Federal court agrees with FCC on VoIP regulation

By Justin Mann on March 21, 2007, 9:38 PM
It what is a slight boost to VoIP businesses all around the U.S., a federal appeals court today upheld a decision made by the FCC that prevents individual states from regulating Internet phone services. While it doesn't represent any change from what already was decided, it cements the ability for companies like Vonage to operate under Federal laws rather than state laws. This saves the companies from having to pay state to state taxes or having to adjust their service for individual areas:

In 2003, Minnesota's Public Utilities Commission tried to register Vonage as a phone company, which would have subjected it to state tariffs and rate regulations. A federal judge barred Minnesota from doing so, and a year later at Vonage's request the FCC ruled that the company's services could not be regulated by the states.
We've seen some companies hit by this before, and most online retailers will still make you pay tax if the state you live in requires it. Overall, for better or worse, it gives VoIP companies a leg up in competing with local telcos.

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