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Ruling on Internet phone service leaves consumer protection in limbo

Tuesday, Nov. 9, 2004
Contact: Mark Cooper, CFA, 301-384-2204
Janee Briesemeister, CU, 512-477-4431, ext. 117

Federal Ruling on Internet Phone Service Leaves Public Safety, Consumer Protection in Limbo

FCC rules VoIP is an “interstate” service not subject to state regulations such as E911, but fails to enact federal standards

(Washington, D.C.) — Today’s ruling by the Federal Communications Commission (FCC) found that Vonage’s Voice over Internet Protocol (VoIP) phone service is an “interstate” service that is not subject to state jurisdiction, but failed to address a comprehensive framework for public safety, consumer protection and universal service, according to Consumers Union and the Consumer Federation of America.
“The FCC took all of the authority and none of the responsibility,” said Mark Cooper, director of research for Consumer Federation of America. “This ruling gave VoIP providers everything they asked for, but did not consider what consumers need. New technologies such as VoIP could be a great benefit to consumers, but this piecemeal approach to tackling the tough public policy questions puts consumers at risk.”
Added Janee Briesemeister, senior policy analyst for Consumers Union: “By approving the Vonage petition, the FCC tied the hands of state regulators who have asserted that VoIP is no different than traditional phone service in terms of public safety, universal service and consumer protection.
“If the FCC thinks the states don’t have the authority to ensure public safety, consumer protection and universal service for consumers, then it should have provided a framework for doing so — but it did not,” Briesemeister added. “Companies are now free to market VoIP as an alternative to traditional phone service, while consumers are left in limbo over vital issues, such as whether E911 will work on their Internet phone.”