New York State Classifies Vonage As Phone Company

securitas writes "CNet's Evan Hansen reports that on Wednesday, the New York State Public Service Commission 'ruled that Vonage Holdings is a telephone company and thus subject to state regulation.' The decision is seen as a blow against the emerging voice over Internet protocol (VoIP) company and the industry in general."

Comments

First?

[bobbis.u]

Sounds like a bad call to me!

Re:First?

[vasqzr]

It might put their IPO on 'hold'!

Re:First?

[N3WBI3]

Welcome to NY where if we cant tax and regulate it we dont want it..

Re:First?

[Eviscero]

Absolutely Wonderful!

I live in NY and I also have Vonage. Am I to understand that this will include some taxes? Do you think NYS could add anymore taxes to my paycheck? Lets see what else they can tax me on:

1)Oxygen/Nitrogen Tax (for breathing)(.40 per cubic cm)

2)Toliet Paper Tax (for wiping bum) (.30 per sheet)

3)Keyboard Tax (.03 cents per key-press)

4)A federal tax (unnamed..maybe we'll call it 'Medicare') that allows for millions of other people to produce a 1/2 dozen children at everyone else's expense.

5)Taxing Tax ($3.00 flat rate applied to all taxes to facilitate taxing)

6) Citizin Tax (40% of total income)- Tax to dry up any other $ that a citizen might have to spend.

Why is NY State determined to rape me of all my hard earned cash? You would think that someone would get the picture and see that NY residents (as well as the rest of the US) are getting screwed with too much government.

I'm moving out of this blood-sucking state and settling on a remote island somewhere.

Taxes?

[millahtime]

Does this state regulation mean the load of taxes thrown on it. The 911 tax I can't knock but all the others.

Re:Taxes?

[vijayiyer]

Even the 911 tax is a lot of baloney. I read recently that the bulk of it goes to the NYS general fund. See http://query.nytimes.com/gst/abstract.html?res=F60 A16FD39580C738DDDAC0894DC404482

Re:Taxes?

[Anonymous Coward]

Actually, NY collects $1.20 for the E-911 service. Of that:

$.50 goes to the general fund
$.24 goes to the police
$.34 goes to homeland security

and

$.12 goes to the E-911 service

Re:Taxes?

[Shakrai]

Does this state regulation mean the load of taxes thrown on it. The 911 tax I can't knock but all the others.

Actually all this means is that they are subject to regulation by the PSC. That means they must file a tariff sheet with the PSC and that the PSC must approve any rate changes (up or down).

The decision is seen as a blow against the emerging voice over Internet protocol (VoIP) company and the industry in general.

I'm afraid I disagree. While I am somewhat leery of Government regulation the PSC does a good job. Ask anyone who has been stonewalled by their phone company. All it takes is one phone call to the PSC and a complaint and your phone company will fall all over you trying to fix the problem.

Three cases in point (both for the Agency I work at): One of our satellite offices changed locates. We informed Verizon two months before the move and followed up with them as it was happening. Yet for some reason the lines weren't moved. After two days of arguing with them ("We'll have your new lines installed in a week") I filed a complaint with the PSC. A Verizon vice President called me back (based on the information the PSC gave her -- she knew nothing about our other dealings with Verizon until I told her) and we had a techie at our site within two hours. Granted he only installed one line but it got us operational again and we had the others installed by the next day.

Another PSC story revolves around my boss deciding (against my better judgment) to move our local services to AT&T. Unfortunately the AT&T sales guy (actually working for a third-party that collected commissions from AT&T sales) lied to us about the services that they could provide. They were unable to provide us with an actual Centrex package so we lost the ability to transfer calls (our central offices handles all phone calls and dispatches them to the CSRs/Agents in the remotes that handle the account if we can't take care of the issue in the main office). This effectively shut our business down. I placed an order with Verizon's "Winback" group but AT&T refused to release the lines because they didn't have control over all of them yet -- so they claimed, funny how none of our Verizon features worked anymore and AT&T was billing us for calls during this time. After a full day of trying to get somewhere with AT&T (the PSC does require you to make a good faith effort to solve your problem first) I called up my friends at the PSC. Within twenty minutes I had somebody from AT&T corporate on the line who solved my problem and released the lines to Verizon. I also used the PSC (about a month later -- referring to the same case) to force AT&T to give us a credit for everything they billed us for since they (or their agents) lied about their services to begin with.

I also have a PSC story that relates to the power company. One day we received an automated call information us that our power would be shut off on Wednesday for "scheduled maintenance". The call didn't say where this outage would be (would it be in a remote office or our main one? They all have the same billing addresses/phone number since the main office handles all the accounts payable). Calling several people at NYSEG and none of them knew jack shit about it -- and they refuse (as a matter of policy) to let you talk to the actual guys that work on the lines. We needed to know which office it would be so we could make a decision -- if they are cutting power to the main office for six hours we will probably close the agency for that day -- but we can't make that decision without reliable information in hand. Anyhow after two days of dealing with this BS I called up the PSC and opened a case. Within an hour we were speaking to a NYSEG Manager who tracked down the field manager that was working on the project in question. He informed us where the outage would be -- turns out it was in an area that we used to

Re:Taxes?

[shrapnull]

Not only that but it creates a horrific precedent. Basically any translation from the web to the "real world" can be considered under this, including internet-to-internet phone calls as user-to-user calls are now.

This could be a staging ground to compare email to snailmail and attempts to apply applicable taxes will surely follow.

Not that I'm wholly opposed to a digital postage stamp as it would help deter spam, but we are surely in poor shape if the argument comes up in the state of New York. They don't seem to recognize that it's not the same market and if the tax on an email were more then a mere few cents, it will become painfully obvious that we're being gouged for replacing postal workers.

VoIP pays for it's use of carriers, but the users are not taxed. It transmits the signal into the local area via the internet and places the call from there. The use of taxes and fees has applied to the carriers internet connections from the very beginning, just not the end users.

However, switching to a "phone service" will supposedly keep local calls free for the forseeable future instead of giving telco's ammunition to charge per minute on local calls as they do in much of Europe.

Re:Taxes?

[Anonymous Coward]

I wholeheartedly disagree.

Vonage provides an internet phone service over your internet connection (which, btw, is not subject to the same stringent standards that your PSTN service is subject to).

Phone companes need to be regulated because they are a natural monopoly, as in they own and maintain the lines that provide these basic and nessecary services to your home.

The PSC shouldn't be used as a crutch for people who are too lazy to practice consumerism. If you don't like the service Vonage provides, don't use them! Your local Verizon service is subject to the rules your PSC puts out becuase Verizon is using public land and providing a type of service no one else can becuase they are given special rights to do this by the government.

This is just simply a ploy by the government to suck more money out of people that does not belong to them (save for 911 service which should be paid for).

Re:Taxes?

[duffbeer703]

Actually, from FY1993 through FY2003, no money went towards NY E911 services at all from that tax. Local counties or cities footed the entire bill.

Re:Taxes?

[Shakrai]

This is just simply a ploy by the government to suck more money out of people that does not belong to them (save for 911 service which should be paid for).

Perhaps you'd care to enlighten us then as to how being regulated by the PSC "sucks money out and gives it to the Government"? Perhaps it will cost them a bit more to prepare and file their tariffs but the PSC isn't collecting a tax for NYS. Any fees collected by the PSC are used to fund the operation of that Agency -- they don't send money back to Albany so I guess that disproves your little conspiracy theory.

911 has nothing to do with it either. Cell phones aren't (yet) regulated by the PSC and they pay the 911 tax. Perhaps you should research a bit more before you comment.

Re:Taxes?

[UU7]

Another useless anonymous troll.

next..

Re:Taxes?

[jc42]

[I]t creates a horrific precedent. Basically any translation from the web to the "real world" can be considered under this, ..

Yeah; what I'm wondering is: Suppose I use the builtin microphone and speakers in my Mac Powerbook, or the plugin mike and speakers in my linux box, and write software to connect these to a program on another machine on the Net?

Am I now a phone company? Do I have to file the appropiate papers, pay taxes, and so on?

It gets more interesting when you consider that both I and my wife have PDAs with WiFi access. There are a number of these on the market now, such as the Palm Tungsten and the Blackberry RIM handhelds, and they mostly have a builtin mike and speaker. Also, voice-recognition software is available for all of these machines. Combine these with the Internet, and using them to remotely access sound files looks a lot like "phone" service.

So if I write a browser plugin that lets me talk into my PDA, which connects to my home machine and retrieves some files, am I now running a phone company? How about if I connect to a friend's home machine and do the same?

And some of us are working on voice-based interfaces for the benefit of the visually impaired. Is this all now to be considered a "phone" service, to be regulated and taxed as such?

Maybe it's time to just declare the Internet to be a phone system?

Re:Taxes?

[JimBobJoe]

I'm afraid I disagree. While I am somewhat leery of Government regulation the PSC does a good job. Ask anyone who has been stonewalled by their phone company. All it takes is one phone call to the PSC and a complaint and your phone company will fall all over you trying to fix the problem.

Your examples all have to with using the public utilities/services commission as an arbitrator when the utility company is not doing its job.

If the company is not a public utility, then the Attorney General's office would serve the same role. (The AG's office has power over all companies in the state not specifically by another state department.) I have found it very useful to use the Ohio AG's office to whack a few companies on the head when I'm having issues with them.

So if Vonage were not covered by PSC, they would be covered by the state AG's office, and I would expect little different in their arbitration/leveraging abilities.

Re:Taxes?

[Anonymous Coward]

Libertarians always think that taxes are theft, but they're wrong. Libertarians always think that private industry can do things more cheaply, but when you factor in corruption, kickbacks, and nepotism, it gets very expensive very quickly.

Re:Taxes?

[JimBobJoe]

So if Vonage were not covered by PSC, they would be covered by the state AG's office, and I would expect little different in their arbitration/leveraging abilities.

Sorry to reply to my own post, but I had an extra thought.

You can make a good justification for the AG's office to be more effective. Public Utilities Commissions are often very strongly lobbied by telcos and complaints of incestuousness are not unheard of.

Re:Taxes?

[no_such_user]

Well, if you strung up some copper wires between you and your wife, that wouldn't be a "phone" service. And if you added a friend or two, that wouldn't be considered a phone service either. But what if you ran copper to 300 of your neighbors, and started charging them a montly fee for service? THAT might be a different story. And what if you then hooked them into the PSTN?

My question is: how can they regulate VOIP when they're not regulating the cable modem service I use to get VOIP delivered to me?

Re:Taxes?

[Geoff-with-a-G]

Libertarians always think that private industry can do things more cheaply, but when you factor in corruption, kickbacks, and nepotism, it gets very expensive very quickly.

Yes. Thankfully there's none of that stuff in the government agencies.

Re:Taxes?

[Fnkmaster]

Except your examples don't make any sense. Verizon moving lines - Vonage doesn't provide lines. AT&T unable to provide a level of service - Vonage offers essentially no level of service guarantees, it's all best effort stuff. I wouldn't bank my business on it, but that's what traditional telephony is for. Power outages affecting your telephony service? Again, not Vonage's problem, that's an issue between you, the power company and your ISP who provides you with the infrastructure for your internet service that Vonage runs over.

In short, I don't oppose all regulation of Vonage because they do stuff over the internet, but I don't see the regulation as useful either, and I do see it as potentially a way to overwhelm competition in the VoIP arena by making it too burdensome for new entrants to compete. Vonage service is useful for some - I think it would be extremely misleading for people to expect the kind of reliability they get with POTS service, simply because the reliability is limited by the reliability of power and the underlying internet infrastructure. Vonage has some reliability issues of their own to hammer out too - but even if their reliability were 100%, you would still have far more outages than you get with POTS, at least in my experience.

If you want to force reliability on VoIP, you need to first try to force reliability on the internet. Piling fees onto Vonage and forcing a higher level of service onto them is nonsensical when most of their customers have residential internet access with no level-of-service guarantees, regular outages, no uninterruptible power supplies and so on. Forcing them to be honest in their advertising and about how they compare themselves to POTS wouldn't be such a bad thing, on the other hand.

Re:Taxes?

[Anonymous Coward]

The government is just a method of transfering wealth from one group to another. In this case, you yourself said that:

the PSC must approve any rate changes (up or down).

The loss of control over their own pricing will be used by their more moneyed competitors (i.e. better lobbyists) to reduce the value that Vonage can provide to their customers. Essentially the PSC will be used to transfer wealth from Vonage to the old-style phone companies.

Regulation is almost universally disguised as being beneficial for the customer, but just as often is used as a barrier to entry for new competitors. These traditional companies want to be regulated because it reduces competitve advantage and keeps the competitive upstarts out of the market.

Re:Taxes?

[Anonymous Coward]

Maybe it's time to just declare the government to be a tyranny?

Re:Taxes?

[RzUpAnmsCwrds]

"There are a number of these on the market now, such as the Palm Tungsten and the Blackberry RIM handhelds, and they mostly have a builtin mike and speaker. Also, voice-recognition software is available for all of these machines. Combine these with the Internet, and using them to remotely access sound files looks a lot like "phone" service."

No, it doesn't.

Repeat after me:

*** A blackberry playing sound files is not phone service. Vonage is phone service because they provide access to the telephone network (e.g. you can call a landline phone or any other phone on the telephone network) and market their service as such. Internet telephony (service without access to the phone network) is not "phone service" because it does not allow access to the phone network. ***

"Am I now a phone company? Do I have to file the appropiate papers, pay taxes, and so on?"

No, but as soon as you connect to the telephone network you are.

Look, Slashdot doesn't seem to get this: Vonage is a phone company because they offer connectivity to the phone network.

It's just like the FCC. You don't need to censor your programming if you are broadcasting on a closed system (cable). You do have to follow the regulations when you broadcast on the public airwaves.

How is Vonage any less of a phone company than Qwest? My Qwest phone lines terminate at a local box - from there on it is all fiber. The fact that Vonage service runs through the internet makes it no different.

Cellular phones are regulated because they connect to the phone network. Landline phones are regulated because they connect to the phone network. Cable phone service is regulated because it connects to the phone network.

So why shouldn't internet phone service be regulated? That's like saying that a TV station broadcast over the public airwaves shouldn't be regulated because their programming is sent accross the internet before it is broadcast.

"So if I write a browser plugin that lets me talk into my PDA, which connects to my home machine and retrieves some files, am I now running a phone company? How about if I connect to a friend's home machine and do the same?"

No. You're not providing phone service, are you. Phone service means that you're connecting to the telephone network.

"And some of us are working on voice-based interfaces for the benefit of the visually impaired. Is this all now to be considered a "phone" service, to be regulated and taxed as such?"

Nope. Not on telephone network.

"Maybe it's time to just declare the Internet to be a phone system"

This is the typical Slashdot attitude.

Repeat after me:

*** Vonage is a phone company because they connect a provider to the telephone network. You can dial any phone in the world with Vonage. Anyone can call your Vonage phone. Thus, you are on the telephone network. Vonage should be regulated like any service which provides connectivity to the telephone network. ***

*** > is not a phone company unless they connect to the telephone network. They should not - and are not - regulated as a telephone company. ***

Oh Well

[kpogoda]

Looks like another stifled and regulated monopoly to me. So much for innovation in this industry. This looks like a bad case precedent.

Re:Oh Well

[Anonymous Coward]

If it looks like a duck
Walks like a duck
and quacks like a duck

It must be a duck.

Seriously, did you think vonage WASN'T a phone company?

Re:Oh Well

[Loconut1389]

Telephone company implies a telephone. IP telephony (a misnomer really) is sending audio signals over the internet to a designated IP address. Only because they are trying to bridge people to VOIP are there any telephone numbers associated with VOIP. VOIP itself does not require any use of POTS. It seems to me that a pure VOIP company (even if perhaps the device you speak into looks like a telephone) where there is no POTS based phone number attached nor does it traverse any of the POTS networks, should have no fees incurred. Now it would make sense to me to have taxes involved when a phone number is attached to it. But either way, it seems that the courts are trying to squeeze VOIP into the telephone paradigm, just like every non-technie in america. It makes it easier to embrace if its just a fancy phone.

Re:Oh Well

[Anonymous Coward]

Hi, my name is kpogoda and I like to add nothing to conversations in an attempt at karma whoring.

Re:Oh Well

[hpavc]

sure ... now i want to see webex, microsofts meeting service, and others charge the same taxes as vonage is forced to.

Re:Oh Well

[h4rm0ny]

If it looks like a duck
Walks like a duck
and quacks like a duck


It must be a duck.

Seriously, did you think vonage WASN'T a phone company?

Vonage may or may not be a duck... I mean phone comapany, but what about less dedicated companies? What about an ISP that includes VoIP? What about a company that outsources their network management to a company that sets up VoIP for them internally to their company? What if some friends and I set up our own system, say about fifty of us? What if we've created a new animal that can quack when it wants to and bark the rest of the time?

The only clear cut off point is when we start connecting to the existing phone network. But I could set that up from my home network with a bit of fiddling. Would they come down on me?

If you don't use the connection to the existing phone network then do they want to monitor all internet traffic? Do they want to access encrypted traffic? Because that's the only way they can regulate VoIP.

And if they do use the connection to the existing phone network as their definition, then what happens 5-10 years down the line when VoIP dwarfs the old network. Do we just disconnect and saev ourselves a lot of money?

Re:Oh Well

[Anonymous Coward]

Seriously, have you HEARD of Vonage?

It has a POTS phone number attached.

The other end of the call has a POTS Phone number.

I don't know whether it's smart enough to keep off of the POTS network when you're dialing another Vonage user, but the rest of the time (at least) it would use the POTS network for at least some of the connection.

Re:Oh Well

[Loconut1389]

that was sort of indirectly my point. im just speaking in general though.

Re:Oh Well

[irenetheno]

Wait.. So can Vonage customers receive incoming calls or not?

VOIP companies appear to be selling digital PBX services. Isn't that still being a phone company?
They're just replacing some of the POTS lines and phone switches with ethernet, routers, etc.

Re:Oh Well

[LostCluster]

The difference is that those Computer-to-Computer meeting services don't offer phone servicce. That is to say, they don't offer the ability to call a PSTN number...

Re:Oh Well

[Anonymous Coward]

"Speaking in general" is a pretty lame excuse for being flat out WRONG. Butt munch.

Re:Oh Well

[Anonymous Coward]

as far as i know vonage customers get a telephone number and can make and receive POTS calls.

Re:Oh Well

[skarmor]

It seems to me that a pure VOIP company (even if perhaps the device you speak into looks like a telephone) where there is no POTS based phone number attached nor does it traverse any of the POTS networks, should have no fees incurred.

If there is no interconnection with the PSTN then no charges are incurred. The problem is that most voip companies are routing voip traffic over the public internet and then interconnecting to the PSTN for the last-mile.

It makes it easier to embrace if its just a fancy phone.

The problem is that voip is going to be used by everyone - not just techies. The average person is not going to see the difference between POTS and voip. They will expect voip service to behave the same as POTS. However, becasue it is not regulated, voip service does not currently need to provdie 911 service, full battery backup or meet any other quality of service standards.

Many people who will purchase voip services in order to save a buck will not understand that these standards are not there. So when one of these consumers tries to call 911 from their voip phone and the 911 operator thinks they are in NYC when they are really in Albany - there will be excessive bitching from the general public - and with good reason.

The same will be true in situations where the power goes out and these people can't use their phones. The regulators are just trying to stay "ahead of the curve"...

