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VoIP Restrictions in Moscow?

April 5, 2005

This interesting article emerged this morning on The Moscow News:

Russian Govt Moves to Outlaw 2000 VoIP Operators

The article is vague about exactly what the Russian government has done to outlaw VoIP, but it seems to imply that entrenched telecom interests have been influencing the government to put restrictions in place that make it hard for innovators and entrepreneurs to operate in the VoIP space:

"The recent conclusion reached by analysts is that bigger operators like Rostelecom or MGTS (the Moscow City Telephone Network that also entered the VoIP market last December) are trying to get rid of the smaller operators by means of administrative resources, or connections.

"Representatives of VoIP-providing companies believe that the commercial abuse of administrative resources is obvious from a recent government resolution, dated March 28, 2005 that brought into effect an order from the Ministry of Information Technology and Telecommunications on electricity networks. The experts say that by setting unachievable liabilities and limitations the document actually prohibits the provision of VoIP services."

The article says that participants at the Russian Internet Forum in March sent an open letter to Russian President Putin, which said, in part:

"The main problem that the VoIP industry of Russia has to face is regulation. The state regulators of Western Europe and the USA see stimulating new technologies as a priority and support the development of VoIP as the main revolutionary technology on the market. At the same time, the instructions designed by the Ministry of Information of Russia and approved by a governmental resolution on 28.03.2005, actually prohibit the provision of VoIP services, forcing operators to turn the traffic towards national and international telecom companies.

"The business of more than 2,000 Russian VoIP operators with a total turnover of about $300 million PA has been proclaimed illegal and forced to shift to unauthorized�— that is, tax-free�— schemes of work. Legislation to turn market traffic towards national and international telecom companies is a serious violation of the principle of free competition and is, in fact, a monopolization of the telecom market in favor of one or two major companies. The instructions were designed by the Ministry neglecting the opinions of the market participants and without an independent analysis."

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AB -- 4/5/05




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