FCC rules Internet-based phone services not subject to state regulation

AP ^ | 11/9/4 | JENNIFER C. KERR

[SmithL]

WASHINGTON -- U.S. regulators ruled Tuesday that providers of Internet-based phone call services fall under the jurisdiction of the federal government, exempting them from some key regulation by states.

The Federal Communications Commission voted 5-0 in favor of Vonage Holdings Corp. of Edison, N.J., which had asked the agency to declare the company's product an interstate service, giving the FCC regulatory control.

Vonage has been battling public utilities officials in Minnesota who want the company to register in the state as a telecommunications service, subjecting it to rate regulation and other state rules.

The FCC ruling applies to cable, phone and other companies offering an Internet phone service similar to the one Vonage provides. The decision does not, however, preclude states from imposing some taxes and fees. It also does not address access charges, which are fees paid to local phone companies for completing calls sent via the Internet to conventional phones.

Vonage also had asked the commission to certify it as an information service, instead of a telecom company. Such a move would have a profound impact on the industry because it would mean providers of Voice over Internet Protocol, known as VoIP, wouldn't have to pay the taxes and fees that traditional phone companies do. The commission did not rule on that request.

FCC Chairman Michael Powell said streamlining regulation of VoIP companies is key to growth of the fledgling industry.

[SmithL]

Can you hear me now?

[Mears]

Persdonally,as a consumer,I'd rather deal with state regulatory agencies than the FCC.