VoIP a value-added service

New NTC draft rules say VoIP a value-added service
Lets ISPs offer commercial VoIP services


Posted 11:06am (Mla time) Mar 30, 2005
By Alexander Villafania, Erwin Lemuel Oliva
INQ7.net



(UPDATE) THE VOICE over Internet Protocol (VoIP) is a value-added service and not a voice service, the National Telecommunications Commission (NTC) has said in new draft rules it issued Wednesday, paving the way for Internet Service Providers (ISPs) to begin providing VoIP services commercially.
VoIP routes phone calls through the Internet instead of through traditional public switched telephone networks. Its lower cost has made it a popular alternative to traditional voice calls.

Prior to the new rules, VoIP was classified as a voice service.
Under the Telecommunications Act, this classification meant that only telecommunications companies with a government franchise to carry voice calls were permitted to offer VoIP commercially, though companies were permitted to make use of VoIP for private networks.

The classification had placed ISPs and traditional telecommunications companies at loggerheads.

The new rules identify the parties that are allowed to offer VoIP services, as well as standard agreements between telecommunications carriers and ISPs regarding service performance standards, interconnection charges, access costs, as well as consumer security and privacy.

The rules also outlined the NTC's mandate to intervene in cases of failure of negotiations between the carriers and ISPs.

At a press conference on Wednesday, NTC Commissioner Ronald Olivar Solis said that both carriers and the ISPs were likely to accept the draft rules as they were based on the position papers submitted by different stakeholders.

Officials from Globe Telecom, Philippine Long Distance Telephone Co., and Bayantel have deferred comment until they see a copy of the draft rules.

The Philippine Internet Service Organization (PISO), an organization of ISPs that has long sought VoIP's reclassification, was elated, saying the reclassification is a welcome development for the local industry and consumers as well.

"If [the rules] are going to treat VoIP as a value-added service then that's good news for us and the general public," said Joji Yap, PISO president and general manager of Pacific Internet Philippines.

Solis said that the NTC will conduct its first public hearing on the draft rules on May 3.

The NTC officials said that they expect few changes to the first draft following the public hearings.

"Only the agreement of the carriers and the ISPs is necessary to make this happen," Solis said, adding that the NTC expects the rules to be implemented within the year.

Solis stressed that VoIP is a cheaper communications alternative to the public, and it can also provide additional features not commonly found in traditional voice services.

The NTC official said the local carriers are expected to respond to the deregulation of VoIP by introducing better and more cost-effective services to offset potential losses stemming from increased competition with ISPs.

Investments are also expected to increase from carriers and ISPs as they introduce other value-added services related to VoIP, Solis said.

The NTC said that National Economic Development Authority Director General Romulo Neri had proposed that government use VoIP to reduce telecommunication costs.

Solis said that Congress, through Representative Simeon Kintanar, information and communications technology committee head, is also working on a law on the implementation of VoIP nationwide.

"Right now, a memorandum makes for a good start, but a law, as proposed in Congress, will give more teeth to VoIP implementation," Solis said.

A copy of the NTC memorandum on the draft VoIP rules can be viewed at ntc.gov.ph.