**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+---------------------------------+
| In the Matter of                 | * | > WC Docket No. 03-211          |
|                                  | * |                                 |
| Vonage Holdings Corporation      | ) |                                 |
|                                  | ) |                                 |
| Petition for Declaratory Ruling  | ) |                                 |
| Concerning an Order of the       | ) |                                 |
| Minnesota Public Utilities       | ) |                                 |
| Commission                       | * |                                 |
|                                  | * |                                 |
|                                  |   |                                 |
|                                  | * |                                 |
|                                  | * |                                 |
|                                  | ) |                                 |
|                                  | * |                                 |
|                                  | * |                                 |
+----------------------------------+---+---------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted: November 9, 2004 Released: November 12, 2004**

By the Commission: Chairman Powell and Commissioner Abernathy issuing
separate statements; Commissioners Copps and Adelstein concurring and
issuing separate statements.

**TABLE OF CONTENTS**

**Paragraph**

I. INTRODUCTION [1](#introduction)

II\. BACKGROUND 3

A. Vonage's DigitalVoice Service 4

B. History of Vonage's Petition 10

III\. DISCUSSION 14

A. Preemption of the *Minnesota Vonage Order* 15

1\. Commission Jurisdiction over DigitalVoice 16

2\. Commission Authority To Preempt State Regulations 19

3\. Conflict With Commission Rules and Policies 20

4\. Preemption Based on "Impossibility" 23

5\. Policies and Goals of the 1996 Act Consistent With Preemption of
Minnesota's Regulations 33

B. Commerce Clause 38

C. Public Safety Issues 42

IV\. CONCLUSION 46

V. ORDERING CLAUSES 47

**APPENDIX -- LIST OF COMMENTERS**

# INTRODUCTION

1.  In this Memorandum Opinion and Order (Order), we preempt an order of
    the Minnesota Public Utilities Commission (Minnesota Commission)
    applying its traditional "telephone company" regulations to Vonage's
    DigitalVoice service, which provides voice over Internet protocol
    (VoIP) service and other communications capabilities. We conclude
    that DigitalVoice cannot be separated into interstate and intrastate
    communications for compliance with Minnesota's requirements without
    negating valid federal policies and rules. In so doing, we add to
    the regulatory certainty we began building with other orders adopted
    this year regarding VoIP -- the *Pulver Declaratory Ruling*[^1] and
    the *AT&T* *Declaratory Ruling*[^2] -- by making clear that this
    Commission, not the state commissions, has the responsibility and
    obligation to decide whether certain regulations apply to
    DigitalVoice and other IP-enabled services having the same
    capabilities. For such services, comparable regulations of other
    states must likewise yield to important federal objectives.
    Similarly, to the extent that other VoIP services are not the same
    as Vonage's but share similar basic characteristics, we believe it
    highly unlikely that the Commission would fail to preempt state
    regulation of those services to the same extent.[^3] We express no
    opinion here on the applicability to Vonage of Minnesota's general
    laws governing entities conducting business within the state, such
    as laws concerning taxation; fraud; general commercial dealings; and
    marketing, advertising, and other business practices. We expect,
    however, that as we move forward in establishing policy and rules
    for DigitalVoice and other IP-enabled services, states will continue
    to play their vital role in protecting consumers from fraud,
    enforcing fair business practices, for example, in advertising and
    billing, and generally responding to consumer inquiries and
    complaints.

2.  Our decision today will permit the industry participants and our
    colleagues at the state commissions to direct their resources toward
    helping us answer the questions that remain after today's Order --
    questions regarding the regulatory obligations of providers of
    IP-enabled services. We plan to address these questions in our
    *IP-Enabled Services Proceeding*[^4] in a manner that fulfills
    Congress's directions "to promote the continued development of the
    Internet"[^5] and to "encourage the deployment" of advanced
    telecommunications capabilities.[^6] Meanwhile, this Order clears
    the way for increased investment and innovation in services like
    Vonage's to the benefit of American consumers.

