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Internet telephony and related Issues

Written by: Dhruv Madan
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The focus of the article is to examine the impact of the proposed Communications Convergence Bill on e-commerce. The ambit of the paper is restricted to internet telephony as the novel and cheap method of communication and of conducting business over the net. Internet telephony is of particular interest to organizations engaged in business process outsourcing as it significantly cuts the costs of communication. In the course of this paper the author would also analyse the guidelines and license issued by the DoT for providing Internet telephony services and discusses some of the emerging legal issues that
are spawned by this liberalization.

After several months of debate, on April 1, 2002, the Government of India finally permitted Internet Service Providers (ISPs) to offer Internet telephony services. Earlier, the legal and regulatory framework in India did not permit ISPs to offer Internet telephony. Under terms of the ISP licence, telephony on the Internet was banned and if any ISP offered these services, the ISP licence could have been terminated. After the opening up of this sector, the Department of Telecommunications (DoT) has granted approvals and licences to several telecommunication companies to commence these services. Though the
quality of Internet telephony services may not be as high as the normal international long distance services, their low cost will definitely attract more consumers. Further, with the rapid advancement in technology, it is only a matter of time that the gap between the two forms of voice communication is bridged.

What is Internet Telephony?

Internet Telephony: The Concept
(a) Meaning
Internet Telephony is a form of Internet Protocol (IP) Telephony. IP Telephony is used as a generic term for the many different ways of transmitting voice, fax and related services over packet-switched IP-based networks. The basic steps involved in originating an Internet telephone call are conversion of the analog voice signal to digital format (binary data) and compression/translation of the data into IP packets for transmission over the Internet; the process is reversed at
the receiving end. This process is called modulation-demodulation, giving the term modem. The communication usually takes place real time.Thus, the main difference between Internet Telephony and normal telephony is that whereas in normal telephony, circuit switching technology is used, Internet Telephony is based on packet switching technology.

(b) Difference between Internet Telephony and Voice-over-IP
IP Telephony can be subdivided into two major groups: Internet Telephony and Voice-over-IP (VoIP), the difference being the type of the underlying IP network i.e. the medium of transmission. Internet telephony primarily involves the usage of the Internet rather than the Public Switched Telephone Network (PSTN) to transmit 'real-time' audio from one personal computer (PC) to another (or in some instances to another telephone itself). However, in the case of VoIP, it is generally an IP technology suite (i. e. a private network) that is used rather than the public Internet.
Another important distinction between Internet Telephony and VoIP is the quality of the transmission. Since VoIP is usually a closed / private network, the technical hurdles are less daunting, which results in greater reliability in the transmission of voice packets than in Internet Telephony where the voice packets are transmitted on the Internet. Therefore, the chances of having a live or real-time conversation are better in VoIP than in Internet Telephony.

(c) Methods of Internet Telephony
Following are the popular methods of Internet Telephony as recognised by the International Telecommunications Union (ITU)
(i) PC to PC
Under this method, calls are transferred from one PC to another PC. No gateway with a PSTN is required, because calls are not switched by a PSTN. Rather, the principal medium of transmission is always the Internet.

(ii) PC to Phone / Fax
Under the PC to Phone / Fax method, the conversion of speech into packets takes place on the originating users PC. The process is reversed at an Internet Telephone Service Providers (ITSP) gateway server, which then dials the called partys telephone number and, when a connection is made, starts sending the callers speech and transmitting the called partys speech in the other direction. The PC to Phone / Fax category includes PC to PhoneVoice and PC to Call Centre services.

(iii) Phone to Phone
Phone to Phone method of Internet Telephony is closely associated with the traditional telephone experience. ITSPs are required to install their own gateways and enter into termination agreements all over the world, both with independent ISPs as well as established PTOs. In Phone to Phone Internet Telephony, the customer, using an ordinary telephone, dials an access code and then the telephone number; the access code then routes the call to a special computer gateway (the IP network). Local computer gateways for companies offering this type of service must be optimally placed in strategic geographic areas. For instance, if a customer using phone-to-phone Internet Telephony plans to call London (England) from Mumbai (India), then local gateways must be located in both London and Mumbai. The gateways convert audio into data for transmission across the IP network and then convert incoming data back into analog signals.

