FCC Reaches $5 Million Settlement with magicJack

The Federal Communications Commission reached a $5 million settlement with voice over Internet provider (VoIP) magicJack regarding its failure to report its interstate revenues and contribute to the Universal Service Fund. The company, which sells a VoIP telephone service to consumers, agreed to the settlement, along with an extensive compliance plan. magicJack markets itself to consumers as a competitive replacement for traditional telephone service. It uses Internet service to allow consumers to make phone calls to and receive calls from traditional mobile and landline phones. The service includes “traditional” phone services such as caller ID, voicemail, call forwarding, and 411 service. The $5 million settlement resolves the Enforcement Bureau’s investigation and makes clear that magicJack will comply with federal rules going forward.