Nov. 9 (Bloomberg) -- U.S. communications regulators barred state governments from applying some rules imposed on telephone services to Internet-based calling sold by companies such as AT&T Corp. and Vonage Holdings Corp.

The Federal Communications Commission voted in Washington to declare that Internet-phone services should be subject only to certain federal regulations.

The ruling is a victory for AT&T and closely held Vonage, which lobbied to minimize government interference in a market that's expected to increase to $776.9 million in two years from $34.5 million in 2003, researcher In-Stat/MDR predicts. FCC Chairman Michael Powell views less regulation as a way to help Internet-based calling flourish.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net.

Last Updated: November 9, 2004 10:37 EST