Minnesota Defends Regulating VoIP; Iowa May Exclude It
Two state commissions diverged on whether they should regulate fixed interconnected VoIP. Tuesday at U.S. District Court in St. Paul, the Minnesota Public Utilities Commission defended its treatment of interconnected VoIP as a telecom service and sought summary judgment. Wednesday, the Iowa Utilities Board (IUB) proposed a revised definition of phone utilities that explicitly would exclude IP and VoIP services. The VON Coalition, which represents VoIP providers and opposed the Minnesota PUC as an intervenor, praised the direction of the Iowa proposal. Industry also last week supported state legislation to codify VoIP deregulation in Idaho.
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The federal court scheduled oral argument on Charter’s lawsuit against the Minnesota PUC for Dec. 13 at 11 a.m. in St. Paul. The court will hear separate motions for summary judgment filed Tuesday by the state commission (in Pacer) and Charter (in Pacer). The cable operator’s complaint alleged the PUC overstepped its authority by imposing state regulations for traditional phone services on VoIP services. The case began in March 2013, when the company transferred 100,000 Minnesota customers to an affiliate that provided VoIP phone service that wasn't certified by the PUC. The agency said interconnected VoIP is a telecom service subject to state regulation, but the operator and the VON Coalition said it’s an information service subject only to FCC regulation (see 1607070037).
“Based on functionality, marketing materials, and technical details about Charter Phone, it is properly classified as a telecommunications service subject to the [Minnesota] Commission’s jurisdiction,” commissioners said in a supporting memo (in Pacer). Charter’s 2013 reorganization changed nothing, they said. "For over a decade, Charter Advanced and its predecessors offered VoIP telephony to Minnesotans under the Commission’s authority without objection. That changed March 1, 2013, when Charter Fiberlink unilaterally assigned its retail VoIP customers to Charter Advanced, apparently to avoid state regulation. In response to a Complaint by the Minnesota Department of Commerce, the Commission affirmed its jurisdiction and required Charter Advanced to once again comply with Minnesota law.”
If the court won’t issue summary judgment, it should refer the matter to the FCC, the Minnesota commissioners argued. “Primary jurisdiction referral to the FCC may be warranted here. Charter Advanced’s claims require resolution of an issue under the Telecommunications Act, which the FCC is charged with administering.”
Iowa regulators sought to clarify their lack of authority over VoIP in a Wednesday order proposing changes to several rules. The Iowa Utilities Board (IUB) sought comment on a new definition for phone utility that specifies it "does not include a provider of internet protocol-enabled service or voice over internet protocol service. ... The Board shall not directly or indirectly regulate the entry, rates, terms, or conditions for internet protocol-enabled service or voice over internet protocol service, [but] voice over internet protocol service may be subject to fees subsequently established by state statute, such as 911 or Dual Party Relay Service.” The IUB also sought comment on refined definitions for IP-enabled service and VoIP service and the impact of all three revised definitions on “the Board's goal of technologically neutral application of its rules.”
Comments are due Nov. 23 on the Iowa proposals. The VON Coalition is “still evaluating the VoIP provision [in Iowa] but at first blush this appears to be a very positive development,” Executive Director Glenn Richards emailed. Previously in the Iowa proceeding (docket RMU-2015-0002), AT&T and Verizon supported complete deregulation of fixed interconnected VoIP, but T-Mobile and Windstream said the IUB should maintain regulation at least for wholesale VoIP service. The Office of Consumer Advocate and Iowa Communications Alliance said the board should regulate all interconnected VoIP services (see 1609060027).
The Iowa proposal to deregulate VoIP is "bad public policy" that "creates an unfair advantage for some local exchange service providers over others," Iowa Communications Alliance CEO Dave Duncan emailed Wednesday. "We do not believe the Board has the authority [to] unilaterally deregulate VoIP service as it proposes to do, which we believe is in direct contradiction to legislative directive and intent." The board should reduce regulation for all phone service providers, he said. Considering the Iowa regulator's statements that it wants to be technology neutral, the alliance "cannot understand why the Board decided to now proceed by creating different standards based solely on the technologies being used," he said.
The telecom industry also is pushing to codify into state law Idaho's current practice of not regulating VoIP and other IP services. In March, legislators asked the PUC to convene a group of parties to discuss the issue. In reply comments last week posted to a VoIP deregulation webpage set up by the PUC, CenturyLink supported VoIP deregulation "as long as the legislation also mandates that VoIP providers and wireless providers pay the various taxes, fees and surcharges that telecommunication providers are required to pay." Frontier supported that view in a separate reply. The VON Coalition said the 36 states that have deregulated VoIP "understand there is no benefit to imposing legacy telephone regulations on VoIP, and that investment will be lost and competition restrained if regulatory ambiguities are allowed to remain in place."