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‘Vonage Order’ Sets Precedent

Clarity Sought on Rules for States’ VoIP Regulation

The FCC should formally deny states’ regulatory authority over entry, rates and other conditions of VoIP services, said a group of 12 Internet, telecom and VoIP companies, Thursday. Google, AT&T, Verizon, Skype, Microsoft and eight other companies and associations asked the FCC to “exercise caution” as it considered a petition filed by the Kansas and Nebraska commissions to require interconnected VoIP providers to pay state universal service fees.

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The FCC’s 2004 “Vonage Order” sets a jurisdictional precedent that should be adhered to by state commissions, the groups said. In that decision the FCC said that Minnesota regulators could not require Vonage or other “IP-enabled services having the same capabilities” to pay state USF contributions (WID Sept/09 11 p5). “The 2004 Vonage Order was based on technology that hasn’t changed,” said Becky Schwartz, a director at the Telecommunications Industry Association, one of the groups that filed the letter. “There are still no jurisdictional boundaries when it comes to VoIP.”

States are still trying to regulate VoIP services despite the 2004 decision, said the group in its letter to the FCC. “We would like to have some clarity and uniformity in [the FCC’s] regulation of VoIP services,” said Danielle Coffey, vice president of government affairs at TIA. The groups also said that VoIP is inherently interstate in nature and “resists traditional regulatory categories.

Pending reformation of the universal service fund is another reason to keep VoIP regulation out of states’ hands, members of the group said. “A year from now we might have an entirely different system,” said Glenn Richards, a representative of one of the groups, the VON Coalition. “Why perpetuate something today that may be completely different a year from now?”

States should not be able to apply their regulations retroactively in the event that the FCC does authorize state commissions to regulate VoIP service providers, Richards said. “States would then attempt to go after VoIP providers who felt they were acting in good faith all those years,” said Richards.