Vonage faces another lawsuit

This time it’s from the city of Baltimore. Baltimore has a tax on all phone lines from 2004 and wants Vonage to pay a tax of $3.50 per month for each subscriber using its Internet phone service. Vonage prefers to call itself an information service and thus exempt from the tax. Vonage won a similar case in Minnesota where a judge ruled it an information service.

But there are apparently higher powers at play here. These are the baby Bells who are seeing a drop in their profits with the growth of VoIP. The falling telecom taxes are also hurting state government initiatives to provide telecommunications in the rural areas at subsidized rates.