On January 30, 2013, the Kansas Corporation Commission released an order finding that TWC Digital Phone (News - Alert) LLC should be classified as a “public utility” due to its provision of fixed interconnected VoIP services in the state. The KCC determined that TWC must obtain a certificate of convenience and authority authorizing it to offer services in Kansas, and have an approved tariff on file. The KCC rejected TWC’s arguments that the 2004 FCC (News - Alert) Vonage Order preempted state regulation of TWC’s service. Instead, the KCC found that unlike Vonage’s nomadic service, TWC’s service was fixed. Noting that the FCC’s preemption decision was primarily based on the VoIP provider’s inability to geographically locate the customer, it found the Vonage (News - Alert) Order inapplicable to TWC’s fixed service. 

Two weeks after the KCC’s order, legislation was introduced in the Kansas House of Representatives to deregulate VoIP and other IP-enabled services in the state. If passed, VoIP would remain subject to state Universal Service Fund and 911 obligations, but would not be otherwise subject to regulation by the KCC. The legislation was passed by the Kansas House of Representatives on February 28, and was sent to the Senate for consideration. 

The KCC’s action to regulate fixed interconnected VoIP services follows a long line of cases in the states considering the limits of the Vonage Order with respect to fixed VoIP services. A number of state regulators over the years have struggled with this issue, with several concluding that fixed VoIP should be regulated in the same manner as traditional telecommunications services. The Kansas legislation, however, seeks to overturn the KCC’s decision, and if passed, Kansas would join the ranks of several other states to have recently taken a legislative deregulatory approach to VoIP services.

William B. Wilhelm (News - Alert) is a partner and Jeffrey R. Strenkowski is of counsel at the global law firm of Bingham McCutchen LLP (www.bingham.com).