Cable Tech

No VOIP for Panama

Late last month, the government of Panama took the unusual step of banning IP telephony providers from routing voice traffic over IP-based networks, including the Internet.

Strange move, eh? Well, coincidentally enough, the country appears to have one dominant international incumbent voice provider: Cable & Wireless (NYSE: CWP). For C&W, whose business has been suffering in other parts of the globe, the ban on voice-over-IP technology couldn't be more timely (see C&W Preparing to Sell US Network?).

This will likely whip the conspiracy theorists into a lather. VOIP technology has become a popular way to cheaply route voice calls over the Internet infrastructure, thus avoiding much of the regulation and tariffs associated with incumbent voice providers. The action in Panama raises an interesting question: Are there other countries where a VOIP ban could happen, perhaps benefiting a dominant incumbent voice player?

So far, Panama looks to be the first country to impose an all-out ban on VOIP, but in other countries the incumbents feeling threatened by the new technology have been pushing for governments to limit its use. Governments in countries including South Africa and Yugoslavia are reportedly considering following in Panama’s footsteps, and several Central European countries allow VOIP only for lower-quality services.

But observers say that most countries are moving away from regulations -- not towards them. “This runs contrary to global trends,” Frost & Sullivan analyst Elka Popova says. “The dominant trend is towards deregulation.”

In the U.S., where the debates over other regulatory issues in the telecom space rage on, regulation of VOIP is not likely to happen any time soon (see Fed Reg Debate Heats Up). “The Federal Communications Commission (FCC) currently has no plans and does not have a proceeding open looking at regulating voice over IP,” according to an FCC spokesman.

Most industry analysts seem to think that Panama’s attempts at halting IP telephony will prove futile. “The traditional models are no longer valid,” says Frost & Sullivan analyst Jon Arnold. “You can’t think of [VOIP] as voice anymore.”

While Arnold says he can understand why incumbent players in small countries like Panama might feel threatened by an invasion of “first-world technology,” he says a ban isn't the right thing to do. “The AT&Ts of this world have a lot to lose, but also a lot to win if they do it right,” he says.

IP telephony is growing strong. According to a TeleGeography Inc. report out this month, IP accounts for approximately 10 percent of the global voice market in 2002.

C&W argues that unlicensed providers took advantage of Panama's liberalization of wireless and data services last year, bypassing the traditional voice market. Peter Eustace, the head of media relations at C&W, says that IP telephony is clearly not a data service: “The effect of it is that it is a voice service."

C&W says it welcomes competition on voice services in Panama, but only from legitimate providers. "Competition begins on a fair and level playing-field," Eustace says. "It’s important that everybody play by the rules… We are supportive of liberalization… and the regulators efforts to achieve fair competition.”

The VOIP ban also poses some interesting technical challenges -- and some question whether it's enforceable.

The Panamanian government has implemented a long-term ban on 24 separate User Datagram Protocol (UDP) ports. Most of these ports are commonly used for VOIP, but some other ports were included in the government’s decree as well.

ISPs in the country have been required to block the ports in their firewalls or in their main or border routers that connect with other autonomous systems. But Internet standards dictate that routers not look at anything besides the IP header, so in theory they can't actually tell if they are carrying voice or not.

“It’s practically impossible to block,” says Andrew Odlyzko, the head of the Digital Technology Center at the University of Minnesota. “You’d really have to destroy the Internet… If you’re [encrypting the traffic], how would they know if it's voice or data?”

“I’m not sure how they’re technically accomplishing this,” Frost & Sullivan's Popova says. “I think that carriers and ISPs in general have a variety of ways of bypassing regulations.”

Odlyzko says that there is no way to regulate private use of VOIP, or small providers. Instead, he says, he thinks that the law will be used to crack down on large commercial carriers. “They may be very successful at regulating [those carriers] over the next couple of years,” he says.

Dialpad and Net2Phone are reportedly among the service providers that have seen their services disrupted in Panama since the ban was imposed two weeks ago.

— Eugénie Larson, Reporter, Light Reading
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BobbyMax 12/4/2012 | 9:18:47 PM
re: No VOIP for Panama It is well known that VoIP cannot provide tolll quality service. Some companies like Cisco, with no experience, in voice telephony service. The UIS VoIP equipment vendors have been targeting third world countries such as India, China, have been to sell their VoIP equipment.

The reson that the US regulators have not banned the VoIP service in the US because it hurt business abroad. They want the US companies to go outside and sell as much as they can. I am positive will fireback soner or later.

Packet Man 12/4/2012 | 9:18:45 PM
re: No VOIP for Panama I can see why LR posted an article dedicated to you, being the wingnut you are.

