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Vonage In The News
Vonage Holdings Corp. Reports Fourth Quarter and Full Year 2013 Results

Carolyn Katz Elected to Board of Directors of Vonage Holdings Corp.

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FCC Expected To Exempt VoIP From State Rules


Vonage In Print News

FCC Expected To Exempt Voip From State Rules

November 9, 2004

By Paul Davidson

The Federal Communications Commission is expected to vote today to exempt Internet-based phone companies from state regulation, a step that could help boost the emerging services.

But the vote is likely to anger some local officials who say the FCC is usurping local authority.

Among other things, the ruling would mean states could not force Vonage and other Internet phone companies to provide 911 service or comply with local consumer fraud laws, FCC officials told USA TODAY.

Vonage is the leading provider of a new crop of Voice-over-Internet Protocol phone offerings that are serving a fast-growing base of several hundred thousand customers.

Customers plug a regular phone into an adapter and broadband line. The voice calls are turned into data packets that travel over the Internet before converting back to voice at the other end.

Because there's no need to use costly phone networks, subscribers pay less than $30 for unlimited local and long-distance calls.

Last year, Minnesota utility regulators ruled that Vonage was a "telecommunications service" subject to their authority. That led the company to petition the FCC. A federal judge has overturned the Minnesota ruling. But a favorable FCC decision would help defend the company before an appeals court.

The FCC plans to say that Web-based phone services such as Vonage that send calls over the public Internet are interstate in nature, with no link to any one state or locality. Customers can use the service anywhere by plugging the adapter into a broadband line.

FCC Chairman Michael Powell has called for minimal regulation of Internet-based phone services to encourage their growth, saying they are more like e-mail than traditional phone calls.

Next year, the FCC could rule that Voip is an "information service" that should be free of most telecommunications rules.

The agency does plan to impose its own requirements that Voip services provide 911 and make their networks wiretap-friendly for the FBI. But state officials say they are better equipped to oversee issues such as 911 and consumer fraud.

"Our main concern is: What's left for the states here?" says Commissioner Bob Nelson of the Michigan Public Service Commission. State and local officials have flooded FCC commissioners with letters voicing concerns about the proposed ruling. One of their concerns is they could not collect revenue from Voip providers to subsidize high-cost rural phone service.

Today's decision is also expected to apply to services similar to Vonage, such as AT&T's CallVantage and some nascent Voip services from the regional Bells. But it was unclear Monday night whether cable companies would be similarly shielded from state oversight. Their Voip services travel over private Internetlike networks, not the Internet itself.

The FCC was working Monday night to afford similar protections to the cable providers.

Some cable companies pay fees to connect in-state toll calls to local phone companies. Some also pay state universal service charges to fund phone service in rural areas. A ruling that includes the cable providers would hand them a big victory by freeing them of the charges, putting them on equal footing with Vonage and CallVantage.

The FCC is expected to put off at least one key question: whether Voip services must pay interstate access fees — which long-distance carriers pay to local phone companies to connect interstate calls — and federal universal service charges. Voip providers don't pay them now.



 
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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

** Certain call types excluded.

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