Eighth Circuit classifies interconnected VoIP as info service, says state reg is preempted

The FCC just got a big boost in its looming fight with states over network neutrality legislation.

The U.S. Court of Appeals for the Eighth Circuit has affirmed that state efforts to regulate information services are preempted by federal law.

That decision came in Charter Advanced Services LLC v. Lange (the state of Minnesota's effort to regulate interconnected VoIP). A district court had concluded that because VoIP was an information service, Minnesota's attempt to regulate it was preempted, and the federal appeals court agreed. 

Actually, the FCC has yet to define how it classifies interconnected VoIP, but the court said the FCC has declined to do so for over a decade so the court did not feel it had to wait around, but could shed its own light on the subject, which it did did (check out footnote three, page six here).

Related: FCC Backs Charter in VoIP Suit

The FCC's Restoring Internet Freedom order reclassified internet access from a telecommunications service, which is generally subject to dual federal and state regulation, to an information service, which is not; eliminated net neutrality rules; and pointed out that state efforts to reinstate them were thus preempted, though several states have done so anyway.

So, the court affirmation that state regulation of an information service is preempted buttresses the FCC's case as it prepares to take on California and other states that have passed, or are planning to pass, net neutrality rule restoration bills in the wake of the FCC's reg rollback last fall. 

“A patchwork quilt of 50 state laws harms investment and innovation in advanced communications services," FCC chair Ajit Pai said of the decision. "That’s why federal law for decades has recognized that states may not regulate information services. The Eighth Circuit’s decision is important for reaffirming that well-established principle: ‘[A]ny state regulation of an information service conflicts with the federal policy of nonregulation’ and is therefore preempted. That is wholly consistent with the approach the FCC has taken under Democratic and Republican Administrations over the last two decades, including in last year’s Restoring Internet Freedom Order.”

An FCC spokesperson was not available for comment on whether the FCC would now launch a proceeding to classify interconnected VoIP as an information service.

“The Eighth Circuit’s decision today holding that Charter’s VoIP service is an 'information service’ not subject to state public utility-like regulation is very significant," said Free State Foundation President Randolph May. "Not only did the decision help clarify the regulatory status of VoIP services, but, more importantly it bolstered the FCC’s contention that state regulation of services determined to be information services under federal law are preempted. While in my view the law on this point was clear before today’s decision, the Eighth Circuit’s decision solidifies the case for preemption of state laws, for example those in Washington or California, that purport to impose net neutrality mandates inconsistent with the FCC’s non-regulation of information services.”

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