The 8th U.S. Appeals Court should rehear en banc Nebraska’s appea...

Louis-based court found May 1 that a U.S. District Court in Nebraska properly upheld an injunction Vonage obtained prohibiting Nebraska’s utility commission from assessing the VoIP company (CD May 4, p5). The en banc request challenges what the state called the panel’s “overbroad reading” of the FCC Vonage preemption order that the appeals court cited in rebuffing Nebraska. Contrary to what the 8th Circuit said, Vonage would not have succeeded with a claim to preemption that it deployed to obtain the injunction, the state argued. “Further, the Decision is based on a misapplication of the impossibility exception employed by the FCC to preempt such entry regulations,” Nebraska officials said in petitioning to have the ruling vacated and an en banc rehearing set. “Indeed, the United States and FCC submitted an amicus brief in this case in support of the NPSC, asserting that the Vonage Preemption Order ‘did not address, let alone preempt, the state-level universal service obligations of interconnected VoIP providers…’, and that the impossibility exception did not preclude the NPSC from placing this requirement on Vonage, as the NPSC’s NUSF Order ‘does not present a conflict with the FCC’s rules or policies.” The Nebraska utility commission’s order that Vonage pay into the state fund “does not conflict with any federal regulatory policy or impair the FCC’s authority to regulate the interstate aspect of interconnected VoIP service,” the state said. “In fact, its action is entirely consistent with the FCC’s imposition of USF contribution requirements on Vonage and other interconnected VoIP providers. The ‘impossibility exception’ relied on in the Decision thus does not apply.” In seeking an en banc rehearing, the state faces “an upstream swim,” said Brad Ramsay, general counsel for the National Association of Regulatory Utility Commissioners. “What’s in Nebraska’s favor is that there’s no question but that the court got it wrong. From a policy, legal and commonsense perspective, the May 1 ruling makes no sense. The question is, will the other judges be willing to act or will they defer to their brother jurists? If the judges really look at this case, they should reverse and rehear.” The May 1 ruling stands to imperil state universal service funds and the federal USF, Ramsay said. “Everything is migrating to VoIP -- not necessarily nomadic, but VoIP nonetheless,” he said. “There are 23 states with universal service funds. If those funds aren’t there, the rates in those states will go up significantly, and there will be a greater burden on the federal fund. This is really bad.” NARUC, which filed an amicus brief on Nebraska’s behalf in the earlier appeal, may weigh in on the en banc request as well, Ramsay said.