Plan to study Internet telephony is dropped

Date: 07/01/1999

By Peter Chapman

THE European Commission has abandoned plans for a detailed study into the case for forcing new Internet telephone services to abide by the Union's tough telecoms competition rules.

Officials say the decision to delay the study reflects the fact that the market for the new services has not developed as quickly as expected.

"We originally said that we would review it in 1999. But our aim is now to link this with the ongoing review of ONP [open network provision]," said one, referring to the slate of EU rules designed to ensure the former monopoly operators open up their networks to competitors at a fair price.

Many traditional operators voiced concerns when Internet telephony first emerged, claiming that it might take away their markets by offering far cheaper calls and pointing out that firms providing services on the Web would not be subjected to the rigours of the Union's telecoms regulatory package.

The Commission had originally intended to launch a detailed probe into the growth of the Internet market this year to decide the extent to which the EU rulebook should apply to the fledgling services. The planned study might have led to calls for specific regulations to ensure fair competition and minimum levels of service in the sector.

One telecoms expert said the institution would discuss the issue with regulators in member states and include a section on the issue on its final policy paper on the ONP telecoms review, which is due to be completed by Easter.

But he added: "I do not anticipate that we will do any studies. The market is not concrete enough yet."

In the meantime, the expert stressed that services which were as high quality as those provided by traditional operators and offered direct access telephone numbers were already covered by the existing telecoms regime.

However, so far, only Norway's Telenor and Finland's Sonera have begun to offer services to its Internet customers which resemble those of a traditional telecoms subscription.

Telenor's service, offered through its Internet Service Provider subsidiary Nextel, includes an individual phone number based on the code '850'. Sonera has also begun to offer a national service only to corporate clients.

The Nordic companies and three other operators, US firms AT&T and Sprint, and BT, have indicated their faith in the Internet by asking the world regulator, the International Telecommunications Union, to reserve an international code for Web services.