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VoIP: Vonage Petition for Declaratory Ruling Dont be a FOOL; The Law is Not DIY

Petition of Vonage Holdings Corporation for Declaratory Ruling Concerning an Order of the Minnesota Public Utilities Commission, WC Docket No. 04-267, Memorandum Opinion and Order, 19 FCC Rcd 22404 (2004).

     1. "In this Memorandum Opinion and Order (Order), we preempt an order of the Minnesota Public Utilities Commission (Minnesota Commission) applying its traditional “telephone company” regulations to Vonage’s DigitalVoice service, which provides voice over Internet protocol (VoIP) service and other communications capabilities. We conclude that DigitalVoice cannot be separated into interstate and intrastate communications for compliance with Minnesota’s requirements without negating valid federal policies and rules. In so doing, we add to the regulatory certainty we began building with other orders adopted this year regarding VoIP – the Pulver Declaratory Ruling and the AT&T Declaratory Ruling –by making clear that this Commission, not the state commissions, has the responsibility and obligation to decide whether certain regulations apply to DigitalVoice and other IP-enabled services having the same capabilities. For such services, comparable regulations of other states must likewise yield to important federal objectives. Similarly, to the extent that other VoIP services are not the same as Vonage’s but share similar basic characteristics, we believe it highly unlikely that the Commission would fail to preempt state regulation of those services to the same extent. We express no opinion here on the applicability to Vonage of Minnesota’s general laws governing entities conducting business within the state, such as laws concerning taxation; fraud; general commercial dealings; and marketing, advertising, and other business practices. We expect, however, that as we move forward in establishing policy and rules for DigitalVoice and other IP-enabled services, states will continue to play their vital role in protecting consumers from fraud, enforcing fair business practices, for example, in advertising and billing, and generally responding to consumer inquiries and complaints.

     2. Our decision today will permit the industry participants and our colleagues at the state commissions to direct their resources toward helping us answer the questions that remain after today’s Order – questions regarding the regulatory obligations of providers of IP-enabled services. We plan to address these questions in our IP-Enabled Services Proceeding in a manner that fulfills Congress’s directions “to promote the continued development of the Internet” and to “encourage the deployment” of advanced telecommunications capabilities. Meanwhile, this Order clears the way for increased investment and innovation in services like Vonage’s to the benefit of American consumers. "


Minnesota PUC v. FCC, Case No 05-1069 (8th Cir Mar. 2007) Affirming FCC Order in Part, Finding Other Parts of Appeal Not Ripe for Review

Petition for review of FCC order which determined that Voice over Internet Protocol technology was impossible or impractical to separate intrastate components from interstate components and thus preempted state regulation was not arbitrary or capricious. It was not arbitrary or capricious for FCC to fail to classify VoIP as either information service or telecommunications service. FCC properly considered economic burden of identifying geographic endpoints. Any inconsistencies with 911 Order did not render FCC order arbitrary. FCC did not arbitrarily determine state regulation of information service conflicted with federal policy of nonregulation or preempt 911 requirements. NYPSC appeal challenging fixed nomadic VoIP was premature.

  • 1.12.06 Oral Argument MP3
  • 12.1.5 FCC Brief Filed
  • The FCC's Vonage decision has been appealed as follows
  • CA 9th Circuit California v. FCC, No. 05-70007 (9th Cir. filed Jan. 3, 2005)
  • PUC Gives Up Fight Over VOIP, LA Times 4/15/2005
  • MN & NASCUCA 8th Circuit Minnesota Pub. Util. Comm’n v. FCC, No. 05-1069 (8th Cir. filed Jan. 6, 2005)
  • Nat’l Ass’n of State Util. Consumer Advocates v. FCC, No. 05-1122 (8th Cir. filed Jan. 11, 2005)
  • NY 2nd Circuit (reportedly narrow 911 grounds) New York. v. FCC, No. 05-1060 (2d Cir. filed Jan. 7, 2005)
  • OH 6th Circuit Pub. Util. Comm’n of Ohio v. FCC, No. 05-3056 (6th Cir. filed Jan. 7, 2005)
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