By Sylvia Carr, 5 November 2004 14:35
NEWS One potential threat to the burgeoning voice over IP (VoIP) market is the imposition of regulations and taxes similar to those for standard telephone companies.
But according to Niklas Zennström, CEO of VoIP software maker Skype, there's not much to worry about.
"You only regulate if the market cannot regulate itself," he told silicon.com in an interview this week. "VoIP is not subject to that kind of monopoly situation."
Regulators, he said, are keen to protect customers from monopolies and create a good competitive environment. If anything, VoIP has lead to more new entrants and competition in the telecoms market than before it arrived, so there's no need to regulate it.
As for his company's Skype software, he said: "It's is a software app [used] to communicate just like any other... There's no need to regulate it just like there's no need to regulate email or IM or web browsing."
Skype is often thought of as a competitor to VoIP services such as those from Vonage and AT&T CallVantage, though the offerings are quite different. Skype is software-only and carries voice data exclusively over the internet. Vonage and AT&T's services require the installation of a router alongside a telephone and computer and allow a user to make calls on the telephone.
To Zennström, though, the latter "is not a growth market" but an intermediary service between true VoIP and fixed-line that uses the net only for the final portion of the call.
VoIP applications such as Skype could be a 6.4bn business in Western European by 2008, according to a recent report from consultancy Analysys.
For more about Zennström's vision for Skype, read silicon.com's profile piece.
Comments
There are 4 comments. Join the discussion
1. Charles Wood
There probably is no need to regulate, but that has never stopped governments before. You have to remember that once a regulator is in place then they need to justify their existance, and salary, like any government employee. Expect regulation...and lots of it!
2. Ian Manzie
I feel there is a need to regulate to help the market develop into a viable business service. Currently it reminds me of the early days of email when I had a 'Telecom Gold', Compuserve, AOL and CIX emails because the various systems would not talk to each other! Today I have a Skype account and a Free World account and could add more if I had the time. Yes I know it is possible to dial the different networks (mostly) from each other but it is not easy and this curtails development and a wider mass market.
Another major issue with this end of the VoIP market is that I find it impossible to find a service that will allow me breakout to the legacy TDM world (normal phones) at an economic rate. So I continue to use my phone as it is cheaper and the quality is predictable (TDM services do not seem to suffer packet delays!)
However I do believe that SIP with all its 'presence' potential is the future when we implement /achieve a simple way to get from user to user.
3. Simon Lewis
I agree with Charles' sentiments about the need for regulation in the VoIP arena. The UK approach - via Ofcom - has been to start promoting what they call "co-regulation". It keeps them happy as Ofcom maintain a 'raison d'etre' - indeed they can play an active role in providing a suitable forum for providers. It promotes the industry coming together to ensure aspects such as access to emergency services are adequately dealt with.
Ian's point: In terms of interconnecting systems, obviously Skype's proprietary peer-to-peer approach is extremely limiting; so much so that I gather it affects their avility to effectively break-out to PSTN. Those of us who have followed the standards-based approach are now looking towards interconnecting our presence engines and encouraging cross-network traffic in a similar fashion to the TDM world. (BON.net certainly feels that SIP is the way to go and that Zennstrom's opinion is based on (understandable) self-interest).
I should declare my own interest in that I am the Technical Director for BON.net who provide the Babble service. We offer our own client software which is closely linked to a presence engine/contact management solution; and which is based on SIP and associated standards. We have been open to interconnect discussions with providers for some time and are actively involved in the discussions about the potential regulatory regime in Europe.
4. James Manktelow
Government keep out! Skype is a useful service that would only be harmed by bureaucratic interference. The only people who would benefit from regulation would be the same dinosaur telcos who have held back the development of IT. I cite BT, who strangled ISDN with its monopolistic pricing - I'm sure they would love to see regulation of this technology.