Re:Oh Well

[azuretek]

Indeed it does so, vonage gives you a phone number that you can call from any POTS phone and vice versa. Pretty neat, right?

How was such a post modded +4 informative? do so many people not know how vonage works? do they assume you can only talk to other vonage customers? please everyone get a clue! Read about vonage, hell sign up! they just lowered their prices... AGAIN! Personally I would clasify vonage as a real phone company, they provide the exact same service as a regular phone company but instead of using POTS lines it uses my internet connection.

Re:Oh Well

[pixelpusher220]

Yes Vonage customers can both make and receive calls from regular POTS customers. (I actually use it for my TiVo to dial up for it's guide data)

Re:Oh Well

[Frennzy]

YES! Incoming. Outgoing. It's a phone, dammit. The primary difference is they use a physical adapter to encapsulate an analog phone signal into IP packets. The device establishes a connection with Vonage proxies, which make the decision about how/where to route the packet, based on the destination phone number. If that number isn't a Vonage number, it ends up going out through a peering point (usually pretty damn close to the termination point of the phone call) and through the last mile copper to the destination. People keep talking about the 'internet' as if it's somehow completely distinct from the 'POTS' system. The vast majority of 'POTS' calls run over the same pipes as your internet data does. Major carriers aggregate circuit switched calls and push them into packet switched networks, because packet switched networks have much greater bandwidth. The thing is, I *already* pay taxes on my broadband connection. I also pay surcharges to Vonage. Why should there be an *additional* tax just because it's providing the same service as the incumbent telcos? Why the hell does the state gov have to be involved? Most of the work being done here is already paid for in other ways. Vonage is a Good Idea(TM) Company, and had the vision and agility to get to market early. They don't NEED regulation. They *lowered* their prices! The only reason phone companies are so heavily regulated is because they are typically lying, cheating, slamming scumbags. They NEED the government to watchdog them. Better yet, they need to be slapped down by the consumer. How? By consumers switching to things like Vonage. Pretty simple. Let the incumbent telcos end up as infrastructure managers. Keep them out of the consumer's pockets/homes.

Re:Oh Well

[skarmor]

Vonage may or may not be a duck... I mean phone comapany, but what about less dedicated companies? What about an ISP that includes VoIP?

If you are interconnecting with the PSTN in order to provide voice services then you are a phone company.

What about a company that outsources their network management to a company that sets up VoIP for them internally to their company?

As long as there is no interconnection to the PSTN then there is no problem. Once there is interconnection then the company that owns the lines is a phone company.

What if some friends and I set up our own system, say about fifty of us?

Again interconnection is the key.

If you don't use the connection to the existing phone network then do they want to monitor all internet traffic?

No.

Do they want to access encrypted traffic?

The FCC and state PSCs don't.

Because that's the only way they can regulate VoIP.

No.

And if they do use the connection to the existing phone network as their definition, then what happens 5-10 years down the line when VoIP dwarfs the old network. Do we just disconnect and saev ourselves a lot of money?

This is going to take much longer than 5-10 years. Think about the amount of investment that the telcos have put into copper lines. They make Billions of dolalrs off of that investment and are not likely to just let it go.

Additionally, VOIP cannot become bigger than the PSTN until there is sufficient broadband deployment across all of teh US - not just urban areas.

The bottom line is that the PSTN is going to be a part of our communications system for many years to come. Once VOIP becomes bigger than the PSTN the regulators will establish new regulations for VOIP...

Re:Oh Well

[Anonymous Coward]

I'm sick of all the whining about the "stifling" $5 fees per month for this. In case you people haven't noticed, just what do you think that internet connection your precious VoIP service runs over? Last time I checked...it was THE PHONE COMPANY!! Now I want all you VoIP lovers to exercise both brain cells REAL hard here, and just think...if the phone companies go under..who's going to build the network? You think Vonage or some cable company is going to pull wire out to Joe Bob's farmhouse to provide universal service? HELL no..because it's not cost effective. The phone company was set up the way it was, way back in the first half of the 20th century, with the understanding that a monopoly was necessary to provide universal service. It wasn't fancy, nor was it necessarily as cheap as it could be, but EVERYONE had a phone, that worked...and worked the same way, and you always had a 99% chance that whenever you picked up that phone, it would work, and your call would go through. All the stuff that's happening in the communications market scares me..what's going to happen in another 20 years when everyone's got something different, call quality is at BEST "a little worse than standard phone service" (which is how everyone STILL describes VoIP)?? What's going to happen when everyone's using this crap, and the next blaster worm comes out and kills the friggin' internet?? I guess there's always cell phones, right? In case you people hadn't noticed, our phone system was the ENVY of the entire world, up until recently when it started getting all screwed up. You know why Europe and Japan loves their cell phones so much??? Because their landline service totally sucked ass. Why?? Because they didn't have Ma Bell, with the support of the US Govt. to build it, that's why! This country would be 30 years behind where it is if not for Ma Bell in the 40s thru 60s, mark my words. So before you go screaming about VoIP as a way to save that huge, unfair, suppressive $5 per month, think about that friend or relative that lives way out in the middle of nowhere, that you can actually call if you want to..because you've been paying that $5 a month so the Phone Company would pull a wire out there.

Re:Oh Well

[Loconut1389]

i understand perfectly about vonage, people just dont read things the same way the writer means them, or the writer has other context in their head that doesnt make it onto the page.

Re:Oh Well

[Anonymous Coward]

Headline: Ignorance kills

Maybe the government could be a bit less intrusive then, and settle for requiring informative labelling for VOIP services that are advertised as POTS replacements?

If that doesn't get the job done, then I don't see why the result would be the government's problem. People die every day because they were ignorant of something or other.

Re:Oh Well

[JimBobJoe]

The problem is that voip is going to be used by everyone - not just techies...The same will be true in situations where the power goes out and these people can't use their phones. The regulators are just trying to stay "ahead of the curve"...

I find this line of thinking extremely distasteful.

First, Vonage goes out of its way to make it very clear to new customers that it may not be as realiable as POTS, does not work for 911, et cetera. The warning is huge, and to imply that only techies would get it is disingenuous--its not in fine print, it's in huge lettering.

I'm somewhat sympathetic to the ideat that the public utilities commission could regulate VOIP for the purpose of being an arbitrator when things go bad (though that's what the Attorney General's office is for.) However I see no reason to protect customer's from something, and dramatically increase their cost, when it's spelled out pretty clearly and anyone can understand it.

Re:Oh Well

[afidel]

Bullshit. Vonage and all the other large VoIP providers use gateway services to access the POTS 911 system through the public alternative number for the local emergency dispatch center. There is a difference in that some changes are allowed to affect the public alternative number while almost no change is supposed to affect the 911 trunk. Right now the Vonage 911 services is an optional component but it's not hard to imagine that it be made a required part of setting up the service. As to the power outage problem, it's true but that's what you get for saving some money, a less reliable service. Unless everyone goes to VoIP I don't see it being a problem, if the power is out and there is an emergency just go use the neighbors phone, same as if your line has snapped.

Re:Oh Well

[Doug Dante]

The whole point of Vonage is that you get a real phone number, and you can call real people at other real phone numbers.

I have a Vonage phone, and when I signed up, they gave me a phone number from my choice of limited exchanges from anywhere in the United States. (By the way, I live in Michigan, what if I were to choose an exchange in the State of New York? Would I be subject to New York regulations? I should not be)

I only call people on the PTSN and cellular network. And if we couldn't communicate, the service would be worthless to me.

It looks like a phone, acts like a phone, and quacks like a phone (duck). We all may have concerns about entrenched government bureaucracies, but Vonage is my home phone company.

I see a regulatory recovery fee on my bill, and 911 works for me (reportedly). (Although 911 service could be a bit better).

There are other services which do not have phone numbers (e.g. MSN Voice Chat, Skype, SIPPhone), but they don't allow me to call the vast majority of people with whom I want to talk. They are not real phones like my Vonage line.

Re:Oh Well

[jc42]

Ah, the old "If it looks like a duck ..." canard. ;-)

The answer to this, of course, is that it could be a member of the family Rallidae (rails, gallinules, coots), not the Anatidae (ducks, geese, swans).

The North American coot looks, acts, and sounds a lot loke a duck, and most people think it's a duck. But in fact it's a rail. It's adapted a lot like a duck, but it's not. If you look at one closely, you see a lot of significant differences. Thus, ducks all have a continuous web between their toes. Rails have "flanges" on the sides of their toes that overlap and act like webbing, but their toes aren't connected like ducks' toes are.

Coots function a lot like ducks, but the low-level technology is very different.

There is a lot of confusion in the business and political world about what the Internet is. It's a lot like the old story of the blind men and the elephant. The guy who feels a leg may think that an elephant is a kind of tree, but that doesn't make it a tree.

Similarly, the cable, movie and music industries think the Internet is a new broadcast medium, despite the fact that the Internet hardly does "broadcast" at all. (It's primarily a point-to-point system, not one-to-many.) They want the Internet regulated so that it doesn't compete with their traditional monopolies. The phone industry thinks the Internet is a new way of doing phone calls, and wants it regulated into a monopoly that doesn't compete with the traditional phone system monopoly.

But this is all a "blind men and elephant" situation. The Internet is fundamentally different from these older comm media. Though it is able to mimic many of their functions, it does so in a different way. And it's a system that is inherently without central control, so it's a threat to the central-monopoly structure of the old media. And, money aside, one of the intended goals of all the old industries is that they want to put a stop to the development that is turning the Internet into a replacement for their monopolies.

One irony is that the phone system has been rapidly converting its low-level wires into TCP (or RTP) connections, and putting all their traffic onto the Internet. This is a huge cost saving to them, but of course their regulation doesn't permit them to pass the savings along to customers (or eliminate the long-distance charges).

The real danger to their business model is from newcomers like Vonage who don't have a tradional system to protect. The whole point of all this is to stop these upstarts and stop the innovation that will kill the traditional business plans.

Re:Oh Well

[Mr. Piddle]

...does not work for 911.... The warning is huge....

It's good the warning is huge, because this is a huge problem. I'd hate to be in an all VoIP office when someone has a heart attack and someone has to either run around hoping to find a "real" telephone or run outside to get cell phone reception.

Basically, this means that it is impossible for an office to switch entirely over to VoIP, because, for liability reasons, there really needs to be a real phone present for 911 (we can't naively assume that someone will have a working cell phone at all times).

Re:Oh Well

[skarmor]

First, Vonage goes out of its way to make it very clear to new customers that it may not be as realiable as POTS, does not work for 911, et cetera. The warning is huge, and to imply that only techies would get it is disingenuous--its not in fine print, it's in huge lettering.

You would be suprised how oblivious some people are. Also, it's a matter of interpretation. Many people do not understand "not as reliable" to equal "911 will not work properly".

I'm somewhat sympathetic to the ideat that the public utilities commission could regulate VOIP for the purpose of being an arbitrator when things go bad (though that's what the Attorney General's office is for.) However I see no reason to protect customer's from something, and dramatically increase their cost, when it's spelled out pretty clearly and anyone can understand it.

The PUC/PSC already have the mandate to ensure the telecommunications network and services meet the needs of the public. There is legislation for every state which defines those needs, among them access to 911 and quality of service standards. These standards are not to be enforced as an afterthought, "when things go bad" but should be enforced immediately before things go wrong.

Re:Oh Well

[skarmor]

Right now the Vonage 911 services is an optional component but it's not hard to imagine that it be made a required part of setting up the service.

The problem is that it is against regulation for 911 to be optional. There are laws that describe what services must be included if you are going to sell voice communications service and functional 911 is one of those services. It's not good enough to offer a semi-fucntional work-around and have bi-weekly meetings at the FCC where it is promised that 911 will be available on a wide-scale "soon".

As to the power outage problem, it's true but that's what you get for saving some money, a less reliable service. Unless everyone goes to VoIP I don't see it being a problem, if the power is out and there is an emergency just go use the neighbors phone, same as if your line has snapped.

What if your neighbour has VOIP as well? But that is not really the issue. The law says that if you are offering voice communications (telephone service)that can be the only means of voice communication in a household then you must meet regulatory requirements. These requirements have been put in place for the good of society in order to protect consumers.

Re:Oh Well

[Anonymous Coward]

Many people who will purchase voip services in order to save a buck will not understand that these standards are not there. So when one of these consumers tries to call 911 from their voip phone and the 911 operator thinks they are in NYC when they are really in Albany - there will be excessive bitching from the general public - and with good reason.

Caveat Emptor! I for one am not a fan of the nanny state. Apparently you are?

Re:Oh Well

[skarmor]

Yes, I think it is a good idea to ensure public safety.

Re:Oh Well

[digitallystoned]

Vonage has POTS numbers, thus why you dont have to be a Vonage customer to get ahold of someone using their system. I looked into getting Vonage awhile back just because I dont like my local POTS provider and my cable connection has very few outages. I like the idea of not having any 'real' taxes on the service. Since Vonage does use existing infrastructure to run, I dont see why Vonage is even BEING taxed. Where I live they tax every service that comes into your home from the local utility. As far as Im concerned Vonage should be considered a 'service', since you're already being taxed on the rest of your utilities, whether it be DSL/T1/Cable modem, what right do they have to double-tax it just because they are a cheaper service..Either way uncle Sam's getting his money, better yet lets tax all the bastards in Congress that continue to raise their salaries every year to do a whole lotta nothing.

Re:Oh Well

[Anonymous Coward]

I'm sick of all the whining about the "stifling" $5 fees per month for this.

I'm sick of all the ignorance spewing from people too cluess to be allowed to connect to the Internet and subject real people to such vile annoyance.

In case you people haven't noticed, just what do you think that internet connection your precious VoIP service runs over? Last time I checked...it was THE PHONE COMPANY!!

You obviously need to get out more. Has your mother put the house key on a cord on your neck yet? If not, you should ask about that.

Last time I checked, my Internet connection was running over cable. Last time I checked, broadband Internet access was also available here via microwave and satellite. Motorola recently fielded an industrial-strength 802.11[x] neighborhood coverage system that will also go a long way to eliminating the need for traditional telco landlines. Somebody will probably introduce a production multiple laser link neighborhood coverage system before long. Heaven knows what will come next.

Now I want all you VoIP lovers to exercise both brain cells REAL hard here, and just think...

Perhaps you should exercise your solitary single brain cell to find a clue since you evidently have none.

The phone company was set up the way it was, way back in the first half of the 20th century, with the understanding that a monopoly was necessary to provide universal service.

Bzzzt! Universal service didn't even begin to exist as a concept until long after socialism began to explode in the U.S. like a basement full of poison mushrooms in the 1960s. A quick check of sources suggests that universal service in the U.S. was created by the Telecommunications Act of 1996, implemented by FCC rules put into effect on May 8, 1997. So... are you less than seven years old, or what? I've lived 6/7 of my life without universal service and growing up I never once heard anyone say anything like, "Gee, I sure wish everyone could have telephone service..."

What's going to happen when everyone's using this crap...

Crap? I use "this crap" for *all* my communications that used to go by phone, and I find it highly acceptable and much less expensive. I cut my average monthly outlay from about US$125 to about US$55 and I no longer pay metered charges for what used to be called "long distance" and "toll calls."

On second thought I recommend you stick with your stunted view of things. I relish the thought that your viewpoint arranges its own punishment. And universal service won't be an issue after you pay for the last rural household in the U.S. to be connected. Then even you will be allowed to switch to VoIP.

Re:Oh Well

[vacuum_tuber]

Excellent! Yours is the clearest post in the entire thread.

Re:Oh Well

[vacuum_tuber]

do so many people not know how vonage works?

Exactly right. This is Slashdot, where it's considered lame to read the article or have a clue about the subject before posting.

do they assume you can only talk to other vonage customers?

No, most posters assume the opposite but leap to an incorrect conclusion. Many understand that Vonage interacts with the PSTN and erroneously believe that therefore it should be regulated. They don't know that interfacing to the PSTN is not and never has been the legal basis for regulating telephone companies. Phone companies are regulated because they were believed to be "natural monopolies" and were given the exclusive privilege in their service areas of running lines on public private property. It was believed that as monopolies they should be regulated and that as exclusive franchisees for building infrastructure on public property and having the power to use private property without permission, they should be regulated. None of those factors is present in the Vonage scenario. The PSTN to which Vonage interfaces for some calls is already funded, built and taxed. Any common carrier such as a phone or cable service that an Internet user employs to utilize Vonage is already taxed.

Many posters also assume that Vonage ties into the 911 system. Maybe someday it will, but right now it doesn't. Vonage lets you set up a kind of speed dial in which "911" will call the regular phone number of your local emergency service. They do this for you when you explicitly request that fake 911 be activated and you provide your certified physical address. If you take your Vonage VoIP box to Italy and dial 911 the emergency folks will show up at your registered address in the U.S.

Personally I would clasify vonage as a real phone company,

Then you're giving up the battle before it's fought. Just because you use Vonage the same way you used the services of your local telco doens't mean Vonage is a phone company in the context of regulation. You're falling into the same trap that advertisers and publishers and legislators and others have fallen into, thinking that the Internet is just like broadcast radio or TV, or just like magazines, or whatever. It's not any of those things, and Vonage is not a phone company. If you favor VoIP as a new, more efficient, less costly and less taxed way of communicating by voice, then perhaps you should learn not to fall into the vocabulary and other traps being used to good advantage by the opponents of VoIP, none of whom are your friends.

So what kinds of extra fees do I have to pay now?

[whizkid042]

So, I use Vonage (and love it, btw) in New York State. And I have never known New York State to not charge a tax on something that it could. So, what kinds of extra taxes will I have to pay now?

If the taxes are large, then it is starting to look like I should just go back to having a cell phone again.

Suppose

[Hangin10]

Suppose that if they see an IP address like
a phone number, it is like dialing an
address and then speaking which is just like
a telephone.

Re:Suppose

[LanceTaylor]

If they only see it that way, then voice chat through any of the messenger services would also fit into the category.

Re:Suppose

[stephenisu]

While you have a valid point about the parent post, you generally don't have the ability to call a normal phone line from an IM program without paying.

Re:Suppose

[LanceTaylor]

True, however, the person on the other end that has the normal phone is already paying taxes on it.

From the article

[I_M_Noman]

"I am quite disappointed to see that New York State decided to apply legacy telephone regulation to Internet based communications..." [Industry advocate Jeff Pulver] wrote.

Why am I not surprised that an "industry advocate" would be disappointed?

Re:From the article

[CptChipJew]

Jeff Pulver created Free World Dialup, and AMAZING service that is free, and lets you make any domestic US call for free, as well as toll-free numbers in the UK and Japan.

He is an advocate in that he wants to keep VoIP free. They make money be selling SIP phones (some of what actually look really cool).

He sees this as a disappointment, because if taxes are applied, it's going to be quite difficult to give a person free long distance in the US (from anywhere in the world) for free. They don't even sell off e-mail addresses.

Re:From the article

[Anonymous Coward]

Any US Domestic calls for free?! It's not what the FAQ says... maybe I should sign up?

http://www.fwdnet.net/fom/serve/cache/28.html

"Is this a PC-to-Phone or Phone-to-phone service?"

No, We are an Internet Telephony Network Service. We only provide connections between IP Phones, PC Phones, and IP Services. We do not provide any toll bypass.

Re:From the article

[Anonymous Coward]

I use FWD for making free US (non 1800 type) phone calls every day. Maybe the FAQ is out of date as this is recently a new feature?

