The Federal Communications Commission (FCC) has just declared that DigitalVoice, an Internet telephony service provided by Vonage Holdings Corp. (Vonage), is not subject to the patchwork of state regulations that govern telephone companies.
At the same time, the FCC declared that other IP-enabled services, including those offered by cable companies, that have characteristics similar to DigitalVoice, likewise are not covered by traditional state public utility regulation.
These FCC declarations build on earlier orders of the FCC regarding Voice over Internet Protocol (VoIP), helping to clarify that the FCC itself, and not state regulatory bodies, has the power to preempt state regulations on IP-enabled services that could interfere with federal authority over interstate communications.
The FCC came to its declarations by acting on a petition from Vonage that sought federal preemption of an order issued by the Minnesota Public Utilities Commission (MPUC). The FCC concluded that Vonage's DigitalVoice service could not be divided into intrastate and interstate segments as a practical matter, which precluded dual federal and state regulatory authority. Because DigitalVoice customers have the ability to uses their phones from broadband connections from any location, it would be problematical to discern whether specific calls are international, interstate, or intrastate.
The FCC further found that the MPUC regulations were inconsistent with FCC deregulatory policies, and that differing state rules and regulations very well could get in the way of the introduction of services that would offer consumers more innovation, competition and choice.
As background, the MPUC concluded last year that Vonage's DigitalVoice was a telephone service as to which Vonage had to meet various requirements, including providing 911 emergency service like that provided by telephone companies. While the FCC ultimately did find that the MPUC requirements must fall away where they bar entry, the FCC still seeks workable solutions, especially when it comes to public safety issues.
The FCC otherwise stated that it will address whether VoIP providers will be required to offer access to the disabled, pay intercarrier compensation and pay into a universal service fund in its IP-Enabled Services Proceeding, which started this past February.
Look for continued developments as communications mediums come closer and closer together over time.
Eric Sinrod is a partner in the San Francisco office of Duane Morris (www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. His column appears Wednesdays at USATODAY.com. His Web site is www.sinrodlaw.com, and he can be reached at . To receive a weekly e-mail link to Mr. Sinrod's columns, please send an e-mail with the word Subscribe in the Subject line to .
Reprinted here with permission from USAToday.com.