News

Calif. Appeals FCC VoIP Order

12/30/2004 6:19 AM Eastern

California regulators are challenging a federal ruling in November that barred states from regulating voice-over-Internet-protocol providers, including cable companies, as traditional phone-service providers.

The California Public Utilities Commission filed an appeal in the Ninth U.S. Circuit Court of Appeals Dec. 22 alleging that the Federal Communications Commission had exceeded its authority in shielding VoIP providers from traditional state regulation.

The case could set the stage for another conflict between the FCC and the Ninth Circuit, which, in October 2003, rejected the commission’s attempt to classify cable’s high-speed modem service as an unregulated information service. That dispute is now before the U.S. Supreme Court.

In its decision, the FCC held that Vonage Holdings Corp. -- a leading VoIP provider with 300,000 subscribers -- is an interstate service beyond the scope of state regulation. The agency said the ruling also applied to VoIP services offered by cable companies.

States have traditionally required phone providers to seek state approval to enter the business, to file rate cards with state commissions and to link emergency-calling services with emergency responders. The FCC voided those requirements, which Minnesota tried to impose on Vonage.

FCC leaders said pre-emption was necessary because VoIP providers should not have to copy with the uncertainty of dealing with regulations that vary from state to state.

Also Dec. 22, the U.S. Court of Appeals for the Eighth Circuit upheld a permanent injunction against Minnesota that Vonage had obtained from a lower court.

The court said the FCC’s order pre-empting state regulation of VoIP supported the injunction, and opposition to the FCC’s ruling had to be brought in a separate case. California regulators began that process with the Ninth Circuit appeal.

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