Re:From the article

[DigiShaman]

Though it's a pain in the ass, you could always use RogerWilco to voice chat over the Internet.

Re:From the article

[OlivierB]

Sounds good, but do they offer encryption? Better yet decentralised server (ala P2P?)?

Only skyp offers both of these. Yes it only works via software now but they are coming up with a siemens adapter/phone later this year.

Also, unlike may of these voip software packages. Skype worked the first time around with NO configuration. Crystal clear sound every time all the time. Even when both or all parties are behind firewalls.

Try that with FWD..

Also, when will we be getting "a la carte" voip? here in the uk I already have a phone line subscription, I don't want to pay another $15 for an extra line. I just want something that I pay WHEN I use it. Also I want to TAKE my number with me whenever I travel to France, the caribbean or the UK. Right now the closest thing to that is Skype on my pocket PC. It is still lacking POTS connectivity but it's coming..

Re:From the article

[Anonymous Coward]

"Sounds good, but do they offer encryption? Better yet decentralised server (ala P2P?)?"

No they are not buzzword compliant with skype. They are totally free though and will not steal your bandwidth while other people make calls or sell your spare CPU time others etc.

Does skype work with industry standard hardware already on the market?

"Only skyp offers both of these. Yes it only works via software now but they are coming up with a siemens adapter/phone later this year."

Oh they don't. Another strike against them then.

"Also, unlike may of these voip software packages. Skype worked the first time around with NO configuration. Crystal clear sound every time all the time. Even when both or all parties are behind firewalls.

Try that with FWD.."

Funny my FWD lines get similar preformance (through firewalls too) but I get the bonus of hooking up the nice phones I already have.

Re:From the article

[Anonymous Coward]

Ok, I'm confused. The FWD site specifically says that they don't provide free access to the regular phone network. What am I missing?

Re:From the article

[Anonymous Coward]

I just signed up, and it seems to work. Dial *1phonenumber, and it works fine. Nice.

This makes sense...

[asdfasdfasdfasdf]

It does have to connect to a real telephone exchange SOMEWHERE... If it was internet to internet telephony only, then I would be against this, but considering that it has to be able to send/recieve calls to other telcos, it should be considered a Telco itself, and taxed/regulated accordingly... Certainly vonage users should have to pay the 911 taxes. This is one of the few taxes in our society that actually pays for a service that is used directly.

I hate taxes (in general) as much as the next telephone user, I'm not saying they're fair-- but as long as they are there, customers should be taxed equally.

Re:This makes sense...

[gdbjr]

But what if you are calling another Vonage user? There should be no telephone exchange involved.

Re:This makes sense...

[Mazzie]

I agree with this 100%. I think that Vonage found a way to temprarily circumvent the taxes by originating all calls from an Internet connection, although I'm guessing a large percentage of the calls connect to a legacy phone system.

This idea is doomed for two reasons:

1. Goverment is cut out of tax revenue.
2. Mega monopoly telcos that lobby/stroke/pay-off politicians are now being undersold and are pissed.

If Vonage was strictly IP to IP and did not provide public services like 911, I think it would be a different story. Anyways, you really don't need a 3rd party involved for IP to IP. That technology has been around for quite a while, although both parties wanting to communicate need the hardware/software to make it work.

Re:This makes sense...

[Anonymous Coward]

If that is the case then there should be a general connection tax -- period. I already pay for an IP connection. I pay for a connection to the cable network. Why should I have to pay for another tax to access the telephone network. The tax model for telecommunications is obsolete and damaging to newer technologies.

It is bad enough that the government taxes Tcoms in the first place.

Re:This makes sense...

[div_2n]

t does have to connect to a real telephone exchange SOMEWHERE.

That is irrelevant. You are taxed on your phone line at home because you use a piece of wired infastructure COMING TO YOUR HOME. You are not taxed for contacting others. You are taxed if you never make a call. If you were taxed at both ends, that would be double taxation.

Your call to Vonage only touches the line when it goes to someone that isn't a Vonage user and thus is paying taxes on THEIR line.

If you the customer have to pay tax on using a line that you don't actually use, that is, IMHO, taxation without representation.

The right to communicate should not be taxable. Public utility infastructure should. The Internet is not public utility infastructure even though at points it uses it.

Certainly vonage users should have to pay the 911 taxes.

I think 911 taxes should be tied to physical addresses and not phone numbers of any kind. I can have a New York phone number with Vonage and live in Florida. You are telling me I should have to pay New York 911 taxes while living in Florida? Better yet, I can be a Vonage customer with a New York phone number and live in Canada. Should I have to pay 911 taxes there?

Keep in mind that the calls I receive while on Vonage would NEVER touch any infastructure in New York if I lived elsewhere unless the caller was in New York.

Re:This makes sense...

[CheeseTroll]

True, but the person on the other end of the line is still paying their fees. Would that be enough to cover the costs of the hookup?

How do the costs for a (local) telco telco connection compare to an IP telco connection?

Re:This makes sense...

[Anonymous Coward]

What if I won the lottery? What if I got hit by a bus tomorrow morning? What if you had a clue about economics?

Macro economics studies the large market. Economic policy (taxes) are based on the norm. VOIP to VOIP calls are not yet the norm by any stretch of the imagination. When they are I am sure taxes will be adjusted accordingly. Until then decision are made on the rule, rather then the exception.

Re:This makes sense...

[Short Circuit]

I'm worried they're going to try to tax the software involved. That's the only way to really kill it.

While I'm thinking about it: Has anyone developed a peer-to-peer VoIP system yet? Something that could be patched into a p2p IM network?

Re:This makes sense...

[Lehk228]

I am sure taxes will be adjusted accordingly

I live in NY, adjusted appropriately will mean raised through the roof to match everything else

Re:This makes sense...

[Anonymous Coward]

Yup, me to. NYC is one of the most expensive places to live but also one of bets city in the world imho.

I do to. I was supposed to get a tax refund but after that fucking 9/11 tax I endind up woing them $600

Bastards.

Re:This makes sense...

[French Mailman]

Skype is a growing P2P telephony network. It's made by the same people who made Kazaa. I haven't tested it myself yet.

Re:This makes sense...

[alienw]

So what? It's STILL a telephone service. It doesn't matter how you conduct a telephone call -- over an internet, over the air, over fiberoptics, or some other way. The thing is, it's still a telephone call. This, of course, is a perfectly logical decision.

Re:This makes sense...

[Lawrence_Bird]

and I wonder how deeply involved the CWA got? There are
many vested interests in doing 'business as usual',
especially in places like New York state.

Re:This makes sense...

[PReDiToR]

Does that apply if you're using a walkie talkie then?

If so, why do you need a ham radio license rather than a phone bill?

Re:This makes sense...

[Python]

Actually Vonage is "strictly IP to IP" when you call another vonage user. There is no POTS interconnect unless you call someone using the old POTS network. So, should someone have to pay the extra taxes if they only make IP-to-IP calls?

Re:This makes sense...

[Anonymous Coward]

What if i use 2 cans connected with a long piece of string? Is that still a telephone call too? What if I use my flashlight to send morse code? How much will the regulatory recovery fee be for that?

Re:This makes sense...

[alienw]

If so, why do you need a ham radio license rather than a phone bill?

Need I remind you that the FCC has rules that specifically prohibit the use of the amateur radio service as a phone? This is exactly why.

Re:This makes sense...

[alienw]

If you somehow manage to offer your cans and string solution as a commercial telephone service, then yes, it will be regulated.

Re:This makes sense...

[Breakfast Pants]

What about CB radios?

Re:This makes sense...

[alienw]

Unless you have an illegal RF amplifier, CB only works for about a mile, so you can't use it as a phone.

Re:This makes sense...

[Anonymous Coward]

If Vonage was strictly IP to IP

It is unless one of the parties is calling from/to a PSTN line. Vonage to Vonage calls are IP to IP and the voice stream does not go through a Vonage server. Think teleconferencing using Yahoo Instant Messenger.

and did not provide public services like 911

Vonage offers no 911 service. All they do, and then only if you explicitly request it, is to set up a kind of speed dial so that dialling 911 will actually place a normal call to the normal phone number of your local emergency service, usually police or sheriff's dept.

I think it would be a different story.

It is a different story. Get your facts straight.

Anyways, you really don't need a 3rd party involved for IP to IP.

Strictly speaking, no, but as a practical matter you need a way to find the other guy's IP address. Even when Internet Phone was a perfectly usable VoIP program for PCs in the mid-1990s, they had to run a server to provide IP locator service based on some more widely known and stable ID. They cleverly integrated with Mirabilis ICQ for IP locator service without the need for a special server just to support the Internet Phone software. Those who didn't use ICQ initiated "calls" through the Internet Phone servers.

Hmmmm...

[akpcep]

New York Stats has it's share of hang-ups already methinks.

Becaue of the Internets Coverage

[millahtime]

Because of the internets coverage every state could regualte every VoIP company (in theory). I wouldn't be like a local phone company that has regions. Thanks to the internet they have a huge encompasing area they can reach which could lead to all states regulating it.

If each state sets down different regulations that could lead to a logistics nightmare.

Re:Becaue of the Internets Coverage

[Paulrothrock]

What if a foreign company creates a similar service, will they be regulated in New York, PA, NJ, CT, NH, VT, et al, including every other nation on Earth?

The internet is a fundamentally different communications system that needs different rules. I suppose that iChat AV, because it allows voice calls, would be considered a phone service and subject to regulation in NY.

Politicians and judges shouldn't be allowed to make rules about stuff they're clueless on. We have a bunch of stodgy old luddites telling us how to use the Internet.

Stupid

[Anonymous Coward]

Well it IS a phone company though, it's pretty obvisous because you can call others, it's just the state that WANTS money.

When you can't compete...

[Anonymous Coward]

...wield the State like a hammer and smash your foes to bits.

Re:When you can't compete...

[Richthofen80]

You are more right than you can imagine. the Internet is a self-regulated 'industry'... in the days that regulation began on phone networks, it was first in order to make order out of supposedly cutthroat businesses that government demanded was a 'public necessity'. Then it was in order to 'safeguard the public with 911 services'. Now there's no legitimate reason other than revenue stream to fund the states.

the internet and other architectures may have been borne out of government research, but they evolved without regulation from the government, hence its rapid growth and success. over the internet you can exchange thousands of times more data than a standard copper phone wire, yet somehow without a 'government standards board' (a la the fcc) things like IP addresses and industry communication standards were born.

Taxes

[stealthmidget]

I'd imagine the taxes will be quite large; the state isn't going to let Vonage come in and undersell the market. If this caught on tax-free, they'd be expected to get a significant portion of the market...now who knows

Re:Taxes

[h4rm0ny]

the state isn't going to let Vonage come in and undersell the market.

At this point the infamous analogy of horse and cart users protesting the unfairness of the motorcar undercutting them appears appropriate.

Whether that anaology is historically accurate or not I don't know, but this present situation is the same in principle. New technology is ready to change everything and increase society's wealth, and the entrenched powers are ready to cripple it in any way they can.

They do not care how big the pie gets, they just want to ensure that their slice looks larger then anyone elses. Is that a fair assessment?

This sort of behaviour can work as long as the US has no international competitors. But I think the international balance of power is shifting faster than most people realize.

What about other VOIP apps

[MrRTFM]

If they are going to regulate companies that develop VOIP applications it will be interesting to see what happens with OS projects.

At the moment its only going to be 'minor regulations', but when it takes off and the "potential tax losses" start getting serious will we see all these companies/ projects move offshore.

Certainly not much could stop it if people want to use it.

Re:What about other VOIP apps

[FauxReal]

Are you trying to scare the crap out of me? Well it's not gonna work FUDster!


BRB, bathroom break...

Re:What about other VOIP apps

[DigiShaman]

When people start using applications to talk over the Internet, that's when you will have your Internet connection taxed. If the government can't micromanage the Internet as taxable revenue, why not just tax everyone's connection and be done with it? The only question I have, is when will it happen and not if.

Re:What about other VOIP apps

[jc42]

When people start using applications to talk over the Internet, that's when you will have your Internet connection taxed.

Do you live in an area where your Internet connection isn't taxed? I don't.

Around here, you can get an Internet connection in only two ways: a phone line (modem or DSL) or cable. Both have a per-connection tax.

If Vonage is taxed as a phone company, then a customer who has DSL-based Internet service is paying the tax twice on the same line.

With cable service, the double taxation isn't so obvious, but it's still there. You pay twice for the connection, once as cable service and once as phone service.

Re:What about other VOIP apps

[Anonymous Coward]

Do you live in an area where your Internet connection isn't taxed? I don't.

Strange, because I do. It's even a law in my country (US). On my cable bill, only the non-internet portion is taxed. Congress recently extended this law. If I ordered RR without cable, I wouldn't pay any taxes an my bill.

The states want money

[WCMI92]

Hell hath no fury like government that thinks it's not getting it's "cut".

This is an attitude of our government that frankly, you and I shouldn't put up with, this thinking that government is entitled to tax EVERYTHING.

Re:The states want money

[millahtime]

Hell hath no fury like government that thinks it's not getting it's "cut".

This may not be a case of them wanting the money. It may be a case of them wanting to make sure regulations are on it so they don't run rampant and do things they shouldn't. SOmetimes regulations are needed when an industry won't police itself.

Re:The states want money

[southpolesammy]

This may be overly idealistic, but there is a simple solution to the problem -- vote them out. This country (contrary to popular /. opinion) is not a dictatorship.

Re:The states want money

[warpSpeed]

This may not be a case of them wanting the money. It may be a case of them wanting to make sure regulations are on it so they don't run rampant and do things they shouldn't.

Ha! Don't kid yourself, it's about the money (taxes)...

Just what is it that they should not be doing that required regulation? Vonage is a buisness, if they screw thier customers, some other company will step in and take thier customers away.

Re:The states want money

[WCMI92]

"This may be overly idealistic, but there is a simple solution to the problem -- vote them out. This country (contrary to popular /. opinion) is not a dictatorship."

Unfortunately, the government long ago sold the majority on the idea of getting "bread and circuses" from the public treasury.

It's so bad that "YOUR CHILDREN WILL STARVE" is effective propoganda against proposed tax cuts...

Sad.

Re:The states want money

[howlatthemoon]

They should have been making their customers pay the hidden tax of buying off the legislators like the other telcos do.

Re:The states want money

[Lehk228]

This country (contrary to popular /. opinion) is not a dictatorship.

That is correct, it is not a dictatorship, it is an oligarchy.

Re:The states want money

[ratamacue]

Technically, any government could be considered an oligarchy, by the fact that any government requires an inequality of power between those who impose the law and those who don't. That inequality must be weighted towards an elite few, or government wouldn't be able to fund its own existence (which it must do by forcibly extracting revenue from the people who actually create wealth -- the majority -- who operate on the principle of voluntary association). Under any type of government, the law must be imposed by someone, and that someone must hold power (the "right" to initiate force as a means to an end) over everyone else. If that someone was equal in power to everyone else, i.e. had no "right" to initiate force, then government wouldn't exist. Thus, power is naturally concentrated in the hands of an elite few, and this is the general definition of oligarchy. To state this another way, if everyone held the "right" to initiate force, then all crime would be legal.

Re:The states want money

[Minna Kirai]

Ha! Don't kid yourself, it's about the money (taxes)...

Money is part of it. But probably more important is control. Specifically, wiretapping. Phone companies are required to keep equipment ready so that any cop who shows up with a warrant can listen in on anyone's calls.

To serve and protect their customers, Vonage might add end-to-end encryption to their product, making wiretapping impossible. The government has to act fast and declare them a telco before wiretapping becomes impossible.

Re:The states want money

[Lord Ender]

'Hell hath no fury like government that thinks it's not getting it's "cut".'

Hell hath no fury like citizens who can't get the civil services they need because there isn't enough tax revenue. What? The public school is closing?

Re:The states want money

[Anonymous Coward]

We did vote the Republicans out of the White House back in 2000.

Have you seen the "re-defeat Bush in 2004" bumper stickers?

Re:The states want money

[Anonymous Coward]

Hell hath no fury like citizens who can't get the civil services they need because there isn't enough tax revenue.

Oh yes! Almost every day I hear someone complaining that they're not being taxed enough to fund the services they want. Sure. Yep. Right.

Already been declared void!

[Anonymous Coward]

I thought Oregon or California tried this and they lost the case! Moreover, the FCC along with Congress wrote legislation to prevent them from being regulated and taxed, thus I'd think anything NY state does would automatically be void too! I see a supreme court case in the works here to settle it once and for all. Most of NY state is the old GTE (now Verizon) phone company and the company stands to lose alot of jobs, along with state revenue.

Re:Already been declared void!

[and by]

If it's true that there is federal law preempting states from applying their own, then it probably won't go to the Supreme Court; the District Court would decide one way or another (probably against NY), the Court of Appeals would decide for Vonage, and the Supreme Court would deny certiorari. This isn't complex, novel, or important enough for the Supreme Court to get involved.

It all depends...

[llamaguy]

Is Vonage a phone company? First, lets look up the meaning of telephone. Telephone: Noun, An instrument that converts voice and other sound signals into a form that can be transmitted to remote locations and that receives and reconverts waves into sound signals. (Dictionary.com) So, by this definition the service that Vonage was offering was a telephone service. However, like practically all else, this is open to debate. So go debate.

Re:It all depends...

[AKnightCowboy]

Is Vonage a phone company?

They seem to think they are. Right on their webpage is their tagline "The broadband phone company". Sounds like an open and shut case.. if you want to call yourself a phone company then prepare to be regulated like one. I have no problems with that.

Re:It all depends...

[lythotype]

Well, 'phone company' and 'telephone' are two different items. But in reality, what NY is trying to regulate is not the 'telephone' device itself, but the service required to make use of the 'telephone' device. By that meaning of the word 'telephone' walkie-talkies and cb radios are 'telephones'. Yet those items aren't regulated or taxed, or should I say, the actual using of them is not regulated or taxed (the actual item itself may be taxed with a sales tax or such). Note that the definition didn't specify how the signals got from point A to point B.

Re:It all depends...

[Anonymous Coward]

if you want to call yourself a phone company then prepare to be regulated like one. I have no problems with that.

I call myself a Diplomat; I still don't get the immunity that comes with it, though.

Re:It all depends...

[Anonymous Coward]

Q: Why are phone companies regulated?
A: Because they are monopolies or at best oligopolies

Q: Is Vonage a monopoly?
A: NO

Q: Should Vonage be regulated?
A: NO

Q: Is AKnightCowboy a member of the sheeple tribe?
A: YES

Re:It all depends...

[Anonymous Coward]

If anything, Vonage becoming successfull will be a reason to deregulate the local telcos. They, of course, would hate it, because the barrier to entry of excessive regulation would no longer protect them from the free market.

Re:It all depends...

[Anonymous Coward]

I call myself a Diplomat; I still don't get the immunity that comes with it, though.

Ah, but in that case you're talking about a benefit. If you called yourself the central park rapist, when in fact you never actually raped anyone, I'm sure the judicial system would love to lock you up.

The lesson here

[squarooticus]

The lesson here, especially to investors, is: "Don't try to provide innovative service in a heavily regulated industry." All that will happen is you'll blow a lot of money to get your business off the ground, only to be slapped down by a regulatory environment that, intentionally (through corruption) or not (through the law of unforeseen consequences), effectively acts as a defender of the status quo: the behemoth government-protected monopolies who've already learned the lesson.