Your comment:
"It is well known that VoIP cannot provide tolll quality service."

My comment:
"You are either technically ignorant or have some other self serving agenda."

As posted Nov 18 on the WWW:

Here is a sample of the article:
(NYSE:NT)(TSX:NT) announced today that TELUS, one of Canada's
largest telecommunications companies, is migrating its national
circuit-based long distance network traffic to a packet-based
network with Nortel Networks voice over IP (VoIP) equipment.

At the heart of TELUS' new packet-based national voice solution
are Nortel Networks Succession Communication Server 2000
softswitches and Nortel Networks Passport Packet Voice Gateways
(PVG). TELUS' national VoIP network includes voice gateways
deployed at 11 major locations across Canada, enabling voice
traffic to be carried on TELUS' national high-speed IP backbone
with carrier grade voice quality.

My comment:
Do you honestly think that these major carriers all over the world would deploy this is it did not work?

Don't get me started. Arrrgggghhh

Packet Man
broadbandboy 12/4/2012 | 9:18:45 PM
re: No VOIP for Panama "At the heart of TELUS' new packet-based national voice solution are Nortel Networks Succession Communication Server 2000 softswitches and Nortel Networks Passport Packet Voice Gateways(PVG)."

Packet Man wrote: "My comment: Do you honestly think that these major carriers all over the world would deploy this is it did not work?"


My comment: How many of you people are aware that the Passport is an ATM switch? What does that say about Telus' confidence in VoIP?


sgan201 12/4/2012 | 9:18:44 PM
re: No VOIP for Panama Hi Packetman,
Nortel Passport only do Voice over ATM now...
Nortel promised that Passport will do VoIP some time in the future...
photon_mon 12/4/2012 | 9:18:43 PM
re: No VOIP for Panama I'm not sure if there is a contradiction.

It seems very typical that a Canadian carrier
would - true to form - buy from a Canadian
equipment provider (let's keep those loonies
flying in tight formation, eh?). Also not
unusual to have a legacy ATM core (hence the
Nortel Passport). Finally, I can't see them
ignoring the eventuality of VOIP. Seems like the
usual progression. Am I off-base?

As far as Panama goes, I believe that - for
obvious reasons in that neck of the world -
they are understandably suspicious of "packets".

capolite 12/4/2012 | 9:18:42 PM
re: No VOIP for Panama
LR editors wrote an article about your posts?
We can debate technical ignorance if we can decipher the point of your post. The cracked grammar and mis-spellings combined with the sweeping generalizations leave whatever point you are attempting to make unstated.
lucifer 12/4/2012 | 9:18:40 PM
re: No VOIP for Panama VoIP can provide toll-quality voice; it's just very difficult to engineer the IP backbone without using ATM to provide QoS and connection restoration...

I don't know what Telus is actually using but I do know the following:

1. Passport 15K is multiservice. ATM and MPLS NNI.
2. The Packet Voice Gateway supports VoATM as well as VoIPoATM, with and VoIP (over GigE)promised "real-soon, really!"

My guess -- Telus is hedging their bets, marketing VoIP (because Cisco cannot be wrong, can they???) and using ATM as the Layer 2 so they can actually build and operate a quality service.

What does have to do with a small poor country that has outrageously high international voice tariffs and an antedeluvian attitude to regulation...

gea 12/4/2012 | 9:18:38 PM
re: No VOIP for Panama Booby...
If I thought you were not very nearly a negativity Robot, I'd almost think you were imitating me imitating YOU! With this post you have sunk to new lows, and you sound like a parody of yourself.

Of course VoIP can provide toll quality service. It's actually used intra-company by many big compaines. It's highly likely you've used it many times and don't know it.

By the way, we never heard your response to your article..YOU'RE FAMOUS! And, I see, still "number 1" on most people's hit parade list!...(oh yeah, before I forget let me give you a 1 too, not that it matters anymore.)
flanker 12/4/2012 | 9:18:38 PM
re: No VOIP for Panama a) It makes a lot of sense to ban VOIP. It protects the franchise of companies that pay *hard cash* for a voice concession.

b) you don't need ATM for toll grade voice service over VOIP. You can run toll grade VOIP over Cisco routers, but you need to provision enough bandwidth and you need to own the network equipment end-to-end. VOIP falls apart when you hand off to third party IP networks without their own QOS.

rjmcmahon 12/4/2012 | 9:18:37 PM
re: No VOIP for Panama It makes a lot of sense to ban VOIP. It protects the franchise of companies that pay *hard cash* for a voice concession.

And exactly why should a voice concessionaire be protected?
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