EU Court of Justice v. VoIP

Posted on 18th June 2019

Skype

The European Court of Justice (ECJ) ruled in a preliminary ruling that Skype’s VoIP service (SkypeOut) — allowing users to call mobile and fix phone numbers using the Internet — is an electronic communications service (telecom) service.

The court battle began after the Belgian telecom regulator imposed a fine on Skype for providing a telecom service without being notified as a telecom operator in Belgium. Skype argued that SkypeOut is not a telecom service since it does not allow users to receive calls from PSTN. The case was referred to the ECJ which ruled in favour of the regulator.

According to the ECJ, SkypeOut principally consists in transmitting voice signals and Skype is responsible vis-à-vis the users of this signal transmission. The ECJ’s argument is based on the fact that Skype provides these services for renumeration and enters into agreements with telecommunications service providers duly authorised to send and terminate calls to the PSTN.

From a technical point of view, the ECJ recognised that while the transmission of signals is carried out by the ISPs on the Internet and the telecom providers in the PSTN, it could only occur thanks to Skype’s intermediary role and agreements with both subscribers and telecom service providers. Moreover, Skype cannot exonerate its responsibility from the transmission of signals through its terms and conditions within the end users’ contracts.  On the other hand, the PSTN providers cannot be considered as responsible for the transmission of the VoIP service because they do not have a contractual relationship with the end users.

In contrast, the ECJ decided a few days later that Google’s email service, Gmail, does not qualify as a telecom service as it does not consist wholly or mainly in the conveyance of signals. The ECJ did not provide a detailed reasoning for this conclusion. Rather, it entrusted the referring member state’s court to verify whether any new feature of Gmail entails the conveyance of signals. Moreover, the ECJ refused to address the question on whether Gmail services are remunerated.

The two ECJ decisions leave several unanswered questions on the regulation of OTT providers. On the one hand, the provider of VoIP services — with a breakout to the PSTN and with contractual relationship with both its subscribers and the PSTN telecom provider — will likely be considered as a telecom service provider and be subject to certain obligations. On the other hand, the abovementioned ECJ decisions did not clarify the obligations for services provided without monetary remuneration or where the signals are conveyed to a lesser extent. Therefore, OTT providers could expect a detailed case-by-case assessment by the national telecom regulators, which may reach different regulatory considerations for the same service. The imminent implementation of the European Electronic Communications Code (EECC), which includes OTT services in its scope, could bring more clarity to the matter.

Author: Maria Zervaki, Policy Analyst, Access Partnership

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