InterComms :: International Communications Project
  Intercomms Issue 20
Issue 20 Articles

Voxbone logoBlurred Boundaries in
EU Telecom Regulations

Itay Rosenfeld, CEO of Voxbone, talks about new business models and operators that have emerged with Voice over IP (VoIP) and why VoIP service providers face challenges in complying with legacy regulations

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Itay Rosenfeld, CEO, Voxbone
Itay Rosenfeld, CEO, Voxbone

Itay Rosenfeld is CEO of Voxbone, market leader in worldwide geographical, toll-free and geographically-independent telephone numbers. Voxbone enables Internet communications service providers, wholesale carriers and mobile and fixed national operators to extend their network reach internationally, rapidly and with minimal costs. Voxbone delivers high-quality inbound communications from more than 50 countries and more than 4,000 cities, using its own private global VoIP network – the world’s first and largest backbone dedicated to voice-origination services. In January, Voxbone launched the first emergency-calling service accessible in multiple European countries from a single IP-based interconnection.

Prior to joining Voxbone in 2012, Rosenfeld served in senior positions at Cisco EMEA and U.S., Ethos Networks (acquired by Tejas Networks), and ECI Telecom. He holds a master's degree in electronics engineering from the Université Libre in Brussels and an MBA from INSEAD.

Liberalization begun in the 1980s has dramatically changed EU telecommunications markets. The resulting triumph of VoIP and the ongoing transition toward all-IP networks have altered the face of the telecom industry particularly over the last few years. However, while costs have come down to enable this transformation, VoIP service providers still face anachronistic regulations.

The most outstanding development is the rise of new companies that can offer services that previously were the exclusive domain of incumbent operators. Today, corporations, small businesses and even residential users can implement new telecom service practically in real-time over the Internet, and they have a wide choice of operators. Provisioning a new telephone line along with a hosted private branch exchange (IP-PBX) has never been easier.

As few as five years ago, provisioning new telecom service was tedious and burdensome. There were few alternative service providers and competition was limited due to high barriers to market entry. Those entry barriers fell into two major categories: high costs and prohibitive regulations. Investments in physical network infrastructure, interconnections and spectrum were costly and had to be written off, and regulatory compliance was linked to a long and complex licensing process.

Since then, regulatory changes have significantly reduced wholesale access costs. Telecommunications services are no longer bundled with the underlying network. Service providers don’t need to invest in their own infrastructure anymore. Voice calls are more and more considered an application that can run on any network and any device. Operators can offer innovative over-the-top services that run on the fixed and mobile data networks of established providers. In addition to enabling the benefits of IP technology, these developments have lowered the cost of a phone call substantially.

However, the regulatory environment is lagging behind market evolution, hindering further progress. While the EU framework distinguishes between publicly available telephony services (PATS) and electronic communication services (ECS), many national regulations still apply plain old telephony principles to new and innovative services, creating illogical, incongruous situations. Furthermore, to some extent, fixed and mobile telephony services are falling under different regulatory requirements, ignoring the reality that VoIP technology and modern life has removed the boundary between those two categories.

Thanks to VoIP, workers at home or on the road can access the functions of a corporate PBX, and individuals can easily switch between fixed and mobile service. Yet, despite the proliferation of mobile devices and geographically-independent services and applications, EU national regulations require fixed telephony numbers to be assigned and be associated with fixed locations. EU national regulatory authorities are becoming increasingly conservative, rejecting new and innovative services. Smartphone apps allow inexpensive calling and texting over Wi-Fi and mobile data networks as an alternative to standard mobile telephony service. However, in many countries, mobile numbers may only be used by mobile network operators and not by over-the-top service providers that offer comparable communications services on mobile devices.

So, how do we apply rules and mechanisms that were designed for the public switched telephone network (PSTN) to the Internet or the cloud? Large Internet telephony service providers (ITSPs) have shifted onto the radar screen of regulators. As more and more calls are handled by ITSPs, it is time to ask: Should these providers be subject to the same regulations as “traditional operators” – with the same benefits, such as being allocated fixed or mobile telephone numbers directly, as well as the same obligations, such as requirements to enable legal intercept by law enforcement authorities or, if termination services are provided, to route calls to emergency services?

VoIP has changed the game entirely, and as a consequence, applying legacy regulation has become a brain-teaser and nearly impossible. For example, the definition of the location of a caller is essential for emergency services and is defined as the physical endpoint in the traditional fixed and mobile telephone networks. In landline networks, the physical endpoint is linked to a permanent address. In mobile networks, the location of the SIM card can be defined via triangulation. With VoIP, such a link between the device and the service may not be present. Hence, it becomes very difficult to define the exact user location for emergency interventions. Mechanisms exist, for example, by using Wi-Fi location or GPS information, but today’s regulatory frameworks do not accept these methods as alternatives to traditional techniques. National regulatory authorities are reluctant to adopt pragmatic solutions to fit the current telecom landscape.

ITSPs and alternative and innovative service providers are making their voices heard on the urgent need for regulations to be updated to match market realities. A healthy and competitive market environment can only be guaranteed if all operators are treated equally with the same rights and obligations. But that can only be accomplished if local regulations are adapted within reasonable time frames to catch up with technological evolution.

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