Expansion-Minded Vonage Taps Global Crossing

Preparing to expand the reach of its Internet telephony services, Vonage has inked 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 Edison, N.J., firm currently provides broadband voice services to 55,000 small business and consumer subscribers.

Last week, it began offering its Voice-over Internet protocol services — which include call waiting, call forwarding and voicemail for a flat monthly rate — in Vermont.

Christine Berthier, a spokeswoman for Florham Park, N.J.-based Global Crossing, said the agreement is for two years.

A spokesman for Vonage declined comment on the deal citing a confidentiality agreement.

The move comes just days after Vonage notched a legal victory that could reduce regulatory red tape for services.

A federal judge ruled against Minnesota’s Public Utilities Commission, which argued that Vonage was subject to the same regulations as phone companies.

Vonage meanwhile, prevailed by claiming it provides an “information service,” and therefore, is not subject to the same rules as traditional telcos, such as setting money aside for 911 services.

It was the first time a state tried to impose such regulations on a VOIP provider. There is no word yet whether the Minnesota plans to appeal, since the full wording of wasn’t immediately available.

The full text, which will lay out the legal rationale, was initially scheduled to be released Friday, but is now expected tomorrow.

Advocates of IP telephony, which essentially uses the Internet to transmit local and long distance calls, say the case is one among several they are eyeing as potential test cases to free VoIP services from traditional telephone regulations.

The outcomes would decide whether phone calls transmitted over data networks should be governed by regulators at the state or federal level.