Re:The lesson here

[malchus842]

And, said regulated industry has high-priced, professional lobbyists who are constantly making sure that a) their monopoly (if they have one) is protected; b) new entrants who try to offer a different, but competing service are barred from entry by regulation, taxes, etc , and c) that "shared" resources are priced high enough that startups have problems using them.

Look at the battle going on between the satellite companies and cable cos. Most cable cos are regulated locally, and have significant taxes. Satellite companies have been able (for the most part) to avoid this because of their model (only downlink located in most localities, and that downlink is privately owned).

I'm not surprised by this classification - every level of government believes that it has a $DEITY-given right to tax and regulate everything. Heck, hosting a home poker game in my state can get you a year in jail! I'm not opposed to all regulation by any stretch of the imagination, but regulation stifles creativity and needs to be applied only in very clear, very limited ways.

Re:The lesson here

[Fulcrum of Evil]

Satellite companies have been able (for the most part) to avoid this because of their model (only downlink located in most localities, and that downlink is privately owned).

So, are you saying that cable companies want the satellite companies subject to the same regs? How do they justify this? Like you say, the satellite companies are a purely private venture - they don't need a right of way from the city or the state government.

This is pretty much like the vonage case - the only shared resource in use are phone numbers. Vonage pays for terminating calls to POTS (apparently), but the VOIP portion is already paid for through existing bandwidth and connection contracts.

Re:The lesson here

[jdreed1024]

The lesson here, especially to investors, is: "Don't try to provide innovative service in a heavily regulated industry."

Regulation goes both ways. We all know how unscrupulous the telephone and cable companies are. Think how much more unscrupulous they'd be if they weren't subject to government regulation. A while back, a friend of mine got "slammed" (the practice of having your long distance provider changed without your knowledge). Verizon wanted to charge them like $5.00 to switch the provider back. They were decided unhelpful. My friend asked for a supervisor, and said "Can I have your name or number to call the DTE (the state agency that oversees Telecom and Energy utilites)?" and the supervisor suddenly said "Well, I think we can waive that fee."

I had a similar issue with Verizon. They signed me up for the wrong international plan, and I got a $200 phone bill (which normally should have been like $70). I had a letter when I signed up indicating I had specified that plan, but they never enrolled me. They claimed the letter didn't constitute proof, but they could switch me back, but it would be $20 and I'd still have the phone bill. I said the magic words "call the DTE", and suddenly they were able to retroactively sign me up for the international plan I was supposed to have been on in the first place with no switching fees.

Sure, everyone loves Vonage, they're the best company in the world, group hugs, blah blah, we know. But this is an entire industry. There exist plenty of POTS long distance providers who specialize in price gouging. The VoIP world is not going to stay pristine - we'll get crappy companies that seem to offer good deals, and then slam you with huge bills and hidden fees. And when that happens, you'll be upset, and call your state public utilties commission, and they'll say "Sorry, VoIP is unregulated. We sympathize with you, but we can't help you. Have a nice day." And you'll be SOL. You might have some recourse if pay via credit card, but that's about it.

Yes, regulation can be used to stifle competition. But it can also be used to protect consumers. That's what it was designed for - even before phones were invented, the railroads (another regulated group of monopolies) were screwing consumers and manufacturers. And the government stepped in the regulate them. If the government is using regulation to stifle competition unfairly, than it's up to the people to fix that. While eliminating regulation is often the knee-jerk reaction, it's not always the best idea.

Re:The lesson here

[skarmor]

I think the lesson here is that companies should not attempt to "fly under the radar" and duck regulation in a heavily regulated industry. There is room for innovation in the telecom industry - but innovative technologies must still meet certain regulatory requirements before they are sold to the public.

Vonage et. al have released VOIP before all the regulatory problems were solved in an attempt to cash in quick. And now they are getting hammered down by regulators. This shouldn't suprise anyone.

Re:The lesson here

[poot_rootbeer]

"Don't try to provide innovative service in a heavily regulated industry." ..."or if you do, don't expect to get away with not following any of the rules that govern that industry."

You are not a special snowflake.

Re:The lesson here

[Anonymous Coward]

The lesson here, especially to investors, is: "Don't try to provide innovative service in a heavily regulated industry."

If New York isn't followed by a rush of other States the lesson here may well bea rough one for New York. A Vonage (or other similar VoIP) "phone" can work from virtually anywhere on the planet. If I visit New York next week and take my Cisco VoIP box along, my phone number will work in New York whether or not New York likes it. New York won't know about it, won't be able to detect it, and won't be able to do anything about it. New York certainly won't be able to tax it.

If you are an AC, don't bother responding.

If you're a moron, don't bother trying to tell me whether or not or how to post.

Colour me cynical but -

[JosKarith]

"only minimal regulations to ensure that it does not interfere with the rapid, widespread deployment of new technologies."
Riiiight. Because when you hand a new area of legislation to a bunch of bureaucrats the last thing on their minds is interfering.
Watch this space for a long list of restrictive and unneccesary regulations being pushed through by people who haven't suddenly become the phone companies best friends, oh no.
Hmmm...
1) Spot a new area of technology that threatens entrenched interests.
2) Start to legislate on it.
3) Let it be known your decision could be swayed either way.
4) PROFIT!!!

horrible precendent

[esarjeant]

This may be the deathknell for most small startups in the VoIP sector. Only the megaconglomerates (AT&T, Sprint, Verizon, SBC) will be able to compete in this kind of arena.

Very unfortunate. I had hoped to jump onboard the VoIP bandwagon in the near future (once my area code is available), but the cost benefit could be going out the window.

Re:Regulation isn't always bad

[Anonymous Coward]

Regulation is good, but should only be strictly applied to mature markets.

If water supply was a new commdodity, then there would be several companies competing for market share, trying to get as large a slice as possible, then they wouldn't want to hike their prices. They'd lose too much market share if they did so.

Right or wrong, it is going to stifle VoIP in NY.

[Matt1313]

New York State Public Service Commission said, "...saying that it nevertheless hoped to apply "only minimal regulations to ensure that it does not interfere with the rapid, widespread deployment of new technologies."

When was the last time a Government Agency applied "only minimal regulations" to anything? The tendency of bureaucracy, once involved in something, is to strengthen their involvement in that thing.

IP only telephony

[80N]

The incumbent telecoms companies ought to be really worried by VoIP. Right now they can get a slice of the action providing someone is trying to make a call to a legacy phone, by if its VoIP to VoIP they dont stand a chance.

Imagine, free unlimited and unrestricted (open source, of course) telephone services worldwide. Just like email. It will happen and there's nothing they can do about it.

And cell phones will be replaced by WiFi phones, with the gentle propagation of free WiFi hot spots in Cafes etc who's going to need to pay for a cell phone?

80N

Re:IP only telephony

[AKnightCowboy]

Imagine, free unlimited and unrestricted (open source, of course) telephone services worldwide. Just like email. It will happen and there's nothing they can do about it.

Oh, just wonderful. We all know how well e-mail works now that it's completely unregulated and free for all. VoIP spam. I can't wait. "Mommy, what's a hot young asian fuck stud and why does he want to sell me viagra?"

Re:IP only telephony

[SilkBD]

My question, if what you say really does happen, what does this mean for internet traffic? Will it bring the internet down to it's knees?

Re:IP only telephony

[redfenix]

The telcos don't get a slice for internet traffic? Since when?Who owns the internet backbones?

27.9% - UUNET/WorldCom/MCI
10.0% - AT&T
6.5% - Sprint
6.3% - Genuity (level 3)
4.1% - PSINet (cogent)
3.5% - Cable & Wireless
2.8% - XO Communications
2.6% - Verio
1.5% - Qwest
1.3% - Global Crossing

Hmm, these names are sounding awfully familiar!

Re:IP only telephony

[devilspgd]

No.

Much of the PSTN and IP traffic is transported along the same physical lines already.

Assuming there is a proportional drop in PSTN calls, that much more bandwidth can be shifted to IP (and the major transit providers still get their cut)

Re:IP only telephony

[Anonymous Coward]

But of course they have no reason to be afraid anymore, because once government gets their hands on it, the bar for entry to the VoIP arena will be raised to the point that the only players big enough to get in will be -- the telcos!

Re:IP only telephony

[poot_rootbeer]

if its VoIP to VoIP they dont stand a chance

Who do you think owns the network lines those VoIP packets are coursing through? The telecoms industry is still going to get its cut.

And cell phones will be replaced by WiFi phones, with the gentle propagation of free WiFi hot spots in Cafes etc

I don't know about you, but perhaps 1% of the cell phone calls I make or receive, if that, take place anywhere near a cafe. I want my portable phone to work reliably over a wide coverage area, and not be subject to the whims of a dozen different schmoes running wi-fi hotspots off their DSL connections over the course of a single city block.

Re:IP only telephony

[Wylfing]

27.9% - UUNET/WorldCom/MCI
10.0% - AT&T
6.5% - Sprint
6.3% - Genuity (level 3)
4.1% - PSINet (cogent)
3.5% - Cable & Wireless
2.8% - XO Communications
2.6% - Verio
1.5% - Qwest
1.3% - Global Crossing

Er, who owns the remaining 33.5% chunk that's unaccounted for in this lineup?

Re:IP only telephony

[AK Marc]

Er, who owns the remaining 33.5% chunk that's unaccounted for in this lineup?

Thousands of little ISPs, none with more than 1.3%, that end up buying from one of the ones on the list anyway so they can claim "tier 1" connectivity. I know of no place where the local phone company doesn't also provide Internet access. And in most cases, if you buy Internet from someone other than the local phone company, you must still pay the local phone company for the line to run the Internet over (cable modems and satellite Internet being the two prominent exceptions).

It is a mature market...

[AzrealAO]

No matter what you call it, VoIP is doing the same thing Telephones do. VoIP is simply moving into an existing market with new technology. As such, it needs to be regulated in the same manner as the technology it is competing with.

Re:It is a mature market...

[devilspgd]

One of the arguments for regulating telco service is that it's effectively a natural monopoly. Barring any bullshit from broadband providers, VoIP is not a monopoly because the barrier to entry doesn't include tearing up the country's infrastructure.

Re:It is a mature market...

[jallen02]

Not if its purely over the Internet. I think as long as it stays digital it should stay unregulated.

THat would be like regulating instant messaging, they do something similar to what phones do, right? Allow for communication with other people. I guess we should regulate video conferencing too, since it does what phones do and more. I think its silly to regulate purely digital communication mediums.

VoIP that hits a physical resource such as the standard phone system, yes, they can be regulated. Not all VoIP is moving into an existing market, but they are also creating a market that never really existed before.

Jeremy

Re:It is a mature market...

[j-turkey]

No matter what you call it, VoIP is doing the same thing Telephones do. VoIP is simply moving into an existing market with new technology. As such, it needs to be regulated in the same manner as the technology it is competing with.

Is it really the same? The end service becomes is the same, however, Vonage has a critical difference. Traditional telco networks require a vast, expsnsive infrastructure. Even with the partial deregulation in the late 90's, competing telcos stil had to lease service from local telco monopolies.

VoIP is pretty different because it doesn't require the same infrastructure. Internet infrastructure is large and expensive, but doesn't require the same regulation, since it's not a government sponsored monopoly -- there are competing ISP's in most metropolitan regions.

I'm not sure that the above warrants the same type of regulation. All they're doing is replacing all of the old infrastructure with a service, using an existing infrastructure which is untaxed. By your logic, all Internet traffic should be taxed -- because that's all this is...Internet traffic.

Re:It is a mature market...

[nolife]

Your computer with an internet connection with a microphone and speaker is doing the same thing a phone is doing no matter how you look at it. It allows you to have two way communication using your voice with someone else. Do you suggest we tax, the computer, the microphone, or the speakers when you use the computer in this manner?

I already pay taxes on my internet connection as does anyone else with a cable modem or DSL. Just because I decide to use voice converted to data over that internet connection does not mean I should now pay more taxes. Is an email tax next? A tax should not automatically apply because the "market" is similar.

Re:It is a mature market...

[13Echo]

This is true, except for the fact that it eventually negates the need for traditional telephone switching services.

Think of it this way. In 10 years, when everyone has a router with some sort of cable or hi-speed connection in their home, will it not just be likely that you dial an IP address instead of a telephone number? The handset that is hooked to your router would monitor any requests to a specific port, and it would open up for the calls.

Vonage takes VoIP and gives it capability to interact with the aging legacy telephone system that is on its way out the door. Phone companies fear that this will eventually make them useless entities. Cable companies love it because it makes them the most likely backbone for information distribution. Governments, losing the ability to tax a traditional phone communications infrastructure, move taxes onto broadband providers. We already pay taxes on the cable TV pipeline.

The nice thing about VoIP is that it will eventually break the need for a single telephone provider. The sad fact is that it doesn't change a whole lot, since the cable company is just moving in and taking over. Companies like Ameritech really lost out, since they were too slow to upgrade and improve the traditional phone system. The need for the thin, two-strands of copper is begining to fade away. Fortunately, we may have more wireless options in the future as well. I suppose that it is possible that with wi-fi access points everywhere, the traditional cellular phone services may be undermined some day as well.

Re:It is a mature market...

[devilspgd]

This is true, except for the fact that it eventually negates the need for traditional telephone switching services.

It's a possibility, although personally I think it's further off then many people seem to think. However, you'd think telcos would jump on this as an opportunity to have some of their regulation reduced by saying "Hey look, there's competition now"

However, it's likely more complex then any of us can easily see.

Re:It is a mature market...

[Big Boss]

Actually, since VOIP requires broadband, telcos are in a position to profit from this. That is, if they would remove thier heads from various orifices. The simple fact is, POTS is on the way out. I, and many people I know, don't even have a POTS line. I use cellular for my phone needs, and wireless broadband. I WOULD use DSL, if I could have gotten it. I would love a decent upstream, but I can't get DSL. Too far from the CO, on fiber, blah, blah, blah. I live in the capital city (Salt Lake City), about 5 minutes from the city center. Of course, I can't get cable TV either (the cableco won't connect the lines). I can only imagine what a pain it is for those further away.

The future is high speed digital links, aka "Broadband". With a decent link, you can pipe all sorts of crap over it. Look at the cable companies. You get 100+ channels, broadband internet, and telephone over a single coax cable. The telcos COULD do the same thing, if they wanted to. The technology exists, but they refuse to deploy it. They COULD put everyone within range of the DSL system with the existing infrastructure using mini-DSLAMs and/or various DLC based DSL equipment.

Oh, and they will make some money anyway in the brave new VOIP world. Telcos own most of the backbone internet links! More IP traffic = more money for them!

IMO, telcos and cablecos should be regulated as they are a government created monopoly with some eminent domain powers. They have to put cables in the ground, that should involve some regulation to keep them from tearing up the whole place or putting everything above ground because it's cheaper. VOIP providers like Vonage do none of these things, therefore should not be subject to the same types of regulation.

Re:Regulation isn't always bad

[bhv]

Been a Vonage customer for over a year now. They sent me an e-mail last week to let me know they are reducing my rate by $5 a month........Leave it the hell alone.

New Yorkers didn't see this coming?

[sjb2016]

Did we not expect this to come from a state so desperate for cash that on the tax forms this year you are required to report purchases over the internet? This is so that while you didn't pay sales tax up front, they will get it somehow. They even talked about requiring people to report inter-county purchases. The NY state legislature never met a dollar they couldn't spend, although I highly doubt NY is alone in this arena. I need to move to New Hampshire.

Re:New Yorkers didn't see this coming?

[hopemafia]

It isn't just in NY, nearly every state that has sales tax requires you to report and pay tax on out of state purchases...it's called "Use Tax". Nobody I know has ever done so though....

labels

[iceperson]

I love how the media labels people. I didn't read the article but I'm guessing that they didn't put [advocate for higher taxes] next to the names of proponents of more regulations. Cum catapultae proscriptae erunt tum soli proscript catapultas habebunt.

Common Carier Laws?

[SWroclawski]

Okay, so most of us agree that this is a bad thing- it places more regulation on the Internet and protocals (taxes are just one step, wiretapping, etc. are of course going to follow and be required in all VOIP protocals (yes we know the reality is something else, nonetheless this is what I fear will happen).

But this does bring up an interesting point. Phone companies are regulated in what they are and aren't allowed to do with the phone conversations. They can't, for example, monitor your calls for marketing ala Gmail "Oh, you asked your wife to bring home some milk- well there's a deal at the local Megamart".

So can we as consumers now require that if VOIP providers are telephone companies, that ISPs be regulated in how they can and can't monitor us, and stop practices like purposefully slowing down connections from rivals? (Time Warner Cable vs Disney.com, etc.)

I would rather none of this existed, but maybe we can force the legal arm to swing in our favor as consumers.

Re:Common Carier Laws?

[Minna Kirai]

Phone companies are regulated in what they are and aren't allowed to do with the phone conversations. They can't, for example, monitor your calls for marketing ala Gmail

That's not a regulation- wiretapping or otherwise secretly listening to a phone conversation is a felony in most states.

On the contrary, telco regulation forces the phone company to be able to wiretap you at any time. But normal law prevents them from doing so without judicial approval.

I can imagine a future VoIP company wanting to advertise an encrypted service that's "so secure, even WE can't listen in on you!". But that would be apparently against regulations. This is a danger of treating VoIP companies like telcos: it starts down the path towards outlawing the use of encryption.

Re:Common Carier Laws?

[SWroclawski]

My question is how the law will deal with non-telco VOIP services. This is tested so often, privacy vs law enforcement.

Is there any pros to being declared a phone co?

[ZombieEngineer]

In a lot of countries, being a telecommunications company grants certain rights and privellages (such as access to "right of way" for running cables over government land). In some places these privellages have been abused (such as installing cellular telephone towers).

My question is these local government taxes (state and/or municipal) a form of check and balances for granting phone companies certain rights and privs?

ZombieEngineer

PS: I live south of the equator so please forgive me if the actions of your government appear to be spinning in the opposite direction to what I am used to.

Re:Is there any pros to being declared a phone co?

[Anonymous Coward]

In America, much less is government controlled than you are used to. The taxes in question are a revenue stream for the government. The question in this case is one of fairness; if the local traditional Telecom provider must pay taxes on their income, and Vonage provides the same service, for a fee, then why should they be exempt from paying the same tax?
The 'rights and priveliges' are not as far reaching as you would think; anyone can choose to put up phone poles and wires, so long as they are willing to deal with the cost of dealing with all the people whose land they cross. There are a large number of regulations that force a Telephone Company to keep up a certain minimum quality of service, and also safety issues (like our 911 system, that routes emergency calls straight to the local police). Becoming a true Telephone Company (CLEC, or Competitive Local Exchange Carrier) actually LIMITS your rights quite a bit by preventing you from cutting corners in your equipment, and forces you to have high reliability. This is part of the cost involved.

By becoming a CLEC, you can get the option of forcing the local Telephone Company to give you access to the wires and poles THEY put up. They don't have to do this for free, but they do have to justify the price they charge you. This allows you to start a 'phone company' without investing a few million dollars in poles and wire. So yes, there are advantages, but they come in leverage against the other companies in that space, and not so much against the government itself.

Re:WiFi range, duh.

[Anonymous Coward]

Who's going to buy a cell?

Anyone who wants to be able to call for help in the middle of the wilderness. Yes, I know they're sometimes not reliable, but still, WiFi doesn't have the same range(yet?).

Taxing Internet Traffic

[christowang]

By doing this, they are technically taxing Internet traffic. Right now Vonage adds on taxes for regulatory fees for the Phone number, but by doing this, what prevents New York from saying IM's or email's should be taxed as long distance communication?

