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INTERNATIONAL
TELECOMMUNICATION UNION
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Document: IPTEL/10
14 June 2000
Original: English
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IP TELEPHONY WORKSHOP
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GENEVA —
ITU NEW INITIATIVES PROGRAMME — 14 - 16 June 2000
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OPENING REMARKS
PREPARED FOR MR. YOSHIO UTSUMI,
ITU SECRETARY-GENERAL
It is my pleasure to welcome you to the ITU for this IP
Telephony Workshop, the second in the series of expert meetings conducted under
the ITU’s “New Initiatives” programme.
The term “IP Telephony” has become a familiar one in the ITU
in recent years. Indeed, it is the work of the ITU Telecommunication
Standardization Sector, in particular in adopting Recommendation H.323, which
has provided the technical basis for IP Telephony to move from a curiosity into
a viable technology. But this is the first time that we have convened a meeting
specifically to examine the policy and regulatory implications of IP Telephony.
Until recently, perhaps, it was not necessary to convene such a meeting because
the question of the implications of IP Telephony simply did not arise, because
the majority of ITU Member States did not allow it. Also, the sound quality
that was offered by IP Telephony over the public Internet was often poor.
But that situation is quickly changing. More than
three-quarters of international traffic now originates in countries in which
the provision of IP Telephony is liberalised. Furthermore, the majority of IP
Telephony now travels over private managed networks. Consequently, even for
those countries that nominally prohibit IP Telephony, it has become nearly
impossible to ignore it. Market forecasts show that IP Telephony will account
for between 25 and 40 per cent of all international voice traffic by the year
2004. Worldwide, the volume of traffic on IP-based networks already far exceeds
that which travels over the public switched telephone network.
But mention of IP Telephony still raises controversy.
Consider these two contrasting views of IP Telephony:
·
For some, the advent of IP Telephony represents the
latest in a series of challenges to the monopoly of incumbent public
telecommunication operators. After call-back and least-cost routing comes IP
Telephony. But, in this view, IP Telephony is perceived as subversive because
it does not play by the “rules of the game”, but rather is a form of bypass. Specifically,
IP Telephony routes calls around the long-distance and international networks
of the incumbent public telecommunications operators and bypasses the system of
international accounting rates and settlements that is associated with those
networks. Thus, for some, IP Telephony should be resisted at all costs.
·
For others, however, IP Telephony represents the future
of the public network. Billions of dollars are currently being invested in
“next generation” networks in which voice and text will be transmitted
alongside data and video, over an IP platform. In this view, IP Telephony is a
benefit to consumers allowing new market entrants to offer low-cost calling,
particularly over international routes. Voice over IP also opens up many new
applications in the field of integrated messaging. Indeed, in the longer term,
“IP Telephony” may be just a sub-set of the much larger concept of “everything
over IP” and the wholesale shift to packet-switch technology for all
telecommunications.
In view of these highly divergent views on IP Telephony, we
are expecting the discussion at this Workshop to be lively. It is important,
however, that we listen to what each other is really saying, not what we think is being said. I have already used
the “B word”—Bypass—which I know raises strong emotions. It is important that
we confront the fears that many governments and public telecommunication
operators have over the spread of IP Telephony. In many developing countries,
international telephone calls to and from developed countries, such as the
United States, provide the mainstay of revenues and hard-currency profits. The
fact that it is now possible, from anywhere in the world, to make international
calls free of charge to any subscriber in the United States, by using a web-based
telephone service such as DialPad.com, gives substance to these fears. How is
it possible to compete against a service that is perceived to be free?
Of course, a service such as this is not really free of
charge. To gain access to the Internet, a user still needs a telephone line and
the ability to make local calls. In many developing countries, it is even this
most basic of services – access – which is lacking. In attempting to extend
access, many developing countries have cross-subsidised subscription and local
calls charges from expensive international calls and incoming net settlements.
One of the effects of IP Telephony will be to accelerate the urgency of tariff
rebalancing. If a public telecommunication operator does not make sustainable
profits from its local access service, then it could very quickly be bankrupted
in the future telecommunications environment. And if a carrier’s long-distance
and international calls are substantially higher in price than it’s local
calls, then it’s ability to compete will be significantly diminished. The
global Internet already offers distance-independent tariffs. The global
telecommunication network will also, increasingly, be distance-independent in
tariff structure.
The telecommunication services providers of the future will
look very much like today’s Internet service providers: They will have hundreds
of points-of-presence in local loops in major metropolitan areas around the
world to which consumers can link their telephones, mobilephones and personal
computers. From there, all kinds of traffic will be routed over essentially the
same global IP network, linking the points-of-presence of all the service
providers. IP Telephony will be used mainly over the inter-city links between
local points of presence. But the economics of IP Telephony will also radically
alter the economics of the local loop itself. Thus, the regulatory implications
of IP Telephony are likely to be broad in scope.
The purpose of this Workshop is to assist ITU Member States,
especially regulatory agencies, and ITU Sector Members, in their strategic
planning with regard to IP Telephony. The aim is to generate informed
discussion that will review some of the regulatory, legal and economic
implications raised by IP Telephony. To this end, we have prepared a document,
IPTEL/4, which provides a suggested list of questions for discussion. Many of
the questions raised are of a regulatory nature: How should IP Telephony be
defined? How should it be licensed? Should IP Telephony Service Providers contribute
to Universal Service Obligations?
Some of the questions we have suggested are quite specific:
for instance, should an E.164 country code be allocated for IP Telephony? Or is
IP Telephony a suitable topic for a future World Telecommunication Policy
Forum? Other questions are broader: for instance, how big will the market for
IP Telephony become? Is it a substitute or a supplement to existing voice
telephony services?
In preparing for this workshop, and to assist you in the
discussion, we have also developed a background paper and a detailed website,
which provides links to web-based resources from around the world, as well as
country-specific information about how the challenges of IP Telephony are being
handled. We have also commissioned a series of case-studies of IP Telephony in
a diverse range of countries, including China, Colombia, Hungary, Peru and
Thailand. I hope that this material will help to enrich your discussions.
We are particularly grateful to the Ministry of Posts and Telecommunications of
Japan that helped us in funding this additional research.
So what is expected from you, the participants in this
Workshop? We are looking for guidance as to how the ITU, and more importantly
the membership of the ITU, should respond to the challenges of IP Telephony.
What are the key issues of IP Telephony that need to be addressed at the
international level? Is there
information that is lacking to inform the debate that the ITU could be
gathering and assembling? How can the
divergent views be reconciled?
You may not find answers to all the questions, but even a
list of key issues would be a good starting point for future work; so let me
wish you a fruitful and stimulating debate over these next few days.
