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States gang up on Vonage

First came Texas. Will New York and California be next to file lawsuits against the VoIP provider over its 911 service?

In a sign of another battle between regulators and Net phone service providers, a high-profile Texas lawsuit against Vonage is generating interest from other states' top cops.

The deceptive trade practices lawsuit filed by Texas Attorney General Greg Abbott in late March alleges that Net phone operator Vonage doesn't adequately disclose how its 911 service differs from what customers are used to. Vonage's emergency call service, for example, has to be first activated by the customer, and the calls aren't routed directly to emergency dispatchers.

The litigation surfaced shortly after a Houston-area Vonage customer allegedly tried, and failed, to get through to an emergency dispatcher after her parents had been shot during a robbery. Vonage denies the allegations.

Since the filing, "several states have expressed an interest in the suit," Abbott spokesman Tom Kelly said, but he declined to identify the states. To date, no other states have joined the Texas lawsuit nor filed their own against Vonage, according to several sources.

New York state could be the next candidate to pull the trigger, however. New York Attorney General Eliot Spitzer began "looking into the Texas lawsuit in greater detail" a few days after it was filed, a Spitzer spokesman said at the time. The spokesman didn't immediately return a call Monday for comment.

A Vonage spokesman had no immediate comment.

The interest in Abbott's lawsuit is another indication that time is running out for fast-growing Net phone providers to fully support 911 emergency services, a key but costly public safety feature that few now provide. Regulatory pressure on Net phone providers to fix their 911 problems has increased as the industry braces for rapid adoption of Internet telephony services as cable companies and Web giants such as America Online enter the market.

The Houston scenario spotlighted once again how U.S. Net phone providers still cannot successfully route a 911 call to the right emergency calling center and provide emergency operators with the caller's phone number and location. Vonage and other voice over Internet Protocol (VoIP) providers have long posed a problem for 911--a result of the technology behind Internet calling.

With VoIP, calls are packaged in Internet Protocol, the same routing instructions that form the backbone of the Internet. The problem, according to Net phone providers, is that the Bells have yet to give providers unfettered access to the 911 infrastructure linking more than 3,200 emergency call centers.

That forces the Net phone companies into less-effective ways of routing 911 calls. Rather than being able to get them directly to trained emergency dispatchers, the calls are typically routed to administrative lines at call centers, which then transfer them to dispatchers. In an emergency, the few seconds lost could be the difference between life and death.

This issue is unlikely to derail Net telephony completely, but it could lead to higher prices and increased regulatory oversight of the nascent industry. Ripple effects could also reach traditional phone networks and the Bells, as VoIP providers call on authorities to help broker deals that would allow them to roll out 911 support faster.