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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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Salt Lake City: impressions after several months




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FCC Rules Internet Phone Services Not Subject To State Regulation


Vonage In Print News

FCC Rules Internet-Based Phone Services Not Subject To State Regulation

November 9, 2004

By Jennifer C. Kerr

U.S. regulators ruled Tuesday that providers of Internet-based phone call services fall under the jurisdiction of the federal government and cannot be regulated by states.

The Federal Communications Commission voted 5-0 in favor of Vonage Holdings Corp. of Edison, N.J., which had asked the agency to declare the company's product an interstate service, giving the FCC regulatory control.

Vonage has been battling public utilities officials in Minnesota who want the company to register in the state as a telecommunications service, subjecting it to rate regulation and other state rules.

The ruling applies to cable, phone and other companies offering an Internet phone service similar to the one Vonage provides. The decision does not, however, preclude states from imposing some taxes and fees. It also does not address access charges, which are fees paid to local phone companies for completing calls sent via the Internet to conventional phones.

Vonage also had asked the commission to certify it as an information service, instead of a telecom company. Such a move would have a profound impact on the industry because it would mean providers of Voice over Internet Protocol, known as VoIP, wouldn't have to pay the taxes and fees that traditional phone companies do. The commission did not rule on that request.

FCC Chairman Michael Powell said streamlining regulation of Voip companies is key to growth of the fledgling industry.

"To subject a global network to disparate local regulatory treatment by 51 different jurisdictions would be to destroy the very qualities that embody the technological marvel that is the Internet," Powell said.

There are more than 600,000 subscribers to Voip services in the United States, up from about 130,000 last year, according to The Yankee Group. The Boston-based communications research firm projects about 1 million subscribers by year's end.

Voip technology shifts calls away from wires and switches and instead uses computers to convert sounds into data and transmit them via the Internet.

With a special box, Vonage subscribers can use their conventional phones and existing broadband connection to make calls over the Internet. The company offers unlimited calls in the United States and Canada for $25 a month and has more than 300,000 subscribers.

Vonage argued its service is interstate because it lets customers make calls from any place that has a high-speed Internet connection. That means there's no way to tell if a customer who has a billing address in Minnesota is making a call from that state or another one, the company said.

In February, the FCC exempted pulver.com's Free World Dialup from regulation. The service lets consumers make calls to other members without using a regular telephone. Special numbers rather than 10-digit phone numbers route the calls.

A few months later, the FCC ruled that an AT&T service in which some calls were routed over the Internet resembled a traditional telephone service more than a Voip service and therefore should pay access fees.



 
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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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