VoIP Internet Telephone Can’t be Regulated by State, Says Court

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A U.S. Federal Court has ruled this week that the State of Minnesota (and by extension all states) cannot regulate Internet telephone usage, known as VoIP (Voice over Internet Protocol), in the same way that the states presently regulate traditional phone lines and usage.

This is bound to be good news for VoIP services such as Vonage and Skype, who have been seeing a dramatic growth and adoption as VoIP services become more mainstream.

The State of Minnesota’s Public Utilities Commission had argued that VoIP services were sufficiently similar to regular telephone services to warrant regulation by the state. Some consumer groups agree, saying that as people start to rely more on VoIP and less on regular “land lines” and “POTS” (Plain Old Telephone Service) lines, the state needs to be able to be sure that 911 systems work, and that people living in remote areas aren’t left out in the telephonic cold.

The court disagreed, however. Relatedly, the Federal Communications Commission last month came out with its own ruling indicating that VoIP services should not be subject to state regulation in the way that have been traditional telephone services. The FCC ruling did however leave open the door to a state tax on VoIP services.

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