The Federal Network Agency carried out an extensive consultation on VoIP in April 2004 (Official Gazette 8/2004, 21 April 2004, page 399ff, in German only), thus taking up regulatory debate early on of one of the most important topics in telecommunications today.

More than 60 companies, industry associations and public authorities took part. Interested parties were asked to respond to a total of 87 questions covering 13 different aspects. The comments (in German only) received gave the Agency a wealth of information about the issues involved.

Even if the consultation brought a multitude of information, it represents only the first insights into a rapidly changing field. Whereas at the time of the consultation in mid-2004 there were only a few VoIP service providers in the market, a year later there are considerably more. Now, in August 2005 just under 40 companies in Germany offer VoIP services for the mass market. Additionally, there are numerous offers for large customers. This testifies to VoIP's rapidly growing importance and underscores its market entry and service dynamics.

Nevertheless, the number of customers and the revenues generated by VoIP services are likely to be relatively low so far. In its Annual Report, the Agency put the number of active customers at year's end 2004 at 250,000, whereby around 500,000 subscribers in all had the necessary software / hardware. According to providers' forecasts in the consultation in connection with VoIP intercepts, this figure could double by year's end 2005. VoIP's development in the telecommunications markets and its implications for competition are consequently still in the early stages.

The Agency therefore assumes that the VoIP market will continue to experience rapid change, and sees it as a tremendous challenge to be able to respond quickly and flexibly to the regulatory requirements, insofar as this proves necessary.

The following key elements represent the first published framework conditions for the regulatory treatment of VoIP. (see PDF-file below)

They take account of the fact that VoIP services are only at the start of their development in the marketplace and that it is too early to say how viable existing and future business models will prove to be. In the Agency's view, therefore, it is not helpful, and ultimately not even possible, to draw up a definitive and extensive body of rules for VoIP today covering all the regulatory issues that are bound to arise.

Yet it is important for the Agency that, at the end of the development process, the different services can co-exist with equal status. In the medium term, VoIP services will have to satisfy the same criteria as traditional services. Thus the Agency considers transitional arrangements for technical reasons, say, a suitable means by which to encourage existing innovation potential and by which to respond to public interest in the fulfilment of legal obligations.

The Agency will keep a close watch on the further development of VoIP and take regulatory decisions if necessary.

In August 2005 the Agency set up an Advisory Project Group of high-ranking telecommunications experts to address issues of IP interconnection and define the building blocks of a new interconnection regime by mid-2006. For more details, go to IP interconnection.

The Agency wishes to continue the debate with all interested parties. Comments on the key elements and on the evaluation of the consultation are thus always welcome.