Court Backs Injunction on Nebraska VoIP Surcharge

     (CN) – In a victory for Vonage, the 8th Circuit upheld an injunction barring Nebraska officials from collecting surcharges to subsidize telecommunications services in high-cost and remote areas of the state.

     Vonage objected to the fees it had to collect and remit to the Nebraska Telecommunication Universal Service Fund for providing nomadic voice-over-Internet-protocol (VoIP) services. Nomadic service, as opposed to fixed service, allows a customer to use VoIP by connecting to the Internet wherever a broadband connection is available.
     Nebraska’s surcharge came on the heels of a 2006 Federal Communication Commission order directing interconnected VoIP service providers to collect a federal “universal service fund” surcharge. As a result, Nebraska VoIP service providers were required to collect fees on interstate and intrastate services.
     Vonage won an injunction after arguing that federal law pre-empts the Nebraska surcharge.
     The federal appeals court in St. Louis agreed that the FCC has “sole regulatory control.”
     “Thus, while a universal service fund surcharge could be assessed for intrastate VoIP services,” Judge Bye wrote, “the FCC has made it clear that it, and not state commissions, has the responsibility to decide if such regulations will be applied.”

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