New Mexico regulators told a federal court that their authority t...

Public Regulation Commission in June sought a declaratory judgment from the U.S. District Court in Albuquerque that Vonage is subject to state authority for universal service assessment purposes (Case 08-CV-00607). Vonage filed a counter motion seeking dismissal on grounds that all state authority over VoIP was preempted by the FCC and that it’s impossible to jurisdictionally separate VoIP traffic or revenue. The dispute began late last year, when Vonage refused to comply with a commision order to collect and pay the state universal service surcharge on its intrastate revenue. The commission told the federal court that Vonage was relying on obsolete or inappropriate FCC and federal court pronouncements and ignored more-recent developments that undercut its position. The PRC said it’s possible to jurisdictionally separate interconnected VoIP traffic by using the FCC’s safe-harbor formula that estimates intrastate revenue by deducting from 100 percent the interstate percentage that’s subject to the federal universal service assessment. The state commission said the FCC also prescribes alternative methods for jurisdictionally separating VoIP traffic by revenue allocations or with a traffic study. On preemption, the state commission said Vonage inappropriately cited a March federal district court decision in Nebraska finding the state was preempted by federal policy from imposing a VoIP universal service surcharge. The PRC said that decision was stayed by the 8th U.S. Circuit Court of Appeals in St. Louis pending the outcome of Nebraska’s appeal, and said the FCC this month in a brief to the 8th Circuit stated that it did not preempt states from assessing universal service fees on VoIP providers. The PRC said nothing in its universal service contribution order affected VoIP rates, terms or entry requirements, matters in which the FCC did preempt the states.