The Telecommunications Authority has issued a statement concluding its views on the regulatory framework for the Internet Protocol Telephony, which aims to help deploy IP technology for innovative services and give protect consumers at the same time.

IP telephony has the potential to integrate voice with data, video and other communications carried partially or wholly over IP-based networks. It is also commonly referred to as "Voice over Internet Protocol" or VoIP. 

The authority says the technology, which can provide voice and innovative multimedia services, is triggering an irreversible worldwide trend.

It is expected to bring tremendous opportunities to the incumbent operators and new entrants, creating new revenue streams from multimedia services, applications and content.

The investment in the IP-based networks will also pave the way for the realisation of the next-generation networks and enable all operators to compete in the international markets, it said, adding consumers are able to enjoy a wider choice of innovative products at lower prices with the introduction of IP Telephony in the market.

The authority adopts a forward-looking approach in setting the regulatory framework for the development of IP Telephony, so the market can grasp the business opportunities ahead, and provide adequate consumer protection in rolling out new technologies.

Under the two-class licence regime to be introduced, services under Class 1 are required to meet relevant licensing conditions applicable to fixed-network operators. It will have all the attributes that consumers now expect from conventional telephone services.

Services under Class 2 are only required to meet minimal licensing conditions so as not to inhibit technological deployment.

By requiring service providers marketing Class 2 services to identify clearly the services as such, the authority said consumers would be able to distinguish readily between the two classes of services and choose those that best suit their needs.

The regulatory framework has incorporated measures to protect consumer interests. Class 1 and 2 service providers must provide backup power supply to the IP Telephony equipment for use by 'life-lines' users if the service is to be sold to these users. 

As the general public expect to make emergency "999" calls on telephones, service providers must also offer those using Hong Kong telephone numbers free access to emergency services.

The authority believes Class I customers should use the eight-digit numbers in the numbering ranges now assigned to conventional telephone services users.

But it has an open mind on whether the same approach, eight-digit, or a longer 10-digit number, should be applied to Class 2 services customers. It will consult with the Telecommunications Numbering Advisory Committee shortly to discuss the way forward.

IP technologies enable the entry of service operators into the market, in competition with carriers. Under the proposed regulatory framework, both carriers and service operators may operate VoIP services. This will promote competition and enhance consumer benefits.

The framework provides for a level playing field between the two classes of operators. The authority expects the new service licence for Class 1 and Class 2 services to be available by the end of this year, after consultation with the industry. 

The authority will create a new service licence for service-based operators. The industry will be consulted on the detailed licensing conditions. Local fixed licensees and carrier licensees may continue to operate VoIP services under their existing licences.

To ensure their services can be rolled out with the minimum of hindrance, Class 1 and 2 service providers should make commercial arrangements with fixed network operators for hosting connections.

The Telecommunications Authority's Statement on the Regulation of IP Telephony can be downloaded here.