VoIP presents a particularly compelling challenge to regulators. Decisions on the regulatory status, availability, and price of VoIP services will directly affect the economic viability and future regulatory status of incumbent operators.
VoIP has the potential to erode the market share and profitability of incumbents. VoIP services can traverse the telephone network without detection. Thus, even where regulators permit only limited or no VoIP services, incumbent operators will still face competition from this source. Incumbent operators may no longer be able to expect voice traffic to generate lucrative revenues and profits.
In response to this competitive pressure, incumbents may seek regulatory relief. For example, incumbent operators may approach regulators seeking:
- Regulatory parity with new entrants, for example by removing asymmetric regulation not imposed on other operators, or
- Protection from competition, for example by banning or seeking to limit VoIP services.
Finally, regulators will have to consider how best to encourage incumbent operators to retrofit their existing networks and install new digital plant, optimized for switching and routing data (of which VoIP will be a significant component in the future).
RELATED INFORMATION
Trends in VoIP Regulation
Differential Regulation of VoIP and Conventional Telephony