Government plans strict regulation of VoIP service providers that seek to replace fixed-line services The government intends to introduce a two-tier regulatory framework for internet telephony service providers, imposing strict rules for those intending to replace traditional fixed-line phones and a looser set of regulations for those who do not. Secretary for Commerce, Industry and Technology John Tsang Chun-wah said yesterday internet telephony operators offering services similar to those of traditional fixed-line firms, such as PCCW, would be subject to the same rules. These include providing access to '999' emergency service, directory inquiry and a power supply back-up. In return, these internet telephony operators will enjoy the same rights as their fixed-line counterparts, such as the ability to port numbers from rivals. A looser set of rules will govern internet telephony operators - such as internet service providers - looking to offer voice as a valued-added service. As they do not intend to replace fixed-line phones, these firms will be regulated lightly, only required to provide full interconnectivity with mobile and fixed-line numbers in addition to calling line identification. They will not get benefits such as number portability. 'We hope that this approach would encourage the information, communications and technology industry to enter the market with even more innovative services,' Mr Tsang said. 'Furthermore, consumers must be clearly advised of the limitations of their services.' Mr Tsang's comments came as the Office of the Telecommunications Authority (Ofta) prepared to wrap up its consultation on internet telephony, which started in October last year. The authority is expected to announce the results of its deliberations later this month. Mr Tsang did not touch on one contentious issue in the internet telephony debate: whether operators had the right to deliver voice services over the internet networks of others without paying a fee. PCCW, which has a legacy fixed-line business to protect, has argued that it should be compensated when others use its Netvigator broadband network to deliver internet telephony services. But Ofta has said no fee is due because the customer has already paid for the internet connection. Last month, PCCW introduced an interconnection charge of $42 per customer per month for operators wishing to offer services over its network. In exchange, it promised to ensure the voice quality of the service by giving priority to voice-data traffic. The market has outpaced the government's ability to pass regulations for the industry. With the notable exception of PCCW, every fixed-lined operator in Hong Kong has launched internet telephony services in some form. Hutchison Global Communications has partnered Skype Technologies, the world's largest internet telephony software provider, and supplied Hong Kong telephone numbers for the European company's SkypeOut service. An Ofta source told the South China Morning Post that the authority was likely to give the industry a free hand in deciding whether to impose an interconnection charge for internet telephony.