Communication from the Commission - Status of voice on the Internet under Community law, and in particular, under Directive 90/388/EEC - Supplement to the Communication by the Commission to the European Parliament and the Council on the status and implementation of Directive 90/388/EEC on competition in the markets for telecommunications services
Date: 2000-12-22
Institutions: European Commission
Subjects: competition, information network, legal status, telecommunications, telephone, transmission network

22.12.2000

EN

Official Journal of the European Communities

C 369/3

COMMUNICATION FROM THE COMMISSION

Status of voice on the Internet under Community law, and in particular, under Directive
90/388/EEC

Supplement to the Communication by the Commission to the European Parliament and the
Council on the status and implementation of Directive 90/388/EEC on competition in the
markets for telecommunications services

(2000/C 369/03)

On 10 January 1998 the Commission published a notice (1) on
communications on Internet under
the
status of voice
Community law and,
to Directive
in particular, pursuant
90/388/EEC. This notice (hereafter the (cid:145)1998 notice(cid:146)) was a
supplement
to the Commission communication of 20
October 1995 to the European Parliament and the Council
on the status and implementation of Directive 90/388/EEC
on competition in the markets
telecommunications
services (2). This
communication identified and clarified
central
raised by the implementation of Directive
90/388/EEC (3) (hereafter the (cid:145)Services Directive(cid:146)).

issues

for

to Article 1(1),
(cid:145)voice telephony(cid:146)

The Services Directive defines the concept of voice telephony.
seventh indent, of
Pursuant
the Services
Directive,
is the (cid:145)commercial provision for
the public of the direct transport and switching of speech in
real time between public switched network termination points,
enabling any user to use equipment connected to such a
network termination point
in order to communicate with
another termination point(cid:146).

In this regard, the 1998 notice concluded that at that time
Internet voice services could in principle not be considered
as voice telephony, because they failed to meet simultaneously
each of the four elements of the definition of voice telephony
pursuant to the Services Directive, namely:

(cid:151) voice telephony is offered commercially as such,

(cid:151) it is provided for the public,

(cid:151) it is provided to and from public switched network termi-

nation points, and

(cid:151) it involves direct speech transport and switching of speech
in real time, in particular the same level of reliability and
speech quality as produced by the public switched telecom-
munications networks (PSTNs).

The new directives which are currently being discussed in the
wake of the 1999 review of the regulatory framework for tele-
communication services will put an end to the distinction

telephony

telecommunications
between voice
services. All electronic communications
services, whatever
their commercial features, will be submitted to the same legal
regime.

and other

remains

Until these directives will be implemented, the definition of
voice telephony enshrined in the Services Directives never-
is necessary to establish
theless
which undertakings
to the regulatory
should be subject
regime applicable to voice telephony operators, including the
requirement of a licence (4) and the possible provision or
contribution to universal service (5).

important, as it

The 1998 notice announced that
should be
technological and
reviewed before 2000 in the light of
market changes. To this end, the Commission held a public
consultation during summer 2000 (6).

its content

Overall assessment

the public consultation,

In the light of
the Commission
framework provided
concludes that under the current legal
by the Services Directive, no substantial changes are needed
to the 1998 notice.

The Commission considers that Internet telephony in general
continues to fall outside the definition of voice telephony,
except where Internet telephony meets each of the conditions
established in the Directive as set out in the 1998 notice.

This means, except in very specific cases where the aforemen-
tioned conditions are satisfied,
that Member States should
normally continue to allow Internet access/service providers
to offer voice on Internet under data transmission general
authorisations, and that no mandatory requirement for a indi-
licence is justified. Conversely, voice communication
vidual
enshrined in the
services
Directive and therefore appearing as substitutes for voice
telephony services provided by traditional means should be
regarded as voice telephony and be submitted to the relevant
regulatory regime,
in consideration of the principle of tech-
nological neutrality.

fulfilling the

conditions

four

(1) OJ C 6, 10.1.1998, p. 4.
(2) OJ C 275, 20.10.1995, p. 2.
(3) OJ L 192, 24.7.1990, p. 10, as

last amended by Directive

1999/64/EC (OJ L 175, 10.7.1999, p. 39).

(4) Under Directive 90/388/EEC and Directive 97/13/EC (Article 7.2).
(5) Under Directive 97/33/EC (Article 5.1).
(6) OJ C 177, 27.6.2000, p. 4.

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Official Journal of the European Communities

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Necessary clarifications

The public consultation highlighted the need for a number of
clarifications of the 1998 notice against the background of the
most recent technological changes.

equipments, while the creativity demonstrated by suppliers
undermines any attempt to further categorise services mixing
speech and data. Classifying the services at stake between the
various categories identified in the 1998 notice should not be
considered as decisive for ascertaining the regulatory regime
applicable.

Voice on Internet protocol and voice over the Internet

A distinction must be drawn between (cid:145)voice over the Internet
protocol(cid:146)
(VoIP) and (cid:145)voice over the Internet(cid:146). The former
encompasses all kinds of conveyance of voice using the
Internet protocol as a routing and transmission technology.
The latter is a subset of the former and covers only such
voice services that are provided over
the public Internet,
defined as a network of networks.

