More on the Minnesota Vonage ruling

My law-school classmate Andrew McLaughlin writes that:

“The
forces set in motion by Judge Davis’s ruling will, I predict, impel
Congress and/or the FCC to (attempt to) craft a rational nationwide
regulatory regime that fits the all-IP future.”

Welcome to the blogosphere, Andrew! To your point, we can only hope.
I actually think the Minnesota decision could lessen the immediate
pressure to adopt a rational framework at the federal level.
Judge Davis effectively preserved the status quo, in which VOIP
services are de facto unregulated. The ones upset about that
situation are the square-state Senators worried about universal service
funds, but they haven’t made much noise since the FCC turned back their
challenge in 1998. What’s much more likely to provoke FCC action
is a patchwork of states attempting to regulate VOIP. Partly
because it puts in place an outcome contrary to the one the FCC
generally supports, and partly because it’s state regulators stepping
into what the FCC feels is its turf. Don’t underestimate the
power of that second factor.

Meanwhile, my friend and sometime business partner Jeff Pulver is advocating a
five-year moratorium on VOIP regulation, analogous to the moratorium on
Internet-specific taxes. Sorry Jeff. The FCC gave you your
moratorium when it released the “Stevens Report” in 1998. There
are plenty of good reasons not to require VOIP providers to contribute
to universal service subsidies, or to keep them out of the ball of
twine that is traditional telecom regulation. None of them are
reasons to put off the question for half a decade.

I fear that if a moratorium such as Jeff proposes were adopted, we’d
have much more regulation of VOIP at the end of the five years.
At that point, incumbent telcos are likely to be on or over the verge
of bankruptcy, blaming VOIP all the way down. They would have
five years to get those square-state Senators and their constituents
chomping at the bit to end the evil VOIP “subsidy.” And I have to
tell you — whomever is running the FCC in five years won’t be more
favorable to VOIP than Michael Powell.