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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."
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.
Vonal Declosion
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.
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.
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.
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.
Great.. Now my packet8 phone line is going to be taxed too?!?! 20 bux a month so so sweet.
My Blog
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!
"It's a very tangled subsystem." --Windows kernel guru
to friends and family
am I now the fone company?
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.
I am sure taxes will be adjusted accordingly
I live in NY, adjusted appropriately will mean raised through the roof to match everything else
Snowden and Manning are heroes.
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
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
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.
Conformity is the jailer of freedom and enemy of growth. -JFK
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)
Sigs? We don't need no stinking sigs!
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.
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.