On August 5, 2010, a group of Voice over Internet Protocol ("VoIP") industry leaders and advocates filed a foreboding ex parte letter with the Federal Communications Commission ("FCC" or "Commission").  The ex parte letter was filed in a proceeding wherein the FCC is considering requests by the Nebraska Public Service Commission and the Kansas Corporation Commission ("State PUCs") to clarify state authority to impose Universal Service Fund obligations on providers of Interconnected VoIP providers.  Signatories to the ex parte include: AT&T, Google, the Information Technology Industry Council, National Association of Manufacturers, Qwest, Microsoft, TechAmerica, the Telecommunications Industry Association, Skype, Verizon, VoIPnet Technologies, and the VON Coalition ("Industry Group"). 

In the ex parte letter, the Industry Group says it believes the Commission is currently circulating a proposed Order that would grant the relief sought by the State PUCs.  In other words, the signatories have reliable information which leads them to conclude the FCC is on the verge of concluding states are NOT PREEMPTED from collecting state universal service fund contributions from certain providers of VoIP services. 

Given the magnitude of such a decision, the Industry Group urges the Commission to exercise restraint, calling on the Commission to ensure its ruling applies prospectively only and is narrowly tailored.  Specifically, the Industry Group urges the Commission to limit any grant of regulatory authority to the states so as "not to disturb or cast any doubt upon [its] longstanding determination that states are preempted from regulating the entry, rates, or other terms and conditions of VoIP services."

Interested clients may review the full text of the ex parte letter at the following link:

VoIP Industry Group Ex Parte Letter

CLIENT ADVISORY

Clients providing interconnected VoIP services are advised that it appears very likely the FCC will grant the relief sought by the State PUCs.  The exact scope and impact of the likely FCC ruling are, as yet, unknown.  Nevertheless, it appears a foregone conclusion that State Utility Commissions will soon gain FCC authority to impose some level of regulation upon providers of interconnected VoIP services, and most likely will be authorized to impose contribution obligations on intrastate revenue.  It is possible the FCC ruling will open the door to additional regulation, as well.  

At the very least, states with existing state-level USF programs and existing regulations or laws which grant their Utility Commissions authority over interconnected VoIP (e.g., Nebraska, Kansas and New Mexico, to name a few) will begin seeking USF contributions immediately upon the effective date of any eventual FCC order.  Such states will likely require companies with customers having billing addresses in these states to register with the State and its Utility Commission, and begin reporting revenue and making contributions.  Furthermore, other states that also have existing USF programs, but which have heretofore refrained from seeking contributions from interconnected VoIP providers, may soon follow suit by implementing regulations to expand their authority, likewise resulting in additional registration and reporting obligations for I-VoIP providers.

In anticipation of the possible expansion of State PUC regulatory compliance and reporting requirements, clients who may be affected by the FCC's impending decision may wish to review our Firm's Compliance & Reporting Service.  Through the firm's Compliance Division, we can assist clients in fulfilling all federally and state-mandated reporting, filing and fee remittance obligations.  If and when the Commission issues its decision on the Nebraska and Kansas Petition, we will provide clients notice.  We would urge affected clients to immediately contact their assigned attorney to discuss the implications of the FCC's decision on their business and to ensure compliance with whatever consequences the FCC's decision has at the state level.