Telco agrees to stop blocking VoIP calls

Madison River Communication of North Carolina will pay $15,000 to the FCC. Chairman Michael Powell claims victory.

A North Carolina telecommunications company accused of deliberately blocking Internet phone traffic has reached a deal with federal regulators to halt the controversial practice.

The Federal Communications Commission said Thursday that Madison River Communication will "refrain from blocking" VoIP, or voice over Internet Protocol, calls and will pay a $15,000 fine to the government.

"We saw a problem, and we acted swiftly to ensure that Internet voice service remains a viable option for consumers," FCC Chairman Michael Powell said in a statement. The consent decree prevents Madison River from VoIP blocking for 30 months.

Based in Mebane, N.C., Madison River reported $194.4 million in revenue for the 2004 calendar year from 120,649 residential voice subscribers, 60,563 business voice subscribers, and 39,562 DSL customers. The company has filed a registration statement for a proposed initial public offering.

VoIP provider Vonage confirmed that Madison River was the broadband provider it complained to the FCC about earlier this month, leading to the FCC's investigation.

"We're very pleased that the commission took very swift action to address the concerns that we had regarding an Internet service provider's ability to block our customers' communications with each other," Vonage CEO Jeffrey Citron said. "This sends a clear message that port blocking will not be tolerated."

Port blocking occurs when a company may prevent certain types of Internet traffic from traveling through its networks, for instance in an attempt to prevent voice subscribers from switching to VoIP.

Port blocking isn't reserved for high-profile VoIP carriers like Vonage. Nuvio, a small Net phone service provider based in Kansas City, Mo., says its customers' calls have been affected by at least one cable operator. Nuvio has yet to make any formal complaint to the FCC, however. In September, Nuvio told the FCC that port blocking was inevitable, given just how easy it was to do and the economic incentives for doing so.

Vonage's Citron said Madison River was the largest company to attempt port-blocking against Vonage customers. "We've identified one or two others that are very small," Citron said, adding that the information will be forwarded to the FCC. Many large cable companies have pledged never to engage in the practice.

Madison River did not immediately return phone calls.

CNET News.com's Ben Charny contributed to this report.

Featured Video

Your phone's screen is ruining your sleep

Staring at your Phone's screen might be hazardous for your sleep, unless you change the color temperature. Sharon Profis explains on "You're Doing It All Wrong."

by Sharon Profis