The FCC's decision last week to exempt VoIP from state regulation is heralded as a watershed ruling by some, but it is only the first step in defining policy for broadband IP services.

Indeed, what last week's ruling does not define is whether VoIP is a telecom or unregulated information service. That matter will be hashed over in another FCC proceeding that began earlier this year.

What the FCC did determine last week was that a VoIP service offered by Vonage Holdings is interstate in nature and, therefore, not subject to the public utility regulations of individual U.S. states. Vonage's DigitalVoice service can't be governed by dual state and federal rules because it can't practically be separated into intrastate and interstate components.

The FCC opinion extends to other similar services, such as those offered by cable operators. Looser regulations usually translate into increased investment in those services and the equipment to provide them, which means enterprise customers will have more to choose from and compare on price.

But the ruling was widely expected. It's no secret that FCC Commissioner Michael Powell favors a light regulatory touch on new broadband services such as VoIP in order to stimulate investment, customer choice and competition.

Some, however, believe the FCC's ruling is the first - not the last - word regarding VoIP and broadband IP service policy. There's still much work to be done, and the industry should not overreact to a single ruling on a single service from a single provider.

The telecom/information service decision will determine if VoIP providers will be subject to access charges and be required to contribute to the universal service fund. Also, the FCC ruling did not address public safety issues, namely the requirement for 911 emergency services over the VoIP service.

The FCC said those issues will be dealt with in the larger IP-Enabled services proceeding, which began in February.

Vonage had petitioned the FCC to preempt a 2003 order by the Minnesota Public Utilities Commission that said DigitalVoice should be regulated like a traditional telecommunications service. The rules required Vonage to get a certificate of authority from the state, provide emergency 911 service and meet other requirements.