When is a voice telephone not a telephone? Only a court could answer this. The Eighth Circuit says "When it's a VoIP phone, b/c it's a data service not a telephone service."
But it's good news since it will keep VoIP out of state telephone service regulators jurisdiction.
An important and favorable decision for the industry:
URL: informationweek.com
VoIP providers scored an important and perhaps conclusive regulatory victory Wednesday when a three-judge federal appeals court ruled that the Internet phoning service is a data service and not a telephone service.
The decision means that the Federal Communications Commission and not state regulatory agencies will oversee voice-over-IP services.
The decision was a victory for Vonage Holdings, which had been challenged in the case by the Minnesota Public Utilities Commission, though the overall burgeoning VoIP industry will also benefit from the decision. A coalition of VoIP providers ranging from Google and Microsoft to Cisco and Skype immediately hailed the decision.
"The Court recognized that the FCC properly embraced the future of VoIP by ensuring it will be free from multiple and inevitably conflicting state jurisdictions," the VON Coalition said in a statement. "The Court's decision is a critical step towards unleashing the full economic benefits of VoIP competition, with the potential to save American consumers upwards of $100 billon over the next 5 years."
The issue had been wending its way through the federal court system since October of 2003 when Federal Judge Michael J. Davis supported the use of VoIP unfettered by state regulations. The appeals court decision was written by Judge Kermit Bye.
In Wednesday's decision from the U.S. Court of Appeals for the Eighth District, the court said regulation by the FCC was "not arbitrary of capricious" and the FCC was not wrong in the way it classified the Vonage VoIP service. The court also indicated that 911 emergency service -- often not available to all VoIP users -- did not preclude FCC oversight of Internet-based phoning.
Vonage, which had been supported in the litigation by a score of VoIP providers, praised the Court's decision and noted that the court said issues raised by state regulatory agencies were "not ripe for review."
The decsion "allows Vonage to continue growing our business unfettered by outdated pre-Internet regulatory structures," said Mike Snyder, Vonage CEO, in a statement. "It protects a young and growing segment of the telecommunications business."
Also included in the VON Coalition statement hailing the commending the decision were telecommunications providers including AT&T and T-Mobile, although VoIP is currently taking business from their existing subscribers.
While the decision was good news for Vonage, the company has been struggling to reach profitability and it recently lost an important court decision to Verizon Communications over intellectual property. |
