FCC Slaps Fine on VoIP-blocking Telecom

The Federal Communications Commission (FCC) today fined a North Carolina telecom holding company $15,000 for blocking Voice over IP (VoIP) calls to their customers.

In addition to the fine, Madison River Communications of Mebane, N.C., agreed to refrain from blocking VoIP traffic and to put measures into place to ensure that such blocking won’t happen again.

“We saw a problem, and we acted swiftly to ensure that Internet voice service remains a viable option for consumers,” outgoing FCC Chairman Michael K. Powell said in a statement. “The industry must adhere to certain consumer protection norms if the Internet is to remain an open platform for innovation.”

The FCC action came after VoIP providers Vonage and Nuvio complained to the agency broadband providers are blocking or degrading their Internet telephony services. In public comments, neither Vonage nor Nuvio named the providers blocking their traffic.

Madison River was founded in 1996 to acquire local telephone companies in small markets. The firm owns and operates four rural telephone companies in Georgia, Alabama, North Carolina and Illinois. Executives did not return calls by press time for comment on the fine.

In a September 13 letter to the FCC, Kansas City VoIP wholesaler Nuvio argued that broadband providers have an economic incentive to discriminate against unaffiliated VoIP providers, since the providers have the ability to control the quality of VoIP calls.

“This raises the possibility that a broadband provider that also offers VoIP service may discriminate against unaffiliated VoIP providers in order to increase its overall profits and retain market share,” the letter states.

In February, the Edison, N.J.-based Vonage confirmed it had met with the FCC about the same problem, but stressed that it had filed no formal complaint. Both Vonage and Nuvio said the companies blocking VoIP calls are setting a dangerous precedence for all IP-based services.

“It’s the largest issue facing VoIP and all other IP services,” Jason Talley, president and CEO of Nuvio said in February. “What’s next? E-mail that doesn’t use your provider? Instant Messaging? If you purchase broadband access, you should be able to use the applications that run over it.”

Vonage Senior Vice President Brooke Schulz added, “It’s really about consumer protection. Last-mile providers should not infringe upon people and the Internet. The whole principal of buying [broadband] service is being infringed upon.”

Talley said broadband providers have three ways to block VoIP calls: blocking the user’s actual port at the consumer premises, blocking traffic from a registered service and selectively and randomly degrading service or introducing latency.

Adapted from internetnews.com.

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