Home > Telecoms > Industry Groups > New Voice Services > New voice services: an overview

After more than 100 years of traditional telephone services we are on the brink of a potentially fundamental transformation in voice services. New voice services based on voice over Internet Protocol (VoIP) could deliver substantial benefits for consumers such as:

• Lower network costs, lower user prices and new pricing structures
• New features such as integrated messaging, conferencing, video and personalised call handling
• Greater choice of innovative and differentiated services as entry barriers fall and competition in the voice market increases
• More competition in broadband as ISPs will be able to offer consumers more compelling propositions combining voice with Internet access - for example, by offering Voice over Broadband (VoB)

IP is already playing a larger and larger role in communications markets and is seen as a key platform for future innovation. Many large companies already use VoIP services, several network operators have already deployed VoIP in their core networks and PC-based VoIP services are being used by residential customers.

More recently, several companies have started to consider taking VoIP into the mainstream market with some looking to offer them as a substitute for traditional telephone services. For example, Wanadoo is considering plans to offer a VoIP service, BT has recently launched its BT Communicator service and a UK industry group (ITSPA – Internet Telephony Service Providers Association) has been formed. BT’s recently announced 21st Century Network plans also envisage a far greater role for VoIP.

Regulation needs to adapt to this rapidly changing world. Regulation must respond to the new questions posed by new technology to avoid creating barriers to its deployment and limiting benefits to consumers.

Many of the issues raised by new types of voice services revolve around regulatory requirements that have developed to reflect the capabilities of traditional voice services. Traditional PSTN voice services have readily been able to deliver certain features, and regulation has required most voice services to provide these features. For example, current regulations stipulate that certain fixed voice services need to offer a very high availability 999 service as well as itemised billing and directory enquiries. Consumers have now come to expect many of these features to be standard in voice services.

However, some new services may not be able to deliver the features that consumers expect to the same standard or in the same way. The way that regulation is currently applied risks preventing new services from entering the market to compete with traditional voice services. For example, some services can be used away from the home, potentially using any Internet connection. However, it might not be feasible to guarantee the same reliability as a normal fixed line when a service is used from, say, a Wi-Fi hotspot in a café. If these new services were regulated in an identical way then this might prevent valuable innovation.

Ofcom is taking action to address these issues within the context of the EU telecoms framework. The European Commission published a paper in June 2004, but there are still some questions outstanding on the interpretation of the legal framework, in particular the definition of “Publicly Available Telephone Service” (‘PATS’). The European Commission has indicated that it will give further clarification on this matter later in the year. In the meantime, it is important that consumers have full clarity on the capability of new services and that the right balance is found between reducing barriers to entry and consumer protection.

Ofcom is today publishing two documents - a statement on numbering for new voice services and a consultation document covering the overall regulation of new voice services and appropriate consumer protection. In particular we are:

• issuing a statement that makes both geographic number ranges and a new 056 number range available for new voice services including VoB. This will allow new voice service providers to offer services without the need for users to have to use an unfamiliar number range. Providers can apply for these numbers immediately.
• consulting with stakeholders on the appropriate framework for consumer protection. The framework could be based on self-regulation, co-regulation or formal regulation. We favour a co-regulatory approach which effectively balances the need for consumer protection with the benefits of less intrusive regulation. This approach has been effective in others areas such as the Telecommunications Ombudsman.
• reviewing existing regulation to make sure that it applies to new voice services in a proportionate way; for example, we are clarifying network integrity requirements to ensure they are not a barrier to new voice services.
• pending clarification from the EC, we are giving interim guidance to providers that will allow new voice services to offer 999 services without having to meet all the other obligations associated with traditional telephone services. This will avoid creating a perverse incentive for providers not to offer 999 services at all.

Together, these proposals should remove unnecessary barriers for operators to offer new voice services, for example, enabling them to offer:

• services that supplement existing phone lines, using normal geographic numbers and providing 999 calls, but without having to offer identical features to traditional telephone services
• services replacing a traditional phone line, that provide 999 and other standard features (eg operator assistance, directory enquiries), whilst avoiding any technically infeasible requirements and allowing the user to keep their existing telephone number

The proposals also aim to ensure that consumers are properly informed about the capabilities of these new services and suitably protected.

Ofcom needs to understand the views of operators, consumers and other stakeholders on these proposals. The statement and consultation document can be found at www.ofcom.org.uk. Responses to the consultation are required by 15 November 2004.

A final statement on these issues will be made in early 2005 following the conclusion of the European Commission’s consultation. A consumer leaflet has also been published to inform and consult with consumers about the new voice services entering the market.
Ofcom will continue to work intensively on the wider regulatory framework for VoIP and VoB in the coming months to create a clear framework for investment and innovation in new voice services and ensure that the policy and regulations for new voice services are coherent with other areas. As well as the documents published today, we will be:

• Agreeing a new settlement for telecoms regulation through the on-going Strategic Review of Telecommunications. The phase 2 consultation will be published in October and the final statement early next year.
• Reviewing the approach for interconnection and inter-operability for VoIP services particularly in light of BT’s move to the 21st Century Network.
• Assessing the role for DSL services that allow the consumer to have a broadband connection and use a voice over broadband service without having to keep their existing fixed telephone line rental.
• Getting the charges and process right for LLU, as LLU is likely to be a key platform that operators use to offer VoIP services. A consultation on charges was published in August with the final statement in December. The Telecommunications Adjudicator is working with the industry on the process issues, including aspects closely related to VoB such as number portability.

Collectively, these proposals for new voice services and Ofcom’s reviews of related markets will help to ensure that the UK takes a lead in future innovation.

Back to top