madrid. EGEA (2007): Expert Group On Emergency Access (EGEA), Operational Needs for Access to Emergency Services, EGEA 07-02, December. ERG (2007): Common Position on VoIP (Draft) of the ERG High Level Policy Task Force on VoIP, ERG (07) 56 Rev1, Brussels. ERG (2006): Report on VoIP and Consumer Issues, ERG (06) 39, Brussels. ERG (2005): ERG Common Statement for VoIP Regulatory Approaches, ERG (05)12, Brussels. EU-Commission (2007): Commission Staff Working Document: Impact Assessment, SEC(2007) 1472, Brussels. EU-Commission (2005a): i2010 A European Information Society for growth and employment, COM(2005) 229 final, Brussels, June 1. EU-Commission (2005b): The European Commissions Approach to Voice over IP: Frequently Asked Question, MEMO/05/46, Brussels. EU-Commission (2004): The treatment of Voice over Internet Protocol (VoIP) under the EU Regulatory Framework, Commission Staff Working Document, Brussels. Finlands EU Presidency (2006): Demand as a driver of innovation Towards a more effective European innovation policy; available at: http://www.eu2006.fi/news_and_documents/other_documents/vko26/en_GB/115150782 2505/ Marcus, J. Scott, Elixmann, D. (authors) Carter, Kenneth R. (contributing author), with Bradner, Scott O.; Hackbarth, Klaus; Portilla, Antonio; Rey, Patrick; and Vogelsang, Ingo (2008): The Future of IP Interconnection: Technical, Economic, and Public Policy Aspects, report submitted to the European Commission, January 29. Marcus, J. Scott (2004): Evolving Core Capabilities of the Internet, Journal on Telecommunications and High Technology Law, 2004, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=921903.
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OECD (2006): VoIP: Developments in the Market, DSTI/ICCP/TISP(2004)3/Final, Brussels. Ofcom (2007a): Regulation of VoIP Services: Access to the Emergency Services Statement and publication of a statutory notification under section 48(1) of the Communications Act 2003 modifying General Condition 4, London, 5 December. Ofcom (2007b): Statement and publication of a statutory notification under section 48(1) of the Communications Act 2003 modifying General Condition 4, London. Ofcom (2006): Regulation of VoIP Services- Statement and further consultation, London. RTR (2008): RTR-Diskussionsdokument zur Thematik Flexibilisierung der Nutzung geografischer Rufnummern in sterreich, Version 1.04, 28.01.2008, Vienna, available at: http://www.rtr.at/de/tk/InputdokGeoKEMV/Diskussion_geoRN.pdf RTR (2007): Ergebnis der berprfung der Mrkte der Telekommunikationsmrkteverordnung 2003, RVON 2/05-31, Vienna. RTR (2005): Guidelines for VoIP Service Providers: Consultation Document, April 2005 Wien, available at: http://www.rtr.at/en/komp/KonsultationVoIP2005/VoIP_Guidelines_2005_Cons.pdf Schwarz-Schilling, Cara (2004): Voice over IP Anhrung, speech held at the DVPT Management-Forum on May 27th 2004, Frankfurt. Stratix (2003): Voice-over-packet technology: Options for OPTA, Report for OPTA, numbers and registration unit, Schiphol.
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Annex I List of acronyms

This annex contains a glossary of terms, acronyms, and abbreviations used in the report.
AGCOM A-GPS ANO ARCEP BBC BNetzA BT CEE CLI CMT DHCP DSL DTAG ECN ECRIT ECS EDI ENCB ERG ESDB ETSI GPS ICT IETF IP ISP LLU
L'Autorit per le garanzie nelle communicazioni, regulator in Italy Assisted GPS Alternative Network Operator LAutorit de Rgulation des Communications lectroniques et des Postes, regulator in France British Broadcasting Corporation Bundesnetzagentur, regulator in Germany British Telecom Central and Eastern Europe Calling Line Identification Comision del Mercado de las Telecomunicaciones, regulator in Spain Dynamic Host Configuration Protocol Digital Subscriber Line Deutsche Telekom AG Electronic Communications Networks Emergency Context Resolution with Internet Technologies Electronic Communications Service Electronic Data Interchange Estonian National Communications Board European Regulators Group Emergency Services Database European Telecommunications Standards Institute Global Positioning System Information and Communications technology Internet Engineering Task Force Internet Protocol Internet Service Provider Local Loop Unbundling
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NAT NENA NGN NITA NRA NRF OFCOM OPTA PATS PECS PLMN PoI PSAP PSTN QoS RIO RTR SIP SMEs SMP TCP/IP TDC TKG UKE URI US USD VoB VoI VoIP Wi-Fi
Network Address Translation National Emergency Number Association Next Generation Network Telestyrelsen - National IT and Telecom Agency, regulator in Denmark National Regulatory Agency National Regulatory Framework Office of Communications, regulator in the UK Onafhankelijke Post en Telecommunicatie Autoriteit, regulator in the Netherlands Publicly Available Telephone Service Public Electronic Communications Service Public Land Mobile Network Point of Interconnection Public Safety Answering Point Public Switched Telephone Network Quality of Service Reference Interconnection Offer Rundfunk und Telekom Regulierungs-GmbH, regulator in Austria Session Initiation Protocol Small and medium enterprises Significant Market Power Transmission Control Protocol/ Internet Protocol Tele Danmark Communications Telekommunikationsgesetz (German Telecommunications Law) Office of Electronic Communications, regulator in Poland Uniform Resource Identifier Universal Service Universal Service Directive Voice over Broadband Voice over Internet Voice over Internet Protocol Wireless Fidelity
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Annex II Member State Regulation Comparison Matrices

This annex contains the comprehensive matrices where the information collected in the selected 10 Member States are condensed.
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Table A- 1: Notification requirements for VoIP services

Article 3 of the Authorisation Directive (2002/20/EC) establishes a general authorisation regime for the provision of electronic communications networks and/or services (ECN/ECS). Member States may require undertakings to notify their intention to commence provision of ECN/ECS and to submit information required to allow the NRA to keep a register or list of providers. The table below shows whether: provision of ECN/ECS under the general authorisation regime requires submission of a notification to the NRA or the ministry? there are notification requirements specific to VoIP services? there is any time limit within which changes to the services in the original notification must be notified? (e.g. where an already notified provider of traditional PSTN voice telephony services starts to provide VoIP services)
Notification requirement? Specific requirements for VoIP services? Any time limit within which have to notify changes to the services in original notification? Operators must notify changes prior to the change (but a notification one day before would be sufficient).
AT
Yes to RTR According to 15 TKG 2003, providers of public electronic communications networks and services have to notify beginning, changing and ceasing their services (prior to the beginning, changing or ceasing) to RTR. RTR offers a web interface for notification.
No. All providers must include a description of their networks or services as a part of the notification. The notification form supports this description by providing different categories, including VoIP technology, but in the published list of notifications RTR does not differentiate by technology. No
DK
No Neither licensing nor registration of operators has been required in Denmark since 1996. Any service provider that starts operations is subject to the rules and obligations set out in the Act on Competitive Conditions and Consumer Interests in the Telecommunications Market and Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services. Individual authorisations (licences) from NITA are only required for the use of scarce resources.
Not applicable
EE
Yes to ENCB According to the art. 4(1) of the Electronic Communications Act of Dec. 8, 2004, an operator must submit a notification to ENCB (Estonian National Communications Board) when it intends to provide ECN/ECS.
There are no specific notification requirements for VoIP providers. However, the operator must always describe the technology it will use.
An operator is obliged to notify ENCB within 5 working days in case of any changes in the information submitted earlier, including when the operator changes the underlying technology (e.g. shifting from PSTN to VoIP). Art. D.98 para III of the code on postal services and electronic communications states that the operator must declare to ARCEP, within one month, by the same procedure, any modification of one of the elements listed the original declaration.
FR
Yes to ARCEP Decree on authorisations was published in Official Journal on July 29, 2005. It covers the declaration procedure and the obligations imposed on providers of public ECN/ECS and operators of networks for closed user groups. The declaration includes a short description of the nature and characteristics of the network and services and of
No
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Notification requirement?
Specific requirements for VoIP services?
Any time limit within which have to notify changes to the services in original notification?
their geographical coverage. Click here for declaration form DE Yes to BNetzA According to the Telecommunication Act ( 6 TKG 2004), providers have to notify beginning, changing and ceasing their services without delay to BNetzA. The notification form requires operators to classify the offered services. There is no special category for VoIP services. Category 8.1 covers voice services based on the operators own network and category 8.2 covers voice services without own network. In the notification form (annex 9 to the Electronic Communications Code of Aug. 1, 2003) the applicant must specify the type of network/service provided, and the network systems used and their location. If the provider seeks to be assigned numbers from the: 0X geographic number range, it needs a general authorisation for the provision of PATS (autorizzazione generale per la fornitura del servizio telefonico accessibile al pubblico) 5X non-geographic number range, it needs a general authorisation for the provision of nomadic voice communications services (autorizzazione generale per la fornitura di un servizio di comunicazione vocale nomadico). For further details on numbering, see Table 4. NL Yes to OPTA Telecommunication Act, Chapter 2 In the notification form, the operators must classify the offered services. Among the services listed, there is a category on VoIP-in and another one on VoIP-out services. Any modification must be transmitted to OPTA using the modification or termination of the provision of public electronic communications activities form. PL Yes to UKE Telecommunications Law, art. 10, pt. 1. Act on the freedom of the business activity, art. 64. Ordinance of the Minister of Infrastructure of March 9, 2007 No (see blank notification form) For any changes in the service, operators must immediately submit a written application to the President of UKE. President has to modify the register within 7 days of the notification. And within 7 days of the modification in the register, President will deliver an ex-officio certificate. In the notification form, the operator must specify if it intends to provide nomadic VoIP services (servicios vocales nmadas). See list of information requirements. If the operator is seeking to be assigned numbers, it has to comply with a resolution of June 30, 2005 of the Ministry of Industry, Tourism and Trade allocating new number ranges According to art. 12 of Royal Decree 424/2005 changes in the ECN/ECS to be provided must be notified within one month. No time limit set to notify the changes to the services. Operators are obliged to notify without delay.
IT
Yes to the Ministry of Communications Art. 25 and annex 9 of the Electronic Communications Code of Aug. 1, 2003
Any change in the information provided in the notification form must be promptly communicated to the ministry. Annex 9 to the Electronic Communications Code of Aug. 1, 2003.
ES
Yes to CMT Art.6 2 of Law 32/2003 of Nov. 3, 2003 (General Telecommunications Law) Art. 5 of Royal Decree 424/2005 of April 15, 2005 on the conditions for the provision of electronic communication services, universal service and protection of end-users
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Notification requirement?
Specific requirements for VoIP services?
Any time limit within which have to notify changes to the services in original notification?
for 'nomadic voice services' (VoIP) to ECS operators who have notified CMT of their intention of providing VoIP. UK No There is no advance notification requirement to Ofcom before starting to provide an ECN/ECS. Not applicable Not applicable
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Table A- 2: Classification of VoIP services

