Washington — Federal regulators gave a boost Tuesday to the fledgling Internet phone industry, removing a regulatory hurdle that had threatened to drive up the cost of making calls through cyberspace.
The Federal Communications Commission unanimously approved a petition from Vonage Holdings Corp., of Edison, N.J., which had asked the agency to declare the company's product an interstate service, giving the FCC regulatory control.
The move exempts Vonage and similar providers of Voice-over-Internet Protocol, or VoIP, from some key state-by-state regulation that the companies say would add cost.
FCC Commissioner Kathleen Abernathy, a Republican, said streamlining regulation of VoIP companies would help the industry grow.
The ruling applies to cable, phone and other companies offering an Internet phone service similar to the one Vonage provides. But the decision does not preclude states from imposing some taxes and fees.
The ruling also does not address access charges, which are fees paid to local phone companies for completing calls sent via the Internet to conventional phones.
The FCC did not rule on Vonage's request to certify it as an information service instead of a telecom company. Such a move would have a profound impact on the industry because it would mean VoIP providers wouldn't have to pay taxes and fees that traditional phone companies do.
No comments
Commenting is turned off for this story.