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A Panamanian Platypus

By Scott Bradner

In late October the government of Panama, prodded by Cable and Wireless Panama (C&W), issued a regulation requiring all Panamanian ISPs to block all Internet traffic using any one of a set of 24 UDP ports on the border router connecting the ISP to any other ISPs. The stated aim of the regulation is to block the use of IP telephony to bypass Cable and Wireless's monopoly on international phone calls. The regulation points out that people using IP telephony do harm to Panama by avoiding paying taxes on international phone calls. This regulation could been seen as a valiant attempt to uphold an exclusivity contract that Panama signed with C&W or as a vain attempt to hold back the inevitable.

This regulation (http://www.ersp.gob.pa/busqueda/show_resol.asp?id=JD-3576&idsector=1) is mostly of note because the Panamanian regulator so clearly says what their aims are and that the block was at the request of the incumbent voice carrier. But Panama is far from alone in trying to regulate IP telephony, a couple dozen other countries do the same. U.S.-based IP telephony folk should not feel too smug, the FCC has said quite clearly that they believe they have the authority to regulate IP telephony but have not yet made the decision to do so.

A basic question comes to mind -- why should telephony be regulated at all, even non-IP telephony? Part of the reason is based in the historical fact that most telecommunications services have been supplied by monopolies at some point, by my guess is that the most important continuing reason is that telecommunications services are highly taxed and the regulators want to preserve the revenue stream. This reason will not go away soon and has meant that in some countries IP telephony providers already have to pay some of the same taxes as traditional carriers do. In the US you do not need a license to put up a web site, even if that web site offers to complete IP telephony calls, there quite a few people who think this should not be the case.

The path that Panama has taken in their attempt to ban IP telephony is a particularly troubling one. The most important factor in the success of the Internet has been the ability for individuals to develop new applications. This ability is enabled by the basic Internet architecture, which transparently carries information from one computer to another over the net. This transparency has been hurt, and thus innovation has been hurt, by the insertion of firewalls and network address translators (NATs) into the net. (see RFC 2775 for more details - http://www.ietf.org/rfc/rfc2775.txt) Government mandated blockages in the net will further exacerbate the situation but will not be that successful in actually controlling the targeted activity because IP telephony servers can be reconfigured to use different ports.

Lee McKnight likened IP telephony to a platypus (http://www.itu.int/osg/sec/spu/ni/iptel/workshop/mcknight.pdf). It may quack like a telephony duck but it is a far more complex beast. Panama will learn that someday, I just hope that other regulators, like the FCC, do not see a telephony duck when they think about IP telephony and decide to make pressed duck.

disclaimer: Harvard quacks a lot but is far more complex (or is that strange) than a platypus but the above quacking is mime.