Different rights and obligations may apply to VoIP services depending on which category they belong to: 'electronic communications services' (ECS) or 'publicly available telecommunications services' (PATS). ECS are defined in the Framework Directive (2002/21/EC) as services normally provided for remuneration which consist wholly or mainly in the conveyance of signals on electronic communications networks. PATS are a subset of ECS defined in the Universal Service Directive (2002/22/EC) as services: available to the public for originating and receiving national and international calls and access to emergency services through a number or numbers in a national or international telephone numbering plan.
PATS providers have additional rights and obligations compared to publicly available ECS providers: number portability, calls to emergency services, carrier selection and pre-selection, right to have an entry in the publicly available directory (see annexes A, B and C to the Commission staff working paper on the treatment of VoIP under the EU 2003 regulatory framework). The table below shows: the classification of VoIP services by NRAs based on ECS/PATS whether NRA has given any interpretation of the term available to the public?
See, for example, discussion on public availability in Ofcom VoIP statement of March 2007 (Paras A5.39 to A5.45)
CC Classification of VoIP based on ECS/PATS Any interpretation of public availability by NRA? No official interpretation
AT
In April 2005 RTR publicly consulted Guidelines for VoIP service providers. In these guidelines, RTR defined two types of publicly offered VoIP services (chapter 2): Class A VoIP services: VoIP services that provide access to and/or from the PSTN and that classify as PATS (and therefore as ECS, as well); and Class B VoIP services: VoIP services that only provide voice communication between Internet subscribers without provision of access to the PSTN and that classify neither as ECS nor as PATS.
On Oct. 10, 2005 RTR published version 1.0 of the guidelines, including this classification. This document is only available in German language, whereas the very similar consultation document was published in English. This classification is still valid, but with focus on market analyses, RTR and TKK focus on those services that provide access to/from the PSTN (the Class A type) and take for granted that these services are PATS and ECS. In particular, in the second round analysis of M 16, RTRs re-evaluation of the market definition ordinance (Feb. 6, 2006) and TKKs final decisions (April 4, 2007) they use the following classification: Voice over Internet (VoI): a VoIP service that is not (only) sold as a bundle with Internet connectivity. RTR says, that some of such services do provide access to the PSTN and some do not, but that no VoI service currently is a substitute of PSTN and therefore VoI is excluded from the market definition. Voice over Broadband (VoB): a VoIP service that is sold as a bundle with Internet connectivity, either with DSL, or with CATV. RTR and TKK argue that these services offer full connectivity with the PSTN on the basis of the providers managed IP infrastructure and are therefore included in the market definition. RTR and TKK do not explicitly say so, but take for granted that VoB services providing access to/from PSTN are ECS/PATS.
83
CC
Classification of VoIP based on ECS/PATS
Any interpretation of public availability by NRA? Under Section 6 (2) of the Act on Competitive Conditions and Consumer Interests in the Telecommunications Market, public electronic communications networks and services are defined as a subset of electronic communications networks and services that are made available to a number of end-users who have not been specified in advance. According to NITA, these are services that can be offered to any user, in contrast to the services that are only offered to narrowly defined categories of users (e.g. banks, insurance companies, educational institutions or virtual private networks and services) (See NITAs notes to the Executive Order on the Provision of Communications Networks and Services, Dec. 2003).
DK
In March 2005 NITA finalised a comprehensive analysis of barriers for development of IP-telephony in Denmark following two rounds of public consultations. NITA has considered five scenarios of IP-telephony, based on the underlying technology, network and service aspects, use of numbering resources and access to public telephone network: Scenario 1: IP-telephony as an application on the open Internet (peer-to-peer communication with the use of special software), no possibility to make or receive calls on public telephone networks (i.e. PSTN/mobile networks). Scenario 2: IP-telephony as an application on the open Internet with IP-address forwarding service (e.g. an earlier version of SKYPE), no possibility to make or receive calls on public telephone networks. Scenario 3: Private IP-telephony network with the possibility to make and receive calls on public telephone networks through a gateway. Scenario 4: IP-telephony as an application on the open Internet with the use of an IPtelephony server and a gateway, with the possibility to make and receive calls on public telephone networks. Scenario 5: IP-telephony over a QoS-secure IP-network with access to public telephone network.
NITA concluded that only VoIP services provided under scenarios 3 5 fall within the scope of the electronic communications legislation and should be classified as ECS. PATS category has not been defined in the Danish legislation. Rights and obligations of different categories of ECS providers are set out in the Act on Competitive Conditions and Consumer Interests in the Telecommunications Market and the Executive Order on the Provision of Communications Networks and Services. Initially, the concept closest to PATS used in this legislation was the category of voice telephony subject to obligations equivalent to PATS (including access to 112 emergency services). Some further obligations were set in connection to telephony services. NITA analysis concluded that both categories, voice telephony and telephony were to be understood as technology neutral and applied to VoIP in the same way as to fixed PSTN/ISDN and mobile services. NITA stated that both concepts could be misinterpreted and potentially result in discriminatory treatment of VoIP providers.
NB NITA also observed that the distinction between PATS and ECS with voice was not
entirely clear in the Universal Service Directive, and there had been no clear guidelines from the European Commission on this matter (See Section 2 in NITAs conclusions to the second round consultation). Following NITAs assessment, the definitions used in the Executive Order on the Provision of Communications Networks and Services have been revised with an emphasis on the technology neutrality principle. The amended Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services sets out the rights and obligations of different categories of ECS providers based on the following classification: public electronic communications networks and services; non-public electronic communications networks and services; and electronic communications networks and services that enable users to make calls to numbers in the Danish national numbering plan. This is a subset of ECS replacing the previously used voice telephony category that is subject to the obligation to provide access to emergency services, calls to the national directive enquiry service and access to a call-based charge advice facility.
EE
A fixed telephony service provided on the basis of VoIP is classified as PATS in Estonia. Under art. 2(58) of the Electronic Communications Act of Dec. 8, 2004, a telephone service is defined as a publicly available electronic communications service for originating and receiving national and international calls at a determined location and for access to emergency services through a number or a short access code connected with the number in the Estonian or international telephone numbering plan. However, there are several VoIP providers (e.g. wireless access operators) in Estonia that do not have their own switching platform, points of interconnection (PoI) or numbers granted from the national numbering plan. Such VoIP providers have access to a fixed PSTN operator (switching and interconnection). ENCB treats these type of VoIP providers as resellers of fixed telephony services of that other operator (to which PATS obligations apply).
Yes Publicly available ECS is defined in art. 2 68) of the Electronic Communications Act of Dec. 8, 2004 as follows: publicly available electronic communications service (hereinafter communications service) is a service provided by a communications undertaking on the corresponding com-
84
CC
Any interpretation of public availability by NRA? munications services market pursuant to the general procedure to all persons, and the persons need not meet any conditions differentiating them from other similar persons. A service is publicly available particularly if provision of the service is continuous and consistent and it is provided essentially under the same conditions. No
FR
ARCEP strongly recommends VoIP operators to register as PATS. From a numbering point of view, geographic numbers may only be used by PATS providers. Non-geographic numbers, such as 09XX numbers, however, are dedicated to services de communications interpersonnelles and can be used also by non-PATS, so ECS.
DE
ECS and PATS (if the VoIP service is a substitute for PSTN) When BNetzA published its Key elements of the regulatory treatment of Voice over IP in Sep. 2005, it stated clearly that VoIP services which provide access to PSTN are telecommunications services as defined in 3 Nr. 24 TKG (see Key element 2). This term is the German equivalent of ECS. In this document BNetzA avoided a clear statement whether VoIP is PATS. In Germany the obligation to provide access to emergency services is postponed until 2009 (see Table 3). Furthermore the rule about number portability is not linked with PATS. Therefore until now it has not been necessary to decide whether VoIP is PATS or not. However, BNetzA attributes VoIP calls to national and international fixed networks to the markets 3 to 6 and treats VoIP services equal to PSTN in the context of geographic numbers (see Table 4).
In the context of the obligation to notify (see Table 1) BNetzA interprets the term publicly available as: any non-defined group of persons.
IT
VoIP may be PATS if it fulfils the criteria laid down by the Universal Service Directive, as transposed by the Italian legislation. For nomadic services there is a separate category, a general authorisation for the provision of nomadic voice communications services (autorizzazione generale per la fornitura di un servizio di comunicazione vocale nomadico). The authorisation in this category implies the same rights and obligations as those applicable to PATS, save some exceptions to the conditions that may be attached to general authorisations (points 1, 6, 12 and 15 of Annex 1, part A of the Electronic Communications Code of July 1, 2003 relating to, e.g. USO funding, network integrity and ensuring communications between the emergency services and authorities in case of a natural disaster). AGCOM Decision 11/06/CIR however specifies that providers must adequately inform end-users, before the signing of a retail contract, of any limitations in conforming with the obligations normally applying to PATS.
No
NL
OPTA only regulates VoIP services providing incoming and outgoing telephony to PSTN using E.164 numbers. If the service is subject to regulation, some differences apply according whether the service can be defined as a PATS or ECS (e.g. access to emergency services is only mandatory for PATS providers). On Dec. 14, 2006 UKE issued a guide on VoIP. In this guide, UKE concluded that providers of VoIP services are not classified as PATS. The provision of VoIP is subject to the same rules as the provision of telecommunications services, defined as provision of services by means of own network, other operators network or reselling a telecommunications service performed by another service provider. ECS is not defined in the Telecommunications Law. Telecommunications Law defines PATS as telecommunications services available to the whole of users, for the originating and receiving of national and international calls and for the access to emergency services through a number or numbers in a national or international numbering plan.
No
PL
No
ES
Following a public consultation, CMT concluded on Feb. 3, 2005 that VoIP services should be regulated as ECS and not as PATS (minimum regulatory approach).
No
85
CC
Any interpretation of public availability by NRA?
However, a VoIP service can be considered as PATS if it complies with all PATS requirements in the Spanish legislation, including if it: offers access to emergency services offers interconnection and interoperability is provided at a fixed location (non-nomadic) ensures number portability.
Currently, number portability is only defined and implemented for PATS and mobile telephony, not for VoIP (that are not considered as PATS). The Resolution of June 30, 2005 of the Ministry of Industry, Tourism and Trade defines a specific category for VoIP, called nomadic vocal services. It assigns specific geographic number ranges for non-nomadic usage (8XY) and a special prefix for nomadic usage (51). It also establishes the obligation to provide access to emergency services. Annex II 30 of Law 32/2003 of Nov. 3, 2003 and Royal Decree 2296/2004 of Dec. 10, 2004 on electronic markets, access to networks and numbering (Annex 1 3). Royal Decree 424/2005, of April 15, 2005 on electronic communication services, USO and protection of end-users Relevant CMT decisions: CMT decision of Oct. 5, 2006 on an opinion requested by Tiscali and CMT decision of Nov. 27, 2003 on the use of conventional geographic numbers for VoIP (request from BT). UK Ofcom Statement on Regulation of VoIP services: Access to the Emergency Services of Dec. 5, 2007. In this document, Ofcom identifies four main types of VoIP voice call service: Type 1 Peer-to-peer Type 2 VoIP Out allowing calls over the Internet to the PSTN Type 3 VoIP In allowing to receive calls over the Internet from the PSTN. Customers can be allocated an ordinary geographic number or a non-geographic VoIP number (056) Type 4 VoIP In and Out (Type 2 plus Type 3). Often, Type 1 VoIP services are marketed as PC-to-PC services because they allow calls from one PC to another, e.g. Skype and Google Talk; Types 2 and 3 are marketed as providing a secondary phone line, e.g. Skype In/ Skype Out and Tesco; Type 4 is also marketed as providing a secondary phone line, e.g. BT Broadband Talk, or as a replacement for making calls over the PSTN, e.g. Vonage. To date, no single combination of business model, functions or equipment has emerged to lead the market. Ofcom expects this diversity to remain for some time, although recent UK and international trends indicate that providers that seek to serve the mass market in the future are likely to offer Type 4 phone-based PSTN replacement services. Depending on their individual characteristics, Ofcom considers Type 1 VoIP services are unlikely to constitute an ECS. Type 2 and 3 VoIP services are likely to be regarded as PECS. Type 4 VoIP services are likely to be PECS or, if they meet the four PATS gating criteria, PATS. Under the general authorisation regime, VoIP providers must comply with certain general conditions of entitlement (GCs) set by Ofcom. See Ofcom guidelines on GCs that apply to ECS/ECN, PECS/PECN and PATS/PTN. Yes, see discussion on public availability in Ofcom Statement on Regulation of VoIP services of March 29, 2007 (Annex 5, Paragraph A5.39 to A5.45).
Ofcom says:
87
Table A- 3: Calls to emergency services

