Minnesota cannot regulate Internet-based telephony like traditional telecommunications services, the 8th U.S. Circuit Court of Appeals ruled December 28.
The ruling spurns a Minnesota Public Utilities Commission appeal of a lower court ruling favoring Vonage's argument that it shouldn't be defined as a telecom but an information service.
The ruling is a big win for companies like Vonage who have argued that, because they supply computer software used to make and receive calls but don't own or operate the physical network carrying them, they are distinct from traditional telephony and should be treated accordingly.
The Federal Communications Commission in November said Internet telephony should not be ruled by the state regulations that cover traditional telephony, part of a set of rules that left open whether states could still tax Internet telephony. That's when the Minnesota PUC asked the 8th Circuit Court to consider whether the FCC superceded the lower court ruling.
States favoring regulating Internet telephony like traditional telephony say Net calls are "effectively the same as traditional telephone calls" and thus should get the same kind of government oversight.
The 8th Circuit Court ruling came on the same day Vonage announced it would donate free phone service to U.S. military personnel in Iraq and Afghanistan, letting American troops make over 200,000 calls worth over two million minutes with loved ones and friends back in the United States, a program the company will continue through 2005.
“Vonage has noticed an increase in calls during the holiday season and is glad we have been able to give our troops the ability to call their families to say happy holidays and tell them how much they are missed and wish them a great New Year,” said Vonage chief executive Jeffrey Citron. “We recognize the sacrifices the men and women of the United States Armed Forces are making in Iraq and Afghanistan, and although we cannot do anything to get them back to their families any faster, we are doing our best to use our service to help make the loneliness of their deployment a little more bearable.”
