Why today's upholding of FCC VoIP regulations ruling really won't matter much

As Reuters reported this afternoon,  a U.S. appeals court has upheld a decision that exempted Internet telephone companies such as Vonage from many state regulations and oversight.

As Reuters reported this afternoon,  a U.S. appeals court has upheld a decision that exempted Internet telephone companies such as Vonage from many state regulations and oversight. The U.S. Court of Appeals for the Eighth Circuit backed a 2004 decision by the Federal Communications Commission that exempted Internet telephone companies from rate regulation and from being required to seek certification before offering service.

I'm sorry, but I don't view this decision as transformative to current competition models as some analysts do.

Two reasons:

1. We're now in a political/economic place where many state and local governments are running budget surpluses. This state of affairs makes it less likely that jurisdictions will go cherry picking for easy targets to regulate. Easy targets that don't have the clout of huge telcos and cable providers that are already licensed by those jurisdictions.

2. There haven't been too many local efforts to regulate VoIP, but still, free-standing VoIP providers are competitively overmatched by the broadband monopolists who seek to bundle VoIP and other services. So to put it another way, how does the prohibition of an already-rare practice (i.e. attempts at state/local regulation of Internet phone services) alter the existing competitive environment?

What do you think?

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