Federal Appeals Court Sides With VoIP Providers

gollum123 writes "AP reports that the Eighth U.S. Circuit Court of Appeals has upheld a ruling by a lower court that A Minnesota agency may not regulate calls through VoIP as it does calls through traditional phone lines. 'The Minnesota Public Utilities Commission had argued that VoIP companies were providing phone-like service and therefore should be regulated as phone companies are. But those businesses said they provide an information service rather than a telecommunications service. This follows the FCC saying that VOIP cannot be regulated using the same rules as traditional phone.'"

Comments

load of bull?

[t_allardyce]

This is really just bullshit isnt it? VoIP _is_ like a phone, the only reason that it shouldnt be classed as a phone system is to get around stupid ancient phone laws that should be updated instead of worked around, its like saying that by-passing CD 'copy protection' isnt a violation of the DMCA because its for back-up purposes, - it quite clearly is a violation, the real point is that the DMCA is crap.

Re:load of bull?

[eln]

That's not a politically viable viewpoint, no matter how correct it is. There is no political pressure to reform the outdated phone system regulations, and classifying VoIP as "phone service" could open the door to classifying IP traffic in general as "phone service," thus opening up the political dynamite that is regulating the Internet.

Clearly, the safest political move is to simply classify VoIP as not phone-related, thereby sidestepping the dicey issues that are really at play here.

Re:load of bull?

[QuantumRiff]

Um, maybe they should not be classified as a phone system is because they are not a phone system. If I live in LA, but get a NY area code from Vonage, which states regulations apply, (or do both). What happens when I take my little vonage box to New Mexico to visit the family for a week, or on a long business trip? What if they use Vonage over a Dialup connection, do they get to pay double fees? The main reason for the laws that are there is becuase they telecoms agreed to them in order to get a government "licensed" monopoly. The goverment taxes the phone lines, (ie, the wires) not the calls. If they want, they should tax the internet connections, the cable modems, DSL lines, wireless hotsposts, whatever, but not the data.

Re:load of bull?

[Jeff DeMaagd]

In a way, it is kind of a tax dodge. I think it is funny, especially when a lot of people buy DSL service (over a phone line), get phone service (VoIP) and basically get the same service with a phone number, 911, voice mail, caller ID, but is not taxable or regulated as a phone service.

Doesn't stop them...

[NoMoreNicksLeft]

From selling it as a telephone substitute. I'd be more than happy to let them out of this, if they were willing to point it out to each customer prioring to signing them up, that courts have ruled that it's not phone service, and that they have no recourse through the utility commission should it have problems.

Re:Doesn't stop them...

[ReTay]

"and that they have no recourse through the utility commission should it have problems."

But that would be wrong.

I work for a large cable company and we are adding VOIP to our line up as fast as we can provide the guaranteed up times mandated by the government. Like 99.99 uptime and independent power supply and such. And yes if your ticked at the cable company you can call the P.U.C

The funny thing is that so many people hate the phone companies so bad they will snap up the service as fast as it is available. The growth has to be slow to keep the network growing in front of the wave of people who hate phone companies bad enough to do nearly anything to get away from them.
They did it to themselves. Bad customer service is legendary with phone companies.

Re:Doesn't stop them...

[jdreed1024]

if they were willing to point it out to each customer prioring to signing them up, that courts have ruled that it's not phone service, and that they have no recourse through the utility commission should it have

Exactly. This is not entirely good. It's good in that it gives the VoIP providers a bit more flexibility in what they can do, and where they can offer service, and what service they can offer. By the same token, there's nothing to stop a fly-by-nite VoIP provider from scewing everyone over.

Some states have regulations that currently prevent phone companies from turning service off completely in the case of non-payment (ie: you can still call 911). And they allow you to dispute a portion of the bill and pay the undisputed portion and still have no service cutoff until the dispute is resolved. Those regulations are among those that states would not be allowed to enforce under this ruling.

However, all the courts said is that you don't get to regulate VoIP in the same method as phone service. There's nothing to stop the states from setting up new regulations for "information providers", etc.

Wiretap

[darth_MALL]

(disclaimer: this is not my area of expertise)
How does this desicion affect the rights of law enforcement to 'tap' VOIP communications? Has it now placed them outside the scope of a traditional wiretap? Does a traditional wiretap now encompass data? If not, Having the FCC and two courts backing this would make it pretty difficult for the feds to work around I think.

Re:Wiretap

[Kjella]

They can always certainly do a wiretap and tap the line the VoIP travels over. They can do that with any form of internet connection, and it can encompass data as well. The question is if they can demand changes to the software to make it meaningful (i.e. be able to decrypt the line).

