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.