In what is being hailed as a major victory for VoIP, the Federal Communications Commission ruled that some state telecommunications regulations do not apply to providers of “voice over IP” services, and ruled that states are barred from imposing telecommunications regulations on Internet phone service providers. The FCC clearly indicated that existing regulations which rely on where a call originates and terminates (“geography-based”)—relevant when the original laws and regulations were written—are increasingly irrelevant today. The decision calls into question the validity of numerous state regulations which conflict with the Commission’s policies and regulations, but the hard work is yet to come—the FCC still must draft rules for services that rely on the “Internet Protocol,” the backbone of the Internet’s infrastructure. The Commission also did not address whether cable service providers were or were not covered by this ruling. Dozens of states are currently trying to regulate voice over IP, nervous that revenues from telecommunications taxes will diminish as businesses and consumers migrate their voice traffic to the unregulated Internet, although the FCC’s ruling does not diminish the power of state to enact and enforce consumer protection laws for the benefit of their citizens. Taxation and other regulation, however, may be a different matter.
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