Charter Says Minnesota Lacks Authority Over VoIP

Charter’s latest filing asserted that the state’s telecom statutes don't apply to interconnected VoIP and that the technological differences between that service and wireline preclude any holding that VoIP is a phone service under Minnesota law. Charter didn't comment Friday.

There have been similar attempts by states, such as Vermont, to establish jurisdiction over VoIP services, but courts have ruled that federal law pre-empts any regulation on the state’s part. This also happened in Minnesota more than a decade ago with Vonage, when the FCC said other forms of VoIP would likely be pre-empted, said Executive Director Glenn Richards of the Voice on the Net (VON) Coalition, whose members include AT&T, Google, Microsoft/Skype and Vonage. Minnesota’s look at the rules is broader than any other state, he said, and the decision to regulate this kind of service at the state level is against federal law. “What the Minnesota decision does is it basically re-reads the Vonage order,” Richards said. “They're taking the position that what Charter does -- which is what they're calling a fixed VoIP service -- is different than what Vonage does and as a result, under their state statutes and under federal laws as they read them, that [state regulation of] the service is not preempted and the commission can assert jurisdiction.”

The issue isn’t that the PUC ruled about the regulation of VoIP services, but whether one service isn't regulated when another one is, said Ron Elwood, Legal Services Advocacy Project supervising attorney. No consumer calls a company and asks for VoIP or a phone service using copper rather than fiber, so the industry shouldn’t be regulated by the way the service is delivered, he said. It's counter to the purpose of telecom -- and other public utilities services -- to deregulate, Elwood said. “Congress has set up a regulatory system which is out of sync with what the consumers are purchasing -- they're not purchasing the technology, they're purchasing the service,” he said. “To completely eliminate any regulatory ground rules and oversight runs completely counter to the fundamental nature of the industry. And the risk of losing those protections is great and the consequences would be seriously adverse.”

The case began in March 2013, when Charter transferred 100,000 Minnesota customers to an affiliate, Charter Advanced Services Cos., which provided VoIP phone service that wasn't certified by the PUC. Charter didn't notify or seek approval from the PUC. The Minnesota Department of Commerce alleged that, in doing so, Charter did not collect the required fees for Telecommunications Access Minnesota (TAM), which provides accessibility equipment and support for the Minnesota Relay service that allows individuals who are deaf, hard-of-hearing, deaf-blind or speech-disabled to communicate over the phone, a spokesman said.

In the case against Charter, several of PUC commissioners argued that neither the courts nor the FCC have established exclusive federal authority over fixed VoIP. The Minnesota commission ruled unanimously in May that phone service provided by a cable company is a telecom service subject to state oversight, making it the first state to establish jurisdiction over fixed VoIP. In its ruling, the PUC ordered Charter to comply with all Minnesota laws and rules that apply to local phone service. The commission didn't comment Friday.