Vonage’s Nebraska USF Win Holds Implications for Fixed VoIP

The question of state authority over VoIP USF contributions stems from the 2004 Vonage Order. The FCC had said states couldn’t regulate Vonage VoIP because of its nomadic nature, the inability to separate interstate and intrastate traffic. The Minnesota Public Utilities Commission (PUC) disagreed and took the matter to court. It lost.

Now much of the legal holdup over state-level VoIP oversight depends on the scope of the Vonage Order. Judge Camp’s decree contributes to the debate over fixed and nomadic VoIP regulation. The outcome will have lasting effects, Bingham McCutchen’s Wilhelm said. “This definitely is a battleground,” he said. “[Nebraska] is not the only state that’s considered imposing these fees, so it does have a wider impact than just Nebraska.”

August 2003: State of Minnesota declares it can regulate VoIP provider Vonage

October 2003: Federal judge tells Minnesota it doesn’t have oversight over Vonage

November 2004: Court hears Minnesota’s appeal

November 2004: FCC declares services such as those from Vonage do no have to comply with regulations such as tariffs or E911, or get certification from states, because they are nomadic.

January 2005: More states fight for right to regulate VoIP

March 2007:  Appeals court rules in favor of Vonage

August 2007: Verizon asks for expansion of Vonage Order, for federal-only oversight of all VoIP services

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