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

What constitutes a telephone company?

[Max Romantschuk]

What is the fundamental difference between a traditional telephone company and purely VoIP-based companies? VoIP is slowly making it's way into traditional phone companies, does this make them less of a phone company?

I'd say the difference is quite minimal for the end user.

I'm just rambling, but I'd sure like to hear my fellow Slashdotters' thoughts.

Re:What constitutes a telephone company?

[I8TheWorm]

I have to agree a little. The only difference I can see is one is a service you explicitly pay for, and the other is built on a service that you already explicitly pay for.

What's the reason for regulation of regular telephony companies anyway? Rate regulation is one of them, and that wouldn't really apply to VoIP, since the service it flies on is generally already regulated by the FCC (http://www.fcc.gov/broadband/).

I can't see any reason to regulate a service that runs on a regulated service... seems like it's from the Department of Redundancy Department.

Re:What constitutes a telephone company?

[Anonymous Coward]

The main differnce is the infrastructure.
Traditional phone companies, have to run towers, wires and connect the planet. Which usually means that they will completely own the infrastrucute, and thus what can and can't pass through it. Hence you get a monopoly like MaBell. This is why the FCC stepped in originally, to protect the consumer from unfair inflation hikes. How can you have capitislm when you have no option? (That isn't being patriotic, more or less, I like to save money)

VoIP on the other hand is simply more data, on the internet, and since there is a standards (i assume) my VoIP company can interface with your VoIP company, and both of us will be in direct competion. Thus the FCC shouldn't need to regulate based on consumer protection.
The other problem w/ the FCC stepping in is, what determines VoIP? Will my Roger Wilco voice chat's with people in game come under the FCC rulings? Will AOL IM then be under they're control, (that might be a good thing, still waiting for a universial IM system)? Then how long before forum posts like this are considred in the domain of the FCC? (ok that's streching it a little, but you get my point)

Re:What constitutes a telephone company?

[aldousd666]

It's like I said before

General Motors is not a Horse-Drawn Carriage manufacturer, nor is Vonage a phone company.

Just because they serve the same user space as phone companies, doesn't make them the same animal.

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.

Isn't Echelon enough already?

[jkrise]

Why should there be any more regulation when the very data can be captured easily?

and, on a related note, will Microsoft be compelled to register as a bank? People use their technology to do online banking you see...

-

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.

My 73 yo father

[G3ckoG33k]

My 73 yo father switched to broadband (10 Mbit/sec), voip, etc some two years ago. He surfs, reads the news, etc. He also pays all his bills via the net and is fighting hard to get me do it too - "Come on, it's really easy", he says. Not only that, know he wants me to install Linux on his machine so "he can see what all the fuzz is about". No, he never had a technical diploma of any sort.

Now, he bugs me with his fancy new voip connection. But, I am sure he never lobbied in Minnesota for their decision.

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.

VoIP is the future

[canolecaptain]

As someone who works in this industry, I thought I'd share some of the future of telecomm for those who aren't 'in the know'. All communication lines going to any endpoint (home, business, sensors, etc) are quickly moving to an IP based data network. Unfortunately, there are two problems that governments and current telephone companies face:
1) Roughly 50% of their voice revenue stream comes from per minute connection charges, other carrier access charges, & regulation charges (govn't). These will evaporate when subscribers move to data driven VoIP (ie: you pay a flat fee for DSL or cable modem bandwidth now, and it can run all your voice calls to anywhere in the world). Eventually the PSTN connection part will no longer be necessary, so Vonage will disappear as we know it today, but it has finally woken up the telcos to what the future will bring.
2) Pretty much the other half of their revenue stream comes from the 'premium' voice feature services (call waiting, text messaging, etc), all of which are quickly moving from the class 5 switch into the phones themselves (aka: free).

What do you do when your primary revenue stream evaporates? Fight it in the courts or with govn't officials. Remember, govn'ts have been taking a nice chunk of that revenue for themselves as well.

We will have to move to a bandwidth & quality of service (QoS) based payment style. A minimum bandwidth is given for a flat rate (which will include -all- voice), and extra bandwidth will be provided on demand at an agreed QoS. The higher the bandwidth & QoS, the higher the fee.

Things to watch out for: VoIP everywhere, SIP phones/services, VoWLAN, current voice carriers moving their infrastructure to their IP networks, and govn't regulations dictating that comm lines (called data services & unregulated) become regulated for QoS.

The companies that move to this model last will not survive. They aren't going to like this. :-)

Good or Bad? Can't tell yet.

[mjh]

While I'm glad that the MPUC's decision was thrown out, I don't think we know whether or not this is really good or just a speed bump for the MPUC (and by extension all other PUCs).

The problem is that we don't have the actual court ruling. We know that the court issued a permanant injunction agains the MPUC's ruling, but we don't know why. We don't know if it's been thrown out for procedural problems. If so, then MPUC simply corrects that procedural problem, makes a slightly different ruling that has the same effect. But if the ruling agrees with the VoIP providers as to what they're offering and why it's fundamentally different than what the LECs offer, then it sets a strong precedent and it impacts every PUC in the US.

Unfortunately, we don't know yet. And we won't know until the ruling is released on Oct 10. So while I'm cautiously optimistic, that's just me being hopeful. It's not reflective of any evidence.