Article 26 of the Universal Service Directive (2002/22/EC) requires that: all end-users of publicly available telephone services (PATS) are able to call the emergency services free of charge by using the single European emergency number 112 or any other national emergency call numbers calls to 112 are appropriately answered and handled in a manner best suited to the national organisation of emergency systems and within the technological possibilities of the originating network undertakings which operate public telephone networks (PTN) make caller location information available to authorities handling emergencies, to the extent technically feasible, for all calls to 112.
The table below shows whether VoIP providers are required to: ensure access to emergency services (based on PATS, ECS or some other classification) transmit Calling Line Identification (CLI) and caller location information to emergency services route emergency calls to a particular local emergency call centre inform their subscribers about the risks linked to the use of the VoIP service (e.g. that the voice service will fail if the broadband connection fails or if there is a power cut, any limitations on access to emergency services or provision of caller location information to emergency services) provide their subscribers with safety power supply solutions (e.g. battery back-up).
PSAP = Public Safety Answering Point
88
CC
VoIP providers required to provide access to emergency calls? PATS/ECS
Transmission of CLI and caller location information to emergency services Non-nomadic VoIP Nomadic VoIP Requirement for VoIP provider to flag nomadic users to PSAP? (i.e. user might be at a different location to registered location)
Requirements for routing call to local emergency call centre? If yes, does Member State provide guidance on which PSAP is responsible for answering emergency calls from particular regions?
Information to subscribers about risks of VoIP service
Requirements for provision of safety power supply solution (e.g. battery backup)
AT
Yes (PATS) All PATS providers must provide access to emergency services ( 20 TKG 2003).
Yes (PATS) All PATS providers must transmit the CLI ( 20 TKG 2003 and 5 KEM-V) and must provide caller location information on request ( 98 TKG 2003). Without regard to the technology, location information is only provided on request. When the PSAP needs location information, it calls the operator and the operator must provide location data of the caller and/or the name and address of the subscriber to the extent that this information is available. If a subscriber has a geographic and a nomadic number, non-nomadic calls to PSAP should present the geographic number as CLI, and nomadic calls should present the nongeographic number, as far as possible. A CLI beginning with 0720 or 0780 therefore flags to PSAP, that the call might be nomadic. It is being tolerated that VoIP providers cannot always provide correct caller location information. A working group of operators and RTR has regular meetings on emergency call issues and develops best practices.
Yes (PATS) PSAP must define location dependent routing and must make this information available in electronic format ( 19 KEM-V) Operators of ECN/ECS must route according to these definitions, but only within the technical capabilities of their network ( 19a KEM-V) In practice, location dependent routing of calls from geographic numbers works well. It is being tolerated, that some VoIP providers route all nomadic emergency calls to Vienna.
No
No
DK
Yes Only ECS providers that enable their users to make calls to the numbers in the Danish national numbering plan are required to provide access to the public emergency services (112 emergency number)
Yes (5 of Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services).
Yes Caller location information must be provided to the extent technically feasible. Where it is not technically pos-
Designated universal service (US) provider (currently TDC) must ensure correct routing of emergency calls to the relevant local emergency call centres.
Providers of electronic communications services that only offer access to international calls or do not enable making calls to the numbers in the Danish national numbering plan are not required to provide access to the public emergency services. These service providers are required to inform end users about unavailability of access to emergency services at latest at
No NITA discussed power supply solutions in its analysis of barriers for development of IPtelephony in Den-
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CC
Transmission of CLI and caller location information to emergency services Non-nomadic VoIP Nomadic VoIP Requirement for VoIP provider to flag nomadic users to PSAP? (i.e. user might be at a different location to registered location) sible to establish the caller location, service providers are required to provide to PSAP information about any service usage characteristics that can be relevant in this context (5 of Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services).
(3 of Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services).
Public ECS providers must ensure that emergency calls are without delay terminated on the US provider network. Non-public ECS providers must ensure that emergency calls are without delay terminated on a public electronic communications network from where the calls must be without delay terminated on the US provider network. Public ECS providers are required to ensure through a detailed agreement with the US provider that the information necessary for correct routing of emergency calls is made available to the US provider (4 of Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services).
the time of entering into the service provision agreement. If it is not technically possible to ensure transmission of caller location information to emergency services, the service provider must inform end users about any service limitations in connection to the correct routing of emergency calls at latest at the time of entering into the service provision agreement. (7 and 10 of Executive Order No. 1031 of Oct. 13, 2006 on the Provision of Communications Networks and Services).
mark but did not propose any specific requirements for VoIP providers that could potentially present another barrier for development of VoIP (see Section 2.7.4 and 11.6 in the final report published in March 2005).
90
CC
EE
Telephone service providers (i.e. PATS, see Table 2). Art. 88 of Electronic Communications Act of Dec. 8, 2004. In practice, ENCB realises that it cannot enforce this requirement on VoIP resellers.
CLI: Yes Caller location information: Yes, where possible. Art. 88 of Electronic Communications Act of Dec. 8, 2004. There is no classification of nomadic or nonnomadic VoIP providers in Estonia. In practice, ENCB realises that it cannot enforce this requirement on VoIP resellers.
No, there are no specific requirements on any telephone service providers, but in practice all fixed and mobile telephone service providers route calls to a local emergency call centre.
No
No
FR
Yes, both PATS and ECS The French legislation (Art. D.98-3 and D.98-8 of the code on postal services and electronic communications) states that both public network operators and providers of electronic communications to the public have to carry emergency calls i.e. 112 (EU emergency number) 15 (ambulance) 17 (police) 18 (fire) 115 (SAMU Social) 119 (abused children) 11600 (missing children)
CLI No explicit requirement (assumed to be implicit) Caller location information Obligation for the operator to provide location data of the caller to the emergency centre where the network equipment at its disposal makes it possible. (Art. D.98-8 of the code on postal services and electronic communications)
Yes To the relevant emergency centre corresponding to the location of the caller. Information on which emergency centre to use are communicated to operators by the Dpartements. (Art. D.98-8 of the code on postal services and electronic communications)
VoIP providers include an article in their terms and conditions. For example, Alices general conditions (4.1) states that in case of nonfunctioning of the network, no call is carried, including emergency calls.
No
91
CC
DE
Yes, but not before Jan. 1, 2009 (see transitional provision mentioned below). 108 TKG obliges all PATS providers to provide access to 112 (EU emergency number, fire and ambulance). Other numbers shall be regulated in an ordinance. This ordinance will probably only refer to 110 (police). The last amendment of TKG inserted a new transitional provision ( 150 (9a) TKG), which exempts providers of PATS based on new technologies from the access obligations before Jan. 1, 2009. See also the Key elements of the regulatory treatment of Voice over IP, Sep. 2005 (Key element 5)
Yes, but not before Jan. 1, 2009
Yes, but not before Jan. 1, 2009 Research under way
Yes According to 108 TKG providers of PATS must route calls to the locally responsible emergency call centre. Details shall be regulated in an ordinance and a technical guideline, but neither of these documents yet exists. DT maintains and distributes to interconnect partners a list that maps geographic number areas to the respective target numbers.
No
No This was one of BNetzAs questions in the VoIP consultation in April 2004, but has not been an issue afterwards.
92
CC
IT
Yes Undertakings authorised for the provision of: PATS nomadic voice communications services.
CLI Yes CLI is general obligation for PATS under art. 3 of AGCOM decision n. 11/06/CIR Caller location information Yes authorised providers of PATS, to the extent technically feasible
CLI Yes CLI is general obligation for providers of nomadic voice communications services under art. 6 of AGCOM decision n. 11/06/CIR Caller location information Yes authorised providers of nomadic voice communications services, to the extent technically feasible.
No
(see Table 2). Art. 76(1) of the Electronic Communications Code of Aug. 1, 2003; AGCOM Decision 11/06/CIR.
Under art. 8(4) of AGCOM Decision 11/06/CIR, before the signing of a retail contract , undertakings authorised for the provision of PATS and nomadic voice communications services must provide the end-user with accurate information of any limitations in the caller location information for emergency calls, and the enduser must give his explicit approval for such limitations. Under art. 11 of the decision, on June 19, 2006 AGCOM launched a procedure in order to address the implementation of caller location information for emergency VoIP calls. No follow-up published so far. No specific provisions on risks related to power cuts and other such failures in the broadband connection.
No
Caller location information The European Commissions 12th Implementation Report of March 29, 2007. Annex 1, p. 161, notes that there seemed to be a lack of technical regulation that would enable operators to fulfil the requirement of caller location for emergency services imposed on nomadic VoIP. On March 22, 2007 the Commission referred Italy to the European Court of Justice as there are still problems in the provision of caller location information for calls to 112.
93
CC
NL
Yes VoIP providers considered as PATS providers must ensure access to emergency services. (Telecom Act, Art. 7.7)
Yes, if operator provides CLI
Yes, if operator provides CLI
All calls must be routed to the USO provider (KPN) who will terminate the call to the appropriate local emergency centre. No
No
No
PL
No VoIP operators must clearly inform its users about any limitation to access emergency services.
No
No
Yes VoIP operators must clearly inform its users about any limitation to access emergency services.
No
ES
Yes VoIP providers (both PATS and nomadic vocal services) must route calls to the single European emergency call number 112. VoIP are considered as ECS (and not PATS). The Resolution of June 30, 2005 of the Ministry of Industry, Tourism and Trade defines a specific category for VoIP, called nomadic vocal services. It establishes the obligation to provide access to emergency services, due to the use of public numbering resources.
CLI No (only PATS need to transmit CLI) Caller location information No, only PATS
CLI No (only PATS need to transmit CLI) Caller location information No, only PATS
In both cases (nonnomadic and nomadic VoIP services), calls are routed to the emergency centre that corresponds to the area of the address determined by the subscriber in the contract for subscription to the VoIP service.
The contracts with subscribers should include information on features of the service, in particular as regards emergency calls. It should clearly indicate that it is a service different from PATS and about its limitations. Resolution of June 30, 2005 of the Ministry of Industry, Tourism and Trade
No Only obligation established for the USO provider. Article 28 2 of Royal Decree 424/2005, of April 15, 2005 - the USO provider must have the necessary technical resources to ensure the continuity of the fixed telephony service in situations of electricity power failure for at least four hours.
94
CC
UK
Current PATS only At present VoIP providers can chose whether to offer 999/112 access on a voluntary basis. Type 4 VoIP providers that offer 999 access and meet the other PATS gating criteria become PATS and have to comply with the PATS General Conditions (GCs). As part of Ofcom Statement on Regulation of VoIP services of March 29, 2007 Ofcom published Guidelines for VoIP providers on complying with GC 3 (network integrity and service reliability) and GC 4 (access to emergency services and provision of caller location information). Under the Guidelines, all VoIP providers that provide 999/112 access (not only PATS) are required to conduct a formal risk assessment of network integrity and implement a risk mitigation strategy. From Sep. 8, 2008 All PECS that allow users to make outgoing calls to national telephone numbers (Type 2 and 4 VoIP services see Table 2) Ofcom Statement on Regulation of VoIP services: Access to the Emergency Services of Dec. 5, 2007. The requirement will apply to services that allow calls to national numbers or to
CLI: as below, where technically feasible Caller location information: Current PATS only, to the extent technically feasible From Sep. 8, 2008 All PECS that allow users to make outgoing calls to national telephone numbers (Type 2 and 4 VoIP services), to the extent technically feasible (GC 4) Ofcom Statement on Regulation of VoIP services: Access to the Emergency Services of Dec. 5, 2007 (see from para 5.39). At present Ofcom considers the technically feasible solution is for VoIP providers to provide the registered address of their VoIP customers to the emergency services database (ESDB), accompanied by a VoIP flag to alert the emergency call handling operator to ask the caller to confirm their location. Where a VoIP service is mainly used in a nomadic way or is mobile and it would be unhelpful for the emergency services call handler to have the registered address because the caller is unlikely to be there, the test of to the extent technically feasible may be met by providing a VoIP flag only. We expect the meaning of technically feasible to change as technology progresses and will monitor that. We strongly encourage and ex-
BT, Cable & Wireless (CW) and Kingston Communications provide emergency answering services. VoIP provider would have to interconnect directly with one of these operators or via a third party. Approx. 80% of emergency calls are answered by BT and 20% by CW. See description of BT Emergency Service for fixed, VoIP and mobile originated calls. Section 9 covers VoIP originated emergency calls. For pricing, see BT Carrier Price List Section B3, Part 3.08 (Emergency Service)
Yes Ofcom Statement on Regulation of VoIP services of March 29, 2007 adopted a mandatory Code of Practice on the provision of consumer information by all providers of PECS offering VoIP services to residential and small business customers, at both fixed and nomadic locations. The deadline for compliance with the Code was May 29, 2007 (GC 14). PECS providers must ensure customers are provided with information about the features of their service. In particular, during the sales process, at the point of signature, in terms and conditions and in any user guide. Type 2, 3 and 4 VoIP providers must provide clear and readily accessible information on whether their service offers 999/112 access and whether it may cease to function if the power or broadband connection fail. The Code requires providers to: secure the customer's positive acknowledgement at point of sale that there is no 999/112 access or that 999/112 access will fail if the power or broadband connection fails offer to provide a physical label for equipment and provide on-screen or printed information stating there is no 999/112 access, or offer to provide physical label for equipment or an on-screen message stating that 999/112 access will fail if the power or
No See Paragraphs A5.72 to A5.74 of Guidelines on the application of PATS obligations to VoIP service providers published as Annex 5 to Ofcom Statement on Regulation of VoIP services of March 29, 2007.
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CC
Transmission of CLI and caller location information to emergency services Non-nomadic VoIP Nomadic VoIP Requirement for VoIP provider to flag nomadic users to PSAP? (i.e. user might be at a different location to registered location) pect industry to strive to agree and implement a standardised solution for providing automatic caller location information and CLI for Type 2 and Type 4 VoIP services. We expect to conduct a formal review in early 2009 with a view to identifying new technically feasible standards and setting a deadline for meeting them. Technically feasible may include costs to the extent that the caller location information solution must be feasible, or reasonable. In considering what is reasonable, we will place particular weight on the importance of providing 999/112 access for public safety. The UK interconnection standards committee NICC is actively developing solutions to provide caller location information for nomadic VoIP services. See also requirements below on user registration of location data.
national and international numbers, but not to Click to Call and internationalonly services. The modification to GC 4 will enter into force on Sep. 8, 2008 (i.e. 9-month implementation period).
broadband connection fails if there is no 999/112 access, play a network announcement each time a 999/112 call is attempted reminding the caller that its unavailable and, for example, recommending they hang up and call from a traditional fixed line or mobile. Intersperse the announcement with the Number Unavailable tone for the benefit of hearing-impaired users.
User registration of location data For all VoIP services which provide access to emergency calls (PECS, not only PATS), the mandatory Code of Practice adopted as part of Ofcom Statement on Regulation of VoIP services of March 29, 2007, sets the following obligations regarding registration of caller location information: VoIP service used principally at a single fixed location: the VoIP provider shall require the customer to register the location where the service is going to be used before activation of the service. VoIP service accessed from several locations: the VoIP provider shall recommend (but not require) that the customer register and update the location information with it, whenever accessing the service from a new location. The VoIP provider shall advise the customer, during the sales process, at the point of signature, in the Terms and Conditions and in any user guide, about any limitations on the location information that will be provided to the emergency services if the location they have provided is not up to date.
96
Table A- 4: Numbering and number portability

