On July 28, 2015, the Minnesota Public Utilities Commission (“Commission”) released an Order finding that fixed, interconnected VoIP services offered by Charter Fiberlink Companies (“Charter”) constituted local telephone service subject to the Commission’s regulatory jurisdiction. Furthermore, the Commission found that neither the FCC nor the Eighth Circuit had preempted the Commission’s regulation of the specific type of fixed I-VoIP services offered by Charter.
The Commission concluded that Charter’s fixed I-VoIP services fell within its definition of “Local Service” because they: (1) provided customers with dial tone; and (2) access to the PSTN. “Local Service” is defined by the Commission’s rules as “dial tone, access to the public switched network, and any related services provided in conjunction with dial tone and access.” Thus, since Charter’s fixed I-VoIP services comported with the Commission’s “Local Service” definition, the Commission concluded that it had authority to regulate Charter’s services as local telephone service pursuant to its general authority to do so under Minn. Stat. Ch. 237.
Furthermore, the Commission dodged federal preemption issues by concluding that “neither the FCC nor any court with jurisdiction in Minnesota has preempted the Commission’s authority over the fixed VoIP service that Charter provides in this state.” Instead, the Commission noted that the Eighth Circuit previously affirmed in Vonage Holdings Corp. v. Minn. Pub. Utilities Commission that the Commission’s authority over VoIP services would be preempted where such services were nomadic, and not based on a carrier’s use of “protocol conversion.”
The Commission also argued that Charter’s I-VoIP services fell within the federal definition of telecommunications service, and not information service – as argued by Charter. This was because Charter was offering a transmission service, and merely used protocol conversion “for the management, control, or operation” of its systems – which fell within the FCC’s management exception to the definition of an information service. Thus, the Commission concluded that it could regulate Charter’s I-VoIP services as telecommunications services without violating federal law.
While the Minnesota PUC’s Order appears to extend the Commission’s jurisdiction over a specific type of interconnected VoIP service on very narrow grounds, it is nevertheless important for companies selling VoIP services to evaluate the decision to determine whether, and if so, the extent to which the decision may be impactful. Clients with questions or concerns regarding the implications of the Minnesota Public Utilities Commission’s Order should contact the attorney assigned to their account, or Keenan Adamchak at firstname.lastname@example.org or (703) 714-1323.