TRAI Consultation Paper on Internet Telephony

Introduction

The Telecom Regulatory Authority of India (“TRAI”) has issued a Consultation Paper on Internet Telephony (VoIP) on June 22, 2016 (the “Consultation Paper”) for comments from stakeholders.  This came on the back of an industry-wide debate surrounding the usage of the internet and software applications for the purposes of making voice calls from one user to another (which in turn was part of the larger net neutrality debate). This provides users with an alternative to conventional phone/voice calling at a fraction of the cost they previously paid – the only charges incurred being for the usage of the data pack on the internet for the duration of the voice call. As technology developed, third parties (like Skype, Viber and WhatsApp) have cut into the services that were previously the sole domain of telecom service providers (“TSPs”), reducing the traffic for conventional voice calls, and thereby reducing the revenues of TSPs. It is against this backdrop that the TRAI released its Consultation Paper, because it realised that if internet telephony was going to replace conventional telephony as the primary means of communication, then the regulatory framework for internet telephony needs to be revised as well.

The Technology Behind Internet Telephony

Since the 1960s, the Public Switched Telephone Network (“PSTN” i.e., the regular landline telephones used by all households/offices) has been used as the primary means of voice communication across the world. In the PSTN, a dedicated circuit is established for the duration of each communication. Further, the PSTN originally transmitted only analogue signals, but has now started transmitting digital communication signals, using technology to convert all analogue signals to digital transmissions at the originating network and vice versa in the receiving network. However, there have always been two significant disadvantages associated with the PSTN system: (a) expensive bandwidth; and (b) inefficient use of networking channels, due to the existence of a dedicated circuit for each conversation.

A recently developed popular alternative to the PSTN, which acts as a remedy to the problems identified above, is the concept of Packet Switched Networks (“PSN”) technology.  Internet Protocol Telephony (“IP Telephony”) uses the PSN technology to provide an alternative means of originating, transmitting, and terminating voice and data transmissions that would otherwise be carried by the PSTN. Thus, while taking into cognizance the rapid growth of this technology and the imminent replacement of the traditional PSTN, the Telecom Regulatory Authority of India has released the Consultation Paper to study the existing regulatory framework, and to seek suggestions for changes and updates to the same in order to cater to the emergence of IP Telephony/Voice over Internet Protocol.

Voice over Internet Protocol (“VoIP”) and its distinction from IP Telephony

VoIP and IP Telephone both utilise the same technologies and processes, but when voice is transmitted over a public internet network, it is termed as IP Telephony, whereas when voice is transmitted over managed IP networks, it is termed as VoIP. Though the difference may initially seem to be nothing more than the kind of internet network used, there is also a significant difference in the quality of speech over these modes of communication.

Essentially, VoIP enables users to make real time voice calls that are transmitted over the Internet rather than the traditional circuit switched telephone networks. VoIP uses network resources in a manner more efficient than the PSTN and thereby reduces the costs of providing a call. While VoIP technology is innovative and disruptive in nature, the existing licensing framework unfortunately is unable to keep pace with the fast technological development and the convergence of networks, services and end-devices. Thus, this Consultation Paper aims to analyse how the regulatory frameworks governing internet telephony (IP Telephony and VoIP) would need to be modified to meet the challenges posed by this convergence.

Current Regulatory and Licensing Framework

The regulatory framework for Internet Telephony has its roots in Guidelines issued by the TRAI in April, 2002. Even though internet services were launched in India via VSNL in 1995, it wasn’t until 7 years later that the TRAI allowed the restricted provision and usage of internet telephone services in India.

The present regulatory framework permits Unified Access Service Licensees (UASL), Cellular Mobile Telecom Service (“CMTS”) Licensees, and Unified License holders to provide unrestricted IP Telephony/VoIP anywhere in the country. This power is given under Clause 2.2 (a)(i) of the Unified Access Services License, Clause 2.1 (a) of the CMTS License, and Clause 2.1(a) (i) of the Unified License.

Internet Service Providers (“ISPs”) have also been permitted to offer/allow IP Telephony in a restricted manner, as stipulated under the ISP licensing conditions issued by the Government in October 2007. As per these conditions, ISPs may allow PC-to-PC IP Telephony calls, and calls from a PC/adapter to a PSTN/Public Land Mobile Network (“PLMN”) abroad. However, IP Telephony calls from PCs/adapters to a PSTN/PLMN in India are not permitted. Additionally, ISPs are not allowed to have or facilitate interconnections with PSTN/PLMN networks.

Regulatory Issues and Implications

The Consultation Paper recognises certain regulatory issues that need to be addressed urgently in order to encourage Internet Telephony services in the country, as well as to ensure the proper regulation and control over them.

