Mozilla Case Could Have Ramifications for VoIP Pre-emption

This is a guest article written by Adam Bender in which he quotes Martha Buyer
A fight over states seeking to regulate interconnected VoIP could return to the Supreme Court if it reviews the 2017 FCC net neutrality repeal, some experts told us. The court last month denied certiori to the Minnesota Public Utilities Commission, which appealed an 8th U.S. Circuit Court of Appeals' decision that VoIP is an information service exempt from state regulation (see 1910210059). Justices Clarence Thomas and Neil Gorsuch’s concurrence said their court should address in an “appropriate” case an underlying question about if federal nonregulation can pre-empt state regulation. That's seen opening a new path of attack for states.

“Giving pre-emptive effect to a federal agency policy of nonregulation … expands the power of both the Executive and the Judiciary,” wrote Thomas and Gorsuch. “It authorizes the Executive to make ‘Law’ by declining to act, and it authorizes the courts to conduct ‘a freewheeling judicial inquiry’ into the facts of federal nonregulation.”

The net neutrality case presents the question posed by Thomas and Gorsuch, said Indiana University Media School's Barbara Cherry, in the FCC Office of Strategic Planning 2002-06. In that case, the U.S. Court of Appeals for the D.C. Circuit said the FCC decision not to regulate doesn’t necessarily stop states, the law professor said. “That’s the actual issue that Thomas is flagging,” and could be a reason the high court would take up Mozilla, she said.

Thomas and Gorsuch “can be read as an invitation to file cert on the preemption question,” emailed NARUC General Counsel Brad Ramsay. The concurring statement says nothing about VoIP classification but shows “this isn’t the final word on preemption of state oversight over services that are classified as information services,” he said. It “goes to the heart of the FCC’s argument that it can preempt -- via conflict preemption -- State net neutrality laws.”

“The underlying legal issue is much greater than just whether or not the states have the authority to regulate VoIP,” said telecom attorney Martha Buyer: Can states can step in on any issue where the federal has opted out? “This is such an important constitutional issue that it could come up almost anywhere where federal regulation exists,” she said. “The splitting of these legal hairs could have significant ramifications for technology down the road.”

Thomas and Gorsuch raised “an interesting question” that might “inspire the FCC to rule that VoIP is an information service, which would finally put an end to whatever ambiguity may still exist,” emailed Voice on the Net Coalition Executive Director Glenn Richards. Denying cert to Minnesota pleased VoIP providers intervening in the case, he said. Most legislatures ban state regulation of VoIP, and Richards “would like to think that those states that have not passed such laws will now think twice before attempting to impose additional regulatory obligations on VoIP providers, [but] I am not ready to predict that this is the end of the fight.”

Some doubt the FCC is more motivated now to classify interconnected VoIP. The agency probably “will continue to duck” VoIP classification until Mozilla is resolved, said Cherry. Buyer is “not sure how well it would play” if the FCC says states can’t protect customers of interconnected VoIP: “That doesn’t mean that its majority won’t act while it can, but its actions stand to survive if it chooses to act judiciously rather than politically.” The FCC didn’t comment Friday.

Vermont and California could be future battlegrounds for the VoIP debate, said Ramsay. Vermont sees facilities-based VoIP as subject to state oversight, while a California law restricting Public Utilities Commission oversight of VoIP providers sunsets at the end of this year (see 1909230048), he said. A Comcast motion to reconsider the Vermont Public Utility Commission ruling that VoIP is a telecom service remains pending before the commission, said PUC General Counsel Kyle Landis-Marinello.

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