NTC may allow phone firms to use Internet for cheaper ILDcalls

The National Telecommunications Commission (NTC) plans to allow telephone companies to use the Internet as an alternative way of providing consumers with more affordable international long distance (ILD) rates.

In a draft memorandum circular, the NTC said that public telecom entities with specific authority to offer international toll services shall be given an option to use the voice over Internet protocol (VoIP).

VoIP utilizes IP data connections to exchange voice and fax that have traditionally been carried over the public switched telephone network (PSTN). By using VoIP, carriers could realize as much as 50-percent reduction in their network cost.

Thus, VoIP call charges would be much lower than current pricing schemes although still subject for approval by the commission.

Likewise, the NTC said that local exchange carriers (LECs) from which the VoIP customers are connected, shall be compensated by the international gateway facility (IGF) operators.

Under the proposed order, even duly registered Internet Service Providers (ISPs) shall be allowed to offer VoIP provided that they have a contract with the LECs and the IGF operators.

The agreement shall include, among others, the access charge to be paid to the LECs by the ISPs offering VoIP. No amount has been specified yet.

ISPs shall also lease international lines only from duly authorized IGF operators.

According to the NTC, the move is pursuant to Republic Act 7925, the Telecommunications Law, which says that consumers should be able to avail themselves of the benefits of new technology.

Telecom suppliers are currently working with local carriers for VoIP solutions which are seen to help the latter gain additional revenue and reduce the cost of telecom infrastructure.

At present, telephone companies in various parts of the world, are facing stiff competition from new players which can offer ILD calls at rates about 80 percent lower than prevailing ones.

During the late 1990s, an increasing number of telephone calls have been routed over the Internet, thus, avoiding the normal high international long distance charges and making operators lose revenue in the process.

IP telephony is relatively unregulated since there is no way at present for operators to know whether a call is made through the Internet or through regular means.

As a result, carriers suffer tremendously since they do not earn anything from international long distance calls passing through the Internet.

A large number of new players called Internet telephony service providers have already mushroomed abroad with many of them offering free long distance PC-to-PC or PC-to-phone calls and very cheap phone-to-phone calls.

Although there are still some complaints over the poor voice quality and some reliability problems, the situation is fast changing as the technology develops.