Citron: Some Bills Are 'Weirdly Weird'

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The Federal Communications Commission (FCC)'Vonage order' exempting VOIP providers from state-level regulation is perhaps the VOIP industry's biggest regulatory win to date. But state regulatory agencies are trying to reverse it, and Vonage Holdings Corp. CEO Jeffrey Citron sees that movement as a huge threat to VOIP companies (see FCC Shields VOIP From States ).

"If that order gets reversed there will be very serious consequences for the industry -- it could kill it," Citron tells Light Reading.

That order, issued November 9, preempted an order by the Minnesota Public Utilities Commission applying to Vonage VOIP service the state's own long list of 'telephone company' regulations, which include rules on everything from E911 services to billing practices.

The California and Minnesota state utilities commissions have now filed separate appeals in circuit courts, while New York and Ohio are reportedly considering following suit.

Representatives from the state commissions claim the FCC's Vonage ruling leaves many regulatory questions unanswered, and opens the door for traditional carriers to begin VOIP offerings just to skirt state regulations.

Citron claims Minnesota PUC's regulations were written for wireline carriers and do not fit the way VOIP providers conduct business. For instance, the state's rules on billing practices apply only to after-the-fact payment, Citron says, while Vonage service is all pre-paid.

The Minnesota regulations also require phone numbers to be closely associated with physical addresses (for E911 purposes), while Vonage service can be used anywhere a broadband connection is available. "They wanted our users to stay in one place," Citron says.

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Jack Decker
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