French regulators have launched an investigation into Microsoft's Skype unit after Redmond failed to designate Skype as an electronic communications service.

In France, companies do not have to get regulatory approval in order to operate as an electronic communications service, but they do have to declare themselves one before providing service in the country. "A failure to comply with this obligation does, however, constitute a criminal offence," according to the organization overseeing the effort, known as ARCEP.

Microsoft, however, does not consider Skype - which provides VoIP-based calling service - to be a telecom service.

"Skype is a globally known and used software app that seamlessly enables millions of people to communicate every day via their Internet connection," a Skype spokesman said today. "We have engaged with ARCEP in discussion over the last several months during which we shared our view that Skype is not a provider of electronic communications services under French law. We will continue to work with ARCEP in a constructive fashion to seek agreement on a resolution that ensures people, wherever they are, can continue to rely on Skype as they do today."

ARCEP, however, thinks otherwise since Skype provides a telephone service to the public. That "implies compliance with certain obligations, which include the routing of emergency calls and implementing the means required to perform legally ordered interceptions."

On that front, Skype last year denied that its Microsoft acquisition allowed it to spy on users and record their calls, calling such accusations "false."

Since Microsoft has failed to comply, ARCEP has informed the Paris public prosecutor.

Here in the U.S., the debate over whether Internet-based services are an information or telecom service went all the way to the Supreme Court. In the 2005 Brand X case, the court found that the law distinguishing between telecom and information services was vague and gave the FCC the authority to determine under which category a particular service should be classified. Ultimately, the FCC found that cable broadband was an information service.

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