VoIP Regulation: State and Federal Developments LAMPERT & O’CONNOR, P.C. 1776 K Street NW, Suite 700 Washington, DC 20006 (202) 887-6230

VoIP Regulation: State and Federal Developments

LAMPERT & O’CONNOR, P.C.1776 K Street NW, Suite 700

Washington, DC 20006(202) 887-6230

www.l-olaw.com [email protected]

MARK J. O’CONNOR

Session EI-04

September 12, 2007

12:45 – 1:30 pm

MARK J. O’CONNOR Lampert & O’Connor, P.C. 1776 K Street NW, Suite 700 Washington, DC 20006 (202) 887-6230 tel www.l-olaw.com

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Introduction

Where is Internet telephony regulation going?

Is the cost of regulation impacting the VoIP bottom-line?

How much more regulation can the industry expect?


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FCC Obligations Imposed onInterconnected VoIP Providers

Title II Regulatory Obligations Imposed on Interconnected VoIP Providers Supply 911 emergency calling capabilities to customers for services that

utilize the PSTN Contribute to the Universal Service Fund (“USF”) Comply with the FCC’s customer proprietary network information (“CPNI”)

rules Comply with the FCC’s disability access requirements, including

Telecommunications Relay Services (“TRS”) requirements and certain obligations

Contribute to the TRS fund Comply with the Communications Assistance for Law

Enforcement Act (“CALEA”) FCC Regulatory Classification of VoIP Services

The FCC has not decided the IP-enabled services NPRM, whether IP-enabled services should be classified as information services or telecommunications services. Does this matter?


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States That Tax or Regulate VoIP Service

23 states currently

tax or regulate

VoIP service


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States That Impose 911 Fees on VoIP Service

13 states currently

impose 911 fees on

VoIP service

Note: Pending legislation could impose 911 fees on VoIP service in California and Pennsylvania


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States That Tax VoIP Service13 states currently tax VoIP

service; 18 states will tax VoIP

service byJan. 1, 2008

Note: Pending legislation could impose VoIP taxes in four additional states

Effective Jan. 1, 2008

Effective Oct. 1, 2007


Effective Nov. 1, 2007



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States with VoIP Consumer Protection Laws

Three states currently have VoIP consumer protection

laws




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States with Pending VoIP Legislation14 states

have proposed or

pending VoIP

legislation


Not yet codified


Tax Pending; Consumer Protection Effective Nov. 15, 2007





Green = 911 Fee

Orange = Tax

Purple = Consumer Protection


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FCC Vonage Decision

The FCC preempted state regulation of Vonage’s VoIP service.

The FCC’s decision was upheld by United States Court of Appeals for the Eighth Circuit.


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FCC Vonage Decision: Key Findings

Vonage’s service is geographically undeterminable. Service is fully portable and numbers are not tied to

user’s home or location.

Vonage’s service is integrated, making the FCC’s end-to-end analysis not readily applicable. Service does not distinguish between local and long-

distance minutes of use; Service offers end users integrated capabilities and

features.


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FCC Vonage Decision: Key Findings (cont.)

No practical means to carve out purely intrastate service. Would require an extensive re-design of Vonage’s service at

a substantial cost; and Such a requirement would be solely for the purpose of

enabling state regulation, because Vonage does not have a service-driven reason to make such changes.

Mandating Vonage to undertake changes to separate out intrastate traffic would conflict with the FCC’s policies of promoting innovative services and broadband development and deployment.


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Open Issues Does FCC Vonage Order preempt current state

VoIP laws vis-à-vis “Vonage-style” VoIP providers? Preemption of state regulation of facilities-based

VoIP services The FCC has not directly addressed preemption of facilities-

based VoIP services. The Eighth Circuit avoided the question of whether the Vonage

Order preempts facilities-based VoIP services. Possible future preemption, litigation over state regulation of

facilities-based VoIP services?


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Open Issues (cont.) Preemption of state regulation of facilities-based

VoIP services (cont.) Not all facilities-based VoIP providers argue that the

Vonage Order should be applied to facilities- based VoIP. In Comcast IP Phone of Missouri v. the Missouri PSC, 2007 U.S. Dist.

LEXIS 3628 (D. Mo. 2007) the Court rejected Comcast’s argument that the Missouri PSC is without legal authority to classify Comcast’s VoIP service as a regulated telecommunications service before the FCC makes such a determination. Comcast did not ask the Court to compare Comcast’s VoIP service to the services at issue in the Vonage Order.


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Conclusion Questions Contact Information:

Phone: (202) 887-6230 Email: [email protected]

Website: www.l-olaw.com

Documents

VoIP Regulation: State and Federal Developments LAMPERT & O’CONNOR, P.C. 1776 K Street NW, Suite 700 Washington, DC 20006 (202) 887-6230