09 March 2001

Internet Telephony Meeting Draws Delegates from 70 Nations

By Wendy Lubetkin
Washington File European Correspondent

Geneva -- Making and receiving calls over the Internet is expected to be the next major area of rapid growth in information technologies. More than 1000 government and industry delegates from some 70 countries discussed Internet protocol (IP) telephony and its impact on traditional telephone services at a conference in Geneva March 7 to 9.

The International Telecommunication Union (ITU) organized the three-day "World Telecommunication Policy Forum on IP Telephony" to begin developing an international consensus on policy, regulatory and technical issues.

IP-telephony, also known as Voice over IP, still constitutes a small fraction of global voice traffic, close to one percent at best, according to Federal Communication Commission (FCC) estimates.

Nonetheless IP voice services have taken a firm hold in a variety of markets, according to the ITU. In a new report, ITU projects that IP telephony could account for up to 40 percent of all international traffic by 2004. It allows the integrated exchange of both voice and data in the same call, a feature likely to be in increasing demand.

IP telephony has the potential to spur economic growth and development, while offering consumers around the world new services at lower prices. Voice services over "packet-switched" Internet networks can be offered to consumers at much lower prices than service over conventional "circuit switched" networks, especially for international calls. But public telecom operators in some countries are fearful of its impact on revenues and existing infrastructures.

IP telephone calls are mainly carried by means other than traditional public-switched telephone networks, so they are outside the regulatory and financial structures that have grown up around traditional systems. In response, a number of countries allow only licensed telephone operators to legally provide IP telephony, and some countries have officially banned such services outright.

The U.S. is urging other countries to avoid slapping unnecessary regulation on a nascent technology that could bring immense benefits to the developed and developing world alike.

"The United States believes that to the greatest extent possible, market forces should continue to drive technological advances and innovation in IP telephony," said Susan Ness, Federal Communications Commissioner (FCC).

In a March 7 address to the ITU forum, Ness warned that imposing out-of-date regulations on a promising new market could inhibit the spread of benefits from the IP telephony revolution.

Not only does IP telephony deliver the immediate benefit of expanded access to voice services, it "can spur the transition of developing countries to the world of state-of-the-art communications," she said.

"IP networks promote infrastructure build-out, human resource development and innovation - all of which are important to bridging the Digital Divide."

Ness said the history of telecommunications deregulation in the U.S., and the decision to preserve the unregulated status of the Internet and of IP telephony, formed the "bedrock for a robust Internet economy."

The United States was represented at the World Telecommunications Policy Forum by a delegation of more than 40 representatives from government and industry. Private sector representatives from companies such as AT&T, IBM, Worldcom, Cisco and others joined Department of State and FCC representatives on the delegation.

U.S. officials said the ITU forum gave them a good understanding of the concerns some countries have about the impact of IP Telephony on revenues and existing telecommunications infrastructure.

"The ITU can play an important role in helping developing countries through this period of transition from the old traditional voice circuit switched networks to more sophisticated networks that deliver all kinds of services," said one U.S. official who spoke on background. "This transition may be destabilizing, upsetting, for certain operators. The ITU's role is to help countries with that."

Industry is anxious to work with ITU because of its broad international membership and stature as a United Nations organization, the official said. But companies have also been sending a subtle signal that if ITU does not demonstrate flexibility on this promising new technology then the relevance of the organization could be threatened.

Although much of the discussion at the ITU conference focused on concerns about lost revenues, another U.S. official said he saw a growing recognition that this new technology should be "cost effective to introduce and that it offers much, much more than just voice."

"This is not just about a voice service of the future," he said. "It's that whole whiz-bang multimedia Internet service that we've been told about. And some countries are realizing, 'Gee, we want to get ahead of the curve!'"