3. Licensing Internet Telephony Services in India

Pursuant to the New Telecom Policy, 1999, the DoT has announced guidelines permitting ISPs to process and carry voice signals (Guidelines). ISPs can only offer these services within the service areas for which they have a licence. Pursuant to the Guidelines, the DoT has revised the Licence Agreement for ISPs to include the provision of Internet telephony services (Revised Licence). The Revised Licence has been issued under the authority granted to the DoT under the Indian Telegraph Act, 1855, the Indian Wireless Telegraphy Act, 1933 and the TRAI Act, 1997.

All ISPs desirous of providing Internet telephony services also have to make an application to the DoT for signing an Amendment to their existing ISP licence. The old ISP licence agreement, which banned Internet telephony services read as follows:
1.12.3 Telephony on the Internet: Telephony on the Internet is not permitted. The licence will be liable for termination for any violation of this clause of the Licence Agreement. The licensee shall also take measures on his own and as and when directed by the Government at his own cost to bar carriage of Telephone traffic over Internet.

However, the Revised Licence does not contain the above clause, and allows ISPs to provide Internet access / content services including, Internet telephony services.

(a) Provision of Internet Telephony Services
As per the Revised Licence, Internet Telephony is an application service, which customersof ISPs can avail of from their PCs or other IP based Customer Premises Equipment (CPE).The Revised Licence restricts the manner in which ISPs can provide Internet Telephony services to onlythree types:
(i) From a PC in India to a PC inside and outside India
(ii) From a PC in India to a telephone outside India
(iii) From an IP-based H.323/SIP Terminal in India to similar terminals in India and abroad provided they employ the IP addressing scheme of the Internet Assigned Numbers Authority ISPs are not allowed to provide any Internet telephony services which fall outside the purview of the above three modes.
It can be seen that the scope of Internet telephony in the second mode to only telephones outside India. So if an Internet telephony service provider allows a PC user in India to call a telephone in India, the same would violate the Revised Licence and the ISP could be penalized for the same. It seems that the DoT has stipulated this condition so that national long distance operators do not lose out on their customer and revenue bases.

(b) Services that fall outside the purview of Internet Telephony
The Revised Licence also states that ISPs are prohibited from offering the following types of services as they fall outside the purview of Internet telephony:
(i) Voice communication from anywhere to anywhere by means of dialing a telephone number (PSTN/ISDN/PLMN) as defined in National Numbering Plan;
(ii) Originating the voice communication service from a telephone in India;
(iii) Terminating the voice communication to telephone within India;
(iv) Establishing connection to any public switched network in India;
(v) Dial up lines with outward dialing facility from nodes; and
(vi) Interconnectivity between ISPs who are permitted to offer Internet telephony services and the ISPs who are not permitted to offer Internet telephony services.

(c) Quality of Service (QOS) Terms
The DoT has not provided any parameters for the QOS14 for Internet telephony in the Revised Licence. The Guidelines and Revised Licence state that the Telecom Regulatory Authority of India (TRAI) shall prescribe the QOS from time to time.

The role of the TRAI is to create an environment conducive to the growth of telecom sector, and safeguard a customer's interest and ensure that he gets the QoS that he has contracted for. As regards QOS, the TRAI has the substantive role in laying down standards, assessment of QOS, and action for improvements. It has, therefore, the following main functions
to perform in this regard:
(i) Setting Quality of Service Standards
(ii) Monitoring
(iii) Enforcement
As of now, the TRAI has not framed any QOS for Internet telephony. Once the TRAI imposes certain basic QOS parameters, ISPs will be obligated to meet the minimum QOS criteria while providing Internet telephony services to their customers.
In order that the customers can effectively utilize Internet telephony services, the TRAI should formulate the QOS terms as soon as possible.

(d) Tariff / Fees
The Guidelines state that the TRAI has not levied any tariffs on ISPs for the Internet telephony services that will be provided over the public Internet. However, there is a saving provision that states that the TRAI may levy a tariff at any time and it shall be binding on the ISP to pay such tariff. This provision has also been incorporated in the Revised Licence. Moreover, the ISPs do not have to pay any licence fee and USO levies for Internet telephony services. Nevertheless, the DoT reserves the right to impose a licence fee on the ISP at any time during the licence period.

