VoIP Avoids State Regulation

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Tom Keating
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VoIP Avoids State Regulation

A U.S. appeals court today upheld a decision that exempted VoIP telephone companies such as Vonage, Sunrocket, Packet8, and others from many state regulations and oversight.

The U.S. Court of Appeals for the Eighth Circuit backed a 2004 decision by the FCC that exempted VoIP telephone companies from rate regulation and from being required to seek certification before offering service.

The court upheld the FCC's order and said an issue raised by the state of New York on state regulation of fixed Internet phone services was "not ripe for review." Several states have demanded that Vonage obtain state certification, be subject to rate regulation and offer emergency 911 services equal to that of PSTN landlines.

"After carefully considering the positions presented by both sides of this dispute, we conclude the FCC did not arbitrarily or capriciously determine state regulation of VoIP service would interfere with valid federal rules or policies," the court decision said.

The court decision is certainly some very welcome news for Vonage which in addition to its IPO failure and other financial difficulties, the company also recently lost a $58 million patent infringement lawsuit to Verizon.

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