FCC Rules Vonage is Not Subject to State Jurisdiction
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The FCC ruled that Vonage&#39;s broadband telephony service is not subject to traditional state public utility regulation and asserted its federal authority over VoIP.
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Washington - Phone calls made over the Internet cannot be regulated by states, the Federal Communications Commission said Wednesday.
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Internet phone company Vonage loses a patent case that could threaten its business.
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Federal regulators decided yesterday that local phone companies that build fiber-optic lines to individual homes do not have to share that part of their networks with rivals.
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(InfoWorld) - A federal jury has found that Vonage infringed three Verizon patents and must pay $58 million in damages plus royalties to Verizon, Vonage confirmed Thursday. Verizon sued Vonage last June, alleging the VoIP provider had violated seven of its patents involving the packet-based calling technology. In reality, the giant carrier sued to try to eliminate "a formidable competitor" to part of its traditional phone business, said Vonage spokeswoman Brooke Schulz. Vonage must pay a 5.5 percent royalty rate on future sales to use the Verizon technology. After the verdict, Verizon asked for a permanent injunction to stop Vonage from using the technology altogether, Vonage confirmed. In a statement, Vonage said it expects the verdict to be reversed on appeal. The award was 70 percent lower than the $197 million that Verizon originally sought, Vonage said. There is no basis for an injunction, and Vonage will seek a stay from the Federal Court of Appeals if it is imposed, the company said. Vonage customers should not see any change to their service, Vonage said. "We are proud of our inventors and pleased the jury stood up for the legal protections they deserve," Verizon said in a statement. Â
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WASHINGTON -- The Federal Communications Commission Tuesday yanked jurisdiction on Internet telephony away from states, a decision that could set a major precedent for the industry.
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AT&T claims that Vonage, the internet telephone company, violated a 1996 patent that broadly describe the idea of routing telephone calls over data networks.
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The Federal Communications Commission said yesterday that the federal government, not states, has the authority to regulate phone service provided over the Internet.
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Internet phone company Vonage Holdings  Corp. said on Friday it was not going out of business despite a  jury's verdict a day earlier that it infringed on three patents  owned by Verizon Communications Inc.
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The Supreme Court turned away a challenge Monday to the federal do-not-call registry, ending telemarketers' bid to invoke free-speech arguments to get the popular ban on unwanted phone solicitations thrown out. -AP
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Decision exempts Vonage from Minnesota state telephony laws.
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By MATTHEW BARAKAT ALEXANDRIA, Va. - A federal jury on Thursday found that Internet phone carrier Vonage Holdings Corp. had infringed on Verizon Communications Inc.'s patents and ordered Vonage to pay $58 million.
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(InfoWorld) - The U.S. Federal Communications Commission has ruled that incumbent local exchange carriers must connect to VoIP (voice over Internet Protocol) services, overruling two state public service commission opinions. The FCC on Thursday granted a petition from Time Warner Cable Inc., which had complained that the South Carolina and Nebraska public service commissions had allowed rural local exchange carriers to refuse access to wholesale telecom vendors connecting to Time Warner's VoIP service. The rural carriers had argued that FCC rules don't require them to connect to the wholesale vendors because they don't provide direct voice service to residents. But the FCC said that argument was a misinterpretation of its rules. The FCC "must promote competition in every sector it oversees and create a level playing field among service providers," said FCC Chairman Kevin Martin, in a statement. The FCC decision "ensures that consumers in all areas of the country reap the benefits of competition in the form of lower prices, innovative services and more choice," he added. Time Warner Cable, which was using wholesale transport services from MCI, now part of Verizon Communications Inc., and Sprint Nextel Corp., filed a petition with the FCC last March. The two state commissions had ruled that the services provided by MCI and Sprint did not quality as telecommunications services, and therefore, rural incumbent local exchange carriers were not required to interconnect with them. But four other states required local carriers to connect with the wholesale vendors, Time Warner argued. The FCC, in its decision, said interconnection requirements should apply to both retail and wholesale telecom services. "A contrary decision would impede the important development of wholesale telecommunications and facilities-based VoIP competition," the FCC said in its order.
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In a ruling that could have implications for increasingly popular VoIP services, the FCC ruled today that a VoIP service from Vonage Holdings is not subject to the public utility regulations of individual states.
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An appeals court agreed with a lower court decision that ruled VoIP is a data service and, as such, can&#39;t be regulated by states.
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(InfoWorld) - A federal court ruled on Tuesday that struggling VoIP provider Vonage infringed on patents owned by Sprint Nextel. Jurors in the U.S. District Court in Kansas found that Vonage willfully infringed on Sprint's patents as part of its VoIP service, Vonage said. The jury awarded Sprint $69.5 million in damages, which amounts to 5 percent of Vonage's revenue during the infringing period. Vonage plans to initially ask the court to set aside the verdict, but if that fails, the company will appeal the decision. In the meantime, Vonage will also develop workarounds that don't require Sprint's patents, it said. This is the second legal blow to Vonage this year. A court found earlier this year thatÂ Vonage infringed on Verizon patents. That case came with an injunction that would have prevented Vonage from signing up new customers.Â Vonage won a stay of that injunctionÂ and is appealing the original infringement ruling. Although it's clearly bad news for Vonage to have two patent infringement rulings against it this year, the appeals could change everything, said Seth Ostrow, a partner specializing in patents in Dreier LLP. "Often there are mistakes made during various stages of a case that form the basis for a successful appeal, and that, coupled with the statistics, gives reason to think that Vonage has a significant chance of getting this changed," he said. Statistics show that patent cases often get changed on appeal, he said. In August, Vonage said it had nearly completed rolling out workarounds for two of the three patents claimed by Verizon. Still, the Verizon case alone appears to have slowed growth for the company, the largest independent VoIP provider. In its second quarter this year, Vonage added 57,000 customer lines, compared with 256,000 in the same quarter in the previous year. Vonage has said that Verizon pursued the lawsuit in an effort to eliminate a competitor. Vonage stock opened the day at $1.99 and closed at $1.20, a 33 percent drop. This story was updated on September 25, 2007
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A telecommunications carrier cannot enforce agreements with two cable television carriers that prevent them from offering competing voice services in parts of Pennsylvania, according to a settlement with the U.S. Department of Justice.