Re:Taxing Internet Traffic

[poot_rootbeer]

By doing this, they are technically taxing Internet traffic.

Technically (and by that I mean TECHNOLOGICALLY), yes. But legally, they're taxing telephone service. The ramification of NY's decision is that the underlying infrastructure isn't relevant -- it's the type of service provided.

what prevents New York from saying IM's or email's should be taxed as long distance communication?

Presumably, the New York tax codes which are written about telephone service, and not about long-distance text-based communication.

Re:Taxing Internet Traffic

[vacuum_tuber]

...legally, they're taxing telephone service.

No they're not. Vonage doesn't provide me with phone service. They don't provide a line and they don't carry my phone calls on any of their equipment. They provide an IP finder, not unlike Yahoo Instant Message service does. Vonage calls are peer to peer once the IP has been found. If one side of the call is in the PSTN then Vonage interfaces there, and pays for it.

There's also no hardware required if you don't want it. In the extreme you can use Vonage just like using Yahoo IM for voice communication -- entirely through your computer. The only difference, even if you elect to use the VoIP router, is that the "user id" for locating the IP of the other party is something that looks an awful lot like a traditional phone number.

Vonage is clearly not a phone company providing phone service, so NY is not taxing telephone service when they tax Vonage and its customers.

Re:Regulation isn't always bad

[Cratylus]

It's also a government sponsored monopoly - not a multi-vendor competitive market. You can't pick your water company.

Price controls are warranted on government-created monopolies - not in the free market.

Re:the Direction of Swirling Comments...

[Anonymous Coward]

"PS: I live south of the equator so please forgive me if the actions of your government appear to be spinning in the opposite direction to what I am used to."

Does the bad humor come with that, too?

Regulate? Ok, but not exactly as a phone company.

[Jonny Royale]

Given the differences in technology between Vonage, and the traditional telco, and some of the items in the article, it seems that there's going to be different standards applied to the VoIP company, which is a good thing.

As the traditional telcos move from the traditional circut switched networks of current phone systems to a more packet switched network, there needs to be a way for the regulatory agencies to keep up with the changes, and ensure that necessary services (e.g. 911) and quality are maintainted.

In the long run, this will probably be seen as a good move, since they're actually trying to keep up with changes in technology, rather than waiting to get run over by it.

Darwin at work

[Anonymous Coward]

Any entity that's too dumb to make large payoffs to the proper politicians deserves to die.

At this point, only large bribes to Bush or a big contract to Halliburton will save them.

Riiiiight

[iceperson]

We've seen how well the state controls energy prices out in CA. And don't tell me the state deregulated the market because the energy companies were not allowed to raise rates without the governments approval. Cum catapultae proscriptae erunt tum soli proscript catapultas habebunt.

depends if deemed a utility

[millahtime]

If they get deemed a utility company this might become a grey area. Utility companies are regulated by the state and not federally.

I find this very interesting timing

[_LORAX_]

Consitering that Time Warner just launched it's VoIP service in the past month. I have to wonder if they are pulling the strings in order to wipe out it's only signifigant competition in this area. TW's prices are ( of course ) much higher and provide fewer services than Vongae does.

Bad Call ;)

[Anonymous Coward]

The internet is just a medium to exchange information, and now a certain kind of information (calls) is being taxed.

Just leave the internet alone, it doesn't need government interference.

Re:Bad Call ;)

[SuiteSisterMary]

On the other hand, if, at any point, the VoIP service interfaces with the phone service, then, yes, they must play by the same rules.

I think that's the issue here. If you want to use VoIP to 'chat' from your PC to Cousin Bob's PC, fine. If you want a phone at home, that's plugged into your cable router, and you pick it up, and can dial somebody elses POTS land line, it's a phone service. Period.

Re:Bad Call ;)

[Anonymous Coward]

On the other hand, if, at any point, the VoIP service interfaces with the phone service, then, yes, they must play by the same rules.

Bzzzt! Wrong. That's not the basis for regulation. Telephone companies are regulated as a counterbalance to their being granted monopoly right to lay cables and string cables on, through, under and over public property and to put cables across private property whether or not the property owner likes it. "Interfacing to the phone service" has nothing to do with why phone companies are regulated and has nothing to do with the legal foundation for regulation.

Re:In other news...

[cshark]

Great. Now if they could just classify paypal as a bank we'de be in good shape.

HELP! Small home business (5-8 lines) & VoIP..

[Spoing]

I've looked some at the VoIP phones, and so far regular phone service seems to win out mainly because of high reliability...though I don't have any direct experience actually installing or managing VoIP. (T1 and regular phone services, yes.)

Are there phone companies -- regular or VoIP -- that folks use on a small scale, such as Cavilier, that anyone can recommend?

Any good sites -- something like Broadband/DSL Reports but for phone/VoIP issues?

Re:Real simple...

[Anonymous Coward]

It's all about the $

In my world, it's all about the #

Yours sincerely,
root

Impact in Canada

[Sandman1971]

I wonder if this decision will have any impact in Canada. The CRTC (rough equivalent to the FCC) has ruled that traditional telcos must follow traditional regulations for VoIP, but those regulations do not apply to non-telcos such as cable companies, Vonage, etc... that offer/will soon offer VoIP services in Canada. Seriously hurts the ability for telcos to compete. Maybe this ruling will have an affect north of the border.

Re:Impact in Canada

[Fulcrum of Evil]

traditional telcos must follow traditional regulations for VoIP, but those regulations do not apply to non-telcos such as cable companies, Vonage, etc... that offer/will soon offer VoIP services in Canada. Seriously hurts the ability for telcos to compete.

Then maybe it's time for the incumbent telco to offer VOIP.

Re:Impact in Canada

[Sandman1971]

That's the problem. The CRTC is stiffling incumbent telcos where VoIP is concerned. I've heard (but can't quantify) and telcos will have to wait until 2007 before being able to offer VoIP due to regulations, while cable cos and companies liek Volnage do not have those limitations.

A crap load more of info can be found here.

Re:Impact in Canada

[Nos.]

Maybe one of them is: http://www.webcall.ca

Re:Didnt the US fight to be...

[planetmn]

Nope.

The US fought to be free from taxation without representation. Among other reasons.

Vonage Rocks

[qwerty75]

Personally I hope this does not signal an end to their business model. I have had Vonage service for 6 months and I could not be more pleased. Thier billing and reporting is awesome. I can actually log into their site to view all incoming and outgoing calls. I can download my voicemail to a wave file. Meaning I can check it anywhere there is a computer with internet access and a sound card. But here is the real shocker. I had a problem sending faxes through their system. Called them up. Had a short wait time ~30 Seconds. They had my problem fixed within 5 minutes. Not only that but they actually asked about what hardware and software I was using to add it to their knowledge base. I was floored. Try having that type of service from Southwestern HELL. Not to mention saving $30.00 a month and having way more features. And the voice quality is excellent.

Re:Vonage Rocks

[nexus987]

I don't have Vonage yet - just learned about it yesterday from some co-workers (who love it). Needless to say, I'll be getting it soon and ditching my regular phone service. Great features and great price. If the regular phone companies wanted to compete, they should be offering free caller ID, free voicemail (similar to above), and detailed online billing and reporting of incoming & outgoing calls. Really, how hard would it be to add these features to a regular phone service? There's been zero innovation in POTS (well, callerID, but they charge extra for that).

Re:Vonage Rocks

[vacuum_tuber]

If the regular phone companies wanted to compete, they should be offering free caller ID, free voicemail (similar to above), and detailed online billing and reporting of incoming & outgoing calls. Really, how hard would it be to add these features to a regular phone service? There's been zero innovation in POTS (well, callerID, but they charge extra for that).

Nope. The telcos have been gaming the regulatory system for decades and now they have to live with the awful mess they've created. They have been creating features as extra-charge items as a way of segregating revenue from the basic rate regulation. They also do sneaky things like not allowing *69 to be disabled and charging an arm and a leg for each time its used, unless you subscribe to one of their bundles of features.

It's a mess. The telcos made it, and now they can't undo it. Screw 'em. They're going the way of the dinosaurs.

Surprise surprise

[Galvatron]

Yeah, this is what generally happens with government regulations. What was originally set up to keep a monopoly from exploiting the people eventually becomes a tool of that monopoly. This is exactly like how the railroads used the Interstate Commerce Commission to repress the trucking industry for decades on end. Bah!

Teamspeak, Gamevoice, et al...

[JoeBar]

They gonna start regulating in-game voice communication software? Pay a tax for every time I say "die n00b" to a Doom3 opponent?

Interesting, but perhaps not too bad

[peterjhill2002]

Well, since with Vonage, you can get a number in any exchange, If you lived in NY and they tried to levy taxes on vonage, get a NJ or CT phone number as your primary number and switch your current phone number to a secondary number that others can call you on, but your outgoing calls will never originate from.

On the other hand, I am pissed that a friend who switched to vonage on my recommendation has been paying for two accounts for six months. It seems that not only does one company own the phone line to your house, another the phone service, but another owns the phone number. They want to keep their original number, but company that give them service and the one that owns line aren't playing well together and they can't get the switch done. Vonage has been somewhat cool in giving them free service, but they have had to make a ton of calls to vonage to get this done. A bit of regulation in this case would not be too bad... In my state (PA) the state regulation board won't help.

So, NY people, pick a new area code. Voice over IP is completely illegal in Qatar, but there sure are people who use it over there, they just don't call the government regulation board when they have problems with their provider.

Re:Interesting, but perhaps not too bad

[vacuum_tuber]

Well, since with Vonage, you can get a number in any exchange, If you lived in NY and they tried to levy taxes on vonage, get a NJ or CT phone number...

I don't believe the regulatory effect has anything to do with the number you select. It has to do with your billing address. Use a remailing service or a friend's or relative's address in a state that doesn't yet regulate Vonage and choose a phone number in any part of the country you like, even your own home area.

On the other hand, I am pissed that a friend who switched to vonage on my recommendation has been paying for two accounts for six months. It seems that not only does one company own the phone line to your house, another the phone service, but another owns the phone number. They want to keep their original number, but company that give them service and the one that owns line aren't playing well together and they can't get the switch done.

I'm amazed! In a time when almost everyone mindless changes phone numbers at the drop of a hat, apparently completely oblivious to the disruptive effect that has on other people staying in touch with them or being able to call them after the passage of some time, you happen to know one of the very few people who makes keeping his number a sticking point. In your friend's situation I would tell the telco that doesn't want to give up the number to stick it up their ass and I'd banish them and their fees to history.

So, NY people, pick a new area code. Voice over IP is completely illegal in Qatar, but there sure are people who use it over there, they just don't call the government regulation board when they have problems with their provider.

You're half right. Pick a billing address outside the regulated area. You can plug a Vonage (usually Cisco) VoIP box into any network virtually anywhere in the world and your number will ring the phone plugged into it.

Also, the big reason people want to have a number local to where they live is so that people nearby won't have to make a long distance call to reach them. OTOH maybe that would be a great way to discourage local annoyance calls. Hmmm...

Re:So what kinds of extra fees do I have to pay no

[hpavc]

Just more of this

http://vonage.com/help/?topic=rrf

The Regulatory Recovery Fee is $1.50 per phone number. This is a fee that Vonage charges its customers to recover the costs related to Federal and State Universal Service Funds (USF) and other similar country specific funds, as well as other domestic and international fees and surcharges. Your total Regulatory Recovery Fee reflects a $1.50 surcharge for every phone number you have, including primary voice lines, second lines, fax lines, Toll Free PlusSM numbers, and Virtual Phone NumbersSM.

Great

[SlongNY]

Great.. Now my packet8 phone line is going to be taxed too?!?! 20 bux a month so so sweet.

Re:Regulation isn't always bad

[Kierthos]

Sure you can. I pick Evian, for instance.

Kierthos

Dear FCC,

[orangesquid]

It is the whole world's Internet.

Not just the U.S. Government's.

Please go home now and leave us in peace.

Thanks,
Matthew C. Williams
and a cast of thousands

Re:Dear FCC,

[BgJonson79]

New York State isn't the US government.

Though both will tax anything that moves (and stuff that doesn't).

Re:Dear FCC,

[orangesquid]

I'm not from Europe. I live in the U.S.

However, the Internet is an international project. It was never supposed to be owned or regulated by any one government or regulatory body. That's my point.

Re:Dear FCC,

[Anonymous Coward]

ObQuote:

The Internet doesn't only belong to the United States; I'm sorry if it's inconvenient.
-- Esther Dyson, chair of ICANN's interim board (commenting on a Hollywood lobby for an ICANN seat)

Re:Dear FCC,

[Idarubicin]

Dear Mr. Williams and cast,

New York State's Public Service Commission is regulating your telephone service here, not the FCC.

Have a nice day.

The FCC

PS: Maybe they're interested in regulating this network because it interacts with the conventional telephone services--including 911. Perhaps they want to have a regulatory framework in place so that people don't get screwed by crappy service.

How good is good enough? People are used to five nines of reliability from POTS. They probably wouldn't notice much if that slipped to four nines (about an hour of downtime per year). Should the PSC be able to step in if your pseudo-phone company slips to three nines? (Eight hours down per year.) Two nines? (Three days.) PSC regulation may or may not mean additional taxes, levies, and bureaucracy. It may or may not also mean the benefits of regulation--quality of service standards with real teeth; an enforcement body in billing and service disputes.

Re:Dear FCC,

[Anonymous Coward]

Is it the wholes world's PSTN too?

Re:free speech?

[stanmann]

Yes,

Free speech means you cannot be prohibited from speaking, not that you cannot be charged(monetarily or criminally) for your speech.

i run asterisk and voicepulse - give away accounts

[Anonymous Coward]

to friends and family

am I now the fone company?

If it looks like a telephone...

[north.coaster]

... sounds like a telephone, acts like a telphone, works like a telephone...

Then it must be a telephone!

Who cares what technology it uses? If I can pick up the handset, dial a number, and expect a recipient on the other end to answer, then the state has every right (and obligation) to deal with it like any other telephone service.

If this were not the case, then cellular telephones would also be exempt from taxes.

/Don

Re:If it looks like a telephone...

[pla]

the state has every right (and obligation) to deal with it like any other telephone service.

Why?

The massive web of regulation on POTS carriers exists for three reasons - One, dealing with them having a monopoly in many areas. Two, making sure everyone can have a phone. And three, dealing with the property rights involved in laying physical lines.

In the case of VOIP, none of those apply. Almost no barrier-to-entry exists (TW just stepped up to the plate, for example), and even if it did, you don't need to pick only a "local" company, one anywhere in the world can provide the service. It doesn't matter if everyone can have VOIP, because everyone can already have a phone. And VOIP uses virtual connections, making the use of land-lines irrelevant, WAP, satellite, or even carrier pigeon would work just as well (might get a bit of a delay on that last one, though).

So yes, at the "pick up handset, dial, and speak" level, VOIP looks like a traditional telephone. But if you look at the reason for all the regulation involved, VOIP looks more like a small purple rabbit than like a telephone.

Re:If it looks like a telephone...

[alienw]

One, dealing with them having a monopoly in many areas.

Cellphones are not a monopoly, yet are still regulated.

Two, making sure everyone can have a phone.

How is Vonage exempt from this?

And three, dealing with the property rights involved in laying physical lines.

Maybe, but most companies deal with that privately.

I fail to see your point. Why should a company not have to follow the same rules everyone else has to follow? Just because they transmit their phone calls over the internet instead of private fiberoptic lines? I fail to see your point.

Re:If it looks like a telephone...

[pla]

Cellphones are not a monopoly, yet are still regulated.

Actually, in many areas (such as my own), a single cell carrier does have a monopoly (ignoring the amazingly expensive satellite phones). I have a choice of US Cellular or nothing.


> Two, making sure everyone can have a phone.
How is Vonage exempt from this?

Because not everyone even has a computer yet.

Additionally, although you may well consider this unfair, the requirement that POTS carriers provide access to everyone satisfies the need for some form of phone service for emergency communication. Thus, "other" communication services, such as AIM, Vonage, and even cellular carriers, do not need to guarantee service everywhere.


> And three, dealing with the property rights involved in laying physical lines.
Maybe, but most companies deal with that privately.

I take it you've never had the local phone company tell you (not "ask" you) that they plan to build a line across your lawn? Let me assure you, they may try to do it privately, but it counts as a very much one-sided negotiation. Thus the need to regulate them in that area, to prevent such abuses (which still occur despite regulation) as plunking down a cell tower in your front yard, or making a residential neighborhood look like the inside of a 1960's computer.


Why should a company not have to follow the same rules everyone else has to follow?

Because the purpose those rules serve does not apply to VOIP. It has nothing to do with "fairness" or "why not", rather, with "why". Why would rules geared toward situations that have no relevance to VOIP get applied anyway?

Vonage won't knock on my front door with a declaration of eminant domain to steal the five feet of my yard fronting the road. Verizon can and does.

Vonage doesn't sarcastically tell me to switch to another local provider (which does not exist in many places) when I call with a complaint. Verizon can and does.


Just because they transmit their phone calls over the internet instead of private fiberoptic lines? I fail to see your point.

If you only use that as your distinction, in isolation, I agree that it seems insufficient to ward off the threat of regulation. That does not, however, count as the only distinction, nor does it even count as the most important. The others I mentioned have far more relevance to the issue of regulation.

Re:If it looks like a telephone...

[alienw]

Because not everyone even has a computer yet.

You don't need a computer to use Vonage. You only need an internet connection, such as cable or DSL. Furthermore, one way to ensure that everyone can have access to a phone is the Universal Service Fund, which is essentially a tax. I don't see why Vonage should be exempt from it.

Because the purpose those rules serve does not apply to VOIP.

Vonage is not just VOIP, it's a PHONE SERVICE. As in, it connects to the PSTN. You still haven't explained why they should not be counted as a phone company.

Vonage doesn't sarcastically tell me to switch to another local provider (which does not exist in many places) when I call with a complaint. Verizon can and does.

Contact your public utility commission, and Verizon will get their act together pretty fast. That is kind of the idea behind regulation.

Again, how is Vonage not a phone company when they call themselves "The Broadband Phone Company"? If they are a phone company, they need to play by the rules. Regardless of what means they use to deliver their service.

Re:If it looks like a telephone...

[Kumiorava]

Cellphones are not a monopoly, yet are still regulated.

Actually, in many areas (such as my own), a single cell carrier does have a monopoly (ignoring the amazingly expensive satellite phones). I have a choice of US Cellular or nothing.

With that criteria Vonage is also monopoly. Is there law that everyone must have cellular phone coverage? I don't think so. As there is no law that everyone must have VoIP coverage. Only land line coverage is needed.

Anyway I think there is nothing wrong in regulating something that connects into telephone service and behaves and is marketed as telephony system. There are logging, security, and billing requirements just for example.

Re:If it looks like a telephone...

[Anonymous Coward]

Is AOL Instant Messenger a telephone?

Re:If it looks like a telephone...

[mjh]

I agree it's a telephone. And I agree that Vonage is a telephone company. But I disagree that being a telephone company qualifies them for regulation. What qualifies traditional phone companies for regulation is the fact that they've been granted exclusive rights to lay cable in a particular area. Consequently they must be regulated in order to ensure that their state sanctioned monopoly is not abused.

What monopoly has been granted to Vonage that requires regulation? Right now, the market that Vonage is in is rife with competition. If you don't like Vonage's service, switch to Packet8. Don't like them, try VoicePulse, etc, etc. There is no need for any level of government to regulate Vonage because the consumers can do it themselves.

