A federal court said it will hear Charter Communications’ complaint challenging state authority over interconnected VoIP services. In a Tuesday ruling (in Pacer), the U.S. District Court in Minnesota denied a motion by the Minnesota Public Utilities Commission to dismiss the challenge. Charter’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 Charter 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 Charter and intervenor the VON Coalition said it’s an information service and subject only to FCC regulation (see 1605200015). Judge Susan Nelson said the case involves “questions of fact” that are inappropriate for resolution on a motion to dismiss. The PUC’s “attempt to have these issues resolved as a matter of law by comparison to judicial decisions and FCC orders addressing other services ignores the FCC’s case-by-case approach regarding particular services,” she said. Nelson said FCC decisions cited by the PUC -- including the net neutrality order and its USF order requiring interconnected VoIP to contribute to universal service -- didn’t settle the question of whether interconnected VoIP is a telecom or information service, nor did the Supreme Court’s 2005 Brand X ruling. The judge said her ruling Tuesday “simply determines that -- in this highly fact-dependent and complex field -- Defendants have not shown as a matter of law that, taking the allegations of the Complaint as true, Charter Phone is necessarily an ‘offering’ of telecommunications. Any such determination must await further proceedings.” The PUC will “vigorously defend its positions” as the case moves forward, a commission spokesman said. VON Coalition Executive Director Glenn Richards called the order “the necessary first step in what we hope will ultimately lead to a decision that the Minnesota PUC has no jurisdiction over interconnected VoIP." VON advocates for VoIP providers including AT&T, Vonage, Google and Microsoft/Skype. State officials have said that the recent U.S. Court of Appeals for the D.C. Circuit decision affirming the FCC net neutrality order may help the PUC fend off the Charter lawsuit (see 1606170049). Charter declined to comment Thursday.

FCC Commissioner Ajit Pai asked for state help in "combating waste, fraud, and abuse" in the Lifeline USF low-income telecom support program "since wireless resellers began participating." Pai wrote to members of public utility commissions in California, Oregon and Texas and a Vermont department to alert them to "some of the abuses we have seen with" the FCC National Lifeline Accountability Database (NLAD). In the letters posted Wednesday, he said he was contacting the four because their states ran their own Lifeline accountability databases and he hoped to learn from their experiences. "NLAD safeguards are critical to preventing duplicate enrollments" in Lifeline, which aren't allowed under the FCC "one-per-household rule," but wireless resellers can override the safeguards, Pai said. "Unfortunately, the NLAD is ripe for abuse," he said, saying the agency proposed a $51 million fine of Total Call Mobile "for its dubious practices" (see 1604080032). The agency's TCM investigation "revealed disturbing trends" in the industry, he said, as wireless resellers completed 5.89 million enrollments October 2014-April 2016 by overriding the safeguards, costing Americans $650 million. Pai said recently $476 million in Lifeline support was questionable and perhaps wasteful (see 1606080062). He asked the state officials to answer questions by Aug. 2 about the Lifeline compliance checks they have in place, potential overrides of safeguards and any remedies they had for potential abuses. The four were: Lisa Hardie, chairwoman of the Oregon PUC; Donna Nelson, chairwoman of the Texas PUC; Michael Picker, president of the California PUC; and Christopher Recchia, commissioner of the Vermont Public Service Department. The FCC recently expanded Lifeline support to broadband service and initiated a shift of Lifeline customer eligibility verification from carriers to a third party (see 1603310056). NARUC and some states have challenged the FCC federal broadband eligible telecom carrier designation mechanism (see 1606030053 and 1607010057).

