Federal Court Rules Minnesota Can't Regulate VoIP Internet Calls

A Minnesota agency may not regulate calls through cyberspace as it does calls through traditional phone lines, a federal appeals court ruled.
The Tuesday order by the Eighth U.S. Circuit Court of Appeals in St. Louis upholds a lower-court ruling and is a win for fledgling companies like Vonage Holdings Corp. of Edison, N.J., which provides Voice over Internet Protocol, or VoIP.
The Minnesota Public Utilities Commission had argued that VoIP companies were providing phone-like service and therefore should be regulated as phone companies are. But those businesses said they provide an information service rather than a telecommunications service.
VoIP converts the sound of a voice into packets of data, sends them across the Internet, and reassembles them into sound on the other end of a call.