Open Internet Court Ruling May Support States Treating VoIP as Telecom
Tuesday’s court ruling on net neutrality may support state regulation of facilities-based VoIP services, said state officials in interviews Friday. The U.S. Court of Appeals for the D.C. Circuit upheld FCC reclassification of broadband as a telecom service under Title II of the Communications Act (see 1606140023). Since telecom services are subject to more regulation than information services under the statute, the D.C. Circuit ruling could help resolve a question that has been raised in courtrooms, state legislatures and utilities commissions across the country, said state officials: Is VoIP a telecom or information service?
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The ruling “supports the idea that communications is communications,” regardless of the underlying technology, said Sherry Lichtenberg, principal for telecommunications research and policy at the National Regulatory Research Institute, a research arm of NARUC. In other words, VoIP should be regulated like a traditional voice telecom service, she said: “We need to see how it plays out, but it certainly begins to answer that question that nobody wants to answer."
That finding supports states in court battles that turn on the VoIP classification question, said NARUC President Travis Kavulla. “It will undoubtedly strengthen the case of the states,” he said. “If broadband is a telecommunications service, and because VoIP is functionally indistinguishable from traditional telephone services, it too must be a telecommunications service.”
NARUC plans to refer to the net neutrality ruling in its appeal of the 2015 FCC number portability order, said Kavulla. The order allowed interconnected VoIP providers to obtain phone numbers directly from numbering administrators, and NARUC has said the commission couldn't do that without classifying VoIP as a telecom service (see 1605200002). “Our counsel is going to file ... a letter with the D.C. Circuit notifying them of the relevance of the Open Internet ruling that the same Circuit issued,” Kavulla said. Also, the D.C. Circuit decision may help the Minnesota Public Utilities Commission fend off a Charter Communications lawsuit in the U.S. District Court in Minnesota, Kavulla and Lichtenberg agreed. Charter sued the PUC for imposing state regulations for traditional phone services on a VoIP, which Charter deems an information service (see 1605060027).
The D.C. Circuit ruling could also have impact for the FCC Lifeline order, which states have challenged in the same appeals court (see 1606030053), said Lichtenberg. “It supports the FCC’s ability to offer broadband as a supported service because the [Telecom] Act says a supported service must be communications.” It may bolster the NARUC case because states are responsible for designating telecommunications eligible telecommunications carriers, she said.
“The FCC for the last 12 years has been extremely vague on whether [interconnected VoIP] qualifies as an information service or a telecommunications service,” said Kavulla. “Unfortunately, you see this trend where the FCC kind of leaps a hurdle by avoiding another.” Even with the D.C. Circuit ruling, the FCC still needs to explicitly clarify whether VoIP is a telecom or information service, he said. “Just because they classified broadband as a telecommunications service doesn’t mean that states somehow have a bevy of new powers, because of the way they wrote the open Internet order.”
“Now that the FCC's classification of broadband as Title II has been upheld, states also have whatever Title II jurisdiction they possess in state law that is left after the FCC's forbearances,” emailed attorney David Bergmann of Telecom Policy Consulting for Consumers. “State laws that were based on the broadband information services classification should now be open to question or re-examination.” Bergmann is counsel to NASUCA.
The ruling empowers state authority over interconnection “because it does appear to bring IP interconnection under the Section 251/252 requirements for the states to evaluate and arbitrate interconnection agreements,” Lichtenberg said. State lawmakers will need to take another look at telecom legislation, she said. About 30 state legislatures have decided that IP services shouldn't be regulated, she said. They make exceptions for Section 251/252 interconnection and 911 services, with another subset stating that it will follow rules laid out by the FCC.
State regulators have already brought up the net neutrality decision in official settings. Wednesday in the 6th U.S. Circuit, Tennessee and the FCC sparred on the ruling’s impact on the case about the agency’s ability to pre-empt states on municipal broadband (see 1606160039). The same day, during the New York Public Service Commission’s vote on the Altice takeover of Cablevision (see 1606150056), Chairwoman Audrey Zibelman pointed to the D.C. Circuit ruling as showing that broadband is a utility and essential service.
“Facilities-based VoIP is not really distinguishable from regular telephony in any legally meaningful way,” emailed Public Knowledge senior staff attorney John Bergmayer. “The court’s decision confirms … that simply adding IP to a service doesn’t magically exempt it from regulation.”