# BACKGROUND

3.  On September 22, 2003, Vonage filed a petition for declaratory
    ruling[^7] requesting that the Commission preempt an order of the
    Minnesota Commission imposing regulations applicable to providers of
    telephone service on Vonage's DigitalVoice.[^8]

## Vonage's DigitalVoice Service

4.  DigitalVoice is a service[^9] that enables subscribers to originate
    and receive voice communications and provides a host of other
    features and capabilities that allow subscribers to manage their
    personal communications over the Internet.[^10] By enabling the
    sending and receiving of voice communications and providing certain
    familiar enhancements like voicemail, DigitalVoice resembles the
    telephone service provided by the circuit-switched network. But as
    described in detail here, there are fundamental differences between
    the two types of service.

5.  First, Vonage customers must have access to a broadband connection
    to the Internet to use the service.[^11] Because Vonage does not
    offer Internet access services, DigitalVoice customers must obtain a
    broadband connection to the Internet from another provider.[^12] In
    marked contrast to traditional circuit-switched telephony, however,
    it is not relevant where that broadband connection is located or
    even whether it is the same broadband connection every time the
    subscriber accesses the service. Rather, Vonage's service is fully
    portable; customers may use the service anywhere in the world where
    they can find a broadband connection to the Internet.[^13] According
    to Vonage, it does not know where in the world its users are when
    using DigitalVoice.[^14]

6.  Second, Vonage indicates that DigitalVoice requires customers to use
    specialized customer premises equipment (CPE).[^15] Customers may
    choose among several different types of specialized CPE: (1) a
    Multimedia Terminal Adapter (MTA), which contains a digital signal
    processing unit that performs digital-to-audio and audio-to-digital
    conversion and has a standard telephone jack connection; (2) a
    native Internet Protocol (IP) phone; or (3) a personal computer with
    a microphone and speakers, and software to perform the conversion
    (softphone).[^16] Although customers may in some cases attach
    conventional telephones to the specialized CPE that transmits and
    receives these IP packets, a conventional telephone alone will not
    work with Vonage's service.[^17]

7.  Third, DigitalVoice offers customers a suite of integrated
    capabilities and features that allows the user to manage personal
    communications dynamically, including but not limited to real-time,
    multidirectional voice functionality.[^18] In addition to voice,
    these features include voicemail, three-way calling, online account
    and voicemail management, and geographically independent "telephone"
    numbers.[^19] Vonage's Real-Time Online Account Management feature
    allows customers to access their accounts 24 hours a day through an
    Internet web page to manage their communications by configuring
    service features, handling voicemail, and editing user
    information.[^20] At the user's discretion, the user may, among
    other options, play voicemails back through a computer or receive
    them in e-mails with the actual message attached as a sound
    file.[^21] Using other features, users may request that DigitalVoice
    ring simultaneously the user's Vonage number plus any other number
    in the United States or Canada regardless of who provides the
    service connected with that other number.[^22]

8.  Among these features, DigitalVoice provides the capability to
    originate and terminate real-time voice communications. Once the CPE
    and software are installed and configured, the customer may place or
    receive calls over the Internet to or from anyone with a telephone
    number -- including another Vonage customer, a customer of another
    VoIP provider, a customer of a commercial mobile radio service
    (CMRS) provider, or a user reachable only through the public
    switched telephone network (PSTN).[^23] In any case, the
    subscriber's outgoing calls originate on the Internet and are routed
    over the Internet to Vonage's servers. If the destination is another
    Vonage customer or a user on a peered service, the server routes the
    packets to the called party over the Internet and the communication
    also terminates via the Internet.[^24] If the destination is a
    telephone attached to the PSTN, the server converts the IP packets
    into appropriate digital audio signals and connects them to the PSTN
    using the services of telecommunications carriers interconnected to
    the PSTN. If a PSTN user originates a call to a Vonage customer, the
    call is connected, using the services of telecommunications carriers
    interconnected to the PSTN, to the Vonage server, which then
    converts the audio signals into IP packets and routes them to the
    Vonage user over the Internet.[^25] Together, these integrated
    features and capabilities allow customers to control their
    communications needs by determining for themselves how, when, and
    where communications will be sent, received, saved, stored,
    forwarded, and organized.

