It looks like VoIP won its first battle against certain state-by-state taxing penalties in the U.S. What seemed to be a never-ending battle saw the beginning of the end today. The FCC ruled in favor of Vonage and possibly other companies that offer the technology. According to the ruling, Vonages services will be exempt from most taxes at state level.
Today, the Commission declared Vonages Voice over Internet Protocol telephone servicewhich uses a broadband connection to process calls from PC to PSTN lines, an interstate service, protecting it from state regulations such as rate regulation, required certification, and some emergency 911 services.
"This landmark order recognizes a revolution has occurred," declared FCC Chairman Michael Powell. The rules declared today will also apply to telecommunication companies such as telephone carriers and cable operators offering VoIP-based calling services.
Vonage has been fighting this battle against state regulators for some time. The companys war started with the state of Minnesota. The state demanded the company obtained state certification, be subject to rate regulation and offer emergency 911 services comparable to those of land lines. "In the absence of FCC action we're facing strangulation by regulation -- 50 different states with 50 different ideas about how we should run our business," said Vonages chief executive officer Jeffrey Citron at the time.
The Minnesota state PUC vs. Vonage case is still pending, however. Both parties are still waiting for the results of a court hearing to take place in about two weeks. With todays FCC ruling, the chances for the states demands to become a reality seem to be thinning out.
Stay tuned to TMCnet in days to come -- Ill keep you posted on this issue!
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Johanne Torres is contributing editor for TMCnet.com and Internet Telephony magazine. Previously, she was assistant editor for EContent magazine in Connecticut. She can be reached by e-mail at