Statement:
"The Forum brought together a little over 750 participants with representatives from 120 ITU Member States, including 25 LDCs and from 100 Sector Members. The bringing together of governments and the private sector is one of the unique features of ITU.

The purpose of the Forum was to develop a shared vision among senior policy-makers and officials on approaches to IP Telephony. It was chaired by Hong Kong Regulator, Mr Anthony Wong. The main output will take the form of a Chairman’s Report consisting of a series of four Opinions, arrived at in the ITU’s tradition of consensus.

The three-day Forum was preceded by a one-day Information session at which companies from developing countries presented their experiences regarding IP Telephony.

On the first day of the Forum itself, statements were made by the Minister of Industry, Employment and Communications of Sweden, the Minister of Communications and Informatization of the Federation of Russia, the Secretary of State of the Ministry for New Technologies, Mauritania, and the Assistant Vice President, Regulatory Affairs, of the US company, Genuity Inc. The sole working document was the Secretary-General’s Report. The report was discussed extensively on the first day and a half, with only minor factual amendments to its Annex to reflect details on liberalization that had occurred in some countries since the publication of the Report.

Today, the last day of the Forum, delegates are discussing the draft Opinions. Three of them had initially been prepared by a group of experts and had been circulated to the membership ahead of the event. One was submitted on the first day of the Forum.

Opinion A is a general policy statement reflecting the shared vision of IP Telephony.

Opinion B deals with how ITU Members can assist each other and sets out a series of collaborative actions for helping Member States and Sector Members in adapting to the changes in the telecommunications environment due to the emergence of IP Telephony.

Opinion C deals with Human Resources Development issues, in particular skill shortages and the need for education and technology transfer.

A new Opinion D, tabled by Syria and supported by a number of other countries, sets out in essence a work programme for the ITU, including essential studies to facilitate the introduction of IP Telephony, including inter-operability considerations which would meet the concerns of some developing countries.

The second part of the meeting was devoted to the discussion of these four opinions. Two main areas were at the centre of the debate: whether or not it could be proven that IP Telephony would be cheaper in the long run than circuit-switched networks and whether, how and when to regulate IP Telephony.

On the cost-savings issue, and despite presentations of case studies by operators who had invested heavily in IP Telephony, many developing countries felt the case for the new technology remained unproven. However, their major concerns were in respect of voice telephony, whereas IP Telephony encompasses a broader area of multimedia services. Many developed countries and Sector Members such as Cable & Wireless, Concert and Genuity argued that IP Telephony could provide a unified platform for future services whether voice, text, data or multimedia.

The debate on regulation was a more philosophical one. Some countries were in favour of a minimal amount of regulation, whereas others saw regulation as an important part of government policy. The latter debate had less to do with IP Telephony itself but rather with the changing nature of regulation within the context of the modern communications environment.

One issue of dispute was over the concept of technology neutral regulation whereby it is services that are regulated rather than the specific technology platform underlying them. The European Union’s position is intent on reducing regulation to a minimum, but in a technology-neutral way. Another view, presented by the USA, is that new technologies such as IP Telephony should be allowed to flourish without being subject to "legacy" telecommunications regulation."

The briefing was then opened for questions from the floor.

Questions and Answers
In response to questions concerning sharing of revenues and the potential for IP telephony to by-pass the accounting rates system, Dr Kelly pointed out that, in some countries, IP based networks are already integrated into traditional telephone networks and/or a lower accounting rate is applied to them. There is a range of other methods that can be used which by-pass the accounting rates system, such as refile, call origination, routing traffic via satellite or via alternative providers, etc. In respect of the ban on Internet telephony in certain countries, he added that a subtle distinction needs to be made since telephony travelling over the public internet is only one subset of IP Telephony. Cable & Wireless, for example, has its own IP-based network which interconnects with the public Internet but also forms part of the Public Switched Telephone Network. The advantages for developing countries in not regulating IP Telephony reside in the fact that they avoid imposing technology choices on licensed operators and avoid closing off the potential for lower priced services.

IP Telephony can be seen as a broader market change. Friction arises when two different pricing traditions come together. One is the per minute/mile/megabit pricing tradition of the telecoms sector based on usage; the other is the Internet with its flat-rate, distance- and volume-independent nature.

Between the two extremes of the usage-based and flat-rate approaches, there are many hybrids. Telephone operators in the developed world often had the luxury of rebalancing their tariff structures over a period of five to ten years whereas those in the developing countries are being forced to swiftly rebalance; this also leads to friction.

On questions concerning market size for IP Telephony, Dr Kelly stated that ITU’s Report on Internet Telephony gives statistics on market size, with the overall figure for 2000 being 4 billion minutes of international calls with traffic foreseen to increase to 7 billion minutes in 2001.

When asked who would foot the bill in developing countries, Dr Kelly replied, "as always, the user". However, he added that ITU historically has been able, via its Member States and Sector Members, to work to provide training and technology transfer thanks to the unique nature of the Membership of the organization. This was particularly the case when countries were moving from analogue to digital networks. The current transition from circuit-switched to IP-based networks is of a similar nature.

The costs for developing countries to shift from circuit-switched networks to IP-based ones depended on their individual starting points. It may be easier to start from scratch than to adapt an older system. China, for example, has committed to investments of US$12 billion in IP Telephony and has been able to move ahead much faster because much of the network capacity is brand new.

With respect to standards, Dr Kelly said that the IP Telephony standards tend to be much more market-driven than other telecoms standards. Nevertheless, there are areas of dispute related to numbering and inter-operability between the Internet and the PSTN. But the main challenge for countries would be that of upgrading their switching and software, as they migrate their networks to IP.

Although the case for IP Telephony was not conclusively proven, the indications shown by operators’ own investments are that they believe IP to be a way of reducing costs. According to a presentation made by Level 3 at the Information Session, the cost per bit for IP is 1/8 of the cost per bit for a traditional switch. The cost signals are clear.

On a question over whether developing countries would see the benefits from the heavy investments made in recent years to develop their circuit-switched networks, Dr Kelly replied that they would because the transition is likely to be a long-term process. The concerns of certain developing countries is understandable, especially in light of such false dawns as the hopes that had been raised over GMPCS (Global Mobile Personal Communications by Satellite) where the promises of bringing services to under-served areas of developing countries was arguably oversold. But it needed to be underlined that GMPCS was a brand new technology whereas IP has been implemented in OECD countries since the late 1970s. The platform for third-generation mobile networks (IMT-2000) will be IP based. IMT-2000 was quoted as a very good example of the transition to IP-based networks.

More observations on these questions would most likely be contained in the final documents which would be available shortly after the end of the meeting.

The briefing ended at 13h00.