Thursday, February 10, 2005

EU Regulators Adopt Pro-competitive VoIP Policy

The European Regulators Group (ERG) adopted a common statement on VoIP services aimed at facilitating the roll out and widespread use of Internet telephony in Europe. At a meeting last week in Brussels, the ERG said it was dedicated to creating a regulatory environment in which VoIP services can flourish.

Some key points of its 25-page Common Statement on VoIP include:

  • Telecom regulations to date have historically been focused on circuit-switched technologies.

  • The inevitable convergence of telecommunications, media and information technology sectors means that all transmission networks and services should be covered by a single European regulatory framework.

  • The regulatory framework should seek a balance between promotion of competition, the development of the internal market and the interests of the citizens.

  • The regulatory approach should enable the greatest possible level of innovation and new market entry.

  • There should be a focus on the regulatory principles of objectivity, technological neutrality, transparency, non-discrimination and proportionality.

  • Consumers and service providers should be provided adequate information to make informed choices.

  • Harmonisation is an on-going process and there will be varying levels of compliance across EU member states.

  • A full legal framework for VoIP will require time and further work.

  • Currently there are different policies in EU member states regarding VoIP numbering, number portability and whether non-geographic numbers should be permitted. The geographic numbering ranges are currently open in 18 countries. They are not open in 5 countries and 4 countries are still reviewing the situation. Further consultation is necessary.

  • Access to emergency services (112) is extremely important. VoIP emergency calls from a fixed or mobile location should be routed to the nearest emergency centre based on the contract's physical address. In the case of nomadic VoIP services, the end user must be informed by the VoIP provider about any restriction in routing emergency calls. Further consultation is necessary.

The ERG also adopted a Work Programme for 2005 and appointed Kip Meek, senior partner at Ofcom in the U.K., as its new chairman.

Separately, the European Commission issued a statement favoring an EU-wide "light touch" approach to Internet telephony as the best way to encourage competition between internet carriers of telephone traffic and traditional telephone networks.

WSJ: Telecom-Gear Mergers May Start to Heat UP

Industry speculation continues to mount that the planned mergers of SBC + AT&T, Sprint + Nextel, and possibly MCI + another RBOC will lead to another round of consolidation amongst network equipment suppliers. The Wall Street Journal published a report speculating that the carrier mega-mergers have thrust several equipment companies into the spotlight as possible acquisition targets, including Lucent Technologies, Nortel Networks and Marconi. Potential acquirers, according to the article, include Motorola, Alcatel, Cisco Systems, Juniper Networks and Huawei.

U.S. Wireless Market Expected to Grow 9% in 2005

U.S. spending on wireless communications will grow by 9.3% in 2005, achieving a total of $158.6 billion, according to the newly released 2005 Telecommunications Market Review and Forecast, an annual publication of the Telecommunications Industry Association (TIA). The report predicts the wireless market will reach $212.5 billion by 2008, with a 10 percent compound annual growth rate (CAGR) from 2005 to 2008.

The U.S. wireless market consists of transport services, handsets, capital expenditures and infrastructure equipment including Wi-Fi equipment plus the emerging market for broadband access (e.g., WiMAX) equipment and professional services in support of the wireless infrastructure.

Revenues in 2004 totaled $145.1 billion, up 11.6% from 2003. The increase in 2004 marked a return to double-digit growth following a dip to mid-single digits in 2003. This uptick in wireless communications spending was driven by faster growth in handset revenue from new models, increased revenue from Wi-Fi equipment and a rebound in support services.

The TIA study predicts that the U.S. wireless subscriber base (wireless telephony and paging) will continue to expand, but at single-digit rather than double-digit rates.

In 2004, there were 173.7 million wireless subscribers, up 9 percent from 2003, most of these -- 163.1 million -- were wireless telephone subscribers. Between 1999 and 2004, the number of wireless telephony subscribers more than doubled.

The principal driver was the introduction of one-rate pricing plans in 1999. Wireless became less expensive than landline for many people, thus spurring an increase in wireless subscribership. With a majority of the population already subscribing to mobile phone service, growth in the wireless universe will begin to slow and drop to single-digit increases beginning in 2005 with growth averaging 5.2 percent on a CAGR basis through 2008 to roughly 200 million wireless communications subscribers.

As subscriber growth diminishes and the wireless subscriber market reaches maturity, rising prices associated with new applications and plans such as wireless Internet access, text messaging, instant messaging, ring tones, wireless games, multimedia messaging services and Wi-Fi technologies will drive the market. Spending on wireless communications services is expected to rise by 11.1%in 2005 reaching $113.1 billion, and to expand at a 10.4 CAGR reaching an estimated $151.1 billion in 2008.

The wireless phone market was buoyed by continued subscriber growth and upgrades to more sophisticated handsets. After slowing in 2001 and 2002, wireless communications handsets rose at double-digit rates in 2003 and 2004, reaching $10.1 billion and $11.0 billion respectively. Spending on wireless communications handsets will grow from an estimated $11.5 billion in 2005 to $13.8 billion in 2008, growing at a 6 percent compound annual rate.

Nuvio Speaks out Against VoIP Tax in Kansas

Jason Talley, president and CEO of Nuvio, testified in opposition to proposed taxation of VoIP providers for 911 service by the State Legislature of Kansas. The proposed state bill would require VoIP service providers to contribute to the Kansas Universal Service Fund (KUSF).

In addition to being contrary to recent FCC rulings, Nuvio asserts that requirements for traditional 911 service are technologically impossible for VoIP. There are significant barriers to service implementation including call origination traceability and access to public safety answering points (PSAP).

"Kansas' attempt to tax VoIP for 911 completely ignores what the FCC has done and is continuing to do in its analysis and rulemaking concerning VoIP," commented Jason Talley. "In the FCC's preemption of the Minnesota Vonage Order, the FCC clearly indicates that 911 requirements and capabilities will be addressed by the FCC in its pending IP-Enabled Services Proceeding. The FCC has already exerted federal jurisdiction over this matter.

"Kansas is rushing to legislate without adequate investigation into the technology and current federal preemption. This tax will only fund wireless and wireline customers, and does nothing to enable 911 for VoIP customers.

"Make no mistake about it, this bill is the opening salvo in legislation to stifle and eliminate a technology that is bringing choice and features to customers in order to easily fulfill funding shortfalls from other programs. This is tantamount to taxing email to support the U.S. Postal System."

Brasil Telecom Ends 2004 with 535,500 ADLS Lines

Brasil Telecom ended 2004 with 535,500 customers for its ADSL Internet access service, up from 282,000 customers at the end of 2003. In 2003, approximately 300 cities were covered, and, in December 2004, the service reached over 1,100 municipalities.

Brasil Telecom provides local wire line services and national long distance services as a concessionary in region II, which includes the Brazilian states of Acre, Rondonia, Mato Grosso, Mato Grosso do Sul, Tocantins, Goias, Santa Catarina, Parana, and Rio Grande do Sul, as well as the Federal District.

See also