Vonage Not a Telecommunications Service, Apppeals Court Says

The 8th U.S. Circuit Court of Appeals has upheld a lower court ruling that Vonage is not a telecommunications service provider, and is not required to contribute to the Nebraska Universal Service Fund.

The logic, of course, is that independent VoIP companies such as Vonage provide an “information service” rather than a “telecommunications” service. But the regulatory regime has to be considered unstable.

Cable companies do pay into the USF fund, for example. Also, the time is coming when lots of portals, Web sites and other providers will be offering such information services.

At some point, the typical regulator test--if it walks like a duck, and talks like a duck, it's a duck--will have to be addressed. The regulatory wall between "information services" and "communications services" is going to be hard to maintain, long term.