Judge Releases Ruling on Vonage's Broadband Phone Service

Judge Michael Davis of the U.S. District Court of Minnesota publicly released the order in which he ruled that Vonage is "an information service" provider and that it should not be regulated by state laws or the Minnesota Public Utilities Commission. In September, the Minnesota Public Utilities Commission (MPUC) had issued an order for Vonage to comply with laws that govern telecommunications companies.


The U.S. District Court rejected the MPUC's "quacks like a duck" argument, which essentially held that because Vonage's customers make phone calls, Vonage's services must be telecommunication services.


Judge Davis said the issue is tied to the evolution of the Internet and that Congress "has expressed a clear intent to leave the Internet free from undue regulation so that this growth and exploration may continue." He noted that the backbone of Vonage's service is the Internet and that Congress had spoken with "unmistakable clarity" on the issue of regulating the Internet.


Notably, the court ruled that Vonage "uses telecommunication services rather than providing them." The line demarcating "telecommunication services" from "information services" is defined in the Communications Act of 1996. Even for outbound calls from a Vonage subscriber to a POTS number, the service was found to be an "information service" because the Vonage customer needs to use customer premise equipment that is different from an ordinary touch-tone phone configuration, and this equipment was found to change the form of the transmission into an information service.
http://www.mnd.uscourts.gov/