There is, however need for the government to regulate BellSouth, Verizon, etc, because they are the only ones with the right to lay telephone lines. And as such, the consumer has no ability to self regulate that company. So government regulation serves a purpose. For VoIP providers, government regulation is redundant, and should not be done until a compelling reason can be identified. They are not a traditional phone company, and the rationale for regulating traditional phone companies does not apply.

Re:If it looks like a telephone...

[mjh]

Cellphones are not a monopoly, yet are still regulated.

Sure they are. They're granted exclusive use to a frequency, and they can't interfere with any of the other frequencies. Which is, of course, exactly why the FCC is pushing for the move to digital television, so that they can recover some of the frequencies so that they can encourage competition for frequency based servcies - including cell phones.

Today, there are a limited number of cell phone companies that can occupy a single area, because there are a limited number of frequencies available.

Maybe, but most companies deal with that privately.

No they don't! They can't. The right to lay physical lines is granted by the municipality. It's necessarily a public problem. And moreover that right to lay cable is granted to only one company in order to avoid the chaos that ensued right after phones became popular.

The point that the OP was making is that telcos (and cell providers) are regulated for reasons that do NOT apply to VoIP providers.

Your argument is roughly equivalent to saying that we should apply environmental taxes to hydrogen fuel cell cars in exactly the same as we tax gas or diesel based cars. The fact that both are cars is irrelevant. The gas cars have deleterious impact on the environment and are consequently taxed as such. Hydro cars don't, so they shouldn't be taxed. It doesn't matter that it "looks like a duck". If it's not actually imposing the same problems as a duck, it shouldn't be taxed like one.

Re:If it looks like a telephone...

[alienw]

The gas cars have deleterious impact on the environment and are consequently taxed as such. Hydro cars don't, so they shouldn't be taxed.

This is the most idiotic argument I have ever heard. You are essentially saying that the sales tax is there to discourage people from buying stuff, and income taxes are there to encourage unemployment. I don't think so. I am sure hydrogen will be taxed, just like gasoline is (though perhaps at a lowered rate at first).

Re:If it looks like a telephone...

[mjh]

I didn't say anything about sales tax. I'm trying to make my point through the use of analogy. If the "it looks like a duck" rule is applied to cars, then all cars should be taxed identically. But that's not sensible. If we were to impose taxes on cars because of greenhouse emissions, then as soon as a ZEV came along, by the "looks like a duck" rule above, we should apply the same enviornmental taxes to that car. It looks like a car and drives like a car, well let's just apply all car taxes to it without taking into account why those taxes exist in the first place. That's just nonsense.

It's the same nonsense with VoIP. It looks like a phone and works like a phone. But it doesn't impose the same sort of problems that traditional phone companies impose. As a consequence, we shouldn't tax that VoIP as if it was the same thing as a traditional phone. It's different, despite the fact that it looks and works the same.

My point is this: when the technology changes, the taxation around that technology has to take those changes into account. Just because Vonage is a phone company doesn't mean that taxing them like traditional phone companies makes sense. The "it looks like a duck" argument is too simple.

Re:If it looks like a telephone...

[vacuum_tuber]

What qualifies traditional phone companies for regulation is the fact that they've been granted exclusive rights to lay cable in a particular area.... [Vonage is] not a traditional phone company, and the rationale for regulating traditional phone companies does not apply.

Finally someone gets it right. The signal to noise ratio here is appallingly low.

-5 WRONG

[Anonymous Coward]

I can have a New York phone number with Vonage and live in Florida

I have a vonage account. Sorry buddy it doesn't work like that. You live in Florida you get a Florida exchange. I was actually wondering abotu this and asked, they said basically "NO, 911 ties phone numbers to locations that wouls screw everythign up" (not an exact quote but the jist of it). Just because VOIP has the ability to do it does not mean you can do it or will ever find a company to do it for you

Re:-5 WRONG

[div_2n]

Sorry, you are mistaken. Call Vonage and ask. I called corporate headquarters and talked with some of their expansion people on how it works.

Also, a phone number does not necessarily tie you to any exhange just like in IP address doesn't necessarily tie you to a physical location. Phone networks are _switched_ and it is trivial for a phone number to answer anywhere.

How do you think you can port your home phone to a cell phone and back again?

By the way, when signing up on Vonage YOU get to choose your area code. Physical proximity need not apply.

Re:-5 WRONG

[Anonymous Coward]

Ahh now I see, you are reduced to lying to cover the misinformation you spread.

Try it. Ask for a NY exchange while living in Florida, they will basically laugh at you. I tried because I live in Connecticut but my business is in NY. I wanted a Vonage business account at my home with a NY number. They said NO.

Nice try though, troll. Call them up again (or for once for real) and they will tell you the same thing I did before.

Re:-5 WRONG

[pixelpusher220]

BZZZT Sorry buddy to you too. He's right and you're wrong.

Vonage Area Codes and the associated text:

"With Vonage, you are no longer tied to your "local area code". You can select any Area Code you want from our list of available area codes. This means even if you live in New York, you can have a California area code."

Re:-5 WRONG

[div_2n]

Ok . . . I will call them AGAIN . . . ahh, to hell with it, I will just check their website. Wow! Look what I found!!!

http://www.vonage.com/area_codes.php

To quote:

"With Vonage, you are no longer tied to your "local area code". You can select any Area Code you want from our list of available area codes. This means even if you live in New York, you can have a California area code."

So, in a few infamous words from Seinfeld, "NO SOUP FOR YOU!"

Re:-5 WRONG

[Anonymous Coward]

I keep looking at the page adn can't find the quote you made up.

Better luck next time troll.

Re:-5 WRONG

[div_2n]

I could say something about a pot and a kettle, but instead I will just refer you to this site. Good luck!

http://www.contactlenses.com/

Re:-5 WRONG

[pixelpusher220]

HA! thanks for the laugh at the moronic troll's expense :)

Re:-5 WRONG

[Anonymous Coward]

I keep looking at the page adn can't find the quote you made up.

You must have an awful time using a computer, being blind and all, eh?

What possible reason can you have for denying something that is so easily provable? Are you mentally ill? Are you stuck with too many telco shares you can't unload? Is your IQ lower than your shoe size?

I'm a very happy Vonage customer. I knew going in that I could get a primary number in any of the area codes in their long list. I chose to port my pre-existing telco land line number just to avoid the hassle of getting friends and family to update their records, and I stayed with a number local to my geographical location so that people nearby who don't have Vonage would be able to continue calling me as a local call.

Better luck next time troll.

I'm not any of the previous posters in this subthread about area codes. I'm just offended by a display of such malicious stupidity. Better luck next time yourself, moron.

Re:free speech?

[stanmann]

Yes, I know
IHBT
IHL
HAND

How about e-mail??

[Fuzzums]

Should that be regulated too?

Yes. There is a cry for regulation and legislation. Just only think about spam.

and on the other hand: who forbids you to write your own application to communicate? eg write your own private VoIP server. Friends only, ssl, safe from tapping.

Just a thought...

email next?

[CheeseTroll]

There was an urban legend floating around a few years back about the government taxing email, partly because it was biting into the USPS's business. It seemed pretty kooky at the time (and still does!), but how is that different than taxing internet phone traffic? Maybe Vonage should refer to their service as ephone.

Or maybe I should just shut up before the feds take another look at taxing email!

Nonsense

[north.coaster]

This is pure nonsense. Weren't cellular telephones at one time considered an innovative service in a heavily regulated industry? Didn't the cellular phone industry manage to survive dispite regulation?

VoIP will survive as long as it provides a useful service that is in some way advantageous over existing land-based and/or cellular systems.

/Don

Re:Nonsense

[AK Marc]

This is pure nonsense. Weren't cellular telephones at one time considered an innovative service in a heavily regulated industry? Didn't the cellular phone industry manage to survive dispite regulation?

What percent of cellular customers belong to a cellular company that isn't associated with a major phone company? AT&T wireless, Cingular, Verizon, and others were formed by or spun off from the land-line companies.

The buy-in costs prevent small outfits from entering the scene. Pay a few billion for licenses, or you have no coverage. Pay the billions for licenses, then you have to pay billions for the infrastructure to cover those areas. Find someone with billions to spare, and they can enter the nationwide market. Otherwise, those that are in it are the *only* ones that will ever be in it (and that number will probably shrink through a merger or two).

Re:Nonsense

[Anonymous Coward]

Yes and who exactly compromises the cellular industry these days? Who managed to survive till today? Yep you guessed it, the same monopolies that make up the phone system who were already under and used to regulation.

Re:Nonsense

[Anonymous Coward]

This is pure nonsense. Weren't cellular telephones at one time considered an innovative service in a heavily regulated industry? Didn't the cellular phone industry manage to survive dispite regulation?

Cellular technology was invented in the late 40's, the FCC managed to delay rollout for over thirty years.

The invention of cellular technology took place at Bell Labs in 1947, but government regulations slowed the process for licensing. Nearly thirty-five years passed before the Federal Communications Commission (FCC) began granting licenses for cellular telephony. However, the grants for licensing limited the competition in wireless telephony. ÒThe FCC allocated half the metropolitan licenses to the Regional Bell Operating Companies (RBOC), which had no interest in using wireless to attack the local loop monopoly. The other licenses it assigned by lottery to gamblers and financiers with no ability to create an alternative local loopÓ (Gilder, p. 3). This action, by the FCC, delayed the inevitable growth that cellular phones played in the telecommunications market.

From: http://condor.depaul.edu/~rtheodos/papers/cellular .html

Re:Nonsense

[ScottForbes]

Only if you ignore the 35-year gap between the invention of cellular phones (1947) and the first FCC-licensed commercial network (1983). Some of that delay was because the idea was impractical until computers became widely available, but a lot of it was petitioning the FCC for a license. A start-up company with shallow pockets would not have had the resources (or the investor patience) to take this idea to market.

This is a good thing!

[stephenisu]

This means schools and libraries will now have a better shot at getting E-Rate funding from the Universal Service Fund Again. Millions and millions of dollars were spent getting schools VOIP and the FCC decided that VOIP wasn't real phone service so they lost funding for it, almost closing many schools, public and private. If you have no idea what I am talking about, go to www.sl.universalservice.org for more info. You might be interested to find out where your USF charge on your phone bills go. (BTW I am an E-Rate consultant for schools, stephenisu@yahoo.com)

Re:This is a good thing!

[gcaseye6677]

The Universal Service Fund is the biggest scam. Much of the money is wasted. Schools in poor areas need to focus on academics and maintaining a safe environment, not connecting every student to the internet so they can play Yahoo games, which is about all we ever used the internet for when I was in school. Getting crap like this taken off of our regular phone bills will help a lot more than trying to expand the socialism to VOIP.

Re:This is a good thing!

[stephenisu]

You know what?

All government programs are gonna have waste, someone will ALWAYS abuse the system, intentional or otherwise (I try and help them to NOT abuse the system and only ask for what they need)

And I am find it rather funny that someone who HAS internet acces should complain. You see in lots of areas where there is little income and parents can't afford internet access. The amount of funding a school recieves is based on the schools students poverty level. Many of these student have no internet at home, and their school may not be able to afford it either.

It's not the childrens fault their parents are poor. And don't try and rebuttle this with the old "Well we didn't need the internet when I was in school" bit either. Thats because you didn't need to be computer literate back in the day. You can't get an office McJob these days without basic understanding of email and the internet.

And quit whining about the $2 a month you pay to the USF, you know why it is there? Because we broke up the telco's, they did all of this internally before "deregulation". With all of the the cost differences between urban and rural communication, this was a neccesity. The cost was already in your bill before, you just didn't see it itemized. And if you pay more than $5 you use the phone way too much anyways.

And I also hate to break it to you, this is a socialistic capitalistic market. Healthcare is the same way.

Re:This is a good thing!

[N3WBI3]

So our kids in poor schools wont be able to read but at leats they will be able to speetk 1337? I never touched a computer until University (1996) and did nothing to inhibit getting an EE degree with CSE minor..

Re:This is a good thing!

[stephenisu]

And prior to about 1998ish email and the internet were still very much not developed tech in the truly mass market. And guess what? You DID get access to them when you went to college. Not everyone needs a college degree for what they do, but most of them will need to be computer literate in the near future.

Re:This is a good thing!

[v01d]

And I am find it rather funny that someone who HAS internet acces should complain.

You think only people without internet access are able to say whether they need it or not?

And don't try and rebuttle this with the old "Well we didn't need the internet when I was in school" bit either. Thats because you didn't need to be computer literate back in the day. You can't get an office McJob these days without basic understanding of email and the internet.

What part of school requires internet access? Math? Science? History? Do you think schools should be preparing students for McJobs? What email client should schools teach?

Sorry if English isn't your native language, but your entire post shows a horrible lack of education. Your abuse of grammar further convinces me that public schools should concentrate on education and leave job training to trade schools. As soon as the American educational system quits churning out illiterate lazy children maybe they should look into expanding the topics taught.

Regardless of how well you know your web browser, your post makes you look like an uneducated fast food "lifer."

Re:This is a good thing!

[Anonymous Coward]

Since I volunteer in a school science department, I can say that many activities have a need for internet access these days. Take a step into a local school and see what is expected of them. Without internet access to perform much of the research, many projects would not be able to be assigned. I for one have witnessed the increased research and compilation skills learned by these students since I formed the framework that they worked within for some of their projects. Much of this is especially true for much of the multicultural activites schools mandated upon public schools. A large benefot to having such easy and quick access is the ability to integrate up to the minute occurances in society, be it from new scientific discoveries or current events. Who is to say that the funds aren't worth it should it help inspire some young kid in school right now to pursue a career that they otherwise would never have been exposed to due to the school's limited resources. As for the blanket statement that the "American education system" is putting out illiterate and lazy children, I'd have to disagree. This may be true in some isolated areas but te vast majority of teachers work hard everyday to teach all kids regardless of background. I only have to look at the school in which my father teaches to see firsthand the enormous efforts teachers are willing to go to. Maybe instead of always criticizing and making blanket statements, you should volunteer at one of your local schools. I have ironically found parents as one of the biggest obstacles to school improvement. "Oh johnny's homework is too hard." "The teacher hates my child because he wouldn't help him." Or they just simply choose not to be involved the way they need to be. Oh, and as for leaving job training to trade schools, if the kid came from a school so poor that they needed to utilize the USF, they tend to be from families equally so poor that trade school is out of reach also. A public school for that kid is the last oppotunity to prepare them for the world.

Re:This is a good thing!

[AK Marc]

The Universal Service Fund is the biggest scam. Much of the money is wasted.

And much of it is used to provide basic services in rural communities that would not be available without the subsidies. But I guess everyone should leave the rural areas and move to the city if they want such luxuries as affordable phone service.

Re:This is a good thing!

[JesseL]

And it wouldn't be so expensive to get phone service to rural area's if they used a wireless (MMDS, VHF, Sattelite, etc.) internet connection and VOIP instead of miles of copper wire. Also, I don't see the problem in it costing more to live in places where it costs more to live. Do people in California pay an avocado tax to subsidize Alaskan's avocados? Hell, maybe they do.

Telephone companies are regulated because they used to be natural monopolies - there was only one company that could get that pair of copper wires to your house. Now you can get a general purpose connection to your house via POTS, fiber, coax cable, wireless in one of it's variations, etc.

Re:This is a good thing!

[AK Marc]

And it wouldn't be so expensive to get phone service to rural area's if they used a wireless (MMDS, VHF, Sattelite, etc.) internet connection and VOIP instead of miles of copper wire.

Yes. Everyone loves the quality of voice over satellite. That delay is fun.

Do people in California pay an avocado tax to subsidize Alaskan's avocados?

Well, the government hasn't decided to declare that communications should be ubiquitous. And, since you claim they should be using wireless, I'll let you in on a secret, the majority of the land area covered in Alaska is covered over wireless. But wireless is poorer quality than wired and has greater recurring cost (though a lower initial cost).

Telephone companies are regulated because they used to be natural monopolies - there was only one company that could get that pair of copper wires to your house. Now you can get a general purpose connection to your house via POTS, fiber, coax cable, wireless in one of it's variations, etc.

Not in the majority of the land area of the US, hence the USF. There are many places where you take POTS as the only choice for local service and satellite as the only choice for broadband (and satellite broadband sucks, especially the oversubscribed and throttled StarBand type services). To help bring the choices you assume are available to the places they are not available, they created the USF and are using it to that effect.

Re:This is a good thing!

[JesseL]

I guess it comes down to disagreement over whether I should pay for other people having their cake and eating it too. I don't see why you expect the rest of us to pay to make sure that someone who chooses to live in BFE can have cheap phone service or why using my internet connection to talk to other people should obligate me to submit to taxes and regulations that aren't necessary.

Re:This is a good thing!

[N3WBI3]

If they are literate they will do fine. Tell you what when 90% of high school grads can read/write on a 12th grade level, then that school should worry about its computing lab.

Re:This is a good thing!

[stephenisu]

You think only people without internet access are able to say whether they need it or not?

I find your lack of compassion humorous, which is what I was getting at.

What part of school requires internet access? Math? Science? History?

All of the above categories are helped by the internet. Many valuable teaching aids can be found online, and many students choose to go beyond learning what is taught at a slow pace in class. Many schools have to cater to the lowest common denominator of student. Giving independent study capabilities in public schools with little money for even books can be quite beneficial to the faster and otherwise bored students.

Do you think schools should be preparing students for McJobs?

My post was pointing out that students not educated about internet related topics can not even get a McJob at best. I figured you would be able to deduce that this means they won't be able to excel past the lowly McJob. It would appear you are more concerned with grammar than content though. I hate to break it to you, this is an internet forum. I suffer from dyslexia, and I would rather worry about making an insightful comment than proofreading a post on a forum rife with bad spelling and grammar.

What email client should schools teach?

I would suggest Outlook or a somewhat similar Open Source alternative, as this is what the current job market will expect you to be able to use. Much like using a pen or pencil, the differences in GUI based email clients are minimal, and most companies have an IT department that configure the more advanced setting on a machine anyways. The concepts of valid email addresses, professional courtesy and forwarding/replying are more important than the details of account configuration. And honestly, if you are going to be using anything more specialized, you won't need that before college.

Sorry if English isn't your native language, but your entire post shows a horrible lack of education. Your abuse of grammar further convinces me that public schools should concentrate on education and leave job training to trade schools. As soon as the American educational system quits churning out illiterate lazy children maybe they should look into expanding the topics taught.

Once again... I have dyslexia and I apologize for this. But this is just an internet forum. I have better things to do than check my spelling and grammar (most of the time). And to further prove this:

Aoccdrnig to a rscheearch at an Elingsh uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht frist and lsat ltteer is at the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae we do not raed ervey lteter by it slef but the wrod as a wlohe.

Regardless of how well you know your web browser, your post makes you look like an uneducated fast food "lifer."

Regardless of your impeccable grammar and perfect spelling, you still look like an ass when you attack a persons post based on said issues and not the facts at hand. While it is off-topic, I am 21, own a house, a decent car (1999 BMW M3), and have stake (not just stock) in multiple companies. BTW this was accomplished by a foster child with a high school education with no help from any resources than ones I acquired. Now this isn't me having a penis size contest or anything, but it was to illustrate that not all people who don't care all that much about spelling/grammar in a non-professional communication are total losers.

Re:This is a good thing!