9.  Fourth, although Vonage's service uses North American Numbering Plan
    (NANP) numbers as the identification mechanism for the user's IP
    address, the NANP number is not necessarily tied to the user's
    physical location for either assignment or use, in contrast to most
    wireline circuit-switched calls.[^26] Rather, as Vonage explains,
    the number correlates to the user's digital signal processor to
    facilitate the exchange of calls between the Internet and the PSTN
    using a convenient mechanism with which users are familiar to
    identify the user's IP address.[^27] In other words, and again in
    marked contrast to traditional circuit-switched telephony, a call to
    a Vonage customer's NANP number can reach that customer anywhere in
    the world and does not require the user to remain at a single
    location.

## History of Vonage's Petition

10. In July 2003, the Minnesota Department of Commerce filed an
    administrative complaint against Vonage with the Minnesota
    Commission, asserting that Vonage was providing telephone exchange
    service in Minnesota and was thus subject to state laws and
    regulations governing a "telephone company." Among other things, the
    laws and regulations in question require such companies to obtain
    operating authority, file tariffs, and provide and fund 911
    emergency services.[^28] The Minnesota Department of Commerce sought
    an administrative order from the Minnesota Commission to compel
    Vonage to comply with these state regulatory requirements. In
    response to the administrative complaint, Vonage argued that these
    state laws and regulations do not apply to it and that, even if they
    do, they are preempted by the Communications Act of 1934, as amended
    (Communications Act or Act).[^29]

11. In September 2003, the Minnesota Commission issued an order
    asserting regulatory jurisdiction over Vonage and ordering the
    company to comply with all state statutes and regulations relating
    to the offering of telephone service in Minnesota.[^30] In so
    holding, the Minnesota Commission declined to decide whether
    Vonage's service is a telecommunications service or an information
    service under the Act. Instead, it found DigitalVoice to be a
    "telephone service" as defined by Minnesota law, thus subjecting
    Vonage to the state requirements for offering such a service. In
    response, Vonage filed suit against the Minnesota Commission in the
    U.S. District Court for the District of Minnesota. In October 2003,
    the district court entered a permanent injunction in favor of
    Vonage.[^31] The court determined that Vonage is providing an
    information service under the Act and that the Act preempts the
    Minnesota Commission's authority to subject such a service to common
    carrier regulation.[^32] The court concluded that "VoIP services
    necessarily are information services, and state regulation over VoIP
    services is not permissible because of the recognizable
    congressional intent to leave the Internet and information services
    largely unregulated."[^33] In January 2004, the court denied a
    motion by the Minnesota Commission for reconsideration, and an
    appeal to the U.S. Court of Appeals for the Eighth Circuit followed.
    The appeal remains pending.[^34]

12. At the same time that it filed suit in the district court in
    Minnesota, Vonage filed the instant petition with the Commission.
    Specifically, Vonage's petition for declaratory ruling requests that
    the Commission preempt the Minnesota Commission's order and find
    that (1) Vonage is a provider of "information services," and is not
    a "telecommunications carrier," as those terms are defined in the
    Act,[^35] and (2) state regulation of this service would unavoidably
    conflict "with the national policy of promoting unregulated
    competition in the Internet and information service market."[^36] In
    the alternative, Vonage seeks a determination that the Minnesota
    Commission's order is preempted because it is impossible to separate
    this service, regardless of its regulatory classification, into
    distinct interstate and intrastate communications.[^37] Vonage also
    seeks a ruling that certain specific E911 requirements imposed by
    the Minnesota Commission are in conflict with federal policies.[^38]
    On August 13, 2004, Vonage submitted additional information to the
    Commission in this matter, requesting that we act expeditiously on
    its pending petition insofar as it concerned the jurisdictional
    nature of the service, explaining that such a determination could be
    rendered independent of the statutory classification of the
    service.[^39]

