One of the advantages that VoIP currently has over traditional phone service is in the area of government regulation. This article will discuss why this is true as well as how this is likely to change in the future.

The traditional telephone companies are subject to certain regulations, fees and tariffs that do not apply to any other business. This includes both landline and cellular service. You are no doubt painfully aware of these fees and tariffs, which can sometimes double the basic cost of telephone service. This additional regulation applies to companies that are classified by the FCC as offering “communications” services.

Currently VoIP providers are classified (in rulings by the FCC and the courts) as providers of “information” services. This means that they are not subject to these additional regulations, tariffs and fees. These regulations require more overhead for the “communications” companies. In addition, the extra fees and tariffs are added to the cost of their services. So, at present, VoIP telephone service can provide a significant cost savings, both in basic rates and in the absence of these additional fees.

The key to maintaining the cost savings of decreased regulation is for VoIP providers to keep their classification as “information” providers, rather than as “communications” providers. This classification is controlled by FCC and court rulings, but Congress is responsible for the all of the underlying laws on which rulings are based. Whenever the FCC makes a ruling in this area, it can be contested by either party in the courts. The court rulings provide the final word on the legality of these rulings by the FCC. As mentioned previously, recent court rulings have gone in favor of VoIP service providers by classifying them as information providers.

This likely to change in the future. One reason for this is that many traditional phone carriers have entered the VoIP market, blurring the lines between the two classifications. Another is the potential for increased government revenue that would come from classifying VoIP as a communications service. The government is essentially losing revenue as consumers and businesses move from traditional to VoIP service in increasing numbers. It is not likely that this additional revenue source will remain untapped for long.

Congress will likely have the most influence over this situation in the future. They are responsible for passing the laws governing regulation, which are then interpreted by the FCC and the courts. So any significant changes will probably be due to changes in these laws. If you are currently using VoIP, or plan to begin soon, then contacting your local Congressman would probably be the most effective way to have a say in what happens in the future.

In addition, traditional phone companies have been subjected to increased state and local regulation. While this is mainly due to their classification by the federal government as communications providers, there are state and local laws that affect this regulation. Since VoIP is relatively new, these regulations have not been applied at the state and local level. So keeping abreast of proposed changes by state and local utilities commissions would also be a good idea if you have an interest in keeping regulation of VoIP to a minimum.

The fact remains that VoIP service currently has a cost advantage over traditional phone service due to its classification as an information service. Also, because of much lower overhead costs, VoIP is likely to maintain this advantage even with increased regulation. So now would be a good time to begin choosing a VoIP provider. You can use some of the other tools at this site, such as the VoIP Comparison Chart, to help you in choosing a provider.

This article "VoIP and Government Regulations " is Copyright 2006 Compare-VoIP.net and may not be reproduced.

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