The Federal Communications Commission (FCC) announced 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.
magicJack, which sells a VoIP telephone service to consumers, agreed to the settlement, along with an extensive compliance plan.

“Today’s settlement sends a strong message that we take seriously the requirements on VoIP service providers to meet their legal obligations,” said FCC chairman Ajit Pai.

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.