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A federal judge explains his decision on a ruling that permanently barred Minnesota from applying traditional telephone rules to Vonage, a pioneer in Internet telephone calls.
The decision, which said that Internet phone companies should not be held to the same regulations as traditional telephone services, could be used to nullify future VoIP regulations expected from about a dozen states now deciding whether to use Minnesota's model.
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In his just-issued 22-page written ruling, Davis explained that Vonage and other VoIP providers supply an "information service," a term already used in regard to companies that sell Internet access. It's appropriate to group VoIP companies and access providers together, Davis wrote, because VoIP calls travel across the Internet rather than across a telephone company's privately owned network. Congress has already mandated that information service providers remain unregulated so that future development is not stifled.
"State regulations would effectively decimate Congress' mandate that the Internet remain unfettered by regulation," Davis wrote. "Until Congress speaks more clearly on this issue, Minnesota may not regulate information service providers as if they were a telecommunications provider."
Minnesota regulators could not be reached Thursday for comment. A Vonage representative said the company was pleased with the ruling.
Davis' decision could have broad implications. It could be used to nullify that are expected from about a dozen states now deciding whether to use the "Minnesota model." Also, Davis' call for a nationwide decision could spur Federal Communications Commission action.
At least one state, California, has said it intends to continue asking VoIP providers to seek telephone licenses. A representative for the state's Public Utilities Commission could not immediately be reached for comment.
Davis' ruling runs counter to aby the 9th U.S. Circuit Court, a decision the state of Minnesota could use to appeal. The 9th U.S. Circuit Court ruled that the FCC incorrectly ruled in March 2002 that cable broadband networks are an "information service" rather than a "telecommunications service." This is an important distinction, because telecommunications services can be forced by governments to open their broadband lines to third parties. Information services, however, are not subject to regulations that force them to resell their lines to outsiders.