Key points of FCC’s Vonage ruling

* Analysis of FCC ruling on Vonage and VoIP

You doubtlessly heard last week that the FCC ruled that Vonage’s residential-focused VoIP service is not subject to, as the ruling put it, “traditional state regulation.” The FCC press release also noted that “other types of IP-enabled services, such as those offered by cable companies, that have basic characteristics similar to [Vonage’s] DigitalVoice would also not be subject to traditional state public utility regulation.”

This seems to us to be a sane ruling, especially as one digs more deeply into reports of what the ruling does - and does not - cover.

In particular, the key point from the ruling seems to focus on E-911 regulations. As we’ve discussed extensively in this newsletter, one of the most difficult parts of even determining whether a given VoIP system is compliant with E-911 regulations is that many of these regulations vary significantly from state to state.

This point seems to be especially important to Commissioner Abernathy, who in a separate statement expressed concern over “the prospect of subjecting providers of these innovative new services - which are being rolled out on a regional, national, and even global scale - to a patchwork of inconsistent state regulations.”

We hope this is a major step toward sane regulation. VoIP is an excellent example of a widespread problem: A great deal of the current legislation concerning technology was conceived (or, depending on your perspective, ill-conceived) based on technological concepts that are no longer meaningful.

For instance, E-911 legislation is generally based on the concept, which was sound logic a few years ago, that a “telephone” is in a fixed location. Clearly, this is no longer the case. With most Internet-based VoIP services, there is essentially no connection between the physical location and the “calling number.” Indeed, as the FCC press release states, “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.”

We see the recent ruling as the tip of the coming iceberg. In particular, the list of issues, including taxation, that are explicitly excluded from this ruling is far-ranging. Nevertheless, it’s an important indicator of probable future directions. 

Learn more about this topic

FCC frees VoIP service from state regulation

IDG News Service, 11/09/04

Residential VoIP? Check the E-911 capabilities

Network World Convergence Newsletter, 08/02/04

More on limitations of E-911 for residential VoIP

Network World Convergence Newsletter, 08/04/04

The Extended Enterprise Issue

Network World, 11/15/04

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