Successful
transitions to IP-based communications technologies depend on innovative
services remaining unburdened by regulatory restrictions. Before the U.S. Court
of Appeals for the Eighth Circuit is the question of whether VoIP services will
remain largely free from state legacy regulation.
Back in
May, the U.S. District Court for the District of Minnesota sensibly concluded that
Charter’s Spectrum Voice – a VoIP offering – “engages in net protocol
conversion, and that this feature renders it an ‘information service’ under
applicable legal and administrative precedent.” Minnesota regulators
appealed the decision in Charter
Advanced Services (MN) v. Lange to the Eighth Circuit.
In a prior
blog post, I described how the District Court’s reasoning bolsters
the FCC’s Restoring Internet Freedom
proposal to reclassify broadband Internet access services as “information
services” under Title I of the Communications Act. As the District Court ruled,
“transforming”
functional capabilities bring an offering within the scope of Title I’s
information service definition. Comments
filed by the Free State Foundation in the Restoring Internet Freedom proceeding explained that broadband Internet access
services involve even more transforming, processing, and other functional
capabilities to end user subscribers, consistent with Title I classification.
Aside
from its implications for FCC broadband Internet policy, the District Court was
surely correct in deciding the question squarely at issue in Charter Advanced. VoIP offerings that
alter the protocol by which subscriber information is transmitted in order to
provide additional functionality to subscribers transform and process that
information – and thereby come within Title I’s definition of “information
services.”
The merits of the District
Court’s decision are ably defended in a legal brief that Charter filed at the Eighth
Circuit on October 19. As Charter’s brief points out, court precedents support
a Title I conclusion regarding VoIP. Four prior District Courts similarly
concluded that IP-to-TDM network protocol conversion transforms and processes
information within the meaning of Title I.
And
because Spectrum Voice is an information service, Minnesota’s regulation is
preempted. Charter’s brief rightly references the 8th Circuit’s holding in Minnesota Public Utilities Commission v. FCC
(2007) that “any state regulation of an information service conflicts with the
federal policy of nonregulation.” State legacy regulation of VoIP services
would frustrate federal policy behind Title I, which the Eighth Circuit previously
described as: “[A]llowing providers of information services to burgeon and flourish
in an environment of free give-and-take of the market place without the need
for and possible burden of rules, regulations and licensing requirements.”
Next-generation
technology transitions have benefitted from the overwhelming movement in the states
toward non-regulation of VoIP. Charter’s brief cited Dr.
Sherry Lichtenberg’s findings that, as of July 2015, “44 states had
specifically eliminated oversight of VoIP and other IP-enabled services.” The
Minnesota regulators’ power grab is an outlier that ought to be rebuffed, not
repeated. Hopefully, the Eighth Circuit will vindicate the non-regulatory Title
I information services holding in Charter
Advanced Services (MN) v. Lange and help preserve a pro-innovation
environment for VoIP services.
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