Free ride over for VoIP?
A cheap, Internet-based alternative to traditional telephone service is facing a sudden regulatory backlash that could slow adoption of the fast-growing technology, raise prices and put financially shaky start-ups out of business.
Two weeks ago, Minnesota drew first blood. It ordered so-called VoIP (voice over IP) provider Vonage Holdings to file for a telephone operator's license. Many see the move, the first attempt by a state public utilities commission to regulate an Internet telephony provider, as the beginning of a new regulatory framework for Internet telephone operators in the state.
Telephone regulators in Alabama, North Carolina, Michigan, Colorado, Illinois, Virginia, Pennsylvania and Ohio are all at various stages of drafting some IP telephony regulations. The Federal Communications Commission could also adopt new rules for VoIP operators soon, signaling the end of the honeymoon for an industry that's operated to date with no official oversight.