My indication so far is that this hasn't been required. However, the way to twist their arm has normally been to demand that they follow phone rules in order to bridge VoIP to phone. Basicly, that they would have to provide the same wiretap capability for VoIP customers.

Regulating pure VoIP is touchy because it doesn't have to be voice. Imagine (for argument) implementing a modem over VoIP. And is VoIP inside a SSH tunnel still voice? It is all 1s and 0s until a computer interprets it. What is the burden of proof for showing that this is voice?

Kjella

Legalese in my favor for once.

[sanityspeech]

When I call my family using VoIP, they can't tell the difference.Who would have thought making calls across the atlantic would be much cheaper than calling someone across town on a payphone?

I don't care what they decide to call it. I'm just glad it's dirt cheap.

Good news...

[drinkypoo]

It's always nice to see law follow reality. The problem with regulating VoIP is the question of where you stop. It's only a short conceptual jump from regulating VoIP telephony to regulating Roger Wilco. Imagine if you had to allow a tap on any voice communications. The only way to do that is either mandate a standard back door, or to outlaw all encryption. The future of telephony is internet-connected phones and dialing by DDNS with very, very short leases. Cellphone providers will become internet and DDNS providers and all communications will be only as sniffable as the communication between the two phones allows.

Regulating VoIP can only make criminals out of those who desire privacy.

This could be a bad thing.

[jacobcaz]

I've run several ISPs over the years and one thing that always was the ISP owners "big stick" over the telcos (both ILEC and CLEC) was the PUC (public utilities council), usually coupled with a local utilities council or other regulatory group (like the IURC in Indiana).

Every time we were jerked around by our ILEC or CLEC providers, we could give the PUC and IURC a call and the problems would usually be solved post haste. A call to our account rep suggesting we would report an incindnet to the PUC would bring swift service indeed.

See, we alone couldn't do anything to SBC/Ameritech or Time Warner Telecommunications (or our other CLECs), but the PUC and IURC could "get their regulatin' on" and slap them around with big fines for not providing the promised service, breaking rate tarriffs, etc.

Sure, you can much more easily choose a different VoIP provider than you can a POTS provider, but how long before market consolidation leaves only one or two real VoIP choices? What happens when they start to pull similar BS that the ILECs and CLECs do but aren't regulated by the FCC?

I'm not generally in favor of governmental regulation, but sometimes a little oversight isn't a bad thing. If they want to act like utilities, let them be treated like utilities since we know the markets will converge and consolidate anyway towards only 1 or 2 big national players.

Re:This could be a bad thing.

[Mattintosh]

The thing is, they're not utilities. They're providers. Utilities maintain wires. The big guys have been protecting their status as both utility and provider for a long time, but VoIP will end that once and for all. SBC will become a line utility, and the ISP will become a VoIP provider. Whether SBC will sell the general public a VoIP service is irrelevant. Someone will, and there will be competition.

Re:This could be a bad thing.

[dbacher]

The phone company is mandated to pay the USF.

The FCC does not require companies to recover their contributions directly from their customers. Each company makes a business decision about whether and how to assess customers to recover Universal Service costs.

The company is mandated to pay the USF. What you quoted says they don't have to list it as a line item on your bill, essentially, not that they aren't required to pay the USF. So they have an option between giving you a lower bill, and putting a line item on for the item the government is requiring them to pay, so that you understand it is the government collecting the money and not them and so their portion of the bill looks smaller, or they can incorporate it into their pricing structure, and give you a higher bill.

In either event, you are, of course, paying the USF -- it's a matter of if the phone company chooses to make it obvious or not solely.

Re:This could be a bad thing.

[aoasus]

This however begs the question.

Who's going to pay SBC if we're all paying VoIP providers for our voice communications? What happens when SBC says, sorry we can't afford/don't care to fix the broken lines in your neighborhood?

Re:This could be a bad thing.

[TheHawke]

Welcome to the club.. We've had to take the ClueBat to our ILEC and CLEC's more than a few times over the time in which we had leased our HiCap analogs and PRI circuits from Verizoned and SBClueless. Each time a circuit would go down, we'd call them, and either they would say it would take 2-3 days, or if it were on a weekend as when it break often, SBChumps woulden't even answer the phone!

The only T1 provider in which we came to love those last couple of years was Sprintlink. They were helpful, nicer'n any other NOC we talked with, and ACTUALLY got the problems solved before things got way out of hand. They had a redheaded southern gal answering the phone, so PLEASE be nice, cuz if you hit any of her buttons better be wearing asbestos earmuffs, cuz yer telephone is going to melt!

