VoIP Appeal Decision on Hold

Minnesota regulators are anxiously awaiting the full text of a recent court decision that effectively exempts Internet telephony provider Vonage from paying fees traditional telecoms are required to.

“After we receive (the document), all the commissioners will have to read it and digest it,” Burl Harr, a spokesman for the Minnesota Public Utilities Commission (PUC), told internetnews.com. “Then, we’ll decide whether to appeal.”

Last week, a federal judge rejected the state’s argument that Vonage provided a telecommunications service and should be subject to the same rules and regulations as phone companies, such as earmarking money for 911 infrastructure.

Instead, the court sided with Vonage, which claimed it offered an “information service” and should not be bound by telecom red tape.

The case has attracted attention in the industry, because it was the first time a state tried to impose such regulations on a Voice over Internet provider .

At the same time, the technology is becoming more reliable and less expensive, promising greater adoption and sticky regulatory interpretations.

Edison, N.J.-base Vonage is not standing pat during the delay. It recently signed a multi-year transport, co-location and long-distance deal with network operator Global Crossing. Financial terms were not disclosed.

The pact is important for Vonage because it gives it a partner with reach and capacity. The firm currently provides broadband voice services to 55,000 small business and consumer subscribers.

Brooke Shulz, a Vonage spokeswoman, said the company is pleased with the court victory, but noted that Minnesota will still have 30 days to decide whether to appeal.