Hitherto also, ISPs do not have to pay any licence fee for providing Internet services. The DoT has continued to impose this licence fee-free regime for ISPs in order to promote the proliferation of Internet usage and now, Internet telephony services. However, since Internet telephony services are in direct competition with basic telephony services, in the event there is unfair competition, the DoT could impose a licence fee to create a level-playing field.

(e) Security Monitoring
As per the Guidelines and Revised Licence, ISPs who provide Internet telephony services through their own Internet gateways would have to provide suitable monitoring facilities for the security agencies at their own cost. The ISPs also have to provide periodic reports to the DoT regarding the flow of Internet telephony traffic through its network.

(f) Inter-connection
The Revised Licence permits only ISPs who have obtained the requisite licence to offer Internet telephony services. It prohibits any interconnection between an ISP that is allowed to offer Internet telephony and an ISP that is not allowed to offer Internet telephony.

4. Emerging Legal Issues

(a) Ambiguity in Definition

While the Guidelines and Revised Licence discuss what services would amount to Internet Telephony for the Indian context, they have failed to define the term Internet telephony per se. The meaning given to the Internet telephony is a restrictive in nature, as it states what services would fall within and outside the purview of Internet telephony for the Indian ISPs. In fact, many of the services, which are prohibited under the Revised licence amount to Internet telephony in the international context. For example, originating or terminating a voice communication service from / to a telephone in India would amount to Internet telephony in the international context, if the public Internet is used as the medium of communication. The Guidelines and Licence do not lay down any clear parameters that need to be satisfied by any telecommunication service to be classified as Internet telephony. While this problem exists world over, and even at the ITU level, this ambiguity could lead to problems in the future when new forms of technology and modes of communication emerge.

At the earliest, as TRAI has suggested, there is a need to distinguish between Internet Telephony and VOIP. The Governments of different countries need to come together and resolve this issue at the earliest.

(b) Meaning of PC and Telephone

The Revised Licence states that PC to PC Internet telephony is permitted in India. However, the Revised Licence does not clearly define a PC. Under the Information Technology Act, 2000 (ITA), a computer is defined as follows:
Computer means any electronic magnetic, optical or other high-speed data processing device or system which performs logical, arithmetic or memory functions by manipulations of electronic, magnetic or optical impulses, and includes all input, output, processing, storage, computer software, or communication facilities which are connected or related to the computer in a computer system or computer network.

Thus the definition of a computer is extremely wide and is not merely restricted to a normal computer, which is used at home or in offices.

Moreover, while the Revised Licence states that the telephone call cannot be originated from or terminated on a telephone in India, it does not define the word telephone. Even the telecommunications laws in India have no clear definition of the term telephone.With the emergence of new technologies and products, the meaning of PC and telephone could be extended to also include personal digital assistants (PDA) (eg.palm pilots) and even mobile phones with computing power (like the Nokia 9110). Moreover, there is also a convergence between PDAs and telephones (like the TREO). If a call is made from such devices, it is uncertain whether the same would be legally permissible.

Another emerging legal issue is concerning IP phones. There exists some ambiguity as to whether IP phones can be freely used to provide Internet telephony services. While it is technically possible to originate calls from IP-based networks, it is uncommon to terminate calls from other networks onto an IP-based network (except in the case of IP PABX system). Since a call from to a number on the national numbering plan is prohibited, a call from an E.164 universal numbering plan may also not be allowed. However, the International Telecommunications Union is studying an option of assigning an E.164 numbering resource to an IP phone using the ENUM protocol. The ENUM protocol converts the E.164 number to an IP address, and a telephone user can call an IP phone by dialing the E.164 number. The perturbing question is whether this would be allowed under Indian laws as they stand right now.

Therefore, it would be necessary to determine and clarify the legitimacy of the type of instruments and the system being used while making an Internet telephone call in order to stay out of any legal problems.

(c) Quality of Services

One of the major difficulties in Internet telephony is in achieving a similar standard of QOS for Internet telephony services as for normal telephony services. The difficulty could arise due nature of the IP network. The IP network uses packet mode of data transmission that can degrade the quality of the voice communication as the packets could get lost in transmission on the public Internet, there could be a delay in transmission, there could be a variation in the packet arrival or there could be an echo effect due to the delay between the transmission of a signal and its receipt.

