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Appeals court tells state to keep hands off VoIP

Vonage victorious in Minnesota

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A Minnesota agency has again been blocked from regulating VoIP (Voice over Internet Protocol) services by a federal appeals court.

The Eight US Circuit Court of Appeals in St. Louis, Missouri this week upheld a lower court ruling barring the Minnesota Public Utilities Commission from trying to regulate VoIP providers as if they were traditional phone companies. The lower court ruling said that Vonage - a major VoIP player - provided more of an information service than a telecommunications service and should not be governed like a phone company.

This recent legal victory adds to the Federal Communication Commission's decision last month that also said VoIP providers should not be regulated or taxed via the same provisions as telephone service providers. The Minnesota Public Utilities Commission asked the Appeals Court to decide whether the FCC's ruling pre-empted the lower court's decision, but the Appeals Court simply stated that the FCC's decision backed the earlier rulings.

While the FCC has sided with VoIP providers thus far, it has also warned that some tough decisions around the technology must be made. VoIP companies will need to provide consistent service levels and solid access to emergency services.

A number of states are still in favor of regulating VoIP services just as they would traditional phone services. This position, however, will be even tougher to maintain given the appeals' court ruling this week. Some states will no doubt look to take the matter to the Supreme Court in the hopes of taxing VoIP services down the road. ®

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