Vonage Holdings Corp. has been griping about an unidentified ISP blocking the VoIP provider's traffic. The identity of the culprit was revealed yesterday as the Federal Communications Commission (FCC) announced that North Carolina-based telco Madison River Communication agreed to pay a $15,000 fine and stop blocking voice Vonage traffic on its ISP network. As part of the negotiated settlement, the FCC agreed to drop its investigation of the matter. While U.S. cable MSOs have privately fantasized about squashing Vonage traffic, which they perceive as a parasite getting a free ride on their cable modem networks, none have done so in practice to the best of our knowledge. In reality of course, MSOs don't need to block Vonage traffic, or that of other VoIP providers. Instead, simply rolling out PacketCable phone services may achieve the same effect, albeit without the use of active discriminatory network practices. You see, cable's upstream IP network bandwidth remains a limited resource. Once MSOs' begin guaranteeing upstream quality of service (QoS) for PacketCable voice traffic, other VoIP providers will be left fighting for what's left on the best-effort data network. Such indirect service degradation is the reality that VoIP providers like Vonage must face to survive in the coming years.