Issues over whether voice-over-IP (VOIP) services should be regulated in the same way as traditional telephone services reared their ugly heads today in an earnings conference call for Level 3 Communications Inc. (Nasdaq: LVLT).

Level 3 announced that it has swung to a positive cash-flow in its third quarter, but it warned that hurdles around VOIP regulation need to be settled swiftly and fairly in order for the market to blossom (see Level 3 Reports Q3 Loss). The company reported a net loss for the quarter of $247 million, or 38 cents a share, compared with a loss of $299 million, or 73 cents a share, a year earlier. Revenues totaled $874 million, in line with its recently reduced guidance, but below its year-ago revenues of $1.05 billion.

The company said it cut 380 positions, or 21 percent of the work force during the quarter, which helped it achieve the $40 million in cash flow against a year-ago $34 million outflow.

During its earnings call Thursday, one analyst raised concerns about potential VOIP regulations and how these might affect Level 3’s business going forward.

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— Jo Maitland, Senior Editor, Boardwatch