Net telephony cracks appear

The first cracks may be appearing in Internet telephony.

Portugal, the Czech Republic, Hungary, Iceland and two South Sea islands, Micronesia and Palau have banned the technology from their countries, according to IDT, maker of the Net2Phone Net telephony product. The first four are all signatories to the World Trade Organisation Accord in Europe, committing them to deregulating telecommunications.

"[Micronesia and Palau] had every right but the others didn't," said Sarah Hofstetter, director of public relations for IDT. "They said they would deregulate but they haven't. I don't think they expected Net telephony to appear as quickly as it has and, with phone-to-phone [Internet-based telephony] here, it really poses a serious threat to PTT."

Hofstetter said she was informed of the Net telephony ban by the FCC.