Judge suspends Vonage order

A federal judge on Tuesday ordered Minnesota regulators to stop forcing Internet phone provider Vonage to abide by state telephone operator rules.

Judge Michael J. Davis made his decision during oral argument between lawyers for Vonage and the Minnesota Public Utilities Commission, according to his clerk's office. A written order will be made available publicly by Friday.

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"We're very pleased," Vonage spokesman Mitchell Slepian said.

The order bars Minnesota's Public Utilities Commission from treating Vonage, and presumably other voice-over-Internet Protocol (VoIP) providers, as it does regular telephone companies. In August, the state ordered Vonage to get the proper telephone company business licenses and to immediately pay fees to the state's Department of Administration to support 911 services.

IP phone service is a cheaper form of telephone calling that uses the Internet, instead of a public telephone network. Free services like Skype are drawing hundreds of thousands of users, while Vonage and other subscription Net phone providers are drawing in new converts at a healthy pace. Cable companies are also using IP phone service to enter the local phone dialing business.