Voice Communication over the Internet

Background

Voice over Internet Protocol (VoIP) technology is increasingly popular. It allows consumers to make phone calls over a broadband internet connection sometimes called an Internet phone. VoIP has fewer consumer protections than traditional landline phone service. This is because states are barred from regulating some types of VoIP.

There are two types of VoIP.

  • Fixed—service is interconnected to the landline network and allows users to call or be called by anyone with a telephone number, including local, long-distance, mobile, and international numbers. 
  • Nonfixed—a service or application enables users to call other people anywhere in the world without charge as long as the recipients are also using the same service or application.

This distinction is important because states are barred from regulating nonfixed VoIP.

Fixed VoIP is subject to state jurisdiction, and some states have, among other actions, required fixed VoIP providers to contribute to state universal service funds, file annual reports with state regulators, and develop a customer complaint process. In contrast, other states have enacted laws that exempt all types of VoIP service from state jurisdiction.

VOICE COMMUNICATION OVER THE INTERNET: Policy

Voice over internet protocol (VoIP)

In this policy: FederalState

Policymakers should ensure that all consumers have ready access to affordable, reliable, and high-quality voice telecommunications service. This should include minimum consumer protections. These standards should apply whether consumers have a traditional landline, subscribe to a VoIP service, or use another alternative.

Among other goals, policymakers should:

  • ensure that all VoIP service includes Enhanced 911 capability (see also Enhanced 911 Service section of this chapter);
  • preserve the dual state-federal system of regulating providers of voice communication service for VoIP services by maintaining states’ authority to adopt service-quality and other consumer protections for VoIP, and further strengthen minimum federal requirements for VoIP providers;
  • require VoIP providers to pay into state universal service funds;
  • allow VoIP providers to achieve eligible telecommunications carrier status and receive universal service funding if they meet mandated requirements;
  • require VoIP providers to comply with federal and state truth-in-billing standards so that consumers can easily understand their bills;
  • establish service termination requirements and procedures and prohibit VoIP providers from imposing unfair early termination penalties on subscribers;
  • prohibit VoIP providers from imposing separate monthly line-item charges, surcharges, or other fees on customers’ bills unless such charges have been expressly mandated by federal, state, or local law;
  • require VoIP providers to provide full up-front disclosures regarding the limitations of VoIP service; and
  • ensure that all VoIP service includes Enhanced 911 capability.