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Vonage Fights Minnesota's Attempts To Regulate VoIP
rmccoy writes "Vonage said Thursday it intends to fight the first-ever decision by a U.S. state to regulate companies that provide Internet-based phone services. Minnesota's Public Utilities Commission unanimously decided two weeks ago that the New Jersey-based voice over IP (VoIP) provider is subject to the rules and regulations that cover traditional phone companies."
Seeing how they're dealing with interstate communication.
I mean, this isn't about just "voice over internet".... it's about a phone service that happens to use the net.
So... either they should have to follow regulations like any other phone company..... OR... the phone companies should be released from their regulatory obligations, at least with respect to the voip providers, so they can operate on equal footing.
While VoIP (or at least, VoIP-connected-to-the-standard-telco-system) is pretty much the same as normal phone service, trying to apply exactly the same regulations isn't going to work.
For example, phone companies are supposed to track where phone calls originate (for 911 dispatchers, for example). That's not going to be possible with VoIP.
There should certainly be some sort of regulations, but simply saying "it's phone service, the same rules apply" is dumb.
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I use vonage as a replacement for my house line. I added a second vonage number for faxing and it works perfectly (except during the blackout).
I have a feeling that many of the things that make this service cool could be affected by this.
Like:
- Being able to have a number in any area code regardless of where you live
- Being able to plug your phone into any broadband line anywhere and have the same number you have at home.
Those are key and I can see them being screwed by this type of regulation.
I'm a satisfied Vonage customer, and I have to say that I really enjoy having a "phone bill" that is completely straight forward. I'm on the $25.99/month plan, and our monthly bill contains less than $1 in taxes. LESS THAN A FREAKING DOLLAR. How cool is that?
If the government starts getting their fingers in this business that is doing just fine competitively, you can bet that I'll start to see loads of fees and taxes being added onto my bill, turning my $27.00 monthly bill into something more like $40.00. And for what benefits? None.
Go Vonage.
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Governments (pretty much all of them) seem to be completely out of the loop and out of control when it comes to technology. Good decisions sometimes get made, but too often it seems they're just throwing darts at a dartboard, completely missing it and assuming that means Ban it or Tax it or Regulate it. And even if you like the idea of regulation for whatever it is, they always try to apply old rules to new things.
In this case, they're trying to treat VoIP as...a regular telephone. Charging them for the 911 setup? What? You want them to be a telecom and pay nebulous telecom fees, ok...why do these fees even exist? By the day I am feeling more and more lost in my own country. Or maybe it's just the world, no one seems to do it significantly better. on any kind of a regular basis.
This nation likes to call itself capitalist, but to me it just looks like a huge pile or regulation, largely designed to create monopolys but not really regulate them - combined with a ton of subsidies, kickbacks, whatever to already large buisiness interests that are also exceedingly anti-capitalist.
Ok to uh, keep on topic, this is ridiculous. VoIP is not the telephone. And why is this Minnesotas decision to make, shouldn't this be at a federal level? Seems like telephony has a pretty large interstate component.
If you connect to the net via the phone company (DSL or modem), you are already paying these taxes. Vonage and other VOIP companies are simply providing a service over existing telecommunications infrastructure. If they tax VOIP, you will end up paying the tax twice.
From the Vonage web site "Vonage is proud to offer 911 dialing. When you dial 911, your call is routed from the Vonage Digital Voice network to your local emergency service dispatcher."
In instances where a company is offering Internet based services that both compete and replace traditional services, it makes sense that such a service would be subject to the same regulatory control as the competition. In this specific case, if you replace your residential phone service with Vonage VoIP service, it seems both reasonable and a matter of public safety that a call made to 911 from your residential phone connect you to local emergency services. As a valuable community service, 911 is funded by fees charged to local phone companies. It seems unreasonable for Vonage to escape paying 911 and related fees that it's regulated competitors can't avoid paying.
Minnesota's Public Utilities Commission does not seem to be overreaching in this case.
Where things get tricky are services that don't outright replace residential or business phone services, but offer a quasi-phone service such as the voice services now being offered as part of some instant message services. At what point do these unregulated services cross the line where they become subject to local public utility commission regulations.
I mean, this isn't about just "voice over internet".... it's about a phone service that happens to use the net.
... even more ineffecient than government and arguably more ineffecient than communism itself).
So... either they should have to follow regulations like any other phone company..... OR... the phone companies should be released from their regulatory obligations, at least with respect to the voip providers, so they can operate on equal footing.
