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State Revanchism: Can the Latest Efforts to Regulate Voice over Internet Protocol be Stopped?

By Gregory E. Sopkin
March 20, 2008
The last “war” fought over Voice over Internet Protocol (“VoIP”) occurred in 2003-2004, when the Minnesota Public Utilities Commission decided that Vonage’s VoIP telephony service seemed a lot like traditional circuitswitched service (it “quacked like a duck”), and so was subject to state agency regulation. A federal district court in Minnesota disagreed, holding that federal law preempts state regulation, because VoIP is an information service.” In 2004, the FCC weighed in with its own Vonage Order, declaring that VoIP providers do not need to abide by a Byzantine set of regulations by fifty-one state commissions. Two years later, the Eighth Circuit Court of Appeals upheld the district court’s decision. State agencies lost, and VoIP providers won—or so it seemed....