Phoney Baloney


My sincere apologies to those sick of my rants on broadband. But, hey, they keep serving up high, hanging curve balls.

The latest is a federal judge's ruling that Minnesota cannot treat voice over Internet protocol vendor Vonage as any old phone company. The state utility commission wanted to force Vonage to collect fees to kickback to the state's 911 service fund, clearly a prelude to demanding Vonage participate in other state-mandated shakedowns and cross-subsidies.

But the judge found that whatever Vonage is, it is not a telephone service operator. That decision is proper and welcome, but notice where that leaves us.

A federal appeals court a few days before ruled that cable Net service providers are phone service operators. Yet now a different federal court finds that an add-on service that rides on top of a cable Net connection to specifically provide voice-to-voice communication is not a phone service.

To recap, the law says your cable modem is a phone, except when you use it as a phone. Then it is not a phone.

NEXT: I Was An Atheist for the FBI

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  1. Makes sense to me, because cable’s like wires and stuff like a phone line, and Vonage software is like numbers and things made out of electricty or something.

  2. When is a door not a door?

    When it’s ajar!

  3. Another oafish’l decision by the government. Maybe Vonage should offer foan service, just to clarify things a little more.

  4. It should come as no surprise to anyone that at least half of this idiocy involves the always entertaining 9th Circuit.

  5. There is a certain logic in the notion that companies that string wires should be treated
    alike, and companies that provide services over IP should be treated alike.

  6. I, for one, welcome our new judicial overlords.

  7. the rulings make some sense. you’re twisting them into their most non-sensical form by making cable the crux of both.

    internet telephony doesn’t care whether it’s sent over cable or copper phone wire or fiber or thru the aether. So it’s a misleading to focus on the fact that some VoIP calls (which one court says can’t be treated as a traditional phone service) might ride for part of their journey over cable lines(which another judge says should be treated
    in exactly the same way as phone wires). There are plenty of VoIP calls that wont be hitching a ride on cable at all. It’s not the medium that matters, its the method of VoIP calls.

    Furthermore, inasmuch as some cable companies exist as govt created geographical monoploies (such as in my hometown, Philly) these firms were granted a further monoploy advantage with the advent of the cable modem market. At least in those particular circumstances I’d say the 9th circuit ryling redresses to some extent the original injustice of the state created monopolies. Though that is probably just a happy accident.

  8. Gubmint mottos, the world over:

    “If it provides a service, TAX IT!”

    “If it earns money, TAX IT!”

    “If we don’t understand it, TAX THE HELL OUT OF IT!”

  9. tom b,

    I saw a reference in Ideas on Liberty a few years back to a study that found cable rates were something like 20% higher in towns where only one company existed as a “regulated monopoly.”

  10. This is a classic example of what happens when government oversteps its bounds.

  11. Yup. Cable one service, with their Normal cable package and cable internet service is about $89/month.

    Monopolies suck.


  12. The Federal Appeals Court did not rule that “cable Net service providers are phone service operators.” They ruled that cable Internet providers are both “information service” providers and “telecommunication service” providers based on the definitions set forth in the ’96 Telecom Act.

    By the same definitions, the Minnesota ruling said that VoIP is an “information service” and not a “telecommunication service.”

    Both are absolutely consistent with each other and the 96 Act and, in my opinion, move us one step closer to some clarity in this mess. Bits are bits and wires are wires.


    I think we all can agree the state created monopolies are a joke.

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