clecrupt9
join:2002-01-22
GA
| Minnesota Regulates Vonage
This coud be a bad sign of things to come:
Vonage, a small New Jersey company that lets consumers make phone calls over the Internet, has been told by the Minnesota Public Utilities Commission that it is operating without proper certification as a phone company.
The PUC issued its order Wednesday on a 3-0 vote and is giving the company 30 days from publication of a written order to file a proper phone company application including a list of prices and a 911 emergency phone plan.
But Vonage officials maintain their high-tech startup is not a phone company, even though on its Web site Vonage calls itself "the broadband phone company." They claim Vonage is a data "information service" because it transports Internet data, not traditional voice traffic, over the Net, spokeswoman Brooke Schulz said Thursday.
Because Vonage is not a phone company, state regulators have no authority over the company, Vonage lawyer Bill Wilhelm said, and the company would appeal the PUC order to state and federal courts.
The state doesn't see it that way.
The Minnesota Department of Commerce brought a complaint about Vonage to the PUC after seeing Vonage advertising in Minnesota last December, said Diane Wells, assistant to Edward Garvey, the deputy commissioner in charge of telecommunications.
The Commerce Department was most concerned with Vonage's 911 service, Wells said. On Vonage, 911 calls don't go directly to emergency dispatchers but are transferred to an administrative public safety agency's number that dispatch centers use as a backup, Schulz said.
Wells said the system would not meet local phone standards and if Vonage comes back with that kind of 911 plan, the Commerce Department will recommend it not be permitted to operate in Minnesota.
Schulz conceded that Vonage uses the term "phone company" to market itself to nontechnically minded customers, "but ultimately, it's data traffic."
"You can convert many forms of transmissions into data — text, instant messaging, for instance," she said. In what's being called "Internet telephony," voice calls are converted into Internet data to bypass the phone companies.
The Minnesota PUC order represented the first time a state has formally attempted to regulate Vonage, officials at the Edison, N.J., company said Thursday. However, regulators in several states in recent months have been looking at the growing number of small startups, including Vonage, that are using the Internet to transport voice traffic, especially long-distance calls, for rates as cheap as a local call.
Traditional phone companies see these upstart tech companies as a serious threat, particularly small rural telephone companies that get half or more of their revenue from long-distance companies that must begin or end their traffic on local lines.
"State law is clear on its description of what is a phone company and what a phone company needs to do to operate as a phone company," said Terry Kucera, spokesman for the Minnesota Telecom Alliance, a statewide organization that represents nearly every phone company in Minnesota except Qwest Communications International and the national wireless companies.
The problem Vonage ran into is that it looks like a phone company even if it uses the Internet, said Mike O'Connor, a St. Paul high-tech entrepreneur who started an Internet service provider at the dawn of the Internet age. O'Connor toyed with the idea of starting his own Internet telephone company last fall before dropping the idea.
"If it looks like a duck and quacks like a duck and walks like a duck, it's a duck," he said. "Regulators are saying, 'We don't care what technology you're using, you're a phone company.' "
»www.twincities.com/mld/pioneerpr···5621.htm |
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bbphone
join:2003-07-13
| Vonage 911 is not true 911. So based on what the article suggests, it seems like Vonage would not be able to meet the MN 911 requirements. Because Vonage is now considered a phone company and must meet MN 911 requirements then it seems like Vonage won't be able to offer service in MN after this 30 day period expires.
[text was edited by author 2003-08-15 10:55:47] |
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bsexton
join:2002-11-27
Linton, IN
| reply to clecrupt9
Vonage CLEARLY not meet the classic definition of a phone company. As it has already been pointed out in this forum, the Minnesota PUC sees companies such as Vonage as a threat because if they don't have the ability to regulate them, then their jobs just might fall into obsolescence.
If the Minnesota PUC has the right to regulate any means which allows termination or origination of calls to/from the PSTN then I guess they have the right to regulate HAM radio as well!!! |
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clecrupt9
join:2002-01-22
GA
| reply to bbphone
911 I knew would end up an issue, it will in other States too. There should be a way to it worked out, weather it requires Vonage to become a full fledged CLEC, I dont know.
The PUC, at least in Ga regulates more than telecom, so I dont think the motive here, if Vonage were regulated, would be about job loss. I really believe that there will be a need for some kind of standards. I further feel that Vonage is a telephone service.