13. Since Vonage filed its petition, a number of other states have
    opened proceedings to examine the jurisdictional nature of VoIP
    services offered in their states.[^40] For example, in May 2004, the
    New York State Public Service Commission (New York Commission)
    adopted an order finding that Vonage, in offering and providing
    DigitalVoice in New York, is a "telephone corporation" as defined by
    New York state law, and is therefore subject to certain
    requirements.[^41] The New York Commission asserted jurisdiction
    over Vonage and ordered it to obtain state certification and to file
    a tariff, but permitted Vonage to seek waivers of New York
    regulations that it deemed inappropriate or with which it was not
    readily able to comply.[^42] Vonage sought, and in July the U.S.
    District Court for the Southern District of New York granted, a
    preliminary injunction of the *New York Vonage Order*.[^43] The
    court held that "Vonage has shown that it is likely to succeed on
    the merits of its claim that the \[*New York Vonage Order*\] is
    preempted by federal law"; that "Vonage has demonstrated that the
    \[*New York Vonage Order*\] will interfere with interstate
    commerce"; and that this Commission's guidance, via orders in the
    *IP‑Enabled Services Proceeding* or the instant proceeding, "may aid
    in final resolution of the matter."[^44] The court has scheduled a
    status conference on December 13, 2004 to consider whether there is
    a need for further proceedings in this matter, including a
    determination on Vonage's request for permanent injunctive
    relief.[^45]

# DISCUSSION

14. We grant Vonage's petition in part[^46] and preempt the *Minnesota
    Vonage Order.*[^47] We find that the characteristics of DigitalVoice
    preclude any practical identification of, and separation into,
    interstate and intrastate communications for purposes of
    effectuating a dual federal/state regulatory scheme, and that
    permitting Minnesota's regulations would thwart federal law and
    policy. We reach this decision irrespective of the definitional
    classification of DigitalVoice under the Act, *i.e*.,
    telecommunications or information service, a determination we do not
    reach in this Order. Although Congress did not explicitly prescribe
    the regulatory framework for Internet-based communications like
    DigitalVoice when it amended the Act in 1996,[^48] its statements
    regarding the Internet and advanced telecommunications capabilities
    in sections 230 and 706 indicate that our actions here are
    consistent with its intent concerning these emerging technologies.
    In addition, we address the fact that multiple state regulatory
    regimes would likely violate the Commerce Clause because of the
    unavoidable effect that regulation on an intrastate component would
    have on interstate use of this service or use of the service within
    other states. Finally, although we preempt the *Minnesota Vonage
    Order*, including its 911 requirements imposed as a condition to
    entry, we fully expect Vonage to continue its efforts to develop a
    911 capability as we work toward resolving this important public
    safety issue in the *IP-Enabled Services Proceeding* as discussed
    below.[^49]

## Preemption of the *Minnesota Vonage Order* 

15. We begin our analysis by briefly examining the distribution of
    authority over communications services between federal and state
    agencies under the Act. We then discuss judicial precedent that
    recognizes circumstances where state jurisdiction must yield to
    federal jurisdiction through the Commission's authority to preempt
    state regulations that thwart the lawful exercise of federal
    authority over interstate communications. Next, we explain our
    current federal rules and policies for services like DigitalVoice
    followed by our demonstration of the impossibility of separating
    DigitalVoice into interstate and intrastate components for purposes
    of complying with the Minnesota regulations without negating federal
    policies and directly conflicting with our own regulations. We
    conclude that preempting the *Minnesota Vonage Order* is compelled
    to avoid thwarting valid federal objectives for innovative new
    competitive services like DigitalVoice, finding consistency between
    our action here and Congress's articulated policies in sections 230
    and 706 of the Act.

