BY LAURA GUEVIN
Managing Editor, INTERNET TELEPHONY

Be Careful How You Call: VoIP Is Illegal In Many Countries

The recent news of eight people getting arrested in Pakistan for operating an illegal voice over IP (VoIP) service caused me to stop in my tracks and really think about the consequences Internet telephony is having on the global long-distance telecommunications market -- not to mention the future potential it holds. True, more and more countries are discovering the benefits of legalizing Internet telephony (not to mention deregulating their telecom monopolies), but there are still many places where this service is outlawed, or regulations governing VoIP are unclear.

In the case of Pakistan, those arrested were charged with running their service in collaboration with Pakistan Telecommunications (PTCL), the country's private telco, which is mostly owned by the government as directed by the Pakistan Telecom Authority. Interestingly enough, the government charges that these individuals have damaged the national treasury, to the tune of $100 million dollars in lost revenue from calls that were routed over IP networks. Worse yet, employees of PTCL as well as various ISPs are involved in the incident, and a special commission is investigating. Apparently, contracts set up with foreign companies to terminate incoming calls over IP networks -- rather than having the PTCL terminate the traffic -- are illegal.

Poland also made headlines recently when the country's Telecoms Minister declared that PTC, Poland's leading mobile phone operator, was illegally routing calls over IP. PTC was supposed to be using the state-controlled TPSA network to route calls, and the government has threatened to take the operator's license away. PTC has said the company will appeal the decision in court, and has not decided whether it will stop routing calls over IP yet.

But the incident has pushed Poland to look at the benefits of VoIP, and in fact, the Telecoms Minister has plans to create a new department for Internet development strategies, which will focus on regulating VoIP services in Poland to expand the country's Internet market and lower access costs. Speed of deployment is slow, however, and legal VoIP initiatives will have to wait until the Polish Parliament passes a telecom deregulation law. Noticeable changes would not take effect until at least 2003 -- by then, who knows how far Internet telephony will have progressed?

Lebanon is yet another nation where ISPs are banned from offering voice services and video conferencing. The country's Ministry of Post and Telecommunications contends companies that offer these services are depleting public funds and undermining the ministry's revenues. And according to the Telecom Regulatory Authority of India, Internet telephony is not permitted at this time. However, the 1999 Telecom Policy on the organization's Web site states, "Government will continue to monitor the technological innovations and their impact on national development and review this issue at an appropriate time."

And then there's Russia, a nation in metamorphosis, which offers a glimmer of hope for other countries that are evaluating their IP telephony policies. Russia only legalized Internet telephony in June of 1999. The Russian Association Network Services (RANS) created an IP telephony group in 1998 to coordinate providers' activities, make recommendations on quality, and set parameters for provisioning these types of services. The group was made up of representatives from 40 companies, which included small ITSPs, ISPs, and CLECs, as well as large companies like Microsoft, Nortel Networks, and Cisco Systems. The group ultimately decided that Internet telephony traffic should be licensed as data traffic, and consequently, it has less stringent regulations than traditional circuit-switched voice traffic.

Here in the United States we have at least a few choices when it comes to choosing a long-distance provider. True, the giants are merging left and right, but there will always be upstart CLECs to pick from, and of course, Internet telephony service providers. VoIP minutes haven't made a substantial cut into the billions of long-distance minutes brokered by U.S. carriers each year -- yet. That will change, and relatively soon, so we may as well enjoy the freedom of unregulated, untaxed PC-to-PC calling until the boot comes down.

Laura Guevin welcomes your comments at lguevin@tmcnet.com.