The table below shows if VoIP providers are allowed to: use E.164 numbers (geographic and non-geographic) from the national numbering plan to provide customers with the possibility to make/receive calls to/from the PSTN port-in/out E.164 geographic and non-geographic numbers from/to another network operator.
The term nomadic services refers to services where the user can connect their VoIP phone to any network termination point and make/receive calls using the same number. Nomadic VoIP services are therefore provided independently of the physical location of the user. The user may, however, be required to specify a particular physical location and corresponding network termination point as their home location when signing the contract with the provider of the nomadic VoIP service in order to enable the provision of caller location information to the emergency services. In countries where number portability is implemented based on direct routing/centralised database solution, the table also shows how the database is financed by the operators using it.
Access to numbers for VoIP Geographic Non-geographic Dedicated ranges for VoIP? Nonnomadic VoIP Nomadic VoIP Nonnomadic VoIP Nomadic VoIP Nonnomadic VoIP Nomadic VoIP Nonnomadic VoIP Nomadic VoIP Number portability Geographic Non-geographic Who entitled to benefit from / obliged to offer number portability? PATS only or ECS VoIP provider entitled to Port IN (i.e. user wants to keep number when moving to VoIP provider) PATS VoIP provider required to Port OUT (i.e. user wants to keep number when moving AWAY from VoIP provider) PATS Number portability in the fixed network uses onward-routing, no centralised database. Where number portability is based on direct routing/centralised database, how is database financed by operators?
AT
Yes (see details below)
No (see below)
Yes (0720: national numbers, and 0780: ENUM numbers)
Yes (0720: national numbers, and 0780: ENUM numbers)
Yes
Not applicable (all geo. numbers are portable, but nomadic use is forbidden)
Yes
Yes
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Access to numbers for VoIP Geographic Non-geographic Dedicated ranges for VoIP? Nonnomadic VoIP Nomadic VoIP Nonnomadic VoIP Nomadic VoIP Nonnomadic VoIP
Number portability Geographic Non-geographic
Who entitled to benefit from / obliged to offer number portability? PATS only or ECS
Where number portability is based on direct routing/centralised database, how is database financed by operators?
Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
VoIP provider entitled to Port IN (i.e. user wants to keep number when moving to VoIP provider)
VoIP provider required to Port OUT (i.e. user wants to keep number when moving AWAY from VoIP provider)
RTR does not allow the nomadic usage of geographic numbers, but describes a possible pseudo-nomadic usage in its VoIP guidelines (p. 10). It is possible that a subscriber has both a geographic and a non-geographic number. The geographic number addresses a fixed-location network termination point and the non-geographic number addresses the nomadic network termination point. In such a scenario, it is allowed to use the geographic number for incoming calls (in the form of call-forwarding to the nomadic number) and also as the CLI of outgoing calls. However, this pseudo-nomadic usage of geographic numbers is only possible for VoIP providers who provide a VoIP service at a fixed-location. VoIP providers are only entitled to use geographic numbers, if they either provide the physical access by themselves (in particular, if DSL operator and VoIP provider are identical) or if they have at least some kind of agreement with the subscribers IP access provider which (technically) guarantees that the geographic number is assigned to an existing geographically fixed network termination point. The use of virtual network termination points is not allowed. In particular, the VoIP provider cannot argue that the gateway between PSTN and IP network would be a network termination point. DK Not applicable (see comment) Not applicable (see comment) Yes Yes Not applicable (see comment) Not applicable (see comment) Yes Yes ECS ECS Direct routing (all calls query ACQ). The centralised database, Operators Clearing House (OCH) is jointly owned by TDC, Telenor (Sonofon) and TeliaSonera. Its operations are financed from the fees paid by connected operators and service providers: connection fees, monthly fees, and transaction and services support charges. The fees vary depending on the type of connection to the OCH database: direct (possibility to import and export numbers to the system and to resell indirect access to third parties), indirect (access resold through another directly connected operator); passive (only possibility to receive updated information from the system).
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Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
The Danish national numbering plan is a closed non-geographic plan. All subscriber numbers consist of eight digits and contain no information about the geographic location of the subscriber. Special allocation rules apply only to short codes and numbers from 80- (free phone) and 90- (PRS) number ranges (Executive Order No. 685 of June 20, 2007 on the Danish national numbering plan and NITAs guidelines to the national numbering plan, Aug. 2007). VoIP providers have the right to use numbers assigned by NITA on the same conditions as any other providers of electronic communications networks and services. In its analysis of barriers for development of IP-telephony in Denmark NITA concluded that reserving a special number range for VoIP would contradict the principles of technology neutrality and non-discriminatory treatment of services regardless of the underlying technology (see Section 10 in the final report published in March 2005). In practice, when allocating numbers, NITA still maintains the distinction between the number ranges for fixed telephony and mobile services. VoIP providers, both non-nomadic and nomadic, are assigned numbers from the same ranges as PSTN/ISDN fixed telephony services. EE Not applicable All numbers in Estonia are nongeographic Not applicable All numbers in Estonia are nongeographic Yes No dedicated ranges for VoIP Yes No dedicated ranges for VoIP Not applicable Not applicable Yes Yes Number portability is a general obligation for all telephone service providers (i.e. PATS, see Table 2). In practice, ENCB realises that it cannot enforce this requirement on VoIP resellers. Art. 89 of the Electronic Communications Act of Dec. 8, 2004 FR Yes Yes, but limited to use in same local area (Zone de Numrotation Elmentaire ZNE) Yes (087 migrating to 09 numbers) Yes (087 migrating to 09 numbers) Yes Yes Yes Yes PATS (providers/subscribers) for all numbers and ECS but for nongeographic numbers only. The reason is as follows, each numbering assignment decision by ARCEP specifies the services that may be provided. For example, a block of geographic numbers can only be assigned to a PATS provider. So, an ECS provider is not entitled to portability of geographic numbers. Indirect routing. Negotiation underway between operators for the establishment of a centralised database to allow for the direct routing of calls. Number Portability (centralised database) is operated and financed by ENCB.
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Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
VoIP provider entitled to Port IN (i.e. user wants to keep number when moving to VoIP provider) ECS
VoIP provider required to Port OUT (i.e. user wants to keep number when moving AWAY from VoIP provider) ECS Number portability uses onward routing (both in fixed and mobile network). No centralised database.
DE
Yes See notes below: provider must verify the users location or address
Yes
Yes (0)32
Yes (0)32
Yes
Yes
Yes
Yes
According to BNetzAs rules there are two steps: allocation of a number block from BNetzA to a provider; and sub-allocation of a number from the provider to its subscriber, based on a contract between the provider and the subscriber.
The rules do not foresee that number blocks are delegated from one provider to another. Therefore, generally the provider that has the contract with the subscriber should apply for allocation of numbers. For geographic numbers see the procedure for allocation and the structure of the number range (in particular pages 3 and 4). The provider has to verify the subscribers location or address against an official document before he sub-allocates a number of the respective area. The numbering range (0)32 national numbers is often used by VoIP providers, because it is not required to verify the subscribers address and the same number block can be used for subscribers all over the country. IT Yes Yes, as long as nomadic use limited to geographic area indicated by the number (see below) Yes Yes 5X UUUU UUUU U=0-9 Yes (within same 0X number range) Yes (within same 0X number range) Yes (within same 5X number range) Yes (within same 5X number range) Subscribers to/providers of: PATS nomadic voice communications services No direct routing/centralised database. Onward routing used.
Art. 3 7 of AGCOM Decision 11/06/CIR; art. 80 of the Electronic Communications Code of Aug. 1, 2003
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Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
Under art. 4 and 7 of AGCOM Decision 11/06/CIR of March 31, 2006, the Ministry of Communications assigns numbers from the: 0X geographic number range only to undertakings in the possession of a general authorisation for the provision of PATS (servizi telefonici accessibili al pubblico), the definition of which is technology neutral and covers all services (including non-nomadic VoIP) available to the public for originating and receiving national and international calls at a fixed location and access to emergency services through a number or numbers in a national or international telephone numbering plan. The service may be nomadic only within the geographic area indicated by the number. 5X non-geographic number range only to undertakings in the possession of a general authorisation for the provision of nomadic voice communications services (servizio di comunicazione vocale nomadico), which enable an end-user to originate and receive voice communications at any network termination point, using a single non-geographic number. Numbers from the 55 number range will be assigned first, while the rest of the 5X numbers are reserved for future use.
(AGCOM consulted from July 6 until Sept. 19, 2007 on the review of the national numbering plan (Decision 44/07/CIR). It did not, however, propose to make any amendments in order to remove the current distinction between numbering ranges for fixed (geographic and non-geographic), mobile and nomadic services).
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Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
VoIP provider entitled to Port IN (i.e. user wants to keep number when moving to VoIP provider) ECS
VoIP provider required to Port OUT (i.e. user wants to keep number when moving AWAY from VoIP provider) ECS All network operators in the Netherlands are members of the association that manages the database (coin.nl). They all pay an annual fee. The fee contains a number of 'free' number portings included in the annual fee. For all ported numbers exceeding this free quota, they pay a tariff based on the annual costs of the association (so members that port more numbers pay more extra). Telecom parties who only need to access the database for routing purposes (no porting) are not members of the association. They simply pay an annual fee for the use of the service.
NL
Yes
Yes, as long as VoIP provider checks that subscriber has home address or company address in the area corresponding to the area code
No dedicated range. Several nongeographic ranges are open for VoIP services: 085, 091 (general electronic communications) 088 (company numbers), 084/087 (personal assistant numbers), 090x (information numbers (VoIP-in only)).
See comment in previous column
Yes
Yes
Yes
Yes
According to OPTA, no dedicated non-geographic number range for VoIP, but 085 and 088 are probably best suited. OPTA guidelines on the use and assignment of numbers for VoIP services - July 2006
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Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
VoIP provider entitled to Port IN (i.e. user wants to keep number when moving to VoIP provider) Yes
VoIP provider required to Port OUT (i.e. user wants to keep number when moving AWAY from VoIP provider) No Distributed databases with query on release. UKE is planning to implement a central database in the future (with direct routing based on all calls query). Direct routing (ACQ or QoR). In 2004 CMT established the portability principles, including the financing criteria that the costs relating to the database should be shared by the operators, who agreed on the following sharing scheme. The centralised database (Reference Entity or ER) allows the portability of fixed and nongeographic numbers and also includes the updated database of all mobile ported numbers. From Jan. 2006, the ER management has been outsourced and the outsourcing company receives 800K per year. 40% of those costs are shared equally by each operator, the remaining 60% are shared proportionally to volume of ported numbers by each operator. No entrance fee or set-up costs since Jan. 2006.
PL
Yes
Yes
Yes (039)
Yes (039)
Yes
Yes
Yes
Yes
ES
Yes, if the VoIP service is PATS.
Yes, specific range (8XY) but limited to the telephone district to which the number belongs
No
Yes (51)
Currently, number portability is only defined and implemented for PATS and mobile telephony, not for nomadic vocal services (51 and 8XY numbers). See next column
PATS + mobile telephony
PATS + mobile telephony CMT stated in its conclusions of Feb. 2005 following a public consultation on VoIP that it would amend current rules on number portability to allow portability between VoIP providers (between 51, 8XY and between PSTN and 8XY). There has been no follow up so far.
