FCC to Decide VoIP Fate Next Week

The Federal Communications Commission (FCC) announced Tuesday it would rule Nov. 9 on whether Internet telephony is an interstate service and exempt from state and local regulation and tariffs.

The decision is considered critical to the future development of the emerging Voice over IP industry, which hopes to avoid negotiating rates with 50 separate state governments.

In particular, the FCC will be ruling on a request by independent Internet telephony provider Vonage that would classify the business as an interstate information service, which is no different from applications, such as e-mail. Such a ruling would put VoIP beyond the taxing and regulatory reach of the states.

“The [Vonage] petition gives the commission an appropriate opportunity to immediately declare that VoIP services, whether traversing the public Internet or privately managed IP networks, are interstate in nature and subject to the commission’s exclusive jurisdiction,” stated 61 members of Congress in an October letter to FCC Chairman Michael Powell.

The lawmakers decided to turn to the FCC after legislation calling for VoIP services to be exempt from carrier access charges, state taxes and local regulations failed to generate congressional support. The bills would have prevented the FCC from delegating VoIP regulatory authority to state and local officials.

“VoIP is the next forward step in voice communications,” Pickering said in a separate statement from the congressional letter. “As this efficient technology grows, consumers will benefit from advanced services and reduced costs. Clearly, VoIP is interstate in nature and thus subject to FCC jurisdiction. This letter asks the FCC to expedite their ruling on the subject and provide jurisdictional and regulatory clarity.”

The Edison, N.J.-based Vonage, which provides SIP-based local and long distance services to broadband users, has been battling state regulators since August 2003 when the Minnesota Public Utilities Commission (PUC) issued an order that said Vonage needs to become certified as a common telephone carrier. Vonage successfully sued to prevent the PUC from enforcing its order, arguing the company operates as an information services provider and is not subject to the jurisdiction of the state’s PUC.

Minnesota appealed the decision. Without an FCC ruling, oral arguments are expected to get under way Nov. 17 in the case. New York and several other states are also considering regulating VoIP.

“We expect that there will continue to be various state commission decisions that take place through the end of the year in significant jurisdictions,” Jeffrey J. Carlisle, FCC Wireline Competition Bureau chief, recently told reporters. “It would be nice to get clarity out in the November timeframe so at least the states that are looking at these decisions will have something from us to read about before they make a decision.”

Tuesday’s FCC vote on the Vonage petition is part of a yearlong review of VoIP’s regulatory status. The FCC has already exempted Jeff Pulver’s Free World Dialup (FWP) from state regulations because the free calls customers make are routed entirely over the Internet and never interconnect with the public switched telephone network. With a broadband connection, FWD members talk with each other computer-to-computer.

In a ruling issued in August, the FCC also said Internet telephony should be subject to traditional wiretap laws. The preliminary decision will force VoIP providers to comply with the same law enforcement rules as telephone carriers.

The FCC is also considering VoIP carrier obligations in regards to emergency 911 calling services and any contributions the VoIP industry should make to the Universal Service Fund.

Adapted from Internetnews.com.

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