### Commission Jurisdiction over DigitalVoice

16. In the absence of a specific statutory provision regarding
    jurisdiction over services like DigitalVoice, we begin with section
    2 of the Act.[^50] In 1934, Congress set up a dual regulatory regime
    for communications services.[^51] In section 2(a) of the Act,
    Congress has given the Commission exclusive jurisdiction over "all
    interstate and foreign communication" and "all persons engaged . . .
    in such communication."[^52] Section 2(b) of the Act reserves to the
    states jurisdiction "with respect to intrastate communication
    service . . . of any carrier."[^53]

17. In applying section 2 to specific services and facilities, the
    Commission has traditionally applied its so-called "end-to-end
    analysis" based on the physical end points of the
    communication.[^54] Under this analysis, the Commission considers
    the "continuous path of communications," beginning with the end
    point at the inception of a communication to the end point at its
    completion, and has rejected attempts to divide communications at
    any intermediate points.[^55] Using an end-to-end approach, when the
    end points of a carrier's service are within the boundaries of a
    single state the service is deemed a purely intrastate service,
    subject to state jurisdiction for determining appropriate
    regulations to govern such service.[^56] When a service's end points
    are in different states or between a state and a point outside the
    United States, the service is deemed a purely interstate service
    subject to the Commission's exclusive jurisdiction.[^57] Services
    that are capable of communications both between intrastate end
    points and between interstate end points are deemed to be
    "mixed-use" or "jurisdictionally mixed" services.[^58] Mixed-use
    services are generally subject to dual federal/state jurisdiction,
    except where it is impossible or impractical to separate the
    service's intrastate from interstate components and the state
    regulation of the intrastate component interferes with valid federal
    rules or policies.[^59] In such circumstances, the Commission may
    exercise its authority to preempt inconsistent state regulations
    that thwart federal objectives, treating jurisdictionally mixed
    services as interstate with respect to the preempted
    regulations.[^60]

18. Thus, our threshold determination must be whether DigitalVoice is
    purely intrastate (subject only to state jurisdiction) or
    jurisdictionally mixed (subject also to federal jurisdiction). The
    nature of DigitalVoice precludes any suggestion that the service
    could be characterized as a purely intrastate service.[^61] As
    Vonage has indicated, it has over 275,000 subscribers located
    throughout the United States, each with the ability to communicate
    with anyone in the world from anywhere in the world.[^62] While
    DigitalVoice clearly enables intrastate communications, it also
    enables interstate communications. It is therefore a
    jurisdictionally mixed service,[^63] and this Commission has
    exclusive jurisdiction under the Act to determine the policies and
    rules, if any, that govern the interstate aspect of DigitalVoice
    service.[^64]

### Commission Authority To Preempt State Regulations 

19. Although the Communications Act establishes dual federal-state
    authority to regulate certain communications services, courts
    routinely recognize that there may be circumstances where state
    regulation would necessarily conflict with the Commission's valid
    exercise of authority.[^65] Where separating a service into
    interstate and intrastate communications is impossible or
    impractical, the Supreme Court has recognized the Commission's
    authority to preempt state regulation that would thwart or impede
    the lawful exercise of federal authority over the interstate
    component of the communications.[^66] The D.C. Circuit, for example,
    applied this impossibility exception in affirming a Commission order
    preempting state regulation of the rate a local exchange carrier
    (LEC) charged an interexchange carrier for a disconnection
    service.[^67] The court explained that Commission preemption of
    state regulation is permissible when the matter to be regulated has
    both interstate and intrastate aspects; preemption is necessary to
    protect a valid federal regulatory objective; and "state regulation
    would 'negate\[ \] the exercise by the FCC of its own lawful
    authority' because regulation of the interstate aspects of the
    matter cannot be 'unbundled' from regulation of the intrastate
    aspects."[^68] Such is the case with DigitalVoice service as
    discussed in detail below.