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Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
VoIP provider entitled to Port IN (i.e. user wants to keep number when moving to VoIP provider) Type 4 VoIP providers that fulfil the four PATS gating criteria AND Type 3 VoIP providers (PECS) for receiving national and international calls through a standard telephone number (no outgoing calls) Modified General Condition 18 as a result of Ofcom Statement on Regulation of VoIP services of March 29, 2007
VoIP provider required to Port OUT (i.e. user wants to keep number when moving AWAY from VoIP provider) All ECS providers required to provide number portability, on request and on reasonable terms, to subscribers of PATS or to subscribers of receive-only PECS. GC 18 Number portability in both the fixed and mobile network uses onward routing, no centralised database solution at present. Change to direct routing planned see below.
UK
Yes
Yes
Yes (056)
Yes (056)
Yes
Yes
Yes
Yes
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Nomadic VoIP
Nonnomadic VoIP
Nomadic VoIP
Number portability Change to direct routing On July 17, 2007 Ofcom published for consultation Arrangements for porting phone numbers when customers switch supplier. Ofcom proposed that: Industry should establish a Central Database (CDB) in order to allow for direct routing of calls to fixed and mobile ported numbers; and Mobile porting lead times should be reduced to a maximum period of two working days from March 31, 2008. UK industry must co-operate to develop a shared CDB which will hold details of all ported numbers and enable calls to ported numbers to be routed directly, without reliance on the customers previous supplier. The CDB will hold both fixed and mobile numbers. Ofcom has powers to make directions about the nature of the CDB to ensure theres no deadlock in negotiations about establishing the CDB. Communications providers must use all reasonable endeavours to establish a CDB ready to be populated with data, as soon as reasonably practicable and, in any event, no later than Dec. 31, 2008. The CDB must be populated with all ported mobile numbers as soon as reasonably practicable and, in any event, no later than Sep. 1, 2009, and with all ported fixed numbers as soon as reasonably practicable and, in any event, no later than Dec. 31, 2012. All mobile providers are required to directly route all calls to ported mobile numbers as soon as reasonably practicable and, in any event, no later than Sep. 1, 2009. All other calls to ported numbers (fixed and mobile) must be directly routed as soon as reasonably practicable and, in any event, no later than Dec. 31, 2012. All mobile providers must implement a recipient-led, near-instant (no more than 2 hours) process for porting mobile numbers by Sep. 1, 2009.
Following on from the July consultation, on Nov. 29, 2007 Ofcom published Statement on Telephone number portability for consumers switching suppliers concluding that:
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Table A- 5: Interconnection
The table shows: Whether incumbent operators at present offer the possibility for IP-IP interconnection for VoIP calls or whether VoIP traffic must be converted via a gateway for traditional PSTN interconnection? Where IP interconnection is offered by incumbent operator, is it part of the regulated Reference Interconnection Offer, or has it been regulated in any other way? The European Regulators Group (ERG) report on IP Interconnection (ERG (07) 09) says that it is still early days and no cases yet where IP-IP interconnection for VoIP. However, the report gives information on future arrangements planned in some countries. For example, the Netherlands (page 17) In NL, IP data interconnection will be available respectively in 4 / 200 / 1000 nodes, while voice interconnection between PSTN and VoIP (SS7 interconnection on Media Gateway) will only be provided at the 4 core nodes Are there any requirements for a VoIP provider to have a switch in-country to offer VoIP services or to have a minimum number of PoIs? How call termination rates for incoming calls on Alternative Network Operators (ANOs) fixed networks are regulated, and whether regulated termination rates for ANOs differ depending on the number ranges (geographic or non-geographic) used?
Regulated IP-IP interconnection offer for VoIP calls from incumbent? Requirements for VoIP provider to have switch incountry or minimum number of PoIs? Non-geographic numbers accessible when calling from: Different network operator within same Member State Another Member State (cross-border call) ANOs fixed call termination rates Regulated? If regulated, does same termination rate apply for all number ranges? (geographic and nongeographic numbers) Yes There are some exceptions (e.g. for calls to value added services or free phone services), but not for calls to the non-geographic number ranges 0720 and 0780, which are often used for VoIP services.
AT
No
No VoIP providers who neither have a network in Austria nor offer a service in Austria do not have operator status and therefore cannot enforce interconnection with the incumbent. The minimum number of PoIs is one. Annex 2 of the RIO does not explicitly require that the PoI is in Austria, but if the distance between the PoI and TAs switch is larger than
Yes The retail tariffs of some operators (in particular some mobile operators) have significantly higher prices for mobile calls to 0780 (sometimes also to 0720) than for calls to geographic numbers.
Yes Some operators charge crossborder calls to Austrian 0720 and 0780 number ranges with a higher retail charge, as if these numbers would be in mobile networks.
Yes, by dispute settlement decisions of TKK. Since the first interconnection decision in 1998, the termination rate of ANOs has always been set equal to Telekom Austrias single tandem termination rate (V3 regional).
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Regulated IP-IP interconnection offer for VoIP calls from incumbent?
Requirements for VoIP provider to have switch incountry or minimum number of PoIs?
Non-geographic numbers accessible when calling from: Different network operator within same Member State Another Member State (cross-border call)
ANOs fixed call termination rates Regulated? If regulated, does same termination rate apply for all number ranges? (geographic and nongeographic numbers)
10 km, the ANO must pay the joining link according to TAs wholesale leased lines offer. DK No No specific requirements for VoIP providers. TDCs RIO (Annex B) contains a minimum requirement of having at least one PoI in Denmark as a prerequisite for interconnection with the incumbent operator. Yes The Danish national numbering plan is a closed nongeographic plan. All subscriber numbers consist of eight digits and contain no information about the geographic location of the subscriber. Yes A requirement to ensure interoperability of publicly available electronic communications services throughout the EU and EEA is set out in Section 41 (2) of the Act on Competitive Conditions and Consumer Interests in the Telecommunications Market In its final decision on M 9 adopted on Jan. 18, 2006 NITA designated TDC and five ANOs as having SMP. NITA concluded that the market power of the ANOs is considerably limited due to the countervailing buyer power of TDC (holding 90% of the cumulative fixed termination market). For this reason, NITA imposed asymmetrical SMP obligations: TDC is subject to an extensive set of regulatory obligations, including cost orientation and price control based on (LRAIC) the five ANOs are only required to meet all reasonable requests for interconnection. On July 28, 2005, when closing its investigation into NITAs notification of M 9 with comments, the Commission expressed its concerns about asymmetrical application of remedies such as not imposing non-discrimination obligations on ANOs with SMP. Yes (all numbers in Denmark non-geographic)
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ANOs fixed call termination rates Regulated? If regulated, does same termination rate apply for all number ranges? (geographic and nongeographic numbers) Yes (all numbers in Estonia non-geographic).
EE
No The wording of ENCBs interconnection decisions (including the SMP obligations in M 9) do not address the type of interconnection. In practice, RIO of Elion (approved by ENCB) includes only PSTN-based interconnection. All VoIP traffic is always converted into PSTN (i.e. SS7).
Yes, through the definition of a fixed telephone service (i.e. PATS, see Table 2) which requires switching and interconnection.
Yes
Yes
Yes, but no difference between VoIP and PSTN. ANOs are subject to the following regulatory obligations: Non-discrimination Transparency (at the request of either ENCB or interconnect operator, publication of information on network features, terms and prices) Price regulation based on benchmarking: Average EU termination rate at single transit level according to the European Commission yearly implementation report ANO may ask ENCB to authorise higher charges, if this can be justified with costs (based on fully distributed historic costs) ENCB Decision of June 28, 2007 concluding the analysis of M 9.
FR
No
No direct legal requirement But having at least one PoI in France is a condition for being granted E.164 numbers by ARCEP. See for instance Decision 06-0509 defining the numbering categories in the national numbering plan.
Yes France Telecom provides transit + termination of calls to non-geographic numbers used for VoIP (087, migrating to 09) terminating on ANOs networks. See FT RIO 2007 Annex 3
Yes France Telecom provides transit + termination of calls to non-geographic numbers used for VoIP (087, migrating to 09) terminating on ANOs networks. See FT RIO 2007 Annex 3
For the market analyses, ARCEP took the view that voice over broadband (VoB) also called managed voice, where the QoS is controlled by the provider of the broadband access, and which has a similar quality to traditional
No ANOs termination rates for VoIP traffic to non-geographic numbers are lower than for voice calls to geographic numbers Annexe 17: Offre de transit commut de France Tlcom
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ANOs fixed call termination rates Regulated? If regulated, does same termination rate apply for all number ranges? (geographic and nongeographic numbers) aux operateurs (page 12) not public available from Cullen International. In practice, most VoIP services are associated with a ported geographic number usually from FT. Since France has implemented an onward routing solution rather than a centralised database for fixed number portability, the calling party network operator still pays the termination rate of the donor operator, which will be FT in most cases.
Further, call origination is not offered by FT at double transit level, but call termination is.
telephony is treated as voice telephony (so falls under market 1-6 and 8-10). On Sep. 28, 2005 ARCEP adopted final decision on its analysis of M 9 for ANOs. ARCEP did not impose costorientation but imposed a prohibition on excessive termination charges. In May 2006 ARCEP ruled on a dispute between FT/Neuf Tlcom and set Neuf Telecoms termination charges for the period Jan. 2006 to Sep. 2008 based on FTs transit level termination charges with a three year lag (so for 2006 the basis is FTs 2003 charges) plus 10% Neuf Telecoms termination rate (for geographic numbers) is set from: Jan. 1 to Dec. 31, 2006: 1.110 eurocents/min Jan. 1 2007 to Sep. 1, 2008: 1.088 eurocents/min In practice, most other ANOs have set their termination rates following the rates set for Neuf in the FT/Neuf Tlcom dispute with the exception of cable TV operators.
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ANOs fixed call termination rates Regulated? If regulated, does same termination rate apply for all number ranges? (geographic and nongeographic numbers) Yes For ANOs there is no difference between termination rates for geographic numbers and (0)32 numbers. In DTs network, there is a differentiation between geographic and (0)32 numbers for each kind of traffic (origination, transit, termination).
DE
No On Dec. 20, 2006 BNetzA published a report on IP interconnection. BNetzA set up a project group of high-ranking telecommunications experts in Aug. 2005 and asked it to develop a new interconnection regime for voice telephony in IP-based networks (NGN). BNetzA gave the group an advisory mandate containing 12 rather detailed questions. On Dec. 20, 2006 BNetzA published the groups final report on framework conditions for interconnection of IP-based networks for public consultation (see press release). BNetzA also commissioned three studies to support the work of the project group: A study by Ingo Vogelsang, Boston University, on economic aspects of accounting systems and interconnection regimes; a study by Scott Marcus, WIK-Consult, on a comparison of accounting systems and interconnection regimes in the US and the UK; and a study by Klaus Hackbarth, Universidad de Cantabria, and Gabriele Kulenkampff, WIK-Consult, on technical aspects of intercon-
Switch in country Although the RIO does not explicitly exclude the possibility to interconnect if the switch is not located in Germany, several contact persons at DT and at one ANO said that they do not know an example where the switch would be outside the country. The PoI must be in Germany. DT offers two types of interconnection links, collocation and customer sited. Customer sited links have a maximum distance of 221 km. Minimum number of PoIs See DT wholesale website (select English > Interconnection > Interconnection Access > Service network concept): There is no prescribed minimum number of interconnection points (PoIs), even if an interconnection partner intends to establish itself nationwide as an alternative network operator. There is, however, an obligation to migrate to up to 23 PoIs if the traffic out of one of the basic catchment areas assigned to these 23 interconnection areas and