Having said that, I would not like to see Vonage forced to operate just like a Clec or a Lec and that is how MN has told Vonage it must be, meaning they now must file tariffs and the whole nine yards. I hope that Jeff and the other industry insiders will find a happy medium to offer to the States where by the voip companies have some responsibility and accountability as Public carriers, but are not forced to totally change the business model because they must operate like a traditional common carrier. |
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balaton
join:2003-03-28
Pomona, NY | reply to clecrupt9
Well, I guess Jeff can always move the FWD server to the Cayman Islands and then FCC and everyone else can go take a hike. |
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clecrupt9
join:2002-01-22
GA
| Thats an interesting point.
I think Jeff will be Ok, its the true phone number that Vonage gives you that might be the catch.
But as US phone numbers become available worldwide, and international numbers too, you could get a scenario where you have an offshore call processor sending you a number. Then the response would probably be that its against the law to have a US number outside the US. |
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oliphant5
Got Identity?
Premium
join:2003-05-24
Corona, CA | reply to clecrupt9
Just a money grab by the state officials with hands in the pockets of the telcos. Telco whores the lot of them.
Politicians want to kill any company they can't steal money from. |
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Cam
Premium
join:2003-01-25
Luther, OK
clubs: | Just wait, if they do this to Vonage, they will do it to Packet8 also. The comparison they used between telephone service and Vonage will work out the same with Packet8...and Packet8 will also be required to provide 911 service. |
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dean2900
join:2003-02-13
Lewisville, NC | reply to clecrupt9
Ok fine then. I vote when go down to 49 states and drop Minnesota. Greedy politicians. |
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Cam
Premium
join:2003-01-25
Luther, OK
clubs: | I'm with you. And then Vonage should run ads in Minnesota that say, "You could get unlimited local and long distance if it weren't for the greedy politicians you have elected to your Public Utility Commission." |
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Gandalf1315
Freelance Philosopher
join:2001-05-23
Indianapolis, IN
 ·RoadRunner Cable
 ·Vonage
| reply to clecrupt9
Personally I think the 911 issue is crap. You know full well before you sign up what the situation is with Vonage and 911. It is a choice you made when you became a Vonage user. I am so sick of the government slowly taking away my RIGHT to choose what is best for me. Land of the Free my ass!!!
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No man's life, liberty or fortune is safe while our legislature is in session.--- Benjamin Franklin |
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qworster
join:2001-11-25
Los Angeles, CA
 ·DSL EXTREME
·Brand X Internet
·RoadRunner Cable
·Vonage
| reply to clecrupt9
Minnesota can pound sand here!
The FCC determines what is and isn't a phone company, not the states. All Vonage has to do is get a declaratory ruling from the FCC (similar to what Jeff Pulver is looking for) and the only thing they'll have to send to the Minnesota state govt. is a bucket of sand and a shovel! |
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clecrupt9
join:2002-01-22
GA
| reply to Gandalf1315
Re: Minnesota Regulates Vonage
The problem is that YOU know, but others who use that phone may not. Of course I do see your point about freedom, and I will agree that you should have the right to not want 911. You do have options, build your own PSTN now thanks to Jeff and not have the Government tell you didley about universal service, 911, excise, ect.
But telecom is what it is and 911 is part of deal if you go into business to provide PSTN dialtone to people. I'll also note that 50% of some calls are PSTN, so you have a person using a standard telephone, making a call that is 50% PSTN.
Some people awhile back suggested that Vonage not offer 911 services at all. It might have been a good move because it looks like Vonage is intending to replace your regulated line, not supplement it and that may make the States see it as a "telecommunications service". |
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Gandalf1315
Freelance Philosopher
join:2001-05-23
Indianapolis, IN
·RoadRunner Cable
·Vonage
| said by clecrupt9  :
Some people awhile back suggested that Vonage not offer 911 services at all. It might have been a good move because it looks like Vonage is intending to replace your regulated line, not supplement it and that may make the States see it as a "telecommunications service".
Good point.
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No man's life, liberty or fortune is safe while our legislature is in session.--- Benjamin Franklin |
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Automate
join:2001-06-26
Atlanta, GA
·Comcast
| reply to clecrupt9
said by clecrupt9 :
Some people awhile back suggested that Vonage not offer 911 services at all. It might have been a good move because it looks like Vonage is intending to replace your regulated line, not supplement it and that may make the States see it as a "telecommunications service".
