FCC rules Internet-based phone services not subject to state regulation

Tuesday, November 9th 2004, 10:37 am

By: News On 6

WASHINGTON (AP) _ U.S. regulators ruled Tuesday that providers of Internet-based phone call services fall under the jurisdiction of the federal government and cannot be regulated by states.

The Federal Communications Commission voted 5-0 in favor of Vonage Holdings Corp. of Edison, N.J., which had asked the agency to declare the company's product an interstate service, giving the FCC regulatory control.

Vonage has been battling public utilities officials in Minnesota who want the company to register in the state as a telecommunications service, subjecting it to rate regulation and other state rules.

The ruling applies to cable, phone and other companies offering an Internet phone service similar to the one Vonage provides. The decision does not, however, preclude states from imposing some taxes and fees. It also does not address access charges, which are fees paid to local phone companies for completing calls sent via the Internet to conventional phones.