UK voice over internet protocol (VoIP) providers will have to provide clearer information about the services they offer under new rules announced by Ofcom.
The service providers will have to be clear about whether or not they allow customers to make calls to emergency services, the telecommunications regulator said. They must also disclose whether they provide directory assistance and access to an operator, as well as whether customers can ask for itemised billing.
The regulations – the first for the VoIP industry in the UK – take effect from June.
The new rules will cost UK VOIP operators money to implement, putting them at a disadvantage compared to overseas service providers that do business in the UK, said Eli Katz, chairman of the Internet Telephony Services Providers' Association (ITSPA), a trade group that includes BT and Vonage.
"That will create a fundamental imbalance," Katz said.
For example, the legal headquarters for Skype, the popular software-based VoIP company owned by eBay, is in Luxembourg. ITSPA said the new regulations will also be hard to enforce on those overseas companies and cause confusion for consumers.
Up to 3 million UK consumers are expected to be using VoIP services by the end of the year, Ofcom said. The new rules follow a public consultation last year that was intended to help consumers make more informed decisions about VoIP services.
So far, the European Commission has taken a "light touch" attitude towards VoIP and not imposed regulation as the industry matures, a stance it adopted in 2005.
Ofcom will hold a further consultation this year to determine whether VoIP providers will be required to provide access to emergency services, since being unable to could be detrimental to consumers, it said.
In the US, the Federal Communications Commission has banned companies from advertising VOIP services if they do not allow people to call emergency services.
"In assessing the need for any new requirement, we will continue to carefully consider the impact of such regulation on market entry, innovation and competition," Ofcom said.
Operators must also be clear about whether their service will work in the event of a power failure, it added. Many VoIP services depend on a powered router for internet access, so if the home power supply were cut off, the VoIP service also would not work.
Operators such as BT offer services where both VoIP and regular landline calls can be made from the same phone, which avoids difficulties in making calls during a power outage.
Providers that don't offer emergency service calls and don't work without a power supply must display warnings on their products, Ofcom said.
VoIP providers will also have to disclose whether customers can keep their same phone number if they switch providers, Ofcom said.