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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."
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.
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
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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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
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.
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).