This may be a saving grace for P8/VoicePulse. They don't sell their service as a primary phone line replacer. They also don't do phone number portability to replace your primary line with VOIP. |
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clecrupt9
join:2002-01-22
GA
| reply to clecrupt9
And I'll say this and then get off the box, 911 isnt something where you cut corners. I know that Bellsouth has spent the money and deployed redundant systems, and fail safes necessary to make 911 always work, even if the center itslef is overloaded. Right now my calls are going to numbers I'm not dialing....If I had an emergency and 911 did not work and I ,for whatever reason, only could use Vonage, Id rather give up a little freedom to my State if they made sure 911 always worked. I question if I called now it would route correctly. Again I dont know that forcing them to be a CLEC is the answer. |
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WhyADuck
Premium
join:2003-03-05
| reply to clecrupt9
Suppose that 911 had been around when the first wireless phone companies started up, and suppose states had been able to say that nobody could offer cell phone service unless they could make 911 work perfectly. We'd still be tied to pay phones for communications while "on the road"!
The thing that Minnesota has to realize is that you can't legislate into existence technology that doesn't exist (if they've figured out a way to do it, I wish they'd pass a law requiring cars to be able to fly). There is presently no way to offer a fully portable, internet-based voice service and give it the ability to connect reliably to the nearest 911 center. They will either have to give on this point, or else they will chase VoIP out of Minnesota (unless the courts get involved, which is likely). |
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clecrupt9
join:2002-01-22
GA
| reply to clecrupt9
Ok good point, but where can you draw the line?
Lets say that I am your elected official in MN and you have just had an emergency where Vonage has told you you have 911, but due to the softswitch crashing your 911 call was sent to someones voice mail. Are you willing to take that risk? I just think that some people would have a fit, and complain to the utility commission, Senators, ect let alone sue Vonage and when Vonage passed the buck sue the State. This is hypothetical, but am I off base?
[text was edited by author 2003-08-15 18:41:00] |
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WhyADuck
Premium
join:2003-03-05
| I'm not saying this isn't a problem, I'm just saying that Minnesota officials need to be realistic about what is possible. The choices are, they either have to give a little on 911, or possibly they may ban Vonage from operating in Minnesota, though I would hope they don't go that far (I want to see the actual order before jumping to any conclusions).
Now personally, I believe that Vonage may have made a couple mistakes here. The first may have been undertaking to offer 911 service in the first place. It's like if you have a large stream across your property - you aren't obligated to build a bridge across it, and if someone decides to cross anyway and drowns, you probably aren't liable. But if you build a bridge, and it doesn't work right (collapses) and someone falls in and drowns, you're liable, even though you weren't required to build a bridge in the first place.
The second may have been promoting Vonage as a replacement for phone service. If they had stuck with promoting it as an add-on second line, the Minnesota PUC staff would not have been able to pull all those quotes off their web site that are causing problems for them now. Of course, nothing would have stopped anyone from canceling their primary phone service, but as it is, Vonage is holding themselves out as a provider of primary phone service. I understand this is done for marketing reasons, but in this case it may backfire, since they're also giving plenty of ammunition to state PUC's.
Consider that if they did NOT do that, many states would probably be content to issue a consumer advisory warning that VoIP service isn't regulated, and that consumers should be aware that it's not the same as regular phone service. They do this now with prepaid calling cards - they don't ban them, but issue consumer advisories warning that if the calling card provider is dishonest, consumers could get little or no value out of the card. But Vonage just may cross the line in holding themselves out as a complete replacement for regular phone service. It might have been better, at least initially, to take a somewhat low-key approach.
But, it's too late to undo what's been done, so it will be interesting to see how this shakes out. In the end, I suspect the feds will pre-empt anything the states do (because the internet definitely crosses state lines), and in fact, a VoIP company located in New Jersey might be able to claim that the state of Minnesota lacks jurisdiction. But I'm sure not making any predictions at this point. |
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BillRoland
Premium
join:2001-01-21
Ocala, FL
clubs:
·Cox HSI
| I found it interesting that in the PDF I read Vonage argued they were not a phone company, but their website says "The BROADBAND Phone Company." They're not making it easy for themselves.
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"Don't steal. The government hates competition." |
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