FCC Rules on Vonage

[David Farber <dave () farber net>]

Begin forwarded message:

From: Robert Cannon <rcannon100 () YAHOO COM>
Date: November 9, 2004 3:24:41 PM EST
To: CYBERTELECOM-L () LISTSERV AOL COM
Subject: FCC Rules on Vonage
Reply-To: Telecom Regulation & the Internet 
<CYBERTELECOM-L () LISTSERV AOL COM>

Cybertelecom: VoIP: FCC
www.cybertelecom.org/voip/fcc.htm
=-=-=-=-=--=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=--=
FOR IMMEDIATE RELEASE:                  NEWS MEDIA CONTACT:
November 9, 2004                                        Mark Wigfield, 
202-418-0253
                                                        Email: 
mark.wigfield () fcc gov

FCC FINDS THAT VONAGE NOT SUBJECT TO PATCHWORK OF
STATE REGULATIONS GOVERNING TELEPHONE COMPANIES
Commission Clears Way for Increased Investment In VoIP
Services Like Vonage’s
Washington, D.C. – The Federal Communications
Commission declared today that a type of Internet
telephony service offered by Vonage Holdings Corp.
called DigitalVoice is not subject to traditional
state public utility regulation.
The Commission also stated that other types of
IP-enabled services, such as those offered by cable
companies, that have basic characteristics similar to
DigitalVoice would also not be subject to traditional
state public utility regulation.
The decision adds to the regulatory certainty the
Commission began building with orders adopted earlier
this year regarding Voice over Internet Protocol by
making clear that this Commission, not the state
commissions, has the responsibility and obligation to
decide whether certain regulations apply to IP-enabled
services. The Commission has the power to preempt
state regulations that thwart or impede federal
authority over interstate communications.
Acting on a petition from Vonage seeking federal
preemption of an order by the Minnesota Public
Utilities Commission, the FCC found that the company’s
DigitalVoice service cannot practically be separated
into intrastate and interstate components, precluding
dual state and federal regulatory regimes.
DigitalVoice customers can use their phones from a
broadband connection anywhere in the world, making it
difficult to determine whether a call is local,
interstate or international in nature.
The Commission also found that regulations that would
have been imposed by the Minnesota Commission were
inconsistent with the FCC’s deregulatory policies, and
that preemption was consistent with federal law and
policies intended to promote the continued development
of the Internet, broadband and interactive services.
Divergent state rules, regulations and licensing
requirements could impede the rollout of such services
that benefit consumers by providing them with more
choice, competition and innovation.
The Minnesota Commission in August of 2003 concluded
that Vonage’s DigitalVoice was a telephone service for
which Vonage was required to obtain a certificate of
authority and meet other rules and regulations
governing telephone companies in the state. One
requirement was that Vonage provide emergency 911
service comparable to that provided by the incumbent
phone companies. Although the Commission found that
the Minnesota requirements must yield to the extent
they bar entry, the Commission does not signal that
Vonage may cease its efforts to develop workable
solutions. The Commission looks forward to addressing
public safety issues comprehensively, with the
participation of our state and local colleagues, in
the broader IP-Enabled Services Proceeding.
The Commission’s order does not express an opinion
about the applicability to Vonage of general laws in
Minnesota governing taxation, fraud, commercial
dealings, marketing, advertising and other business
practices. But the Commission expects states to
continue playing a vital role in protecting consumers
from fraud, responding to complaints, and enforcing
fair business practices.
        The Commission noted that the question of whether
DigitalVoice should be classified as an unregulated
“information service” under the Communications Act or
a telecommunications service will be addressed in the
Commission’s IP-Enabled Services Proceeding.  The
Commission will also address whether VoIP providers
must provide access to the disabled, pay intercarrier
compensation and contribute to the universal service
fund, in the Commission’s IP-Enabled Services
Proceeding, which commenced in February of this year.
Action by the Commission November 9, 2004, by
Memorandum Opinion and Order (FCC 04-267).  Chairman
Powell, Commissioners Abernathy, and Martin,  with
Commissioners Copps and Adelstein concurring.
Separate statements issued by Chairman Powell,
Commissioners Abernathy, Copps, and Adelstein.

Wireline Competition Bureau Staff Contact:  Terri
Natoli, 202-418-1574, terri.natoli () fcc gov.



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