Voice over Internet Protocol (VoIP) refers to the transmission of voice telephony over IP networks. VoIP can be delivered over the Internet and over the managed IP networks. The Internet is a ‘best effort’ medium, whereas in the managed IP networks it is possible to maintain specified levels of QoS. Furthermore, gateways can be used to interconnect VoIP to the PSTN or mobile networks. This results in three main deployment scenarios for VoIP:
- Pure IP: Here the VoIP services are implemented using Computers (or other IP terminals) as end devices. In some deployments, the regular PSTN terminal is connected to an IP converter. The communication takes place over the Internet or over managed IP networks. Skype is an example of VoIP over the Internet.
- IP => PSTN/mobile: In this scenario, there is a gateway between the IP and the PSTN or mobile networks, such that one can call from the IP terminal to legacy PSTN or mobile networks. Skype-out is an example of this service type.
- IP <=> PSTN/Mobile: In this scenario, it is possible to call from an IP terminal to the PSTN/mobile AND from a PSTN/mobile terminal to an IP terminal. Skype-in is an example of this service type.
- Interconnection. Interconnection to the legacy PSTN networks is essential for the success of VoIP services. This interconnection is implemented by using gateways and contractual agreements between VoIP providers and PSTN operators. These interconnection arrangements should be monitored by regulators. If fair and non-discriminatory conditions for interconnection are not established in a timely fashion in the marketplace, regulators should intervene following traditional interconnection principles, as reasonable interconnection is a precondition for the successful development of VoIP.
- Universal Service. In rural areas the new wireless technologies will play an important role, where a combination of VoIP services and wireless infrastructures can enable a more efficient development of all communications services, including basic voice services. A particular problem related to use of VoIP for the provision of universal service is In-line powering of terminals. Traditional telephony service is designed with back-up power, and so it continues to work in case of electricity power failure. The current VoIP services/terminals are dependent on a functioning power supply. A requirement for in-line powering of terminals could put an enormous burden on the VoIP operators and slow development of service to un-served rural areas. Regulators should facilitate VoIP growth as a driver for network extension. For the longer term, the requirements for emergency communication standards and services can best be addressed by considering all the new technologies and services in the NGN, and most particularly VoIP and mobile.
- Numbering. VoIP services will co-exist with traditional public telephony for many years before the transition to all VoIP is completed. The rate of growth of VoIP will depend on its access to the national E.164 number plans. Any regulatory obstacles in accessing numbers can impede or slow down VoIP development. One model is to assign a new number series for VoIP services, although this would create confusion among consumers. The best model would be to assign numbers similar to the current PSTN numbers and to require number portability, so people are not forced to change their phone numbers when they want to change to a competitor offering VoIP services.
- Emergency call and positioning. The possibility to perform emergency calls and to route the call to the nearest authority (fire department, police, hospitals etc.) has been defined as a core element of Publicly Available Telephony Services in Europe. Similar requirements are part of regulation in other countries. Location information is also more frequently becoming a requirement for both fixed and mobile telephony. In VoIP it is possible to maintain positioning and routing information for emergency calls. However this requires use of VoIP services from fixed locations. However, one of the promising characteristics of VoIP services is nomadic use. In nomadic use at the current level of technological development, the position information cannot be connected to the emergency call. This is a challenge both to the market players and to the regulatory framework. Regulators should take a lead in facilitating the resolution of these important emergency issues in future networks.
- QoS. With POTS, there are detailed recommendations on QoS from the ITU and in many national regulations. In managed VoIP services it is possible to provide measurable QoS, but this is more difficult in best effort services. Another important issue is the willingness of facility based operators to offer access to QoS provision to non-facility based operators. For example, a major debate in Europe and other regions is the lack of QoS provision in the wholesale Bit stream access products offered by the PSTN incumbents. Regulators will need to take the lead in ensuring consumer protection with respect to QoS.
- Interoperability & Standardization. Different technical standards are used to establish VoIP services. It is important to establish interoperability between these standards. The interoperability may be implemented at the technology or market levels. Also new numbering schemes like global Dialing System and ENUM may require standardization and interoperability. These developments should be monitored by regulators, and if the market players do not find adequate solutions for interoperability, regulatory measures may be necessary.
- Security and consumer protection. In regular telephony services the security and consumer protection standards have been defined and are generally found adequate.
 For a more detailed outline of the European discussion see e.g. Communication staff working document on the treatment of Voice over Internet Protocol (VoIP) under the EU regulatory framework, Brussels, June 2004
For information about the competition and price regulation aspects of VoIP, please see Module 2, section 4.2, "About VoIP"
Quality of service
Network and information security