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Feature Article
October 2004


Euro Regulators Propose VoIP Framework

BY William B. Wilhelm, Jr., Esq.

For many Americans, Labor Day signals the end of summer and the return to work and school. For European regulators, Labor Day 2004 marked the advent of several new consultations concerning the treatment of VoIP. Just as their counterparts in the U.S. acknowledged earlier this year, the Europeans understand that the market for communications services is changing — and so too must the regulations.

The European Regulatory Framework
Back in July 2003, a package of European Union (EU) Directives on Communications became effective and significantly altered the regulatory regime applicable to communications services in the EU. Unlike the U.S. system of individualized licenses, the EU adopted an approach that would permit providers to avoid registration or licensing requirements in most circumstances if the provider simply complied with specific conditions. This regulatory regime extends to all providers of electronic communications networks and electronic communications services. This forward-thinking approach anticipated telecommunications, data, and broadcasting as one converging market and sought to avoid some of the costly and burdensome entry regulations associated with earlier licensing requirements. In essence, rather than require licensing — the EU provided a “rulebook” with which providers of electronic communications networks and services must comply.

Under this “self-policing” system, each national regulatory authority has the power to set the various general and specific conditions, but the types and scope of such conditions are strictly limited by the EU Directives.

The UK & VoIP as PATS
Adopting this general approach, the UK regulatory authority — the Office of Communications (“OFCOM”) — established General Conditions applicable to providers of electronic communications networks and services. It also published certain informal guidelines for VoIP providers in the UK. The Informal Guidelines provided insight as to under what circumstances OFCOM would deem that a VoIP service would be treated as a Publicly Available Telephone Service (“PATS”) and therefore subject to the additional obligations. Under these Guidelines a company is subject to PATS obligations

  • If the VoIP provider markets its services as a substitute for traditional telephone service;
  • If the services appear to the customer to be a substitute for telephone service with which they would expect to access emergency services or directory assistance; or
  • The service provides the customer’s sole means to access the traditional circuit switched telephone network.

However, where a VoIP provider service is being offered as an “adjunct to a traditional telephone service” or as a “secondary service,” it is likely not to be considered as a PATS. While the Informal Guidelines were non-binding and subject to change at any time, they provided important insight as to OFCOM’s view of how VoIP should be treated in the UK.

The September Consultations and Directives
In early September 2004, both the European Commission (EC) and OFCOM proceeded forward with consultations and declarations designed to clarify the regulatory obligations applicable to VoIP providers. While the EC inquiry raised general questions concerning VoIP — similar to those being considered at the FCC in its IP Enabled NPRM, OFCOM actually reached decisions on number portability and geographic and non-geographic number assignment available to VoIP providers. In this regard, OFCOM decided that it would permit the assignment of geographic telephone numbers directly to both PATS and non-PATS VoIP providers within the UK In addition, the regulator authorized the allocation of numbers from a non-geographic specific area code — (056).

Troubling, however was OFCOM’s decision regarding number portability obligations. Specifically OFCOM determined that until the EU decides otherwise, it will only allow customers of PATS services to port their telephone numbers to other PATS services. In so deciding, OFCOM reasoned that portability was the carrot (or stick) that would “encourage” VoIP providers to conform their services to comply with additional PATS obligations — including network reliability obligations, provisioning operator service, offering traditional emergency dialing capabilities, and designing systems that are TTY compatible and offer advanced disability access capabilities such as interactive voice response. Unfortunately, unless reversed, OFCOM’s narrow view of porting obligations is likely to limit the ability of a customer to migrate their telephone number to a VoIP provider.

Moreover, because customers will be unaware (and rightfully unappreciative) of the PATS and non-PATS designations, they will likely face frustration as they get mixed messages from various providers as to whether they are obligated to port or receive ported telephone numbers. In addition, because there is no official list of PATS providers, VoIP providers that self-certify they are PATS may still be subject to delays in getting numbers ported from traditional PATS providers that dispute the basis of a VoIP provider’s self-certification.

To PATS or Not to PATS…
While OFCOM has initiated a new consultation on VoIP and PATS, providers entering the market must carefully consider whether they wish to be deemed as offering PATS or not. While PATS providers are entitled to number porting rights and obligations — PATS providers are also required to subject themselves to numerous obligations that traditional nomadic VoIP providers may find limiting or technically impractical.

For example, as a PATS provider, a company will be required, among other things, to provide:

  • Access to Emergency Call Numbers: This includes ensuring that any end-user can access emergency organizations by using the emergency call numbers “112” and “999” free of charge. In addition, to the extent technically feasible, shall make available the caller location to the emergency organizations.
  • Operator Assistance, Directories, and Directory Enquiry Facilities: PATS providers must ensure that any end-user can access operator assistance services and directory assistance services. In addition, a PATS provider must supply each subscriber with a directory (i.e., white pages) containing all telephone numbers in the subscriber’s local area.
  • Special Measures for End-users with Disabilities: PATS providers shall provide deaf and hard of hearing consumers with access to relay services and offer special technical accommodations to consumers who are blind or ave sight deficiencies.

EU Activity in 2004
While OFCOM’s framework provides some exciting opportunities for VoIP providers offering services in the UK (such as the ability to receive direct number assignments and non-geographic area codes) the rules suggest that further rule revisions on number portability, 999, and network reliability requirements will be forthcoming in the next several months. In addition, because OFCOM’s rules and other member state frameworks are subject to the outcome of the larger EU proceeding it appears likely that European providers of VoIP will have to wait till 2005 before a clearer regulatory framework emerges.

William B. Wilhelm is a Partner in the firm of Swidler Berlin Shereff Friedman, LLP. For more information, please visit www.swidlaw.com. The preceding represents the views of the author only and does not necessarily represent the views of Swidler Berlin Shereff Friedman, LLP or its clients.

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