Therefore, while determining what amounts to real time in the context of Internet telephony, it is necessary that the TRAI keeps in mind the recommendations of the ITU on Real Time . The ITU in its recommendation no. G.114 (2.96 revision) recommended certain limits for one-way transmission time for conditions with echo adequately controlled . According to Recommendation G.131 (Stability and Echo):
0 to 150 ms: Acceptable for most user applications .150 to 400 ms: Acceptable provided that Administrations are aware of the transmission time impact on the transmission quality of user applications .above 400 ms: Unacceptable for general network planning purposes; however, it is recognized that in some exceptional cases this limit will be exceeded.

Another practical difficulty that ISPs are facing is the lack of adequate co-operation from basic telephone operators. Unless the basic operators give better QOS in their agreements with ISPs, ISPs will not be able to provide better QOS to their subscribers. While last year, the TRAI released its recommendations for QOS for ISPs offering Internet Services, ISPs are unable to meet these QOS terms because of the lack of co-operation from basic operators. Therefore, the TRAI must keep in mind the existing competition and economic scenario while framing QOS for Internet telephony services.

(d) Liability of the ISP

The ITA contains provisions dealing with the liability of Network Service Providers (NSPs). A NSP has been defined under the Act to mean "an intermediary". An "intermediary", with respect to any particular electronic message, means any person who on behalf of another person, receives, stores or transmits that message or provides any service with respect to that message. Thus an ISP would be an NSP as it receives, stores or transmits electronic messages over the Internet on behalf of its subscribers. The ITA stipulates that every NSP is given general immunity as regards any offence under or contravention of the Act or the provisions made thereunder, if such NSP proves that:
(i) such offence or contravention was committed without its knowledge or
(ii) that it had exercised all due diligence to prevent the commission of such offence or contravention.
Under the ITA, publication or transmission or causing publication of any obscene information is an offence.

Therefore, if while using Internet telephony services, if the subscribers transmit any obscene information, the ISP could be held liable for such transmission. However, if the ISP can prove that it was not aware of such contravention or if it had taken reasonable steps to prevent such contravention, it may be immune from any penalty or liability. Therefore, ISPs must be careful to include appropriate terms in their subscriber agreements to preclude such liability.

(e) Validity of Messenger Services

Off late, there has been some debate regarding voice chat facility which instant messenger services have been offering. There are various issues that arise in this context which need to be addressed in order to determine whether such a voice chat facility is legal.

The first issue that arises is whether such services amount to Internet telephony. Under normal circumstances, they would amount to Internet telephony as the instant messengers use the public Internet as a means of transmitting voice between two or more users.

The second and more important issue is whether these messenger services are permitted to offer these services in India. As discussed above, in order to offer Internet telephony services, the service provider requires a license. Currently only ISPs and basic service operators (i.e.BSOs, NLDOs and ILDOs) are allowed to provide such services as per the provisions of their licence. Moreover, no interconnection is allowed between an ISP who has the Internet telephony licence and an ISP that does not. Therefore, in order to offer the voice chat facility using the public Internet, the messenger would have to obtain an ISP licence. Otherwise, the messenger may have to enter into an appropriate arrangement with the ISP wherein the voice chat facility is offered to the messenger users. However, the validity of such an arrangement is also unclear under the law (specially as ISPs are not allowed to assign or sublicense their services). The issue is further complicated if the ISP with whom the messenger has an arrangement does not possess the Revised ISP licence. It is essential that ISPs and the messenger services settle this problem at the earliest.

(f) Blocking of Internet telephony websites

The ISP licence does not require that an ISP must provide Internet telephony services only to its Internet subscribers, nor does it mandate that Internet telephony and Internet services have to be provided together. However, news reports indicate that after April 1, 2002, some ISPs have started blocking access to websites of other rival ITSPs (including foreign ITSPs) . If so, do they have the authority to block the sites? Further, many ITSPs have tied up with international ITSPs to leverage their customer base. The viability of this option remains to be seen, as foreign ITSPs can set up 100% subsidiaries in India without the help of Indian ISPs. Infact, it may be economically advantageous for them to do so as they would already have their servers and networks established in foreign countries.

The Communications Convergence Bill, 2001 (Convergence Bill) aims at promoting, facilitating and developing the carriage and content of communications including broadcasting, telecommunication and multimedia in an orderly manner. It recognizes the coming together of voice, video and data, aims to set up a single super-regulator for the telecom, Internet and broadcasting sectors, to be called the Communications Commission of India (CCI). The Convergence Bill will replace the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, the Telegraph Wires (Unlawful Possession) Act, 1950, the Cable Television Networks (Regulation) Act, 1995 and the TRAI Act, 1997.

