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Feds claim VoIP for their own

For the time being, anyway . . .

The FCC determined that, since VoIP has no reliable or practical (read: cheap) way to determine geographic location based on the IP addresses used for the calls, there is no way to determine whether a call is interstate or intrastate. Thus, the impossibility exception applies and the FCC can sweep away all state regulations that interfere with valid federal rules or policies.

The court upheld the FCC's interpretation on this point, stating that the FCC's determination was entitled to a great deal of deference since the issue was technical and fact-heavy. The court did specifically address the state regulators' argument that an FCC order involving VoIP 911 calls contradicted the idea that it was impractical to determine geographic locations for VoIP users, but found it wanting.

The FCC 911 order, you may recall, was an attempt to ensure that VoIP users could properly access 911 systems based on their usual geographic location. The regulators argued that this order proved that VoIP providers can, in fact, determine a user's geographic location, and so the impossibility exception should not apply.

The court, on the other hand, took note of the fact that the 911 order was a temporary, compromise solution based upon a VoIP user's registration of the area in which they typically use the service - not an IP-based fix on the user's location. The order itself even notes that it would be nearly impossible to ever accurately determine a user's actual location based on an IP address, and relied on the registration quick-fix as a way around that technical roadblock.

The court also pointed to the fact that the FCC left a backdoor in its decision as a reason not to overturn it. The loophole allows a review of the Vonage order if VoIP technology ever changes in such a way that it suddenly becomes practical to pinpoint user location in real-time. This, said the court, was imminently reasonable, and further proved that the FCC's order was within its authority.

The court didn't seem to think it a problem that this bit of logic would encourage the VoIP providers to stifle the development of any new technology that could trace a user to their actual, real-time physical location, since this could then force the FCC to revisit the entire issue and possibly result in a flood of state regulations that would drive costs for the providers through the roof.

Thus, a decision that was meant to further the federal aim of encouraging competition and technological development in the telecomm arena could actually wind up reducing the quality of VoIP service.

In all fairness to the Eighth Circuit, though, that's more of a problem for the FCC than the court. Thanks to administrative law precedent in the US, an agency can come to the wrong decision as long as it considers all its option in good faith. Thus, as long as the FCC's decision isn't arbitrary or capricious, it can stifle or encourage innovation to its heart's content, and the court won't second guess it.

Which leaves the VoIP providers free to continue providing jumpy, distorted communications without the added burden of state regulations for the foreseeable future.®

Kevin Fayle is an attorney, web editor and writer in San Francisco. He keeps a close eye on IP and International Law issues.

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