1) Points of Interconnection

In telecommunications, “interconnection” is the linking of a carrier’s network, with facilities and/or equipment not belonging to it/its network – such as the network of another carrier, its own network in another service area/state, or the equipment used by a customer. In order to ensure that telecom networks around the country are linked, and to ensure that boundaries like service areas are well defined, interconnection becomes the most important aspect of the telecom network. The interconnection framework in India, both technologically and from a regulatory perspective, is currently designed to cater to the PSTN/circuit switched networks. However, with the Internet, the original infrastructure laid down by telecom service providers to facilitate voice calls (such as cables, towers for signal etc.) is being rendered largely redundant. The internet functions over a wireless medium, due to which boundaries such as service area or country are not discernible and have disappeared. IP Telephony is nothing but a voice service provided by means of applications functioning over the Internet, meaning that the infrastructure and costs involved are significantly reduced. Further, the convergence of technologies and markets has made the conventional approaches to interconnection charging unsustainable. Thus, the Consultation Paper seeks to understand and analyse how to revise the existing regulations related to interconnection, in order to adapt them to packet switched networks and IP Telephony. This is with the assumption that in the near future, voice telephony will migrate completely from circuit switched telephony to packet switched technology, meaning that the internet interconnection and pricing models will have to replace the current arrangements of interconnection.

With reference to this question, we are of the limited view that solely from a consumer benefit perspective, there should ideally be no additional cost involved with using the internet, be it for making voice calls or for any other purpose. Further, from a practical perspective, internet networks do not operate over any physical connection/transmission network, making it difficult to recognise points of interconnection. The internet services/networks provided by different corporations are all interconnected, forming the uniform internet experience. Thus, we believe that it would be beneficial for the market if internet services/data consumption continue to be charged as they are today, irrespective of usage, and without a need for regulations pertaining to interconnection.

2) Allocation of Numbers

While transitioning from PSTN to IP Telephony, there will be multiple instances where consumers/users still using the PSTN networks will want to call an IP Telephony subscriber. A major hurdle in this process is the fact that as of now, IP Telephony subscribers are not allocated numbers like subscribers of the PSTN network. This makes calling them impossible, potentially restricting the growth in usage and popularity of IP Telephony. Unlike the countries in the west, India does not have a framework for the allocation of a common number for fixed line, mobile and Internet Telephony networks. Thus, the Consultation Paper seeks to receive the views of stakeholders in understanding the best way for allocating numbers to IP Telephony subscribers. This can be through the allocation of fresh numbers/codes, not already used by the traditional PSTN subscribers, or by allowing the portability of numbers already available with prior PSTN subscribers, who are now shifting to IP Telephony.

In our view, adopting the strategy and regulation followed by countries like the US (as mentioned above), may prove to be the best and most efficient method for allocating number. For users who are shifting from PSTN to IP Telephony, mobile number portability should be enabled and made easy; and for new subscribers, numbers may be allocated from fresh codes. Further, the sequencing/format of number allocated to IP Telephony subscribers (for eg., changing the number of digits from 10) need not be changed, as this will further increase confusion amongst users.

3) Quality of Service (QoS) Parameters

Currently, India does not prescribe any minimum standards to be maintained by ISPs, CMTS Licenses, Unified Access License holders etc. that are providing internet connections to their users. It is generally perceived that internet speeds equivalent to those provided in a broadband connection will be required to enable IP Telephony services with good speech quality. Thus, the Consultation Paper seeks to analyse whether any minimum internet speed to be provided to users should be specified as a QoS parameter, as opposed to letting service providers determine this by themselves.

In this regard, we are of the limited view that the TRAI should prescribe minimum QoS parameters for anyone providing internet services in the country. This if for a few reasons: (a) Keeping in mind the growth of IP Telephony, and the gradual shift of all consumers to this mode of communication (as has been stated in the Consultation Paper), it is relevant to provide QoS parameters in order to further enable this transition; (b) While we understand that leaving decisions regarding internet speed/quality up to the service providers will any way force them to provide better quality services due to competition, it is possible that ISPs/CMTS Licensees etc. collude to provide sub-standard services. Additionally, having legally mandated QoS parameters will hold them accountable to the TRAI, and provide a bigger dis-incentive to shift from such minimum standards.

Conclusion

This Consultation Paper raises some important questions in the face of the growth of IP Telephony, and the rising volume of complaints from telecom service providers. However, with the proliferation of the internet and “Digital India” as one of the present Government’s main goals, it may be counterproductive for the Government to charge IP Telephony in any manner other than as existing today. At the same time, this Consultation Paper recognises some important roadblocks to the growth of this mode of communication, and we hope that the Government takes the necessary steps to increase the quality of IP Telephony services, and ensure ease of access for the public. We await the release of the TRAI’s Recommendations, pursuant to the comments and counter-comments received in response to this Consultation Paper, to see which side the Government is leaning towards on this matter.

Authors: Madhav Rangrass & Apurba Kundu

Disclaimer: The information contained in this post is for dissemination purposes only and shall not be relied upon as any opinion or advice, in any way. For any help or assistance please email us on  relationships@novojuris.com

 

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