The whole VoIP industry is breathing a sigh of relief. The Federal Communications Commission has voted that Vonage’s Voice over Internet Protocol (VoIP) phone service is “interstate” in nature, meaning that individual states cannot regulate Vonage as it would a traditional telephone company, nor regulate the rates, terms and conditions of Vonage’s service. This decision is the kind of boost the VoIP sector has been looking for, and will for at-least some time prevent states and cities from meddling in the technology which has barely cracked the half-million mark. FCC voted 5-0 in favor of Vonage.

As expected, we can expect this decision to be challenged by the states and also by the cities, who are seeking their pound of flesh.

I am supremely impressed by FCC Chairman Michael Powell’s remarks on this decision.

Just as consumers personalize their cell phones with ring tones, pictures and applications, the same is possible with internet voice. Consumers have come to expect technology to be tailored to their preferences—“My Amazon,” “My Tivo,” “My Ipod.” Internet voice, ushers in the era of “My Telephone.” Adding enhancements to voice is no longer a highly complex and expensive modification to the network – now it is just a matter of adding to the next software release.

Powell went on to say, “The genius of the Internet is that it knows no boundaries. In cyberspace, distance is dead. The Order recognizes that several technical factors demonstrate that VoIP services are unquestionably interstate in nature. VoIP services are nomadic and presence-oriented, making identification of the end points of any given communications session completely impractical and, frankly, unwise.”