A New Jersey court affirmed a Board of Public Utilities stipulation for a Verizon broadband deployment requirement. In an opinion Thursday, the New Jersey Superior Court, Appellate Division, denied a challenge to the 2014 BPU decision by the New Jersey Division of Rate Counsel. A 1993 board requirement required Verizon to provide broadband throughout its territory in New Jersey by 2010, but by 2012 the company had completed 99.4 percent. Verizon and the board negotiated a stipulation of settlement, and in 2014, the BPU approved a new plan whereby Verizon must provide broadband within nine months in any census tract where at least 35 customers with no access to broadband or 4G wireless make a request. The Rate Counsel said the decision was unlawful, arbitrary and capricious, and violated the Administrative Procedure Act because it was approved without a hearing. The regulator and telco said no hearing was required and the board satisfied due process by allowing the public to provide input. Verizon said the Rate Counsel should have raised procedural arguments before the board. In the opinion, the court said its role isn’t to decide whether an administrative agency policy is wise but rather if it’s lawful. “Applying this standard to our review, we conclude the Board's decision to approve the stipulation without an evidentiary hearing was supported by sufficient credible evidence on the record as a whole … and was legally correct, essentially for the reasons expressed by the Board in its order approving the stipulation.” Nobody, including the Rate Counsel, requested a hearing in comments to the board ahead of the decision, the court said: “By affording a period for public comment, the Board provided a sufficient hearing for the public and interested stakeholders to question the stipulation and to urge the Board to adopt or reject it.” The court classified the opinion as “unpublished,” meaning it’s non-precedential. The decision pleased Verizon, which is "eager to move forward and continue making the network investments that have made New Jersey one of the most wired states in the country," a spokesman said. The Rate Counsel disagrees with the decision, Division Director Stefanie Brand said. It's reviewing the opinion and considering next steps, she said. The 30,000 to 40,000 people in New Jersey without broadband access "deserve more of a hearing," she said. It's unclear "how they're going to get broadband or whether they're going to get broadband." The BPU "is satisfied" with the ruling recognizing "the wide deference granted" to the agency, including its interpretations of rules and the regulator's "flexibility in determining the most appropriate proceeding process," an agency spokesman emailed Friday.

Telecom companies urged a district court to preclude the California Public Utilities Commission from compelling disclosure of Form 477 data to a third party. AT&T, Comcast, CTIA, Verizon and other industry plaintiffs sought a permanent injunction in a motion (in Pacer) Thursday in U.S. District Court in San Francisco. May 20, the court temporarily banned the CPUC from enforcing a May 3 ruling compelling top ISPs to disclose the data to The Utilities Reform Network, or any third party, as part of a state investigation of market competition (see 1605240014). Earlier in the week, the telecom entities said a CPUC division already has violated that preliminary injunction by disclosing the data to an outside consultant (see 1606290061). Disclosure of Form 477 data, which includes information about phone and broadband deployment, “conflicts with, and poses an obstacle to the fulfillment of, the FCC’s binding rules and policies, and is therefore preempted,” the telecom companies said. The court scheduled argument for Sept. 29.

The Oklahoma Corporation Commission voted 3-0 Thursday to approve final emergency rules to implement state legislation aimed at modernizing the Oklahoma Universal Service Fund. The law, signed May 9 by Gov. Mary Fallin (R), made administrative tweaks and updated the OUSF to account for technology changes, including a provision requiring interconnected VoIP providers to contribute. Per Oklahoma rules, the commission order still needs approval by the governor. At the OCC’s meeting, Chairman Bob Anthony called for strong auditing of the fund, saying the rules should specify that government officials can call for a special audit, paid for by the OUSF, when appropriate. “I have made the statement numerous times that we have overpaid out of this program millions of dollars,” he said. The new law is a step forward for the OUSF, emailed Deborah Sovereign, chief financial officer of Kellogg & Sovereign, a consulting firm that advises schools and libraries on the E-rate program. “Once fully implemented, we expect the fund demand to decrease."

A California legislative committee cleared two parts of a proposed Democratic package to overhaul the Public Utilities Commission (see 1606270076). At a hearing Wednesday, the Assembly Utilities and Commerce Committee voted to move Democratic bills SB-215 and SB-512 to the Assembly floor. The bills already passed the Senate. Proposed reforms address “the serious problems we’ve had” with the CPUC, Sen. Mark Leno (D) said at the committee hearing. He said it provides “greater transparency” and ensures “the commission serves the people of California and not the special interests that they are intended to regulate.” Leno said additional amendments are forthcoming “as we put the final touches on the agreement and resolution that we’ve reached with the administration.” The proposal isn’t as “ambitious” as one Leno proposed last year, he noted. “This is a compromise solution. Nobody got everything, but … the administration did work with us. This is a major step forward.”

