As countries across the globe struggle to rewrite telecommunications regulatory regimes, efforts to maintain control over telecommunications markets are increasingly being stymied by technology itself. First came video-on-demand which caused numerous h eadaches for the UK’s Office of Telecommunications watchdog: the regulator decided in 1984 that British Telecommunications Plc should not be allowed to transmit broadcast entertainment over its network in order to protect the then fledgling cable television industry. Suddenly, however, it was presented with a technology that was not broadcast – yet which would compete directly with the cable companies. The regulator eventually decided that British Telecom could proceed with trials of the technology. The questions posed by video-on-demand are not as complex as those presented by the latest telecommunications innovation, software that enables users to conduct full duplex phone conversations over the Internet.
As with video-on-demand, the problems stem from the fact that voice over the Internet does not fit neatly into existing regulatory definitions: it cannot even be defined as a telecommunications service, since all that the companies are providing is a software package, while the service element comes from an Internet access provider. The regulatory dilemma – and the problems caused by the technology’s newness – is summed up by Oftel which said It will take a while to see how – or if – these particular services impinge on current regulations. Its position is made more difficult since it is hard to see how voice-over-the-Internet could be regulated, even if the authorities wanted to. The only points of control are banning the sale of the software, which would be difficult and would call into question whether Internet videoconferencing and non-real-time Internet voice communications should also be regulated, or regulating Internet access providers. And as Daniel Nissan, vice-president of marketing for VocalTec Corp, which produces the Internet Phone system commented, How can you differentiate between [Internet] packets that send graphics and packets that send voice? The US Federal Communications Commission seems furthest down the line in adopting a formal position: it said One of the items suggested [by voice over the Internet] is a need for reassessing access reform, although it added that It’s premature to say that we know what the total impact will be. The Commission is in discussions with carriers but while they are sharing their views this could not be categorised as a complaint. Oftel said it has not been approached by UK carriers, while in Canada at least, intervention seems unlikely. Industry Canada, the government department dealing with telecommunications, said that since There’s no such thing as a service provider licence, any reform dealing with voice over the Internet is unlikely. France seems least prepared for the new technology. Direction Generale des Posts et Telecommunications, regulatory arm of the Ministere des Technologies de l’Information et de la Poste, said to our knowledge, the telephony products for the Internet do not correspond to the definition of voice telephony found in the European directive on telephone service.
That definition states By telephone service, we mean the commercial operation of the direct transfer of the voice in real-time between two users connected to terminal points of a telecommunication network. The French body said, That said, how would we proceed? If we saw an article in the press about the availability of such a product, we would probably… ask them to submit it for evaluation. Nevertheless, one company providing voice-over-the-Internet software is playing it safe. Quarterdeck Corp is positioning its WebPhone solely for use on the Internet’s chat forums and, speaking in London, the company’s president, Gaston Bastiaens, specifically said that customers would not use the system to save money on long distance
calls. Bob Kutnick , vice-president and chief technology officer, admitted that it is possible to use the system to bypass phone services, but we’re not saying that’s what to do with it. VocalTec, conversely, is taking a bullish attitude, and Nissan said If they want to regulate [voice over the Internet] they have to regulate the whole Internet. He admitted that Internet Phone is used by customers to avoid phone charges. The software developers are also justifying their right to exist in other ways, although at best these arguments seem flimsy. Quarterdeck’s Kutnick, for example, differentiated its product from regular telephone service, since it can only be used when both parties’ personal computers are switched on, and telecommunications companies and on-line carriers pride themselves on 24-hour service. Similarly, he added, since a split-second delay can occur when communicating, if it’s delayed by half a second, is it real-time? VocalTec’s Nissan also said that telecommunications carriers can reapbenefits of Internet phones in other ways, notably by becoming Internet access providers. This view is – surprisingly – echoed by the the US Commission, which said Some [telecommunications carriers] may see new business opportunities as a result. A regional Bell, for instance, could, in providing digital ISDN lines. While this position is just about tenable for local service providers, it is difficult to see how long-distance and international operators can benefit – although MCI Communications Corp is an exception, since it claims to deliver around 40% of US Internet traffic, and to receive around $1m in reevnue a month as a result. So could the Internet replace regular telecommunications networks for long-distance and international calls? At least in its current form, the answer seems to be no.
If a recent Computerworld report is to be believed, the Internet is already suffering from long-forecast overload problems. The paper says that an Internet brownout on September 5 slowed traffic across the US to a crawl. While the problem was traced to a single user who had broadcast a message intended for the entire Internet community, the paper commented that increased usage of the network by high-bandwidth applications, the ever-rising number of people on the Internet, and ever-faster access speeds, mean the incident was the first in what analysts warn could be a string of similar incidents. While delays are irritating for users trying to access World Wide Web sites, they would make conducting a telephone conversation unviable, especially since phone subscribers are used to crystal-clear, instantaneous communications. And if the analysts quoted in Computerworld are correct in predicting that the Internet’s popularity could lead to unworkable transmission delays, it might signify that widespread adoption of voice-over-the-Internet could, ironically, be the factor that will stifle its long-term success.