[gcaseye6677]

I've always believed that when people in rural areas are taxed in order to provide rent/mortgage subsidies for people in urban areas, then I will feel that their subsidized phone service is fair. Seriously, we've had phones for about 100 years now, the lines are all in place, and the rural phone systems have had all the subsidies they need in order to provide adequate service. If it costs more to provide rural phone service on a continuing basis, people who live in rural areas need to pay it. Almost everything else is cheaper in rural areas anyway, so its not going to kill them to pay a little more for communications.

Re:This is a good thing!

[Specter]

WTF do schools need VOIP for? Why should we be subsidizing public schools' external phone connectivity?

It's debatable whether we should have jumped on the bandwagon of Internet enabling every school in the nation (rather than leaving it to the local school system and tax payers), but there's just no argument for yet-another-tax to give free phone calls to schools.

Re:This is a good thing!

[AK Marc]

I don't see why you expect the rest of us to pay to make sure that someone who chooses to live in BFE can have cheap phone service

Ah, yes. The age old "If you don't like it, move." argument. I guess you expect everyone to abandon their family because they want affordable phone service. And no, it isn't "cheap" in that it isn't any less than non-subsidized areas. And the government has decided that trying to equalize the cost of necessities (like phone service, roads, education, electric power) is beneficial to the entire nation. Many people agree. Aside from the "I don't want to have any of my money go to anyone but me" argument, I've yet to see anyone say anything negative about those programs.

Since you seem to think that affordable power, phone service, and decent education should only be available in population centers, could you explain why?

Re:This is a good thing!

[JesseL]

I think that people need to accept that no matter where they live there will be certain advantages and disadvantages. To coerce the public into funding the homogenization of the nation is somthing I find absurd. I think that people should be encouraged to work together for they're mutual benefit and karmic well being - but they should never be forced to.

I see little difference between taxation and extortion, the fact that you will occasionaly benefit from what the government does with your money does nothing in my eyes to distinguish it from mafia "protection" money.

I'd be happy to voluntarily let some of my money go to good causes and necessary services(in fact I already do). I don't like being threatened with imprisionment if I don't submit to paying 90% of my earnings (think of all the taxes you pay - when you buy, when you sell, what you just keep - it's all taxed!)to a government whose only claim to legitimacy the threat of overwhelming force and a "social contract" which they claim I have accepted simply by being born.

Re:This is a good thing!

[notsoclever]

Because nobody ever eats anything which was grown on a farm, so rural comms are useful and necessary for society as a whole. 'coz order fulfillment and shipping tracking and supply-side management and so on are only useful for computer parts, not for food.

Telephone == Interface

[hwestiii]

Coming from the Slashdot crowd, all this excitement over whether Vonage is a phone company or not is particularly amusing.

Granted, not everyone that reads Slashdot is programmer, but clearly a lot either are or have more than a passing acquaintance with programming concepts and theory.

I think what we are seeing here is simply a bureaucratic manifestation of the separation of interface from implementation. The whole point of companies like Vonage is that the do all the stuff a normal telephone company does, but using non-standard methods. If they didn't, they'd have no customer base, and their users would stick with existing providers.

If the users think its a phone company, why shouldn't the regulators? Isn't that the whole basis of OOP over the last several decades? What a thing does is more important than how it does it.

If it looks like a duck...

[IEEEmember]

Vonage is advertising their service as a replacement to phone service despite any disclaimers they make about feature limitations. Recently visiting their website would activate a pop-up that invited you to cut your phone bill. However Vonage and other VoIP providers have been immune from the regulations that increase costs for POTS providers, their competitors. The argument should not be whether Vonage should be treated as a phone company, but rather what taxes and regulations should be applied to the service components, and what taxes should be applied to the last mile physical components which are typically government granted monopolies. It also becomes evident that the Universal Service Fund now needs to consider subsidizing VoIP as an alternative to POTS where it is most cost effective. This creates additional business for VoIP providers. Ultimately VoIP should reduce, though not eliminate, regulations and taxes for all providers as the market determines what features providers must support. Disclaimer: I am still miffed at Vonage about the length of time my number transfer took.

Re:If it looks like a duck...

[Anonymous Coward]

You miss the point phone companies pay taxes because of how their business operates, they use lines on public land. VOIP providers use the internet so now I am taxed on my internet and something that uses it that is like taxing me twice on the same thing. We should feel no pity for the phone companies as they are a$$holes. eventually VOIP will replace the phone company and eliminate the lines running into our homes, the government should promote this not hinder it.

Re:If it looks like a duck...

[IEEEmember]

No, I did not miss the point.
I specifically stated that regulatory agencies would need to begin to differentiate between regulations required for infrastructure, for example open access provisions, and regulations required for services, for example E911, and that this separation would likely lead to reductions in regulation overall as service regulation would be eliminated through market competition.
You state VoIP will replace the phone company. This is false, the phone company will continue to supply connections to customers although they may be digital in nature and provide alternative services including video.
As to whether or not the phone companies are, as you claim, less well looked upon body parts, please remember that the phone companies had a hand in building this country and have until recently been at the forefront of technological innovation.

Re:If it looks like a duck...

[Anonymous Coward]

please remember that the phone companies had a hand in building this country and have until recently been at the forefront of technological innovation.

You must have a very long term definition of "recently." Case in point: ISDN. First introduced in the 1970s it was touted as something that was going to revolutionize "last mile" communications. Although the ISDN spec is actually a masterpiece of technical design encompassing speeds up to multi-megabits, pretty much the only version ever adopted by telcos was BRI/PRI, the bottom tier of ISDN. In fact, few phone companies who adopted and offered ISDN ever even fully learned it, and as recently as 1998 HAL-PC was telling attendees to its ISDN classes that they would have to specify precisely to their phone company how to provision the line at the switch when ordering up an ISDN line because the phone companies still didn't have a clue.

So roughly 30 years later the only version of ISDN ever fielded by telcos is now an obsolete dinosaur, far superceded by xDSL and cable Internet, all without the telcos ever having fully learned how to run ISDN and provision their switches and without ISDN ever having delivered on its promises. But not for any fault or flaw in the technology. What's wrong with this picture, hmmm?

Re:Regulation isn't always bad

[13Echo]

Do you bathe in Evian every morning?

That would be very expensive. You might want to consider the switch to Aquafina.

Makes sense to me

[iii_rjm]

If it walks like a duck and quacks like a duck.....

Re:Makes sense to me

[hopemafia]

Then it's:

AFFFFLAAAACK!

(sorry, couldn't help it...please don't hurt me)

What am I missing?

[Anonymous Coward]

Im sure with all the intelligent people here, and the overwhelming disagreement with the NY position, I'm sure I'm missing something.

I think this should be regulated entirely, just as phone companies are.

Where I live, in NY. I cannot have cable. The cable co. has said it isn't profitable enough to provide me with cable, too few residents.

I can't get DSL. Again, rural area, not enough profit. But the phone company HAS to provide me with dial tone, as the electric company has to provide me with power. They have to run service to my house, even if it isn't profitable.

While I'm sure Vonage is a great service to those that can have it, what does it do to the phone co? They will lose revenue because the service will immediately go to high density population areas, where broadband is readily available in many forms, and from different providers. They will look at rural markets, realize it still isn't profitable, and forget us.

In effect, the biggest profit centers will move to the VoIP side, and leave the phone co., with the rest of us not-so-profitable people. They can't survive on that. The gov't won't let them shut down, so a bailout will be coming. Then, we will all pay anyway.

I know the local phone company does not make a whole lot on my service. They have miles and miles of cable to maintain, and *very* few homes over all this cable. Contrasted to the cities, where there are lots of subscribers per mile of copper, the difference in revenue should be obvious.

Leaving this unregulated will only hurt rural America - the phone companies surely aren't going to eat the loss. So, until there is broadband for everyone (which again must come from Gov't policies), any competitor to a regulated service should be regulated as well, even if the technology used to provide the competing service is newer or different.

And for those that think urban residents shouldn't have to subsidize rural people, tell me what the heck I'm paying State Taxes for public transportation for? Im sure I won't be seeing any new bus routes along my road!

Straighten me out. Thanks.

Re:What am I missing?

[pixelpusher220]

I'll bite...somewhere in the middle anyway.

Is Vonage a 'Phone Company'? I would say no. I pay for my broadband connection, how I *use* that service should be up to me and free from intrusion. I'm simply sending data bits back and forth. Gaming is pretty much the same thing; even has voice capabilities.

Now the other side, Vonage does interface with the POTS network. Should there be a fee for that? I think it's argueable that yes there should be. As many have agreed, paying for 911 seems acceptable. I can stretch that to other costs of running the POTS network provided the fees are reasonable. And that's where regulation of the Phone Companies came from to make sure they didn't abuse the monopoly they were granted. So regulate the costs to 'access' the POTS network but keep away from regulating *how* someone uses a separate service.

Does all this that make Vonage a 'Phone Company', no I still don't think so.

In summary, I think the classification as a Phone Company is wrong, but that yes there needs to be some remuneration(sp?) by the POTS network operators for use of their network.

Re:What am I missing?

[Anonymous Coward]

pixelpusher220 wrote:

...does interface with the POTS network. Should there be a fee for that? I think it's argueable that yes there should be.

Vonage already pays to interface to the PSTN. You think that's free?

As many have agreed, paying for 911 seems acceptable.

Vonage doesn't presently interface to the real 911 services. To provide a 911 equivalent you register your service address and they look up the official standard local emergency phone numbers that serve your address, such as your Sheriff's or Police Dept. regular phone numbers. When you dial 911 on your Vonage phone it's like speed dialing your local authorities, nothing more.

And that's where regulation of the Phone Companies came from to make sure they didn't abuse the monopoly they were granted. So regulate the costs to 'access' the POTS network but keep away from regulating *how* someone uses a separate service.

You've got it all mixed up. Access to the PSTN is not the basis for regulation. The phone companies, like electric and water companies, were originally granted monopolies in their service areas because it was widely believed that it would be an unmanageable mess to have multiple such companies all trying to run their wires and pipes through the same streets. Now we've learned that indeed multiple coax or fiber can be run, and that water and electricity can be metered going into and coming out of a single shared grid.

There is no basis for regulating VoIP companies as "phone companies" and fact no basis for continuing the monopoly and regulatory system for water or electricity except maybe to referee the system for sharing a common distribution grid for the services for which it still isn't practical to run multiple lines to customers' premises.

biased procedure

[Anonymous Coward]

What a completely biased procedure. New York State decided (surprise) that New York State should have greater authority.

Almost everyone wants more power. The more power you have, the faster you can accumulate it.

Its not about regulating the Internet...

[jonwil]

or any programs that run on it.

What this is is a decision that a company that lets you call up people on any other phone companies network (Verizon etc) including calls to Emergency numbers shouldnt be granted an exemption from this particular piece of state legislation that regulates phone companies just because their phone connects to the Internet instead of to a regular phone network.

Programs (including voice chat progams and such), protocols and internet services that dont talk to the regulat PSTN network wont be affected by this decision.
Also, even programs that are used for services that connect to the PSTN wont be affected. The only affect this will have is on companies offering a telephone service that lets you ring up someone on the regular PSTN (or on a mobile etc) and lets them ring you.

I'd have to agree

[spaeschke]

They may accomplish what they do differently than your standard phone company, but the fact remains that that's exactly the business they're in.

Of course, it's also possible to do what Vonage is doing with any other broadband connection. Suppose a company pops up that just runs a database that keeps track of it's users IP and assigns them a "phone number". They're not in any way a hardware company, but aside from physical infrastructure, they're performing the same function as any phone company. Are they treated the same? How about the broadband provider? They aren't performing the function of a phone company, but they are providing the infrastructure to make those exchanges possible.

Re:I'd have to agree

[Anonymous Coward]

I know it's not fashionable on slashdot to have the slightest clue before commenting, but your ignorant post demands a response.

FYI Vonage isn't a hardware company and provides no lines, broadband or otherwise. What it does is precisely what you suggested might not be a phone company when you wrote, "Suppose a company pops up that just runs a database that keeps track of it's [sic] users [sic] IP..."

Hostile Neighborhood

[lysium]

New York State is home to New York City, which contains how many telecommunication giants, exactly? Verizon alone wields enough clout in New York politics to influence decisions like this. This state (or entire region) is not exactly the place for emerging players.

===---===

Re:So what kinds of extra fees do I have to pay no

[dr_dank]

I am a NY state resident as well and I can say that the cell phone is no picnic either. At least eight or nine dollars of my bill (nearly a third) all go to a host of regulatory fees, receipt taxes, and such.

Re:Regulate? Ok, but not exactly as a phone compan

[telstar]

"there needs to be a way for the regulatory agencies to keep up with the changes, and ensure that necessary services (e.g. 911) and quality are maintainted."

• Why not let the customers do the
• ensuring. Good service = customer loyalty. I'd like to think we could keep these companies providing good service without somebody applying a tax.

Vonage Is Not A Monopoly

[Anonymous Coward]

It's easy. NYS already taxes the POTS lines that Vonage customers call or are called by in NYS.

Vonage does indeed offer the "service" of 911 for NYS customers if they want it.

Simply have a fee for NYS users who want to use the 911 service, thereby paying for that service. This is something even a bureaucrat could understand.

The problem is the addiction to force. It is easy for the politicians and bureaucrats to use force against anyone for any reason that they can dream up, and if it doesn't work out there is no "cost" to the bureaucrats and politicians. "Power Corrupts".

So, rather than charge Vonage customers the very understandable fee for the voluntary use of a service, they bring the full weight of the State and its myriad regulations behind this act to punish Vonage. The customers who don't want the service are punished as well by being "taxed" for something they do not use.

The State created the power to regulate telephone service on the theory that phone service should be (not "was", look it up) a "natural monopoly", and in order to get votes by forcing "universal service". The phone companies returned the favor, in effect writing the regulations themselves exactly like the railroads had done, because after all they were the experts.

So not only is the rationalization of "it's a telephone company" founded on falsehood, the "tax" is unnecessary as well.

Don't expect other states to keep their hands off as well, killing the golden goose.

So?

[Anonymous Coward]

VOIP sucks. I've seen several companies try it, and all of them have had problems with breaking up of the voice during bandwidth hogging.

Re:So?

[Anonymous Coward]

VoIP is well established in commercial use and is now eminently workable for personal use. The companies you've "seen try it" and fail must have been incredibly incompetent or perhaps such cheapskates that they tried woefully inadequate, amateur solutions.

You don't sound like the sharpest knife in the drawer yourself.

As to VoIP sucking, I use Vonage and love it. I run up about 2,000 LD minutes per month and save a ton, plus I don't have that nag factor in the back of my mind reminding me that the meter is running up money every minute.

Vonage Dirty Secret: Number Portability

[hirschma]

Vonage is a Number Portability roach motel - you can port to them, but they refuse to give it up to anyone else in case you want to switch.

This will likely force them to port in two directions, something that they are not doing now.

Jonathan

Re:HELP! Small home business (5-8 lines) & VoI

[Anonymous Coward]

http://www.dslreports.com./forum/voip

Easy fix.

[acceleriter]

"Sorry, Vonage is not available in the State of New York. If you don't live in New York [wink, wink, nudge, nudge], please specify an address outside of New York to complete signup."

Re:Didnt the US fight to be...

[jav1231]

Correct. Now we have burdensome taxes from out representatives. I think we've even hit the 50/50 mark where 50% of the populace doesn't pay income tax. Couple the burden of taxes on phone and such with income tax and we have a powder keg on our hands.

Another case of tech getting ahead of the law

[Overzeetop]

"Phone service" "Telephone" "VOIP" blah balh blah.

If you ask me, the "intent" of the regulatory law is either to:

1. Provide a mechanism to ensure that safety and performance standards for public services are maintained.

AND/OR

2. To prevent a defacto monopolistic situation from becoming abusive. In this case, it's the copper "last mile" (last 3 miles for me ;-) which is single-source.

If NY is attacking based on case 1, Vonage is a phone company. They provide a utility service and should be subject to all the cr@p that every other phone provider goes through. Can you say "long distance?" I knew you could. They use the same model - no physical plant, just bits routed to the right places, with A/D and D/A at each end, running over your existing copper which is owned by another entity.

If, as some slashdotters have suggested, that the real reason for regulation is the control of monopolistic abuses by the owners of the last mile (which, not coincidentally, happens to be local phone providers in nearly all cases), then Vonage is clearly not a phone company, but neither are the non-owner long distance carriers.

IMHO Vonage is clearly providing a telecommunications service, and is no different than a long distance carrier which does not own your local physical plant.

A closing thought...a converstion...

"No, your honor, this check isn't for wages, it's a gift. I don't have to pay taxes on a gift, it's right there in the IRS code. You see, I enjoy sitting in this cubicle as a hobby. I play around on this computer that happens to sit here and I do some design work with my friends - all of us members of this neat club. Now, there's this big company..I think they own the building...and through their generosity they offer many residents of my town a monetary gift each year. In fact, everyone in our club gets a gift, as does the local park and I think some of the schools. Yes, they give me a portion of the gift every two weeks - they say it makes it easier for their philanthropic budgeting. Job? No, its definitely not a job, it's more of a club...you send in your membership application and if you're a good fit - we all have similar interests - you get this membership card which lets you in. Sure, sometimes a member misbehaves, and they lose their membership priveleges - did you know they have a walking trail and free photocopying?"

Re:Regulate? Ok, but not exactly as a phone compan

[Jonny Royale]

Because there are also systems like 911 calls that need to be standardized and regulated, and unfortunately, that costs. I am, however, glad to pay for the service, even if I don't use it, since I know if I need it, it's there, and it will (hopefully) work the way I expect it.

Re:HELP! Small home business (5-8 lines) & VoI

[Spoing]

1. http://www.dslreports.com/forum/voip

...erp, thanks!

PARENT OFFTOPIC

[Anonymous Coward]

What a waste of effort. All that trolling and I only got you modded down 1 point.

Well better to have you modded back to 2 instead /. Mods are such fools and tend to believe what they want to. Hopefully you will be modded down even more for these OFFTOPIC posts.

I am the lizard king!

Re:Didnt the US fight to be...

[mtaff]

Have you even _read_ the Declaration of Independence?

Taxation isn't even in the top 10 reasons for independence. If memory serves, it's like number 17 before taxes are mentioned.

"No taxation without representation" was just a political rallying cry, much like "Anybody but Clinton|Gore|Bush"

RTFDoI (Read The Fine Declaration of Independence)

Mark

Vonage Price Drop

[danuary]

You know, as a Vonage customer (and a NYer), I can't help but wonder if this relates at all to the fact that they (again) just dropped their prices not TWO DAYS AGO. When I first signed up for service, it was $39.99; it then dropped to $34.99. I just got an email Tuesday that they've again dropped, now to $29.99.... So regulation could be in response to how much Vonage is trying to undercut their competitors. That being said - the service is fantastic, and I see no need for regulation. It "just works" and it "just works" all the time.

Re:Regulate? Ok, but not exactly as a phone compan

[telstar]

"Because there are also systems like 911 calls that need to be standardized and regulated"

• Since your broadband provider could be the critical link between you and 911, shouldn't they bare some of the burdon of ensuring 911 is available as well?

Re:Regulate? Ok, but not exactly as a phone compan

[Jonny Royale]

They should bear some of the burden, and they do, since they have to have it available, and up to spec in terms of getting the call through quickly, etc. But, if the carrier had the sole responsibility of maintaining the system to any level they wanted, what's to stop SBC from chaging the way they handle the 911 call versus Verizon handling it a different way? And when you switch providers, you have to learn a new way of putting through an emergency call?

