The Federal Communications Commission announced yesterday that a North Carolina-based telephone company agreed to pay $15,000 and to stop blocking the ability of consumers to use voice-over-Internet calling services instead of regular phone lines.
In the first action of its kind, the FCC settled with Madison River Communications Corp., which operates several rural phone companies throughout the Southeast and Midwest.
Calling based on voice over Internet protocol (VoIP) increasingly is being used by businesses and consumers as a substitute for traditional phone service. Although VoIP requires high-speed Internet access, its major providers offer unlimited local, long-distance, and even some international calling for as little as $20 a month.
Vonage Holdings Corp., one of the nation's leading Internet phone companies, had complained that as many as 200 customers had their service blocked by a Madison River subsidiary that provided its phone customers with Internet access.
For those customers who had disconnected their traditional phone lines and were relying solely on Vonage, the blocking meant they had no ability to make calls, even to emergency 911 services.
"The industry must adhere to certain consumer protection norms if the Internet is to remain an open platform for innovation," FCC Chairman Michael K. Powell said in a statement.
A spokesman for Madison River declined to comment, citing the company's pending filing for an initial public offering of its stock.
Vonage chief executive Jeffrey A. Citron praised the FCC for moving quickly.
"Blocking is akin to censorship," Citron said. Voice-over-Internet traffic is just like any other type of content, he said, and if an Internet provider were allowed to block calls, it could also censor certain types of news or entertainment.
"This sends a clear message . . . that interference in broadband communication will not be tolerated by the government," he said.