In the present scenario different services like basic telecom, cellular, Internet and satellite television have different licenses and are regulated by different agencies. The present situation does not allow bundling of services, like your cable operator cannot offer you telecommunication services, your ISP cannot carry voice etc. The licensing regime that exists as of today service operator has to apply for licenses separately and are permitted based on the regulations governing service. This would change with the adoption of the Communication Convergence Bill, 2000.Recommendations of the Bill: The Convergence Bill proposes to have a single authority Communications Commission of India responsible for issuance of licenses and regulating the communications sector including the infrastructure and the content delivered through the infrastructure. The bill also proposes setting up Communications Appellate Tribunal. Any person aggrieved by any decision or order or penalty of the commission could appeal to the tribunal for speedy decision on the appeal. The commission and the appellate tribunal have been given power equivalent of a civil court. Responsibilities of the Commission.The commission would be responsible for providing licenses under four categories namely:
1. Network Infrastructure facilities (Infrastructure Service Provider)
2. Network Services (Network Service Providers)
3. Application Services (Application Service Providers)
4. Content application services (Content ASP)

The classification is technology neutral and service sector neutral. The segmentation of the market into the four different segments would be based on the services provided . Each layer is dependent on one or more of the earlier layers for the provision of services. The Act, it is hoped, shall usher in the era of convergent handling of communication medium in place, ie the Communication Commission of India shall be responsible of handling basic telephony, cellular service, cable, satellite channel and Internet service operators. The bill shall segment the market on the basis of the layers as illustrated above. This
would enable operators to obtain licenses for the specific layer rather than for the service. For eg an operator could take license for offering only infrastructure facility with the services being offered by some other operator. Hughes, the private basic service operator for Maharashtra would be able to offer services like telephony, Internet (it offers these even today), interactive content or any other service over the cable coming into your home.

The Convergent View "Convergence" refers to the fact that different kinds of communication services, whether in the form of voice, text or video, can be provided using the same basic infrastructural facility, and similarly, different kinds of infrastructural facilities can be utilised to provide the same service. For instance, share prices can be accessed via the Internet on a PC or through the wireless medium on a mobile phone. Perhaps the most significant aspect of the Bill lies in the name itself. It recognises the "blurring of borders between telecommunications, computing and media" . Further, it also acknowledges that "The continuous development of new technologies results in an inability to predict the future evolution of convergence viz. the development of new services like web-casting, Internet Telephony etc. resulting in the need for regulations which does (sic) not aim to predict the future, but aspires to be flexible enough to accommodate and propagate any permutation and combination of technologies and services." The Bill, smartly enough, has steered clear of burdening itself with technological details.

The three key aspects in any communication are : The infrastructure facilities used, such as earth stations, satellites, cables, etc. The kind of service provided such as telephony, broadcast of cricket matches, etc. The technology used to provide the service The Convergence Bill does not concern itself with the third aspect above. It only seeks to regulate the communication sector based on the nature of infrastructural facility and the nature of service provided. The basic objectives Irrespective of the infrastructure or technology used, long distance communication is based on electromagnetic waves, of varying frequency.

In order to ensure hassle-free communication, a proper allocation of frequency bands to various service providers is crucial . For this purpose, the Bill proposes the setting up of a Spectrum Management Committee, which will earmark distinctfrequency bands for use in strategic and commercial purposes.
The Bill also envisages the setting up of the Communications Commission of India, which will be the regulatory agency on the communications sector. The Commission will be responsible for assigning the various frequencies (earmarked by the Spectrum Management Committee for commercial purposes) among the various users, and giving out licences to service providers.

