New York Defines Vonage as Telco Provider

A state regulatory agency in New York ruled Wednesday that Vonage Holdings is a telco provider, a significant classification that has important ramifications for the ongoing debate over government regulation of the emerging technology.

In its ruling, the New York State Public Service Commission determined the Internet telephony provider offers competitive telephone services via Voice over IP technology and is therefore a telephone corporation as defined by New York state law.

Specifically, the commission noted a core public interest in ensuring public safety and network reliability, but it also suggested only minimal regulation would be advised because of the rapid growth of the new field.

"Telecommunications services are a critical component of this state's economy, and our decision today seeks to maximize the benefits of the emerging VoIP technology, while minimizing the risks to the public interest, including safety and economic interests," Commission Chairman William Flynn said in a statement.

The public agency's action was not seen as a welcome development by one leading VoIP proponent, Jeff Pulver, whose company - Free World Dialup - has also been at the center of the debate over regulating VoIP."This is a very troubling development," Pulver wrote on his personal blog in response to the public utilities commission. "I am quite disappointed to see that New York State decided to apply legacy telephone regulation to Internet based communications while the FCC is in the process of figuring out the right regulatory treatment for VoIP."

Among other agencies, the FCC is taking a hard look at making regulatory decisions that many consider to be critical for the future of VoIP.