Local telephone company sued by Vonage for blocking VoIP calls; FCC investigation launched

• The federal government is looking into allegations that as many as 200 people who switched from traditional telephone service to placing calls via the Internet had their new service disrupted by the local telephone company in their area.
• Vonage declined to identify the phone company involved.
• Vonage, along with competitors such as AT&T Corp. and a number of start-ups, is posing a growing challenge to local and regional phone providers by offering unlimited local and long-distance Internet-calling plans for as little as $20 a month.
• More than 1 million consumers use VoIP, and many businesses are adopting the technology.
• He said Vonage has seen a few other examples of blocking by other phone companies but did not complain about those.
• The allegations could focus new legislative and regulatory attention on a long-simmering issue: whether the small number of phone and cable giants that provide high-speed Internet access to most of the country might undermine, degrade or discriminate against content that relies on their networks to reach homes and businesses.
• With telephone companies' land-based service under siege by wireless and VoIP and cable firms also eyeing the Internet telephone market, VoIP providers that rely on consumers' Internet connections are one obvious potential target.
• They fear a scenario in which the network owners cut deals with certain vendors of Internet content so that their information gets to consumers faster, or with higher quality, at the expense of others.
• Citron, who said Vonage was able to route its customers' calls around the phone company's blocks, regards it as a form of censorship.
• The major phone and cable companies have said that regulation is unnecessary because they have no plans to discriminate and that the problem was purely hypothetical.