Yes, from most networks Some operators charge significantly higher retail tariff to (0)32 numbers as they charge to geographic numbers, or do not include them in flat rate packages. See e.g. this table in a VoIP user forum (last update in July 2007). Vodafone, the second largest MNO, did not offer calls to (0)32 before Oct. 2007 (Source: teltarif).
Yes Reports from previous years show significant problems to call (0)32 numbers from abroad, but it seems that the numbers are now accessible from most countries.
Termination rates in Germany are not reciprocal. Termination charges of ANOs are 0.17 eurocents/min higher than corresponding charges into DTs network. BNetzAs last set of decisions on ANOs termination rates (May 31, 2006, valid from June 1, 2006 to Nov. 30, 2008, eurocents/min excl. VAT): Tariff I Tariff II Tariff III peak 0.69 1.05 1.53 off-peak 0.53 0.76 1.06
Tariff I applies for local interconnection, tariff II for single tandem, and tariff III for double tandem. Note, that the detailed rules on routing, in the interconnection agreement contain some exceptions, e.g. DT only has to pay tariff I if it requested local interconnection for that area but ANO did not interconnect.
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nection in IP-based networks (extended executive summary in English). IT No AGCOM March 2006 decision on VoIP Art. 8(6) of AGCOM Decision 11/06/CIR of March 31, 2006 required that authorised providers of PATS (servizi telefonici accessibili al pubblico) and nomadic voice communications services (servizio di comunicazione vocale nomadico) must: negotiate interconnection that is most efficient from the technology and economic points of view (para. 76 of annex A clarified that this means direct IP interconnection between two VoIP providers) provide access to technical interfaces, protocols and other technologies necessary for the interoperability of VoIP services where possible, use standard protocols as set out in art. 20 of the Electronic Communications Code.
into one of these 23 basic catchment areas exceeds 48.8 Erlang. No explicit obligations in AGCOM decisions or Telecom Italia current reference offer. Yes nomadic voice communications services (servizio di comunicazione vocale nomadico) in 5X non-geographic number range Art. 7(2)(c) of AGCOM Decision 11/06/CIR. Yes nomadic voice communications services (servizio di comunicazione vocale nomadico) in 5X non-geographic number range Art. 7(2)(c) of AGCOM Decision 11/06/CIR. In addition to TI, ANOs termination rates regulated on the basis of delayed reciprocity. AGCOM Decision 417/07/CONS of June 28, 2006 concluding the analysis of M 8-10 included VoIP (that allows originating and receiving national and international calls using E.164 numbers from the national numbering plan, and which interconnects with PSTN (SS7)) in the definition of the interconnection markets. In M 9 (call termination): in addition to Telecom Italia (TI), 11 ANOs were designated as having SMP AGCOM decided that ANOs should be allowed fair and reasonable (equo e ragionevole) termination charges. It set the maximum call termination charge of ANOs with a view to apply symmetrical charges between TI and ANOs within five years, as shown below. Taking into account the network topology of ANOs, the maximum call termination charge of Yes AGCOM Decision 11/06/CIR does not differentiate between the number ranges and the same termination rate applies, as stated in AGCOM Decision 417/07/CONS.
Under art. 11 of the decision,
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on June 19, 2006 AGCOM launched a fact-finding procedure in order to define the technical details implementing the above requirements. No follow-up published so far. AGCOM June 2006 decision concluding analysis of M 8-10 Art. 14(3) of AGCOM Decision 417/06/CONS of June 28, 2006 concluding the analysis of M 8-10 required TI to include in its reference offer IP interconnection with the nodes of its NGN backbone network. Pending an AGCOM decision on the implementation details (see above), such interconnection must be offered on same technical terms as used internally. Art. 14(4) adds that until an appropriate AGCOM decision defining the cost accounting principles, TI must offer packet switched origination and termination services on same prices and at same interconnection levels as for PSTN.
1.54 eurocents/min until June 30, 2007 was based on TI's single transit charge in its first RIO in 1998 when the market was liberalised. This charge was based on TIs costs and international benchmarking. AGCOM therefore noted that this charge entails notable economies of scale of TI, but that these can be compensated by lower running costs of ANOs (annex A, para. 624625). ANOs max. termination charges are: o o Until June 30, 2007: 1.54 eurocents/min July 1, 2007-June 30, 2008: 1.32 eurocents/min July 1, 2008-June 30, 2009: 1.11 eurocents/min July 1, 2009-June 30, 2010: 0.88 eurocents/min July 1, 2010-June 30, 2011: 0.69 eurocents/min July 1, 2011-June 30, 2012: 0.55 eurocents/min (same as TI, calculated based on the current price control on TIs call termination charges.)
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ANOs may ask AGCOM to authorise higher charges, if this can be justified with costs By Dec. 31, 2006 AGCOM would define the cost accounting model for the evaluation of the glide path (not yet published) By March 30, 2007 AGCOM would re-examine the proportionality of the imposed price caps (not yet published). NL No KPNs All-IP project, due to be completed by 2010, foresees IP data interconnection possible in 1000 nodes. Interconnection between voice on PSTN and VoIP will be available in four main core network nodes. No Yes Yes OPTA includes managed VoB (where QoS provided is similar to traditional fixed telephony) in M 9. ANOs are subject to a price control obligation: they cannot charge a higher termination tariff than KPN charged three years ago ('delayed reciprocity' based on KPN's single transit tariffs). OPTAs final Decision on M 9 of Dec. 21, 2005. Yes Delayed reciprocity for both geographic and nongeographic numbers. Numbering ranges 085 and 091 were not yet introduced in the Dutch numbering plan at the time of the analysis.
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ANOs fixed call termination rates Regulated? If regulated, does same termination rate apply for all number ranges? (geographic and nongeographic numbers) Not applicable
PL
No
No
Yes
Yes
No Following analysis of M 9, UKE did not impose price control obligations on ANOs. The European Commission commented on the non imposition of price control obligation on alternative operators and asked UKE to monitor the evolution of ANOs termination rates. See Commissions comments on Oct. 18, 2006 and June 11, 2007.
ES
No
No requirements
Yes Requirement to ensure interoperability and interconnection with PSTN telephony in order to get numbers for VoIP. CMT Decision of Dec. 21, 2005
Yes
Only normal fixed geographic numbers are regulated (VoIP geographic (8XY) and VoIP non-geographic numbers (51) are not regulated). When analysing M 9 (final Decision of March 8, 2006), CMT concluded that VoIP is not part of the product market due to lack of substitutability with PSTN. CMT imposed on ANOs the obligation to provide 'reasonable' call termination charges, maximum 30% above Telefnica's rates for termination of calls to geographic numbers (PSTN only) at local interconnection level (for time-based interconnection). In a consultation document on Next Generation Access
Not applicable
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networks of May 2007, CMT asks whether VoIP (with geographic numbers - 8XY) should be included in M 9. UK No BT is in the process of rolling st out its 21 Century Network 21CN. This network will replace BTs current network architecture by a simplified, IP based architecture, which will consist of approx. 5,500 multiservice access nodes (MSANs, where the copper or fibre access lines will end) and approx. 100 metro nodes which will provide IP routing. The future points of interconnection will be at the metro nodes (see FAQ NGN Interconnect). BTs undertakings contain provisions where BT committed to be transparent and to cooperate with the Network Interoperability Consultative Committee (NICC) in the transition phase (see section 11), but the undertakings mostly cover access products (see sections 3.1.2, 5.7) and only partly interconnection. BT has published a transitional interconnection offer using a PSTN emulation charging model. Ofcoms market analysis of No Yes Most non-geographic numbers available from most networks, though there are concerns that some network operators are slow to open new ranges and that some premium rate and other nongeographic numbers are not available from some networks (generally mobile networks). 056 numbers are accessible in practice. Yes 056 numbers are accessible in practice. All ECS/ECN providers required, where technically and economically feasible, to ensure end users in any part of the EC outside of the UK are able to access nongeographic numbers, unless where subscriber has chosen for commercial reasons to limit such access. GC 20 implementing requirements of article 27 of the USD. Limited access to 08 and 09 numbers (both premium rate services) from abroad due to problems with scams and money-laundering. Yes - Strict reciprocity with BT. Two reference charges, depending on whether the ANO is classified as "singleswitched operator" or "multiswitched operator" (see below): Single-switched operators can charge a weighted average of BT's local exchange rate and BT's single-tandem rate. Multi-switched operators can charge a weighted average of BT's double tandem (short) rate and the rate of single-switched operators. In principle, yes. The formulas do not refer to geographic or non-geographic numbers. However, it seems to be unclear if an ANO could gain multi-switch operator status, if a high percentage of calls to the ANO are addressed to non-geographic numbers. BT's Reciprocity Offer expects that a multi-switched operator provides numbering information to BT, in order to enable BT handover at the switch next to the called party.
NB These arrangements
dont apply to 08 and 09 numbers where BT is subject to an SMP obligation to originate calls on regulated terms. Terminating operators purchase origination on regulated terms so there are no termination charges.
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M 810 covers all existing wholesale products, regardless whether they are provided over the old network or the 21CN, but do not cover new wholesale products like IP interconnection at the metro node. Market analysis As a result of finding each fixed operator to have SMP in M 9, Ofcom on Nov. 28, 2003 required all operators to provide network access on fair and reasonable terms. In addition, BT's call termination services are subject to an annual RPI - 5% charge control from Oct. 1, 2005 - Sep. 30, 2009 (Ofcom revised the previous cap RPI - 10% on Aug. 18, 2005), and they must be cost oriented on the basis of forward looking LRIC. Ofcom considers that the reciprocal charging arrangement, where ANOs' fixed call termination charges are based on BT's equivalent regulated charges, addresses the potential harmful effects of their SMP in fixed call termination markets. See Ofcom's final Decision on M 9, section 4.14. Dispute settlement decision On June 16, 2006 Ofcom published a decision resolving a dispute between cable operator Telewest (now Virgin Media) and BT regarding charges payable by BT to Telewest for fixed geographic call termination. Telewest had disputed the formula for calculating single-switched traffic rates. Ofcom rejected Telewest's proposal for charges and accepted BT's. Background ANOs must make an agreement with BT to set their charges for fixed geographic call termination services based on BT's charges. Under BT's Reciprocity Offer of Oct. 1, 2005, BT pays ANOs a charge based on call termination on its own network, taking into account differences between BT's and the ANO's networks. The Reciprocity Offer distinguishes between: single-switched calls = calls handed over from BT to the ANO's local exchange switch and thereafter terminated by the ANO to on an end-user's network termination point connected directly to this switch; and multi-switched calls = calls handed over from BT to the ANO and thereafter switched by one or more ANO's tandem switches, before being switched by the ANO's local exchange switch and terminated to an end-user's network termination point.
ANOs with more than a 10% proportion of multi-switched calls can apply to BT for "multi-switch-operator" status. The ANO's termination charge is in all cases a weighted average of BT's termination charges, but the exact calculation depends on ANO's status: Single-switched operators receive termination payments for all calls received based on the single-switched call charge ("Rate A"). The single-switched call charge is a weighted average of BT's single tandem call termination and local exchange call termination charges, where the weights reflect the mix of geographic call termination traffic sent from the ANO to the relevant BT tandem and local exchange switches and also take account of any relevant local exchange Carrier Pre-Select (CPS) traffic the ANO receives from BT. Multi-switched operators receive the higher multi-switched call charge ("Rate B"), which is a weighted average of the single-switched call charge and the BT double tandem (short) rate, where the weights reflect the proportion of traffic sent from BT to the ANO's network that is multi-switched or single-switched.
Both the single-switched call charge and the multi-switched call charge are calculated separately for peak, evening and weekend tariffs.
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Table A- 6: Codes of practice and future legislation

