Traditional telephone services have existed for over 100 years. However, changes are underway that could significantly affect the way voice services are provided in the future. In particular, Voice over Internet Protocol ("VoIP") services change the way voice services are delivered. These services typically use a broadband connection to provide voice calls using VoIP technology via a PC with handset/headset or a special adaptor connected to a traditional telephone handset. They have the potential to deliver significant consumer benefits through reducing the cost of delivering existing services, enabling new and innovative services and increasing competition.

Consumers benefit most when new technology can be adopted quickly, when regulatory rules do not prevent new services from being offered, and when competition between old and new services occurs on a level playing field. It is also important that as technology develops, measures to protect consumers are revised to ensure that they remain fully effective.

In response to the early developments in VoIP services and discussions with stakeholders, Ofcom published a consultation document entitled New Voice Services: A consultation and interim guidance on 6 September 2004 (the “2004 consultation") . That document set out Ofcom’s proposals for the regulatory framework for VoIP services to help ensure that consumers’ interests were best met. The proposals reflected both the constraints of relevant European Community directives and also the relative infancy of the market.

Since September 2004, there have been a number of further developments that require a reassessment of Ofcom’s previous proposals to ensure our objectives in relation to VoIP services are achieved.