The Federal Communications Commission Tuesday declared that a leading type of Internet-phone service offered by cable companies and others will be largely free of regulation by state governments.
The ruling made it clear that the FCC has sole power to decide whether certain regulations apply to voice over Internet protocol, as the service is known.
Vonage Holdings had asked the FCC to preempt an order of the Minnesota Public Utilities Commission that imposed regulations on the service. Agreeing with Vonage, the FCC ruled that it is not feasible to split Vonage’s DigitalVoice service into intrastate and interstate components. That's because VOIP users can use their phones from a broadband connection anywhere in the world and determining whether a call was local, interstate or international is impossible.
The commission also found that regulations Minnesota officials imposed were inconsistent with the FCC’s policy of deregulation. The Minnesota Commission found in August 2003 that Vonage’s DigitalVoice was a telephone service and Vonage was required to obtain a certificate of authority and meet other rules and regulations governing telephone companies in the state. One requirement was that Vonage provide the same emergency 911 service as phone companies.
Whether DigitalVoice should be classified as an unregulated “information service” under the Communications Act or a telecommunications service will be addressed in the Commission’s IP-Enabled Services Proceeding, the FCC said.
The cable industry said it was happy to be free of the threat of state regulation for VOIP services. "By establishing a national framework for the regulation of VOIP services, the FCC has taken a significant step toward promoting competition in enhanced voice services," the National Cable & Telecommunications Association said in a statement.