Telecommunications operators increasingly use the Internet
protocol (IP) as a transmission technology for voice services
in the core of PSTNs, as an alternative or a substitute to other
transmission technologies such as asynchronous transfer mode
(ATM) or synchronous digital hierarchy (SDH). In such cases,
the Internet protocol on a privately owned or
the use of
dedicated network is not perceptible
end-user.
Moreover, the service is marketed as voice telephony, and is
clearly the subject of a commercial offer as interpreted in the
1998 notice.

the

for

The 1998 notice does not mean that all IP-based voice services
fall outside of the field of voice telephony. Rather, the use of or
the migration to IP technology within the core of public
switched telephone networks does not affect the regulatory
position of the companies concerned, nor require any change
in the licences or authorisations under which they operate.

Categories of Internet telephony

The 1998 notice provided a description of
categories of voice communications making use of
Internet, namely:

three distinct
the

(cid:151) computer-to-computer voice services,

(cid:151) computer-to-phone voice services, and

(cid:151) phone-to-phone voice services.

Quality and reliability

The 1998 notice explained the condition of (cid:145)direct transport
and switching of speech in real time(cid:146). It drew the conclusion
that for voice over the Internet (here understood as the public
Internet), due to congestion risks, it was (cid:145)difficult or impossible
to guarantee the same level of reliability and speech quality as
produced by the PSTNs(cid:146). The 1998 notice further stated that
these services could not for the time being be considered as
voice telephony in the sense of the Services Directive.

in
Average latencies have reduced dramatically since 1998,
particular owing to improvements in underlying technologies.
However, the way the public Internet is managed still makes it
difficult to rule out any congestion risk affecting the trans-
mission of
the 1998
the voice signal. The conclusion of
notice thus remains valid as regards voice services over the
public Internet.

The condition of (cid:145)direct transport and switching of speech in
real time(cid:146) could however be considered as satisfied when a
voice service is generally regarded and used by consumer as
a substitute for voice services over a circuit-switched PSTN, by
virtue of its characteristics, in particular its level of quality and
reliability. This condition should also be considered as satisfied
where the provider of
the service guarantees its customers
PSTN-like quality and reliability.

Integrated Internet services

The 1998 notice pointed out that (cid:145)in most cases, the facility for
voice communications
is only one part of an integrated
Internet service offered to the customer, where the voice
service is ancillary to other elements of the Internet service(cid:146).
In those cases, the service would not be the (cid:145)subject of a
commercial offer(cid:146) as required by the legal definition of voice
telephony.

These categories were not presented by the 1998 notice as
entailing direct legal consequences, but used for descriptive
purposes. The assessment of the regulatory status of Internet
voice services does not hinge on these categories, but on
whether the four conditions set out in Article 1(1), seventh
indent of the Services Directives are met.

These categories
they are
increasingly blurred by the technical convergence of terminal

remain broadly applicable but

In its paragraph about the future situation regarding the regu-
latory consequences, the 1998 notice indicated that in some
cases voice communications services could be (cid:145)a decisive driver
for Internet subscription(cid:146). However, it is not easy to determine
which element is determinative in the subscription decision. It
may vary to a very large extent from one user to another.
Therefore, when analysing whether a voice service bundled
with other services is the subject of a separate commercial
activity, more objective criteria should apply.

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Official Journal of the European Communities

C 369/5

In this regard, when the voice element is marketed as voice
telephony or billed separately, or when similar bundled services
are marketed by the same company without this voice element,
the commercial offering condition could be considered as
satisfied.

However, such indicators may be of
situations, where voice communication and other
elements are marketed as a package or billed together.

little help in reverse
service

In such cases, the notion (cid:145)integrated Internet service(cid:146) mentioned
in the 1998 notice should provide good guidance. It refers to

situations where the voice element is not separable of other
components, as is the case, for instance, with video telephony.
In such cases,
the provision of voice services cannot be
considered as the subject of a commercial offer. Conversely,
when operators market a combination of a voice service and
a data service which, although distinct and clearly separable,
are bundled within the
the
same
Commission would consider this package as comprising two
commercial offers. A voice service could be considered as
separable from a data service, even though they are usually
offered together under commercial usage.

commercial package,

Non-opposition to a notified concentration

(Case COMP/M.2059 (cid:151) Siemens/Dematic/VDO/Sachs)

(2000/C 369/04)

(Text with EEA relevance)

On 29 August 2000 the Commission decided not to oppose the above notified concentration and to
declare it compatible with the common market. This decision is based on Article 6(2) of Council Regu-
lation (EEC) No 4064/89. The full text of the decision is only available in German and will be made public
after it is cleared of any business secrets it may contain. It will be available:

(cid:151) as a paper version through the sales offices of the Office for Official Publications of the European

Communities (see list on the last page),

(cid:151) in electronic form in the (cid:145)CDE(cid:146) version of the CELEX database, under document No 300M2059. CELEX

is the computerised documentation system of European Community law.

For more information concerning subscriptions please contact:

EUR-OP,
Information, Marketing and Public Relations (OP/A/4-B),
2, rue Mercier,
L-2985 Luxembourg.
Tel. (352) 29 29 424 55, fax (352) 29 29 427 63.