The table below shows if there are any: codes of practice or guidelines related to marketing VoIP services in force? Are they focussed specifically on residential and SME customers, or applicable also to large business customers? If no codes of practice or guidelines specific to VoIP, are there any codes of practice or guidelines related to marketing of voice telephony services in general that would be relevant? pending or future national legislation or regulation specific to VoIP services planned?
Codes of practice on marketing VoIP services? AT No Codes of practice on marketing voice telephony services in general? No Future legislation or regulation on VoIP? No published plans for future legislation. On June 18, 2007 RTR published for public consultation four documents on the future of regulation. On Oct. 16, 2007 RTR presented the results of the consultation and a tentative work programme for 2008. These documents have a strong focus on NGN, but more on the issues of next generation access and investments than on the issue of IP interconnection. Bill&Keep will be subject of discussion within the next months, but primarily in the context of mobile termination and not yet in the context of NGN. In 2008, RTR will publicly discuss the usage conditions for geographic numbers. Depending on the results of this discussion, the conditions could be changed. DK No NITA published on its website guidelines for VoIP users in connection with access to public emergency services (112). In particular, NITA addressed: access to 112 emergency services and the fact that not all IPtelephony providers are subject to this obligation limitations to availability of end user location information in case of nomadic VoIP services and that the end users need to inform the emergency services about their location. No No No No published plans for future legislation on VoIP. Between Oct. 9 and Nov. 7, 2007 NITA consulted on legislative proposals for amendments to the Act on Competitive Conditions and Consumer Interests in the Telecommunications Market and a new draft Executive order on requirements for providers of electronic communications networks and services in connection with the planning and the necessary measures to safeguard vital electronic communications in emergency situations and other extraordinary situations. The new legislation is expected to enter in force on June 1, 2008. No No published plans for future legislation.
EE FR
No No
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Codes of practice on marketing VoIP services? DE No
Codes of practice on marketing voice telephony services in general? No
Future legislation or regulation on VoIP? No published plans for future legislation. Future regulation: On Dec. 20, 2006 the project group Framework Conditions for the Interconnection of IP-Based Networks published its final report. See also the additional information on BNetzAs website (in particular the studies commissioned by BNetzA). See Table 5.
IT
No
No But several AGCOM decisions on tariff and billing transparency: Decision 96/07/CONS of Feb. 22, 2007 Decision 126/07/CONS of March 22, 2007. See also AGCOM website that provides links to operators offers.
No published plans for future legislation.
NL PL
No No
No No
Possible future regulation will be decided on in the next market analysis. On 3 July 2007, the Council of Ministers adopted a draft act amending Telecommunications Law and some other acts. The amendments aim at, among others, introducing new pro-consumer regulations. This could have an impact on VoIP providers. The regulator, UKE, is in the process of revising its national numbering plan. The President of UKE considers that the definition of geographic numbers should be modified. The revision of the numbering plan should enter into force in the second half of 2008.
ES
No
No
CMT to amend number portability rules to allow NP between VoIP providers. Timing not known. Yes Ofcom Statement on Regulation of VoIP services: Access to the Emergency Services of Dec. 5, 2007 introduces a modification to General Condition 4 that will enter into force on Sep. 8, 2008. From that date, all PECS that allow users to make outgoing calls to normal national telephone numbers (Type 2 and 4 VoIP services), excluding Click to Call and international-only services, will be required to allow users to access 999/112 emergency services free of charge, and to provide caller location information to the emergency organisations handling those calls to the extent technically feasible.
UK
Yes Ofcom Statement on Regulation of VoIP services of March 29, 2007 adopted a mandatory Code of Practice on the provision of consumer information by all PECS offering VoIP services to residential and small business customers, at both fixed and nomadic locations. The deadline for compliance with the Code was May 29, 2007. See Table 3 (fourth column).
Specific Code of Practice for VoIP, see left column

