The Un-Telephone Companies

Vonage, Net2Phone and other self-ascribed "information service providers" that deliver phone services over IP are renouncing the name "telephone company" and the regulations that go along with it. The state of Minnesota, however, begs to differ.

The Minnesota Department of Commerce brought a complaint against Vonage to the state public utility commission (PUC) after Vonage advertised its "broadband phone" services to the public. Under Minnesota and other states' laws, phone companies must file a proper application that includes a price list and a 911 emergency plan. Of concern is Vonage's 911 service, whereby calls are transferred to a public safety number used by dispatch centers as a backup and not switched to emergency dispatchers directly.

The PUC unanimously held that Vonage's broadband phone services are subject to the same rules and regulations as traditional phone companies. But Vonage is appealing the decision because, it says, the company's service transports Internet data and is not a traditional phone service.

Although some oversight may be needed to protect consumers, bringing VoIP services under aging regulations will increase prices. It may also inhibit phone-service innovation.

A better answer may be to review the law and 911 services in light of new technology.Post a comment or question on this story.