I consider things like the 911 system similar to internet standards. To maintain the standards such as TCP/IP across carriers and networks, someone has to maintain a standard, and ensure compliance. In that case, the IETF, the IEEE, even the FCC and other groups do. I pay those groups, either through membership, or via taxes, to ensure they're funded to maintain the standards. I have no problem with that, since I get someting (access via a standardized method) for what I give (fees, taxes).

Re:Oh Well - your wrong

[Anonymous Coward]

The infrastructure over which IP (VoIP included) travels is more or less the same (I work for a company that makes that equipment). And whether we encapsulate IP or TDM is immaterial.

I was the one who posted an article to slashdot a while ago about the FCC getting the Pulver call correct. Vonage, Packet8 and the like are a different matter. They terminate into the PSTN (Public Switched Telephone Network). In my opinion this should be the deciding factor as to taxes. This is why ATT is all wet trying to get out of termination fees because their "backbone is VoIP". They still terminate PSTN to PSTN calls.

We can debate if it is right to levy taxes at all on the service but fair should be fair. If it passes thru the PSTN you should have to pay taxes just like the RBOC, CLECs and ILECs. Off the PSTN (like FWD) is another issue. The only issue I see is that *some* of the traffic (of VoIP) may terminate from the net to the net (no PSTN) but at this point that is minor as it is not that much.

Bottom line should be connect to the PSTN = pay taxes. BTW, I bet the FCC will agree with this in the end.

Re:Right or wrong, it is going to stifle VoIP in N

[poot_rootbeer]

When was the last time a Government Agency applied "only minimal regulations" to anything?

Environmental protection, mental health care, the Microsoft antitrust case, food safety inspections, just about anything where megacorporations are involved...

Re:Regulate? Ok, but not exactly as a phone compan

[telstar]

"They should bear some of the burden, and they do, since they have to have it available, and up to spec in terms of getting the call through quickly"

• You're telling me your ISP never goes down? The best I get when that happens is a "we're working on it". That doesn't quite cut it when it comes to 911.

Reminds me of a quote

[mc6809e]

"We have ... every possible kind of Council, including a World Council -- and if these do not as yet hold total power over us, is it from lack of intention?" -A.R.

This is all about power, folks, not protection.

Re:Didnt the US fight to be...

[planetmn]

Did you even read my post?

My point was to clear up the parent's post implication that the colonists were upset at taxes in general. In addition, your post is the reason why I said "Among other reasons."

RTPTUWYART (Read the parent to understand what you are replying to)

Vonage *IS* A Telephone Company!!!!

[Anonymous Coward]

What the hell do you idiots who claim it *ISN'T
think it is?

Some kind of freaking *PET STORE*?

Re:Regulate? Ok, but not exactly as a phone compan

[Jonny Royale]

It doesn't cut it when it comes to 911, but if there wasn't regulation, that's what would happen. That why we need the reguation. To make sure that critical systems maintain availability and consistency.

I don't think the phone or cable companies should bear the brunt of having these systems aviailable, which is why I pay taxes on my phone line, to have the system available. I've never called 911, and I hope I never have to, but if I do, I know the call is going to get to where it needs to, no matter who's phone I use. Why? because it's standardized. Why? Because it's regulated And who pays for the regulation? We do, through taxes.

Re:Even if...

[symbolic]

...there IS a connection to a POTS line, the POTS line most likely belongs to a local telco, which means that someone is already paying taxes for the local phone service. This being the case, I am unclear as to how NY State intends to impose taxes on an IP-based phone service.

PSC?

[Anonymous Coward]

Who the fsck is PSC? I'd like to contact them since AT&T royally screwed up our phone line transfers and forwarding to our new office.

Is PSC:

• PSC, Inc.
• Pittsburgh Supercomputing Center
• PSC. Partit dels Socialistes de Catalunya
• PACER Service Center Home Page

I believe most English writing standards state this, but you typically want to spell out the acronym before you use it in the rest of your text.

Re:PSC?

[Shakrai]

I believe most English writing standards state this, but you typically want to spell out the acronym before you use it in the rest of your text.

I'm 95% sure that your trolling but I'm going to bite anyway. I didn't mention it because it was covered in the story submission. This isn't even RTFA it's RTFS.

For the record when I said PSC I was refering to the New York State Public Service Commission. Why that wouldn't be clear to you given the context of the post is beyond me.

911 Service

[Anonymous Coward]

This is just simply a ploy by the government to suck more money out of people that does not belong to them (save for 911 service which should be paid for).

I would disagree about 911 service; I should be able to opt-out. I'm getting billed some amount every month on my cell phone for a 911 service I'll never use. I'm willing to take the risk of not having 911 service in the event I really need it, but that's not an option. Kind of like the social security scam the Fed's running.

Re:911 Service

[Shakrai]

I would disagree about 911 service; I should be able to opt-out. I'm getting billed some amount every month on my cell phone for a 911 service I'll never use. I'm willing to take the risk of not having 911 service in the event I really need it, but that's not an option. Kind of like the social security scam the Fed's running.

Expect it would cost more to allow people to opt-out of 911 service then to build a system that would do an id check and refuse to let you place the 911 call if you had opted-out.

Besides, of all the taxes/fees to bitch about this one is pretty stupid. You mention cell-phone. Are you 100% sure that you'll never use it? What happens when some drunk guy whips around that corner at 95mph and hits you? Are you telling me that you aren't going to use 911 then?

Sometimes taxes/fees are actually used for the better good. I don't see how the hell people can bitch about having a functional 911 system as opposed to having to write down the phone numbers of every agency in whatever town you happen to be staying at.

Phone Company?

[Anonymous Coward]

What? New York State Classifies As Phone Company?

Re:Right or wrong, it is going to stifle VoIP in N

[Matt1313]

Haha. Ok, sorry I should have been more specific... in what good and correct ways has a Government Agency applied "only minimal regulations" to anything.

But yeah, you do have a valid point. ;)

Private VOIP Servers

[Anonymous Coward]

So how will this regulation affect people running personal VOIP servers? A friend of mine works for a telephony company. They do VOIP as well as call-push, custom telephony applications and hosting, etc. If I wanted, I could get a copy of the server they use and call my friend directly at home via my cable modem.

If you're educated, you don't need a middle-man to provide VOIP services for you.

The wrong question

[Anonymous Coward]

The question isn't is Vongage a phone Co., but shouldn't the phone companies be allowed to compete with less regulation. We look at the argument the wrong way: politicians want to define the debate as raising tax revenue so they want to define Vonage as a phone co.

NY should lower the taxes to the phone companies and let them compete with Vonage rather than making Vonage pay up. The problem is that NY has a spending problem, so we've all accepted taxing telephone service. Now they defined the argument.

NY needs money, we need money. NY is big and powerful, we are not. NY will win, we will lose. Period.

The good news is that technology will move faster than government regulations, so when Vonage is taxed, other companies will move in take over. At some point (other's have pointed this out) NY will simply tax the internet connection and then it won't matter anymore. They will win.

Re:Regulation isn't always bad

[YrWrstNtmr]

Now THAT'S what I call flushing money down the drain!

If that's a libertarian, then socialists think...

[WebCowboy]

...that all taxes are ussed for the common good. Sometimes taxes ARE theft. I consider my tax money stolen when the government collects it for one purpose and uses it for another.

In Canada, automotive fuel is taxed at about 100% (The actual revenue stations take in is 40-somehting cents per litre and consumers are paying 80 to 90 cents). The government put these taxes in to cover road repair but the bulk of it now goes into general revenue and our roads are crumbling (at least they are in places that don't vote for the governing party). They broke their promise and keep taking the money. That's dishonest and I think a form of theft.

The government also collects Employment Insurance as a payroll deduction on our cheques. The EI program has generally taken in millions more than it pays out. When he was finance minister, our current prime minister took a sizeable amount of money from the program and put it into general revenue to pay for other programs and debt financing. HE STOLE OUR MONEY--money meant as protection against job loss and spent it on God knows what.

Socialists also tend to think that Government is Good. Private companies are self interested---they are out to make a buck off you no matter what, while government is there to protect your interests and ideally would always break even. Apparently government regulators and publicly-owned organisations are immune to "corruption, kickbacks and nepotism" and will always be cheaper than private interests because there is no profit motive...

What a bunch of CRAP. It costs me 60-some dollars to register my vehicle--the province ownd the data but registration is handled by private companies. In Canada, all firearms must be registered to be legal. The federal gov't handles the whole thing top to bottom. Gun owners pay quite a bit more out-of-pocket to register each gun, and the taxpayers have paid even more...no exaggeration--the government has spent OVER $3000 PER GUN just to register them much less enforce the law! Regardless of anyones views on gun control everyone is outraged at the waste in this program. The civil service seems to thrive on nepotism and waste...hire your friends and if you're the boss of enough people you get a raise.

Not only can governtment be notoriously INefficient when compared to private enterprise, it can be notoriously corrupt. Ask Italians whether government stepping in will reduce corruption. Heck, as us up here in Canada! Our previous prine minister used his connections with a government-owned financial institution to shore up a money losing hotel in his riding in which he had invested. The government established a giant "national unity" program that did whatever they want and broke the governments own rules on accountability. Millions of dollars were spent on reports and advertising that were never produced--the marketing and advertising firms that got the money sure liked to donate to the governing party's election campaigns though.

Kinda reminds me of how companies owned by friends of Bush and Cheney in the US get some pretty sweet deals in rebuilding Iraq and Afghanistan, and how they go the extra mile in defending oil interests...

Anyways, given my observations perhaps you can understand my skepticism of government regulation and ownership in VoIP or any other industry.

A phone is a phone

[beetle496]

Aside from 911/e911, another important thing government regulation does is to ensure accessibility to people with disabilities. This was the conclusion from a panel of experts at a recent public forum on VoIP.

Re:Even if...

[Mazzie]

I was only referring to the lack of tax revenues on the origin of the call. Since the call is usually payed for by the "caller" no the "callee" then that is where the big money is.

Taxaholics in Albany

[Anonymous Coward]

In a statement announcing its decision, the agency sought to soften the blow, saying it nevertheless hopes to apply "only minimal regulations to ensure that it does not interfere with the rapid, widespread deployment of new technologies."

Translation: We are terrified of the possibilty of losing lucrative POTS line tax revenue, but we don't want to cripple an industry and keep the cost of business high in New York relative to other states. We will continue to let companies build out VOIP for a while unfettered, and when the time is right (when the infrastructure is sufficiently large), we will then tax the hell out of it like we do most other things in New York...
I am a former resident of New York State. This is how they think. It's all about the money. Those people have raised Killing The Golden Goose to a high art.

Re:Taxaholics in Albany

[Anonymous Coward]

I have to agree. Taxes, regulation and wacko, far-left politics are the reason NYC no longer gets a dime from me. I left almost 25 years ago and will never return except occasionally to visit.

In Oz....

[pbjones]

This is one of the the reasons that in Australia we separate Telephony service providers from carriers. In Oz a company that offers Telephony products and services, regardless of the carrier used, would be a 'Telco' and governed by the applicable laws etc. It's then a fine line between providing VOIP equipment and offering VOIP services to others.

Vonage just lowered rates again, too.

[EvilStein]

I just got this email from them 2 days ago:

Vonage

Hello Jonathan,

We are very excited to inform you that your monthly phone bill is going DOWN! Our price on the Residential Premium Unlimited Plan has been dropped AGAIN!

The base price of the Residential Premium Unlimited Plan will drop from $34.99 to $29.99 as of your first billing cycle on or after May 17, 2004.

There is no need to contact customer care - you will automatically receive the 14% monthly savings. The new, lower price plan will be reflected in your next billing cycle.

By adding 150,000 customers to our network, Vonage has cemented its lead in the industry. As a reflection of our commitment to our customers, we would like to reward you by passing the operational efficiency and cost-savings we've achieved through our success directly back to you.

Again, thank you for your continued support and loyalty. Without you, we would not have been able to pass this significant savings along. If you have any questions, please email us at customerresponse@vonage.com with the words "Price Change" in the subject line.

Sincerely,
Rich Gale
Manager, Vonage Customer Care

PS - with this new price change, it's a great time to tell your friends about the savings through our Refer-a-Friend program!

Vonage 2147 Route 27 Edison, New Jersey 08817
This email was sent to vonage@pbp.net by Vonage.

Instant removal with Unsubscribe | Privacy Policy.

Re:Vonage *IS* A Telephone Company!!!!

[Anonymous Coward]

Hey, moron, a "phone company" in the long-standing and regulatory sense is a company that runs physical lines out to homes and businesses and provides access to the public switched telephone network. The only reason they have long been regulated is that they were once viewed to be a "natural monopoly" in the sense that it wasn't viewed as practical to have a bunch of companies all trying to run physical lines on the same poles or tunnels on the same streets to the same homes and businesses. VoIP is none of the fucking business of the regulators and the idea that any kind of voice services today could constitute a natural monopoly is laughable, hence no need for traditional state regulation. Further, there are tons of modes of voice and data communication that are not traditional "phone company" activities. If the definition can be stretched out of all meaning just to satisfy New York's insatiable appetite for tax revenue then the sky's the limit. Talking over the back fence will be called "operating a phone company" and taxed.

Re:Regulate? Ok, but not exactly as a phone compan

[vacuum_tuber]

Since your broadband provider could be the critical link between you and 911, shouldn't they bare some of the burdon of ensuring 911 is available as well?

An awful lot of you seem to be completely ignorant of the fact that Vonage has nothing to do with 911 service. All Vonage does, and then only if you ask for it, is to set up a kind of speed dial in which "911" on your Vonage phone will speed dial your local emergency 7- or 10-digit phone number. Get it?

Science Fiction foreshadowing?

[serutan]

Many years ago, like in the 1970s, I read a story about archaeologists investigating why a planet's civilization died out. Their conclusion was that the inhabitants went bankrupt. Somehow their economy collapsed and they all starved, even though they had ample resources. I wish I could remember the title or author, but it was a long time ago.

In the real world of today I think there are dangerous signs of strangulation. Examples: the flood of trivial patents and the ensuing litigation, copyrights that never expire, and the spreading web of technology restrictions being imposed to enforce them. Sometimes I wonder how soon progress will come to a halt because innovation has been made too risky.

tradeoffs

[zogger]

it's probably not possible to compare an exact tradeoff on a one to one basis. In the aggregate though, it's better if both the rural and urban areas help subsidise each other because both gain. Better roads,basic infrastructure of utilities, etc, in the rural areas help to lower costs on the goods and services that the rural areas provide the urban areas and make it more liveable. These would be, food, water, energy, lumber, raw materials for manufacturing, etc. This is a very good deal to the urbanites and suburbanites, because all that stuff they need is not produced in suburban or urban areas. And rural people get taxed in ways that help urbanites, for example, some general taxes go to subsidise mass transit, something the rural people rarely use.

We can't really exist as separate stand alone communities, so it just makes sense for the areas where there is surplus to share with the areas that have greater needs. It seems to work out Ok when we do it, granted, there's always a certain limit or level of bureaucratic overhead that could be improved upon.

I can say, if I had had even slow dial up internet when I was a kid in school, in a very rural area, it certainly would have helped me. Local libraries I used to use were very small, limited selection, and very hard to get to on a daily basis for research, and the school library was even smaller. I doubt that has changed much, so having net connection and cheaper phone service has got to be a major help in a lot of ways.

better idea

[zogger]

Instead of adding the taxes to vonage, why not eliminate the taxes the other guys (you and me) pay for telephony? On my POTS bill, various taxes, surchargers, whatever seem to make up a decent chunk of the total. And I have *no* idea how much of that is really necessary, or just a waste. Government tends to get bigger, it's expensesd go up, so they say "see, our expenses go up so we have to charge you more". they get more, inevitably try to spend more than what they have, and the cycle is repeated. I don't know where it will end (collapse probably), but it's a verifiable phenomenon. We have something like 3 million laws (last I knew, call it some huge number) on the books now across the US, and all they do every year is write new ones, which inevitable gives rise to-more taxes.

The ultimate bottom line in this particular phone argument is the government wants to eventually heavily regulate the internet, with taxes being only a part of it. That's just something you can smell coming. It just infuriates them that they right now have so little control over the net, something that no other segment of society can claim, all the rest has been hijacked by excessive government regulations, taxes, fees, licenses, permissions granted and removed, etc. Allowing them a toe hold is just that. The old analogy is the camels nose under the tent flap, eventually the camel is all the way inside the tent.

A society that has freer and more universal exchange of ideas gets better off, just like a society that has a freer and more pervasive infrastructure in other areas is better off.

I think limited taxes to help develop infrastructure are OK, but in the real world they are never removed, they seem to always go up, and then new taxes added to the old.

I have no easy answer to the question, because I don't think one exists, not in any practical terms anyway. A pure laissez faire market approach will inevitably wind up with a single private monopoly owning that niche, so I think that's a bad idea. A pure government run everything is a REAL bad idea. So, we are stuck with what's left, which is really what we have now,it's a blend on a case by case basis with a lot of debate all the time. I tend to fall onto the side of "enough's enough" on government taxes. How about a spell of "no new taxes on anything" for a coupla generations, see what happens. We have been doing it the opposite way for a long time now, and it's really starting to hurt. A society that costs 50% of it's wealth produced just to run itself into a deficit is not an example of anything being run efficiently. Or sanely for that matter.

Re:Oh Well (PSC's generally are pro Telcos)

[pghpirate]

Agree fully with Frennzy. I would only add that if anyone wants to know who supports the Public Service Commission, simply get hold of the list of Campaign Contributions for elected PSC members. Look at who funds the campaigns of Governors and who handles "transition teams" for new Governors? It is ALL about squeezing the most out of the "last mile" monopolies. The rate structures controlled by State PSCs for telcos have a hefty "investment recovery" charge to compensate telcos for their Universal Service requirement. In most states the telcos recover 20% of ALL PAST INVESTMENTS built in to current rates ....that means those investments made 30 years ago (and never improved) get recovered over and over and over....... One more thing. I bet you didn't know that more than 60% or the operating costs for telcos are for BILLING! Yeah, the PSCs substitute for the telcos "customer service" department. But the PSCs are really about protecting that "last mile" monopoly. Ask the small towns and rural areas in this country without broadband/Internet access about the actual capital investments the telcos make from their Universal Service investment recovery allowances. For the most part the Telcos are incompetent, blood-sucking, corrupt Neanderthals who will do everything possible to keep rural and poor America using 30-50 year old telco equipment with no direct access to digital services or communication. Frennzy got it right!...phone companies "are typically lying, cheating, slamming scumbags!"

No problem.

[porkchop_d_clown]

You stop using our backbone and our servers and our protocols and we'll stop pestering you.

This was tried by Minnesota...

[rfc1394]

...and a federal judge handed the regulators their ass on a platter.

This is an obvious power-grab by New York state officials probably because Verizon is pissed and wants something done about this destructive upstart competitor who has the NERVE to do an end-run around carefully bought and paid-for state regulators and offer local service in a way that completely cuts Verizon out of the loop.

There is a big difference between a wireline telephone company and a data service provider who allows you to connect voice traffic to the PSTN. By this reasoning, the people who implement tpc.int to allow people to send faxes by e-mail could also be (regulated and) taxed. And what about efax which will provide you with an incoming fax number to receive faxes, I suppose they are next.

Paul Robinson <Postmaster@paul.washington.dc.us>