FCC Issues Fines for Blocking of VoIP

FCC Chairman Michael Powell has slapped Madison River Communications with a $15,000 fine for blocking Voice-over-IP (VoIP) Internet phone calls. The FCC's enforcement action comes less than one month after VoIP provider Vonage filed a complaint asking the US government to investigate allegations that competitors are deliberately blocking the use of its services.

Following the agency's disclosure of the settlement, Powell said, "The industry must adhere to certain consumer protection norms if the Internet is to remain an open platform for innovation."

In the complaint, unnamed competitors were accused of blocking Session Initiation Protocol (SIP) addresses that Vonage relies on to operate its services.

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IP telephony, better known as VoIP, has economized both local and long distance calling with cut-rate prices as other telephone companies scramble to migrate from their Public Switched Telephone Networks. While smaller Internet firms like Vonage and were first-to-market, major companies such as AT&T, SBC and Comcast have recently launched VoIP offerings.

At the time the complaint was filed Powell told reporters that the agency was "on the case" and taking the complaint "pretty seriously."

Yankee Group, a global communications and networking research and consulting firm, forecasts that the VoIP market will nearly triple its subscriber base in 2005 with 2.8 million customers largely in the enterprise. By 2008 that number may swell to 17.5 million provided home users accept IP telephony as a substitute.

Vonage chief executive Jeffrey A. Citron hailed the action as a blow against censorship, comparing VoIP blocking to the ISP-level censorship of editorials, news and entertainment. "Blocking is akin to censorship," Citron said in a statement.

Madison River is declining requests made by the media to comment.

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