The objectives of the Commission, as listed in the draft Bill, are as follows: "The Communications Commission of India, while exercising its functions shall be guided by the following principles:
(i) that the communication sector is developed in a competitive environment and that market dominance in a converged environment is suitably regulated;
(ii) that communication services are made available at affordable cost to all uncovered areas including the rural, remote, hilly and tribal areas;
(iii) that there is increasing access to information for greater empowerment of citizens and towards economic development;
(iv) that quality, plurality, diversity and choice of services are promoted;
(v) that a modern and effective communication infrastructure is established taking into account the convergence of information
technology, media, telecom and consumer electronics;
(vi) that defence and security interests of the country are fully protected;
(vii) that introduction of new technologies, investment in services and infrastructure, and maximization of communications facilities and services (including telephone density) are encouraged;
(viii) that equitable, non-discriminatory interconnection across various networks are promoted;
(ix) that licensing criteria are transparent and made known to the public;
(x) that an open licensing policy allowing any number of new entrants (except in specific cases constrained by limited resources such as the spectrum)is promoted; and
(xi) that the principle of a level playing field for all operators serving consumer interest, including existing operators on the date of commencement of the Act, is promoted."

With the bill adopted, service operators would be able to offer multiple services over the same network. This shall reduce the cost and other overheads for the operator. The bill defines the physical network, network services and the content delivered over them independently thus enabling the use of the same network to carry multitude of services. This shall help solve the anomaly of having a separate license and network for say offering Internet, telephony and cable services . The bill shall increase the value of companies in the communications business specially the businesses owning the last mile access like MTNL, Hughes, BSNL etc. The cable operator in your colony would have the best of the world with his network. He could now also start bundling telephone services, Internet and other value added services than just the plain old un-interactive cable television. Licensing Regime under the Bill.

The Convergence Bill also provides for a new licensing regime, with a limited number of five licenses, which include network infrastructure facilities, networking services, network application services, content application services and value-added network application services. While granting licences, the CCI may grant them either singly or jointly, depending upon the nature of services to be offered. Therefore, while providing Internet telephony services, the service provider would have to obtain the network application services licence and probably the value-added network application services licence under the Convergence Bill.

Classification of Internet Telephony Under The WTO

The General Agreement of Trade in Services (GATS) under the World Trade Organisation (WTO) envisages the progressive liberalisation of trade in telecommunications services. Though, India has made no specific commitments for Internet telephony, it has made certain commitments for other telecommunication services. Going forward, it would be important for the Indian Government to understand how Internet telephony services could be classified under the GATS framework while making any commitments.

Under GATS, telephony falls within the purview of telecommunications services as per the Central Product Classification System (CPC) . Telecommunications services are further classified as basic telecommunications and value-added telecommunications. It would be useful to see what commitments India has made in this sector and analyse how Internet telephony can be classified for the purposes of GATS.

(a) Basic Telecommunications Services vis--vis Internet Telephony Basic telecommunications services are further classified as:
(i) Voice telephone;
(ii) Packet- switched data transmission;
(iii) Circuit- switched data transmission;
(iv) Telex;
(v) Telegraph;
(vi) Facsimile;
(vii) Private leased circuit;
(viii) Other - including mobile communications, and various others, (e.g.satellite services, paging, trunked radio) depending upon the country.
For the purpose of Internet telephony services, voice telephone, packet-switched data transmission and other services would be relevant. Of these three, India has made commitments with respect to voice telephone and other services.

(i) Voice Telephone
Voice Telephony Services have not been defined or explained under the GATS.

View of the European Union:
It would be helpful to look at the definition of voice telephony according to Article 1 of the Directive of European Union, which
defines Voice Telephony as the commercial provision for the public of the direct transport and switching of speech in real time between Public Switched Network termination points, enabling any user to communicate with another termination point. Further as per the said Directive, Internet telephony is defined as Voice Telephony if it meets the following criteria:
the communications are subject of a commercial offer; the service is provided for the public; the service is provided to and from public switched network termination points on fixed telephony network; and,it involves direct transport of speech in real-time.

As per this definition, it can be understood that the first two forms of Internet Telephony (i.e. PC to PC and PC to Phone) would not be characterised as Voice Telephony under this Directive, simply because the service would not be provided solely "to and from PSTN points".

View of the United States: However, the US meaning of voice telephony is broader. As per Federal Communications Commission (FCC) of USA, IP telephony services enable real-time voice transmission using Internet Protocols.

Voice Telephony as Public Telephone Services: Under the CPC, voice telephony services are classified as Public Telephone Services. Public Telephone Services are further classified as Public local telephone services Public long distance telephone services.

