Net telephony: Onto a new frontier

Though it prohibited Internet telephony when it came into force, the National Telecom Policy (NTP 99) allowed the government to take appropriate action in response to developments in the sector. Recently, the Government sought the TRAI's recommendations on allowing Internet telephony in the country, and the latter initiated public consultations. While inviting public comment, TRAI made a distinction between VOIP, seen as a largely technological issue, and public Internet telephony. In formulating its recommendations, TRAI should be guided by some unexceptionable principles: Integrity of the existing licences and rights and obligations thereunder, should be upheld to the maximum extent possible to avoid legal and other complications; Efficiency in supply of services in a technology-neutral way, with due regard for the potential for convergence, should be promoted; Commercial free-riding on public good resources such as the public Internet should be discouraged and, at the same time, such resources should be allocated to the most disadvantaged people on equity considerations, which in the case of telephony would mean people targeted for USO services; The policy framework should be monitorable and implementable, and; It should be consistent with practices elsewhere in the world. On these considerations, it would be apparent that VOIP should be permitted to existing licencees in all categories (except ISPs), as that would enable these licencees to evaluate their technology options cost-effectively and without diluting their obligations under the licences, particularly with regard to QoS. This would not be the case if Internet telephony (over public Internet on a best effort basis) were allowed as it would require dilution of the QoS. If both VOIP and Internet telephony are allowed to existing licencees, it may create serious monitoring difficulties on the QoS front. Permitting operators to evaluate their business options against all available technology platforms is necessary if convergence is to come happen. So long as there is clear commitment by the regulator and the government to promote competition through an appropriate market structure to be achieved in each of the licence categories, and there is relatively free entry, even while allowing the existing licencees the option of another technology platform, competition will ensure that the eventual gainer is the consumer and no undue benefits accrue to the licencees. While the existing licencees should be allowed the use of the VOIP platform without any dilution of QoS stipulations, this should not be taken to mean that all use of the VOIP, particularly for in-house networks by organisations, should now need to be licensed. As these are not public service providers, these should continue beyond the pale of licensing, as is the case in the EU. There are two attributes of Internet telephony that call for differential treatment from VOIP. One is that the quality of service would only be on a `best effort' basis. The other is that the public Internet is a public good which, if allowed to be exploited on commercial considerations, would suffer the tragedy of leading to socially-excessive congestion. There is also the equity consideration ? that a free public resource like this, as far as possible, should be allocated in favour of the telephonically-disadvantaged. Keeping these considerations and the need for separating VOIP and Internet telephony for the ease of enforcement of QoS standards, (public) Internet telephony should only be allowed through new Rural Internet Telephony (RIT) licences valid only in USO areas. These would have lower QoS standards and tariff rates and extremely easy entry conditions. While these would spotlight the failure of the existing licensees to implement their roll out plans to meet their USO commitments, it is not proposed to dilute their USO obligations in any way because RIT would only provide a different and inferior product. RITs could be of great interest to post offices, rural unemployed youth, NIC, companies into rural marketing, such as ITC, fertiliser companies, NGOs, etc. This distinction between Internet telephony and VOIP for licensing purposes would be consistent with that prevalent in the US and Canada. In sum, in this scheme there would be a new category of RIT licencees. The existing and future licencees of BSO, NLDO, ILDO and CMSO would get the option of the additional technology platform of VOIP, while to maintain the integrity of the existing licensing scheme, the ISPs would get nothing.