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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."
Does this state regulation mean the load of taxes thrown on it. The 911 tax I can't knock but all the others.
Evolution or ID?
Looks like another stifled and regulated monopoly to me. So much for innovation in this industry. This looks like a bad case precedent.
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.
You can't expect to wield supreme executive power, just because some watery tart threw a sword at you
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.
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.
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But what if you are calling another Vonage user? There should be no telephone exchange involved.
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
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.
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?
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!
"The question of whether a computer can think is no more interesting than that of whether a submarine can swim" -EWD
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.
"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.
Corporatism != Free Market
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.
Give a man a fish, he'll eat for a day, but teach a man to phish...
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...
Privacy is terrorism.
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.
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.
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.
Sigs? We don't need no stinking sigs!
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.