Telecom companies alleged violation of a court injunction by a division of the California Public Utilities Commission that disclosed Form 477 data to an outside consultant. The form includes information about phone and broadband deployment. U.S. District Court in San Francisco on May 20 issued a preliminary injunction temporarily banning the CPUC from disclosing confidential subscription data to third parties in a commission investigation of market competition (see 1605240014). CPUC’s Office of Ratepayer Advocates violated the injunction when it disclosed the Form 477 data to at least one third-party consultant -- Lee Selwyn, president of Economics and Technology Inc. -- claimed AT&T, Comcast, CTIA, Verizon and other industry plaintiffs in a Tuesday motion (in Pacer). Selwyn relied on the data in testimony June 1, while the injunction was in effect, they said. The telecom companies said they confronted ORA. The office didn’t dispute disclosing data to the consultant but claimed it didn’t violate the preliminary injunction. "The disclosure to a consultant who is not a direct employee of the CPUC -- and who over the course of his career has often represented Plaintiffs’ competitors and opponents -- is precisely the type of disclosure prohibited by" the FCC "that formed the basis of the preliminary injunction,” the plaintiffs said. “Even if [Selwyn] scrupulously abides by the terms of the Protective Order, he cannot ‘unsee’ the Form 477 data, and questions will invariably arise about the extent to which his future work for private parties makes use of those data, even unintentionally." The telcos urged the court to enforce the preliminary injunction and enter civil contempt sanctions against the defendants. Or the court should order the CPUC to retrieve all Form 477 data that has been disclosed to anyone not a direct employee of the CPUC, withdraw Selwyn’s testimony, bar that agency from taking any actions based on the testimony and prohibit ORA any other parties from using Selwyn as a witness in the case. ORA didn’t comment Wednesday.

Verizon said it would probably participate in a proposed Maryland communication system to facilitate the transfer of utility pole attachments. Public Service Commission technical staff recommended May 12 that all Maryland utilities participate in the National Joint Utilities Notification System (NJUNS) to enhance communications and accountability for joint operations among state utilities. In Maryland, Verizon both owns poles and attaches facilities to poles owned by others. In comments Monday in docket PC38, Verizon said it’s “willing to participate in NJUNS and work with the Commission and the industry to do so, but only if there is industry consensus to adopt NJUNS statewide.” The PSC shouldn’t “attempt to force the industry to adopt it if other significant industry members oppose doing so,” it said.

A New York bill that could have stopped diversion of the state’s 911 fee revenue failed. The legislature wrapped its session this month without bringing to vote S-6297, which would have prohibited diversion of any government funds, including 911, for purposes other than for what the fund originally was intended. The bill’s sponsor, Sen. Daniel Squadron (D), won’t be able to reintroduce the measure until January, when the legislature returns. New York and two other states that divert the most 911 fee revenue are seen as unlikely to quit the practice soon, our research found (see 1605270020). New York diverted 41.6 percent of 911 revenue, or $77.3 million, to the state’s general fund in 2014, the FCC said in its most-recent report to Congress about such fee collection.

The Pennsylvania Public Utility Commission plans a hearing July 27 on Verizon’s buy of XO Communications, the PUC said in an order Wednesday. It confirmed agreements from a prehearing conference June 16. The hearing starts at 10 a.m. in Harrisburg. The PUC set an Aug. 12 filing deadline for main briefs in the matter and Aug. 24 for reply briefs. It granted petitions to intervene by Core Communications and the Office of Small Business Advocate. The commission said it encourages settlements: “The parties are strongly urged to seriously explore this possibility.” Verizon and XO had asked the PUC to skip the hearing and OK the deal Sept. 1 (see 1606160042).