Voice over Internet Protocol, or VoIP, is rapidly becoming the dominant technology for communications services in Minnesota, replacing antiquated landline telephone service. Communications over an internet connection lower rates for consumer and provide consumers viable alternatives to traditional phone services. According to the Federal Communications Commission, nearly 200 VoIP providers serve more than 1 million consumer and business lines in Minnesota-representing about half of all lines in the state.
VoIP's successful adoption stems from the light regulation by the Federal Communications Commission. Beginning in 2005, the FCC surgically applied important public safety and consumer protection obligations on VoIP, but not the more burdensome regulations that were developed for a monopoly phone system 85 years ago.
The FCC also preempted states from regulating VoIP, allowing providers to expand service and innovate without having to manage 50 different sets of regulations. As a result, at least 37 states have passed legislation prohibiting additional state regulation. In Minnesota, I've authored similar legislation in past sessions to bring Minnesota's telecommunications policy into the 21st Century and out of rotary-dial telephone regulation. The biggest obstacle to moving Minnesota forward has been the State of Minnesota itself.
For 16 years, the Minnesota Public Utilities Commission has attempted to regulate VoIP providers. In 2003, it was Vonage; in 2015, it was Charter. Each of these attempts has failed as both the FCC and the federal courts have found the PUC lacks jurisdiction to regulate. Most recently, in September 2018, the US Court of Appeals for the 8th Circuit rejected the PUC's justification for regulating VoIP services and ruled-once again-that VoIP is an information service and state regulation of information services is preempted by the FCC.
The PUC is now considering requesting the United States Supreme Court review the 8th Circuit Court of Appeals decision. While it's unlikely the Supreme Court will hear the case, because no appellate court has decided otherwise, this uncertainty will not benefit taxpayers, consumers or VoIP providers in Minnesota.
The state of Minnesota has spent hundreds of thousands of dollars in legal fees to unsuccessfully impose its regulatory authority over VoIP - only to lose on five different occasions in federal court (twice in district court, twice at the U.S Court of Appeals and most recently an en banc decision of the entire 8th Circuit). It is time for the PUC to lay down the gloves and give up this fight once and for all. It is time for the PUC to embrace innovation and progress.
Kresha, R-Little Falls, represents District 9B in the Minnesota House of Representatives