FCC rules Internet-based phone services not subject to state regulation

Abstract

In a unanimous vote, the Federal Communications Commission (FCC) has ruled that voice over Internet protocol (VoIP) phone service falls under the jurisdiction of the FCC and is not subject to state rules.The agency stopped short, however, of declaring VoIP an information service, which would also have freed Internet phone service from certain state taxes and fees. The decision also does not cover access fees, which local phone companies charge for calls delivered across conventional phone lines. FCC Chairman Michael Powell said the growth of the VoIP industry depends on a simple regulatory approach rather than forcing providers to comply with rules from as many as 51 different jurisdictions. The FCC's ruling applies to any company that offers VoIP service, which currently has about 600,000 subscribers.That number is expected to rise to about one million subscribers by the end of the year.