Feds expected to ease Net phone rules

The nation's top telephone regulators are widely expected to decide on Tuesday to further deregulate Internet phone services.

States would be barred from imposing telecommunications regulations on Net phone providers, which treat calls no differently than any other application on the Internet, according to those familiar with the Federal Communications Commission. That class of operators includes Vonage Holdings, which asked the FCC for just such a designation last May, plus Verizon Communications, AT&T and dozens of other commercial Internet providers, according to those familiar with the FCC's thinking.

"This is going to be huge," said Jeff Pulver, co-founder of Free World Dialup, a free PC-to-PC telephone service provider that won exemption from federal and state regulations last year. "Otherwise, anyone who wanted to offer Internet phone services could be subject to 51 different sets of state regulations." A tougher regulatory stance may hurt projections that VoIP services will expand from the 1 million homes foreseen at year's end to about 10 million by the end of the decade. As traditional phone carriers see more local calls flow over the Internet rather than their own more expensive networks, they have been adding their own VoIP-based services to lure business customers away from those companies that specialize in Net phone technology.

News source: C|Net News.com

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