Less than a year after the Australian Communications Authority announced plans to introduce VoIP regulations, acting chairman Dr Bob Horton has conceded it won"t be easy and that choice will be the ultimate regulator.

Speaking at this year"s Australian Telecommunications Users" Group conference in Sydney, Horton said VoIP regulation is a challenge because it is a global platform with implications for quality of service, consumer expectations, and competition.

"VoIP needs some regulatory underpinning," he said. "For example, there will always be a need for law enforcement agencies to intercept communications."

The ACA plans to release "minimal" VoIP regulations by mid-year.

"If you"re presenting to the public a substitute telecom service based on VoIP then there will be an expectation that there is an emergency service number capability associated with that," he said.

Horton also went so far as to say that VoIP will eventually fall apart without some form of regulation.

"If a VoIP service is not good enough customers won"t subscribe to it," He said.

Internet telephone directory, e164.org, project leader Duane Groth said the ACA will have a hard time regulating VoIP because it can be delivered from beyond Australia"s borders.

"I think the big question is what specific wording Bob plans to propose to be used in legislation," Groth said. "And how he plans to have it enacted without adversely affecting both small local companies and large multinational companies reselling services to other parts, or subsidiaries, for tax reasons."

Groth believes true VoIP, that is a call that goes directly between two parties over the Internet, is near impossible to regulate or control in any way shape or form.

"Basically the FCC [in the US] got this one right; if you regulate it, you will chase business out of the country and miss out on tax revenue," he said.

"There"s a lot more money that can be made from taxing minutes if they stay in the country then sending the business overseas and getting nothing."

Horton said there will be a need for jurisdictional cooperation as we operate in markets over sovereign boundaries "more and more so".