Nortel Response to Ofcom Regulation of VoIP Services Consultation Introductory Summary Nortel welcomes this opportunity to respond to the Ofcom consultation ‘Regulation of VoIP Services’. In responding to the consultation Nortel draws on over a century of experience and innovation in delivering communication networking solutions. From Alexander Graham Bell's original telephone patents to the anywhere, anytime connections of today, Nortel has been at the forefront of innovation in the ever evolving history of communications. Since its 1895 founding as Northern Electric and Manufacturing, supplying telecommunications equipment for Canada's fledgling telephone system, Nortel has grown to become a global leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel today delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP (VoIP), multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. The Nortel position on regulation of VoIP services is clear and based on the key differential of whether VoIP services are subject to the Publicly Available Telephone Service (PATS) or whether they are defined as a non-PATS Public Electronic Communications Services (PECS). Nortel welcomes regulatory certainty. It is unfortunate that Ofcom have had to discontinue their interim forbearance policy which allowed PECS VoIP services to deliver PATS like services. As a result of the change of policy, VoIP services that meet the four gating criteria of PATS1 will also automatically be considered as PATS and will be required to meet all the regulatory criteria for PATS. While this does ensure clear differentiation between PATS and PECS services, which will assist consumers in making informed choices about the available services, it is likely to establish investment hurdles that will inhibit the evolution of PECS services to PATS 1 PATS gating criteria are ‘a service available to the public’; ‘for originating and receiving national and international calls and’; ‘access to emergency service’; and ‘through a number or numbers in a national or international telephone numbering plan’. Nortel Confidential Page 1 of 10 services and will consequently inhibit the adoption of emerging technologies by operators with the strategic intent of delivering a PATS service. Nortel believes it is in the interests of innovation and of the consumer that PECS VoIP services should be able to flourish in a transparent, stable, technology neutral regime with minimal regulation, including having the flexibility to offer PATS like services, but with consumer empowerment as detailed in this consultation. ¾ Developing VoIP Policy Question 1: Given recent developments, do you agree that Ofcom’s focus should be on the following three objectives in developing our policy for VoIP services, namely (in so far as is possible) (i) enabling innovation in a technological neutral way, (ii) ensuring consumers are well informed, and (iii) ensuring maximum availability of 999 services? Nortel agrees with the three objectives identified by Ofcom and stresses the need for these aims not to be country specific but to be shared with other National Regulatory Authorities (NRAs). Nortel believes that technology and service neutral regulation drives innovation. Nortel supports methodologies for consumers to be well informed about communications services and specifically a co-regulatory approach for PECS VoIP services which would help ensure that consumers are fully aware of whether their VoIP services includes access to emergency numbers on a best efforts basis. Nortel believes that many consumers value access to emergency services and that the type of available services will grow according to consumer demand. ¾ Service Levels Question 2: Do respondents agree with this approach for the interaction between network providers and PATS providers? Nortel agrees that it may not be practical for PATS VoIP providers to negotiate Service Level Agreements (SLA) with the full range of network providers that are used to deliver their service but that a VoIP provider should endeavour to put in place Service Level Agreements (SLA) if at all possible. In addition, documentation available to end customers by VoIP providers could also include information explaining service limitation to customers as a result of lack of control of the underlying network. Nortel Confidential Page 2 of 10 ¾ General Conditions Question 3: Do you agree that the limitation of GC 3 obligation to providers of service at a ‘fixed location’ is not sustainable in the long term? What views do you have on how this may be addressed? Question 4: In light of the other measures proposed in this document, are there particular issues in relation to VOIP services that should be addressed in this review? Question 5: Are there particular issues in relation to VoIP services that should be addressed in this review? Question 29: Do you have any other comments on the proposed approach to investigating the application of the GCs applicable to providers of PATS in the context of VoIP? Question 30: Do you have any comments on Ofcom’s views on the meaning of abovementioned terms and legal concepts? The nature of innovation in VoIP services is that a restricted fixed service may become a communication service of the past. Regulatory frameworks that are limited to one type of service will quickly become obsolete. Next Generation Networks (NGNs) increasingly being rolled out enable services to be provided from anywhere in the network and anywhere in the world. Mobility is a key feature offered by VoIP - IP telephones providing PECS will be easily portable offering the consumer complete mobility and flexibility. Such telephones may not look like traditional telephones but no more than soft phones on desktops, laptops and PDAs. Nortel welcomes Ofcom’s decision to commence a broader review of the effectiveness of General Conditions (GCs) focusing on network integrity, location, disaster/emergency planning, numbering and number portability. Incredibly fast moving innovation in communications technology and usage means that regulation could be left behind and therefore Nortel supports Ofcom’s work in ensuring that regulatory rules do not hold back new services whilst at the same time ensuring that consumers are empowered. ¾ Number Portability Question 6: Do you have any comments on Ofcom’s proposed modification to the PATS definition in GC 18? Nortel Confidential Page 3 of 10 Nortel welcomes the decision to discontinue the interim policy with respect to number portability which will help to ensure effective competition develops between all types of PATS providers to the benefit and protection of consumers. ¾ Consumer Protection Question 7: Do you agree with the proposed application of the code? Question 8: Do you agree with the proposed approach for informing consumers that services may cease to function if the broadband connection fails or there is a power cut or failure? Question 9: Do you agree with the proposed approach for informing customers where access to emergency calls is not available? Question 10: Do you agree with the proposed approach for informing consumers that access to emergency calls may cease to function if the Data Network fails or there is a power cut/failure? Question 11: Should the code be extended to point of signature acknowledgement in respect of reliability of access to emergency calls? Question 12: Do you agree with the proposed approach to location information providers where the service does provide access to emergency calls? In particular, do you believe that subscribers should be required to register their main location prior to activation of the service? Question 13: Do you agree with the proposed approach to informing consumers where services do not provide emergency location information? Question 14: Do you agree with the proposed approach to informing customers where services do not provide number portability? Question 15: Do you agree with the proposed approach to informing consumers about the types of facilities that might not be available, but which they have come to expect from a telephone service? Question 16: Do you agree with Ofcom’s view that all aspects of the code of practice should be mandatory? Question 17: Do you consider that the overall programme of activities is appropriate? Question 18: In light of Ofcom’s Consumer Policy Review, are there other consumer education measures that Ofcom should consider? Question 19: Do you have comments on this proposed enforcement approach? Nortel Confidential Page 4 of 10 Question 20: Are their other areas of research activity that Ofcom should consider to ensure it understands market developments? Question 21: In relation to ensuring high availability of 999 access, are their other measures that Ofcom could consider? Nortel does not supply services directly to residential customers. However, Nortel does supply services to small businesses with its Enterprise range of products. As a result, Nortel has decided to respond to the consumer related questions (numbered 7-21) en bloc and as applicable. Nortel supports the co-regulatory approach outlined by Ofcom and the mandatory code developed by industry and Ofcom in partnership to ensure that consumers are fully informed of the service level of their chosen