Wednesday, February 23, 2005

The bell-heads view on VoIP: it is all about tariffs 

ComReg(the Irish regulator) issued last week a Consultation Paper called "Draft Directions to Enable Opening of Access to VoIP Services based on 076 Number Ranges".

Major points:

Ireland will also join the club with a national VoIP Number range (076).

The rest is primarily about tariffs:

Since there was no common agreement on the tarifs, two "price points" for retail tariffs will be defined:

One price point will be known as “VoIP Local” and have per minute rates of 4.07c, 1.04c and 1.04c for daytime, evening and weekend respectively. and use the number range 076-6.

The second price point will be known as “VoIP Sub-Local” and have per minute rates of 1.61c, 0.80c and 0.80c for daytime, evening and weekend respectively and use the number range 076-3.

A "VoIP national price point" generally felt to high.

Explanatory Note: It should be understood that this consultation and the draft Directions included in it are primarily concerned with PSTN-originated calls to VoIP services that use 076 numbers, i.e. inbound calls to 076 numbers. For these to function effectively, there must be contractual agreement concerning the retail amount charged by the PSTN originator to the caller, the termination amount paid to the recipient VoIP service provider and the retention amount to cover the call originating operator and possible transit operators.

VoIP to VoIP calls are not affected by this document nor are calls to non-076
number ranges.

Executive Summary:

In its response to consultation document ComReg 04/103, ComReg decided to designate a new non-geographic number range, based on the access code 076, for VoIP-based services. ComReg also decided in the document that the nongeographic settlement model (also known as the Number Translation Code model) should be used in respect of industry payments for calls to 076 numbers, with the retail tariff ceiling of this 076 range of numbers to be set at standard national rate.

In ComReg 04/103, ComReg accepted the strong preference expressed in industry responses to be allowed to negotiate its own arrangements for opening access, though with the caveat that ComReg would intervene if this process was unduly prolonged.

As few signs of progress were noted in opening of 076 access, ComReg intervened in January by asking eircom to submit a proposal based on three separate price points (national, local, and sub-local (equivalent to the rate used for 1891 Internet access)). These rates were to be submitted by Thursday 27th January, in time for an industry-wide consultative meeting called by ComReg. eircom submitted its proposal on Friday 28th January, based on a single price point (sub-local or 1891).

On the 2nd of February 2005, a consultative meeting of members of the VoIP industry was held at ComReg’s offices, following a widespread email invitation to all known interested parties. Of the 17 separate organisations that attended this meeting, both new and traditional voice service providers were represented. At this meeting ComReg presented its proposals for a choice of three initial price points.

The meeting consensus was that a single retail price point for 076 calls was preferred as an initial starting point but no consensus could be reached on what that price point should be, with some attendees preferring local call rate and others preferring a sublocal rate (i.e. equivalent to eircom’s 1891 rate). A national rate was generally felt to be too high.

The meeting concluded on the basis that ComReg would now consider the outcome including how to handle the disparity of views on preferred price positions. Following detailed internal discussions, ComReg has concluded that despite the meeting’s preference for a single price point, it would be impossible to meet the needs of both groupings i.e. those preferring local and those preferring sub-local retail rates. Accordingly, ComReg concludes that offerings should be available for both of these values (based on 076-X and 076-Y1) and in order for this to be
implemented as quickly as possible it is necessary to direct those affected to undertake the necessary work. The outcome will:
• Offer enhanced choice to Service Providers (and through them to the consumer);
• Meet ComReg’s stipulation in ComReg 04/103 that prices must not exceed national rate while also meeting industry’s wish for local rate or less;
• Facilitate efficient billing of disparate rates (i.e. using separate 076 number ranges);
• Meet as closely as possible the wishes of industry to reduce the number of price points.

Having arrived at these conclusions on the framework, it is next essential to quickly move to the actual operational opening of services, based on the 076 numbers. From 1 X and Y are any suitable digits; ComReg has proposed 3 and 6, respectively. experience since October 2004, it is unlikely that timely progress will be made without Direction by ComReg. Accordingly, this consultation proposes a set of draft Directions aimed at moving the process forward and all interested parties are invited to submit their views on these.

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