Mobile telephone services

With respect to voice telephone service, Indias commitments are limited to local/long distance, for public use over a public telecommunication transport network and wire based (i.e. for fixed network of subscribers) services. The Internet is a public network of computers and can be used for transport of telecommunications, such as voice and data. Thus, it could be interpreted as a public telecommunication transport network in case of Internet telephony.
As mentioned earlier, the main difference between Internet telephony and normal telephony is that whereas in normal telephony, circuit switching is used, Internet Telephony is based on packet switching technology . In packet switching, electronic transmissions are chopped into packets of varying numbers of bytes. Each packet is given a header or address label, and sent from one network node towards another . The packets are (theoretically) bounced along from one router to another, armed at each hop with only enough information to get them safely to another router, where the process is repeated. By contrast, on circuit-switched networks operating under a protocol such as Signalling System 7 (SS7) a call is routed through a hierarchy of local, inter-urban and international switches to establish a circuit between caller and called party.

Though Internet Telephony could amount to voice telephony, it is suggested that it should fall under a separate new category as it involves a different form of technology from traditional voice telephone services. This proposition can be supported by the fact that a separate classification was resorted to with respect to mobile telephone services based upon the technological difference between mobile telephony and normal telephony.

Further, India has not made any specific commitments under voice telephone for Mode 1(cross-border supply) and Mode 2 (consumption abroad) of supply under the GATS. Therefore, even if Internet telephony is treated as voice telephony, by opening up Internet telephony, India is already a step ahead since it has not made any specific commitments in this respect.

(ii) Other Services
This is a broad group that includes various services such as mobile communications, satellite services and radio paging services. As discussed above, due to the technological differences, India could argue that Internet Telephony should fall under this category. As of now, India has only committed that foreign service providers can set up operations to provide these services provided they obtain the licence from the DoT. However, there are no commitments with respect to these services under Mode 1 and 2.

Value-added Telecommunications Services

Value-added Telecommunications Services are classified as:
(i) Electronic mail,
(ii) Voice mail,
iii) On- line information and data base retrieval,
(iv) Electronic data interchange,
(v) Enhanced/ value- added facsimile services, including store and forward, store and retrieve,
(vi) Code and protocol conversion,
(vii) On- line information and/ or data processing (inc. transaction processing).India has made some commitments with respect to services (i), (ii), (iii) and (v).

As per the CPC, these services have been qualified as Data and message transmission services. Data and Message Transmission Services are further sub-divided into:
(i) Data Network Services (75231): Network services necessary to transmit data between equipment using the same or different protocols. This service can be provided via a public or dedicated data network (i.e.via a network dedicated to the customer's use);

(ii) Electronic Message and Information Services (75232): Network and related services (hardware and software) necessary to send and receive electronic messages (telegraph and telex/TWX services) and/or to access and manipulate information in databases (so-called value-added network services).
However, Internet telephony may not fall under these categories, as it is not a network service . Further, India has no commitments with respect to Electronic data interchange, Code and protocol conversion and On- line information and/ or data processing (inc. transaction processing). From the above analysis, it can be concluded that Internet Telephony services could fall within the meaning of Voice Telephony services. However, due to the technological difference between Internet telephony and traditional voice telephony, it would be suitable to formulate a separate category for classification of Internet telephony. Depending upon the reciprocal commitments India receives from other countries, it could use these as a negotiating tool at the WTO.

With increased competition in the telecommunications sector, relatively high tariffs and low tele-density, India is an attractive market for Internet telephony and VoIP. In fact, experts have indicated that India will be the fourth largest market for Internet telephony in the Asia Pacific region, after China, Japan and South Korea. After the opening up of this sector, several foreign companies have also joined the race to offer Internet telephony services in India. For example, US-based Net2Phone and India based CalTiger have joined hands to deliver VoIP services to the United States at as low as Rs 3 per minute. Further,
World Phone Internet Services Pvt. Limited, a joint venture between US-based WPI group and Delhi-based IT-enabled service company Speed Holdings has already ventured into Internet telephony in the country. Several market players have also begun plans to commence and offer video-conferencing facilities.

While the growth of Internet telephony will certainly increase the competition with basic service operators, on the whole the consumer will stand to gain. However, regulations that artificially restrict the usage and growth of Internet telephony will only make the viability of this service more complex and ambiguous. The DoT needs to try to resolve all forms of ambiguity in the licence terms to avoid future misunderstandings. At the same time, service providers must ensure that their Internet telephony services fall within the parameters of the existing regulatory framework. This will assist in minimizing legal liability.

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