Federal Court Throws Out Minnesota VoIP Regulation

An anonymous reader submits: "Voxilla reports that the FCC will announce Friday that 'a federal court has issued a permanent injunction against a recent ruling by the Minnesota Public Utilities Commission to regulate Voice over IP provider Vonage as a telephone company.' This is a significant move towards stopping recent movement by states to regulate VoIP -- most notably, California vs. VoicePulse and Wisconsin vs. Packet8."

Comments

Re:Calling all the militia

[1lus10n]

give it a few more years. after the average US citizen starts being noticably effected by these (stupid) laws.

and give it a few more years with no more major terrorist attacks (or alot of attacks) and the american public (hopefully) wont be so happy-go-lucky about endorsing things labeled as "security" or "defense" or .... "patriot" "consumer" etc .....

the scary part is the stupid laws are starting to trickle over to the EU .... (see: software patents)

Hmm

[arvindn]

At first I thought its a nice thing that courts and lawmakers at least partially seem to understand that the internet is different from conventional channels, with some hope that in the future they would also understand that software is different from other arts. Then I realized that all this could be merely because there aren't any uber-corporations interested brib^W lobbying politicians to tax the internet the way they do for software patents, ridiculous copyright laws etc.

Spam/no-call?

[deltagreen]

Vonage had maintained that it does not provide telephone service. Instead, lawyers for Vonage contended, the company offers data services over the internet

Where does this put VoIP with regards to telemarketers? If it's a data service, the FTC no-call list can't be applied, can it? Does this mean a call from a telemarketer to a VoIP-phone could be classified as spam?

this might be bad

[c4ffeine]

What I'm afraid of is politicians that don't understand voip. Knowing them, they'll probably apply a tax to help regular phone companies "remain competitive". They'll then limit this technology, perhaps when the lobbyists demand it, perhaps when they decide that it's a threat to homeland security. Or, the phone companies could sue for some reason- unfair competition? copyright infringement? and kill it that way. I hate to be cynical like this, but politicians are just that way.

Re:this might be bad

[Interruach]

Except you *want* a reliable 911 service, even if you switch to VOIP. All regulation isn't bad, you know.

Where do you draw the line?

[Michael Hunt]

OK, don't get me wrong, i'm not disagreeing with this ruling. Where do you draw the line, though?

Do you tax the providers who provide a circuit switched network, but not those who use a packet switched network? (as seems to be the case here, never mind that a lot of phone companies use ATM/AAL1 on the backhaul anyhow)

Do you tax a provider who provides you with a physical FXS connection, but not a provider who lets you make calls by some other method? (e.g. h.323 to a peering point which connects to a bunch of DS1s)

Do you only tax the incumbents, because their lines are running through public space and were paid for with public money? (this one almost makes sense)

Where do you draw the line?

This would be GREAT

[SCHecklerX]

...if I didn't have to depend on my local phone company for a DSL line in the first place :(

Oh, they understand it all right.

[emil]

I've said a couple of times before that the federal tax that we pay for landline and cellphones was originally a temporary measure in 1898 to finance the Spanish-American War.

VOIP is an opportunity to get out from under all of this stupid infrastructure. Even without 911 service, I am all for it.

Re:What constitutes a telephone company?

[TomV]

I can think of one key way in which the economics could have very nasty consequences:

If unregulated VoIP proves significantly cheaper then regulated telephone service, then one can expect customers to migrate en-masse away from the regulated providers. At some point, it may then become uneconomic for those providers to continue in business, at which point nobody is required to provide 911 service - the new VoIP firms don't because they're not required to, and the old PST firms don't becasue they no longer operate in the telphone business. At which point it becomes necessary to regulate the VoIP providers, in which case it would have made much more sense to do so in the first place, before the problem manifested.

tomV

Re:What constitutes a telephone company?

[Dun Malg]

On the other hand, Vonage isn't a purely VoIP company; they actually connect to the telephone network, and they offer telephone network numbers. They're like a traditional telephone company except for how your call gets to their switch; on the other side, they interact with the phone network like a traditional phone company.

No they're not, and no they don't. They are like any other private company out there with an on-site telephone system using Direct-In-Dial. Let me explain how it works:
With DID, you reserve a block of, say, 250 phone numbers. Not 250 lines, just the numbers. These are purely for addressing. Each extension in your company is assigned one of these numbers. Incoming and outgoing calls are handled by, say, a couple T1's. This gives you a pool of 48 lines for incoming and outgoing calls. Many companies and universities do this, and they aren't phone companies. At UCLA they'll even charge you monthly for the DID line, like a phone company! Vonnage is doing exactly this: selling you the use of an extension on their phone system. The only difference is that the extension isn't in their office, it's delivered over the Internet. Delivering a service over the Internet isn't in itself regulable, nor is selling DID phone service managed by private equipment.

Basically, Vonnage isn't delivering service on monopoly infrastructure, they are simply connecting to it like any other business.

This is taxing the internet

[silicon not in the v]

Remember the urban legend crap emails about "Congress is going to start taxing email!!!" Well for the same reason email can't be taxed, this can't be taxed. Let's suppose someone with a VOIP phone calls someone else with a VOIP phone. They are communicating entirely over the internet with no use of any telephone wires. That is almost exactly the same as a voice chat session over AIM, Yahoo IM, etc. except for different software. Congress has already passed a law that they will not tax any communication over the internet.(online purchase is something else entirely) Now they sure as Hell aren't going to tax IM services as phone companies, so they had better not tax VOIP, either.

With the capability of VOIP to connect to regular telephones, that is a capability that they are paying the phone companies for. When it gets onto telephone wires at the receiving end, that is already being paid for, taxed, regulated, etc. by the receiver of the call.