We did a 3am relocating of our gear, including the router. Everyone was notified, save for Sprint. Ten minutes into the move, the phone rings and it's their NOC, wondering why our router was not responding to their regular inquiries. We told them we were moving stuff about and it was unplugged for about 5 minutes before you called us.
Ah well, these days it's leasing the circuits from wholesale CLEC providers. Pricey, but are dependable and fast.

Re:Laws?

[techno-vampire]

Why does every government agency seek to enlarge it's power by regulating new things?

It's simple. The more things they regulate, the more power they have, the more people they need and the bigger their budgets get.

Ebay isn't an auction site, paypal isn't a bank

[CrazyJim1]

By claiming Ebay isn't an auctionsite, but an online marketplace, they circumvent the thousands of laws across the world regarding how auctions take place.

Same goes for paypal, they get to dodge all the laws that regulate banks because they don't claim to be a bank, but an online transaction site or something.

I'm just thankful the government hasn't been able to tax the internet yet.

the 911 issue

[zoloto]

I've heard many people for an against VoIP regulation, most people make valid points with it. My personal opinion is leave it unregulated and unencumbered by law.

My only issue is that of 911 calls. Like one poster mentioned about location (sorry, Quantumriff but it's a good one) , if I lived in LA but had a New York area code then visited relatives in New Mexico, how would the 911 issue be fixed?

They don't have to provide this service at all (to the best of my knowledge) but if they had to/or are willing here's what I suggest.

Make it based on IP/range etc. When you plug in and log-on, have a dialog setup for voluntary or manditory address insertion before you can use the phone. Shouldn't take too long right? That way your info can be transmitted via the VoIP service to the 911 center and have the correct information.

Once you plugged in again to the system, you can opt to have that information perminantly deleted or kept in your account for future if it's a frequented place of yours.

Does that sound viable? Opinions please!

-zoloto

Regulating/taxing VoIP is a bad bad thing

[ValuJet]

VoIP is just data packets being sent back and forth on the internet. There is no real difference between a VoIP packet and one of your favorite website. Allowing the government to apply regulations to a specific kind of traffic is the start of a VERY VERY nasty slope. The government should not be able to apply taxes to VoIP because it is just data being sent over the internet.

You don't solve a thing...

[Mustang Matt]

So I'm in LA and I have an internet connection with a tunnel to an ISP in Nebraska. As far as my IP address, I'm in Nebraska. How are you going to verify that?

Maditory address insertion is absurd at best. Some insane scheme of madatory GPS would be more realistic but probably just as easy to spoof/bypass.

How do cell phones do 911? I guess they can at least tell what tower the device is connected with.

Time to change

[pnewhook]

It's time we change the way we think about these utilities and start removing some of these outdated regulations.

Currently (here in Canada at least) I can get telephone, cellphone and high speed internet from my cable television supplier, or I can get cellphone, television and high speed internet from my telephone company, or I can even get most of the above through a number of independent smaller companies, usually through a wireless antenna or satellite dish.

With all of these options on equivalent services, these regulations and their outdated definitions no longer make sense.

What do we do about abuse now?

[destiny71]

Whichout regulation, what kind of defense does The Quality Paperback Club in Mechanicsburg, PA have when enough people report them for harrasement?

They seem to be calling my house 3-4 times a day every single day, sometimes leaving a messege, other times not. They start their prerecorded messege before my machine is even done with it's announcement. It's a machine calling, and leaving a messege.

You may be asking why a paperback book club would be making automated calls to me, well, they're not! It's a bill collector using a calling service from out of the county (accent sounds like maybe India) Just yesterday, the collection agency called me from their own offices, left a message, then withing 5 seconds their calling service called.

They are using VOIP service into the US to make calls without having to pay long distance charges, and faking their number on caller ID

I called once on this practise, and was told that as far the the FCC is concerned, there's nothing they can do. I have to put up with the calls, and the poor owner of the book club has to fight with complaints from uninformed targets of this harrasement.

I feel that if it's a service, and device used to make calls to a standard telephone system, then they should be under the same rules and regulations as anyone else that uses the telephone service.

They've found a loophole, and are abusing it to their full advantage. How long do we have to put up with this?

VoIP not really a phone - more reasons

[Frank T. Lofaro Jr.]

1. Phones can work without power, as long as the switch is alive.
2. A normal phone can be a simple piece of electronics not subject to computer failure modes.
3. Phone service is circuit switched and reliable. VoIP is packet switched, and thus has much less reliability.
4. 911 doesn't work well over VoIP.
5. Even if it did, problems 1-3 would make it something you can't rely on.
6. People should always have a land line for emergencies. If an emergency occurs and they onle have a VoIP and/or cell and they might suffer tragedy.

Loss of phone service is expected to endanger life in many cases. It needs to be regulated.

Loss of VoIP should not be expected to do so, except if people choose to rely on it and not have a landline.