TRAI’s Consultation Paper on Internet Telephony (VoIP) was released on 22 June, and finally closed on the 13th of this month. The paper dealt with the question of whether Internet Service Providers (ISPs) should be allowed to provide unfettered internet telephony, or Voice-over-IP services. Under the present rules, ISPs are only permitted to provide PC to PC internet telephony. The responses from various stakeholders, both for and against this proposal, show that there are very basic issues that need to be sorted out before discussing the issues raised by TRAI in the paper.

Emergence of innovative communication models
VoIP has huge benefits over traditional voice services. Traditional voice services were provided over traditional circuit switched networks (like PSTN). The technology has now moved to IP based packet switched networks, which provide a cheaper and more efficient form of voice communication. In addition, voice services can now be clubbed with multiple other services like video conferencing, instant messaging and e‑mail services.

This has changed the way communication is done, leading to convergence of services (like voice and video), networks (like access networks and carriage networks) and devices (like PCs and mobile phones). It has also led to the evolution of newer services like BSNL’s Fixed Mobile Telephony’, a system which allows customers to make local and STD calls from their landlines in India, using an app on their mobile phones. It was following this service of BSNL that TRAI issued the VoIP paper.

Stringent regulations governing telcos
The rules applicable to telcos to provide voice services are very extensive. Not only does obtaining the license have a huge entry fee, thereafter telcos need to pay a share of their revenue to the government, comply with KYC, security and interception requirements, maintain Quality of Service standards, etc. Telcos like Vodafone and Idea, and telecom associations like COAI feel that since VoIP services provide a similar or substitute service, they should also be subjected to the same rules. At present, to provide internet telephony, a license, like a Unified License is required. Telcos feel that ISPs wanting to provide internet telephony must also obtain such a license.

VoIP services are far more advanced
On the other hand, some stakeholders argue that VoIP services need completely different regulations. AT&T feels that VoIP has far more advanced attributes than traditional voice services, such as converged voice and data services, use of mobile devices to perform job functions at work, increasing use of cloud-based and as-a-service models, and integrated voice, messaging, video conferencing and e‑mail capabilities. The same regulations cannot apply to a service which is so different.

VoIP causes loss of revenue using telcos infrastructure
The convenience of VoIP services and improving quality make it a direct threat to traditional voice services. The set-up of traditional voice services needed investments to the tune of Rs.8,50,000 crores to set up the underlying infrastructures. Telecom companies, naturally, have issues with VoIP services which ride on the same infrastructure, and without any investment, are causing loss of call revenues to the telcos. The telcos argue that a more level playing field is required.

Telcos need a new form of returns
Microsoft on the other hand, points out that while the need to safeguard the investment and returns of the telcos is important, this shouldn’t be at the cost of a cheaper and more efficient service for the people. For example, when mobile telephony came about, the government did not take any measures to protect STD and PCO providers. The better or cheaper technology was allowed to prevail for the benefit of the public, and the same should happen in the case of VoIP services.

Microsoft also points to the fact that with the advent of VoIP, globally, revenues from traditional voice services are declining. Telcos now need to shift their focus to a newer form of obtaining returns. Encouraging VOIP will give a new reason for consumers and businesses to subscribe and use broadband data services. The Internet Democracy Project also recommends that the government reduce TSP levies in order to create a more level playing field between the telcos and other players like OTT services and ISP.

All VoIP services are not the same
Another common issue of the stakeholders was the lack of clarity on the definitions of internet telephony’ and public internet’. The current definition made no difference between one form of internet telephony and the other. For example, Microsoft suggests that a difference be made between VoIP apps which are mere software apps using the internet, and VoIP services which can directly compete with traditional voice services, such as VoIP which enables calls to and from PSTN. Clubbing all such VoIP services under one head for the purpose of regulation will be detrimental to innovation.

Internet telephony, particularly within India, is still a developing service. Moreover, until now, the more preliminary issue of whether traditional voice services and voice services from OTT apps like WhatsApp should be governed by the same rules or not has not been decided. Many of the stakeholders pointed out that deciding this is more urgent than resolving the specific queries raised by TRAI in the VoIP paper, such as numbering, entry fees and termination charges. Without the resolution of preliminary issues, it is too early to decide on how to regulate VoIP.

Originally published in