March 3, 2005 1:08 PM PST

Telco agrees to stop blocking VoIP calls

A North Carolina telecommunications company accused of deliberately blocking Internet phone traffic has reached a deal with federal regulators to halt the controversial practice.

The Federal Communications Commission said Thursday that Madison River Communication will "refrain from blocking" VoIP, or voice over Internet Protocol, calls and will pay a $15,000 fine to the government.

"We saw a problem, and we acted swiftly to ensure that Internet voice service remains a viable option for consumers," FCC Chairman Michael Powell said in a statement. The consent decree prevents Madison River from VoIP blocking for 30 months.

Based in Mebane, N.C., Madison River reported $194.4 million in revenue for the 2004 calendar year from 120,649 residential voice subscribers, 60,563 business voice subscribers, and 39,562 DSL customers. The company has filed a registration statement for a proposed initial public offering.

VoIP provider Vonage confirmed that Madison River was the broadband provider it complained to the FCC about earlier this month, leading to the FCC's investigation.

"We're very pleased that the commission took very swift action to address the concerns that we had regarding an Internet service provider's ability to block our customers' communications with each other," Vonage CEO Jeffrey Citron said. "This sends a clear message that port blocking will not be tolerated."

Port blocking occurs when a company may prevent certain types of Internet traffic from traveling through its networks, for instance in an attempt to prevent voice subscribers from switching to VoIP.

Port blocking isn't reserved for high-profile VoIP carriers like Vonage. Nuvio, a small Net phone service provider based in Kansas City, Mo., says its customers' calls have been affected by at least one cable operator. Nuvio has yet to make any formal complaint to the FCC, however. In September, Nuvio told the FCC that port blocking was inevitable, given just how easy it was to do and the economic incentives for doing so.

Vonage's Citron said Madison River was the largest company to attempt port-blocking against Vonage customers. "We've identified one or two others that are very small," Citron said, adding that the information will be forwarded to the FCC. Many large cable companies have pledged never to engage in the practice.

Madison River did not immediately return phone calls.

CNET's Ben Charny contributed to this report.


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Voice over IP
VoIP: I notice it long time year 1998, That Voip will be block by a certain carrier, however if VoIP community will act again blocking the port' the telco willnot be allowed to distibuted DSL or
IP address.Voip users/provider will be lost. and every telco claiming to take the rigths and previledge.
Posted by (1 comment )
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Bandwidth throttling?
I have heard from several people that Comcast throttles the bandwidth of Vonage users. Where is the FCC on this?
Posted by jj45 (14 comments )
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The telecos will undoubtedly find ways to throttle the VoIP industry in the short term, but ultimately they're going to have to come to terms with it. Like it or not, the net is poised to overtake conventional telephone businesses - much like it did the print industries (newspapers, books, phone directories).

VoIP is here to stay.
Posted by hydroace (1 comment )
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