FCC Will Help Telecoms Dodge State Regulations For VoIP Services

The United States Federal Communications Commission placed its thumb on the scale of a court case being fought by Charter Communications to avoid regulatory requirements in the state of Minnesota.

The FCC chose the side of the telecommunications company, filing an amicus brief in support of Charter as it fights against the Minnesota Public Utilities Commission’s (MPUC) consumer protection rules for Voice over Internet Protocol (VoIP) phone services.

At issue is the MPUC’s attempt to impose utility-style rules to VoIP services provided by telecommunications companies. The state attempted to classify the internet-based phone service the same way that broadband internet has been classified under Title II of the Communications Act, which would make the service considered a public utility and would give the state more regulatory power over how it is managed.

In particular, the state would like Charter to start collecting fees from customers that would be used to contribute to state programs that help low-income individuals and families, as well as hearing-impaired people access phone services. The MPUC would also serve as a consumer advocate in cases of complaints filed by citizens against Charter.

Charter has thus far ducked the regulations put in place by the state by shifting its phone service to a subsidiary company. Despite still using VoIP technology to provide its phone service, Charter has argued that its subsidiary is not subject to the MPUC’s jurisdiction.

According to the state’s filing in the legal dispute, "Charter unilaterally transferred all its Minnesota residential consumers...to its new Charter Advanced subsidiaries, which it contends are not subject to the MPUC's jurisdiction. Charter Advanced does not have and has not sought authority from the MPUC to provide telecommunications service in Minnesota."

According to the state, Charter made the decision to create the Charter Advanced subsidiary company and continue its operation within the state’s borders "without notice to or approval by the MPUC."

Prior to the dispute between Charter and Minnesota, the FCC had not taken a definitive position on how VoIP services could be regulated. Landline phones and mobile phone services are both classified as “telecommunications services” by the commission, which places them under the Title II framework used to regulate broadband internet.

VoIP services have continued to operate in a gray area, somewhere between the Title II utility classification and the Title I “information services” classification, which provides the government with less regulatory levers.

Under the leadership of Chairman Ajit Pai, appointed to the position by President Donald Trump, the FCC appears to have decided to take a position on the issue—and the position favors the wants of cable companies.

"The Minnesota PUC's sweeping demand that Charter comply with the state's full panoply of legacy telephone regulations, even though the FCC has not classified VoIP as a telecommunications service, threatens to disrupt the national voice services market," the FCC said in an amicus brief supporting Charter.

The decision to back the cable company may represent the FCC drawing a line in the sand as debate over state-level telecommunications regulations heat up. Earlier this month, Comcast started pressing the commission to use its powers to prevent states from creating net neutrality laws at a local level that would replace the rules that are set to be revoked at a national level.