You ignore a fundamental difference. Local telcos own a monopoly over the local copper cable running to people's homes. As a monopoly they must be regulated, nationalized into a public works, or we are left with a monopoly market running amock (remember, monopoly markets are the least effecient
There is a huge difference between a company that essentially offers a software (or firmware) service over the internet that happens to transmit and receive electrically encoded voice data, and one which owns the local DSLAMS, the local copper running into your home, and can leverage that local infrastructure monopoly in an anticompetative manner if they are not regulated.
The idea that the regulations designed to hold a local telco monopoly in check should apply to a competely unrelated business that provides what is essentially a software service via an entirely different infrastructure (one that entails no monopoly, at that) is ludricous.
One hopes the law is written such that (a) this is a federal, not a state matter and (b) such that telco's are targeted, and broader software services are not.
Otherwise you'll see AIM, MSN Messenger, Jabber, and other services targeted the moment they can provide audio and video conferencing, and seamless communication with old POTS phones.
And that would really chill innovation, as much as any Microsoft monopoly could ever dream of.
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Ending up with a situation where some packets sent over IP are taxed - specifically in this case a subset of packets containing vocal audio - can only lead to a situation where every single packet needs to be audited simply in order to track and log the taxable ones. That's horrendous enough - and so expensive to implement that even aside from the privacy implications it would cost much more than any revenues raised.
But consider, what's the difference between a packet of "telephone" voice and a packet of "Internet radio" voice? What's the difference between an Internet radio monolog and a conference call in which one party is doing all the talking? If two people listen live to each others' Internet radio shows, and converse thereby, is it telephony for purposes of taxation? If so, then when is Net radio not a phone call?
The only sane conclusion is: Vocal conversation over the Net may look like a phone call, but it's really something else. It may also look like radio, but it's really something else. Making Internet "phone" companies license themselves as real phone companies do makes no more sense than requiring a broadcast license of Net radio stations.
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It is rediculous to assume that because the service VoIP companies provide to consumers is similar to the service phone companies provide to consumers, the same regulations will work to govern them. In fact, why should VoIP be subject to regulation at all? The only reason I can think of is: if it is not regulated, it has the potential to destroy the market for traditional switched land-line service. But the question we should be asking is, is that a bad thing? Shouldn't we be moving toward a model where phone companies transform into bandwidth providers and voice communication service is provided over the same connection as everything else?
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VoIP doens't mean "Any voice service on the internet". VoIP is a specific set of protocols for providing integration with the telephone system via IP.
What Vonage offers is a box that you plug a telephone into, get a real telephone number, and make real telephone calls to and from. It is no more or less a telephone than the telephone you use in your house hooked up to your phone company.. the only difference is the backhaul.
So.. rather than saying "Should vonage be regulated"... the question should be "What is different about Vonage that they should not be bound by the regulation the phone company is? Could the phone company start giving you a cisco VOIP box, a DSL line, and thereby avoid regulation? You bet they can't, cause they are the phone company.. why should Vonage be able to offer something the phone company cannot legally offer?
It's minnesota's decision to make because Vonage is offering phone service to Minnesotans.
I think the problem is that the phone companies are actually offering two things: the physical network infrastructure, and phone service. The regulations for both are intertwined since they have historically been equivalent, but now one can be offered without the other. Minnesota is trying to apply their combined regulations to a company that is only offering the phone service, and that is just dumb. So we agree that Minnesota's decision is dumb. What is really needed is for separate regulations to apply for phone service and network providers. Traditional phone companies should be subject to both, and Vonage should be subject only to the phone service ones. Also, we agree that existing phone service regulations are probably impractical in a world where phone service is provided over the Internet and they probably need changing (perhaps to the point of abolishing them entirely).
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How about the point where they interconnect and exchange calls with the POTS network?
Talk only to other net phones, you're a net application. Interconnect net calls with POTS calls as a service to your customers and you're a phone company.
And when I say "as a service to your customers" I'm making a distinction:
If you're selling connectivity to the POTS network to general customers, suitable for replacing local phone service, you're a telco - whether you're doing it over copper, fiber, "cellphone" packet, 802.*, infrared, wires-through-wormholes, or what-have-you.
If you're selling a PBX replacement, hooking up a customer to his own lines for which he's ALREADY paying off a telco and the telco's tax man, you're an equipment/software vendor.
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