Is VoIP a telecommunication service or information service? This question comes to fore in the wake of ongoing legal battle between Vonage and the city of Baltimore recently.

The City of Baltimore has filed a case against Vonage America claiming the Internet phone service provider is avoiding the telephony excise tax.

The tax amounting a monthly charge of $3.50 was imposed way back to 2004 on telephone lines as part of Mayor Martin O’Malley’s plan to fill the budgetary deficit. The tax not only applies to the cell phones and land lines but also to Internet phone services, writes a Baltimore site.

However, Vonage has declined to pay the tax. The company claims that its Internet phone service is not telecommunication service, rather an information service. The company is ready to fight against the suit.

With legal battle dominating the mainstream, it is high time for the FCC to set a fresh guideline to determine whether VoIP is information service or telecommunication service.