The Regulation of Voice Over Ip (Voip) in Europe: Wik-Consult Final Report

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WIK-Consult Final Report

Study for the European Commission

The Regulation of Voice over IP (VoIP) in Europe

Bad Honnef, March 19, 2008

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

To what degree are the Member States harmonized?

Study on the Regulation of VoIP in Europe

What are the impacts on VoIP service providers?

What are the impacts on the broader economy?

3 See Marcus et. al. (2008).

Study on the Regulation of VoIP in Europe

What should be done?

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

See ERG (2006).

Study on the Regulation of VoIP in Europe

7 See ERG (2006). 8 See EU-Commission (2004).

Study on the Regulation of VoIP in Europe

These issues are therefore central to the present report.

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe

Previous analyses of VoIP regulation in Europe

18 See OECD (2006), p. 5. 19 See ERG (2005).

Study on the Regulation of VoIP in Europe

Allowed Not Allowed

Cyprus Czech Republic Denmark

Partially Allowed Under Review

Greece Hungary Iceland Ireland

Yes Yes Under review Yes

Yes, in connection with certain requirements (under review)

Study on the Regulation of VoIP in Europe

Are geographic numbers allocated to VoIP services?

Under Review Not Allowed

No Yes, in connection with certain requirements Yes

Under Review Not Allowed

Under Review Allowed Allowed

Yes, if technically feasible Yes Yes, if technically feasible

Switzerland Yes UK Yes

Source: ERG (2005)

20 See ERG (2005), p. 8.

Study on the Regulation of VoIP in Europe

Non-geographic number- Only PATS

21 See ERG (2006).

Study on the Regulation of VoIP in Europe

Obligations on VoIP operators to inform their customers on limitations of their service?

Allocation of geographic numbers to VoIP operators? ing plan

Restriction of Number Portability?

Limited to fixed location Limited to geographic numbers at fixed locations

Not imposed yet Only PATS No restriction Only PATS

Source: ERG (2006)

22 ERG (2006), p. 6. 23 See Ibid.

Study on the Regulation of VoIP in Europe

History of policy recommendations at the European level

2.2.1 The European Commissions Public Consultation on VoIP (2004)

Study on the Regulation of VoIP in Europe

Study on the Regulation of VoIP in Europe