### Conflict With Commission Rules and Policies 

20. Regardless of the definitional classification of DigitalVoice under
    the Communications Act, the *Minnesota Vonage Order* directly
    conflicts with our pro-competitive deregulatory rules and policies
    governing entry regulations, tariffing, and other requirements
    arising from these regulations for services such as
    DigitalVoice.[^69] Were DigitalVoice to be classified a
    telecommunications service, Vonage would be considered a
    nondominant, competitive telecommunications provider for which the
    Commission has eliminated entry and tariff filing requirements with
    respect to services like DigitalVoice.[^70] In particular, in
    completely eliminating interstate market entry requirements, the
    Commission reasoned that retaining entry requirements could stifle
    new and innovative services whereas blanket entry authority, *i.e*.,
    unconditional entry, would promote competition.[^71] State entry and
    certification requirements, such as the Minnesota Commission's,
    require the filing of an application which must contain detailed
    information regarding all aspects of the qualifications of the
    would-be service provider, including public disclosure of detailed
    financial information, operational and business plans, and proposed
    service offerings.[^72] The application process can take months and
    result in denial of a certificate, thus preventing entry
    altogether.[^73] Similarly, when the Commission ordered the
    mandatory detariffing of most interstate, domestic, interexchange
    services (including services like DigitalVoice), the Commission
    found that prohibiting such tariffs would promote competition and
    the public interest, and that tariffs for these services *may
    actually harm consumers* by impeding the development of vigorous
    competition.[^74] Tariffs and "price lists," such as those required
    by Minnesota's statutes and rules, are lengthy documents subject to
    specific filing and notice requirements that must contain every
    rate, term, and condition of service offered by the provider,
    including terms and conditions to which the provider may be subject
    in its certificate of authority.[^75] The Minnesota Commission may
    also require the filing of cost-justification information or order a
    change in a rate, term or condition set forth in the tariff.[^76]
    The administrative process involved in entry certification and
    tariff filing requirements, alone, introduces substantial delay in
    time-to-market and ability to respond to changing consumer demands,
    not to mention the impact these processes have on how an entity
    subject to such requirements provides its service.

21. On the other hand, if DigitalVoice were to be classified as an
    information service, it would be subject to the Commission's
    long-standing national policy of nonregulation of information
    services,[^77] particularly regarding economic regulation such as
    the type imposed on Vonage in the *Minnesota Vonage Order*.[^78] In
    a series of proceedings beginning in the 1960's, the Commission
    issued orders finding that economic regulation of information
    services would disserve the public interest because these services
    lacked the monopoly characteristics that led to such regulation of
    common carrier services historically. The Commission found the
    market for these services to be competitive and best able to
    "burgeon and flourish" in an environment of "free give-and-take of
    the market place without the need for and possible burden of rules,
    regulations and licensing requirements."[^79]

22. Thus, under existing Commission precedent, regardless of its
    definitional classification, and unless it is possible to separate a
    Minnesota-only component of DigitalVoice from the interstate
    component, Minnesota's order produces a direct conflict with our
    federal law and policies, and impermissibly encroaches on our
    exclusive jurisdiction over interstate services such as
    DigitalVoice. This notwithstanding, some commenters argue that the
    traditional dual regulatory scheme must nevertheless apply to
    DigitalVoice *because it is functionally similar* to traditional
    local exchange and long distance voice service.[^80] Were it
    appropriate to base our decision today on the applicability of
    Minnesota's "telephone company" regulations to DigitalVoice solely
    on the functional similarities between DigitalVoice and other
    existing voice services (as the Minnesota Commission appears to have
    done),[^81] we would find DigitalVoice *far more similar* to CMRS,
    which provides mobility, is often offered as an all-distance
    service, and needs uniform national treatment on many issues.[^82]
    Indeed, in view of these differences, CMRS, including IP-enabled
    CMRS, is expressly exempt from the type of state economic regulation
    Minnesota seeks to impose on DigitalVoice.[^83] Commenters that
    argue that the Act requires the Commission to recognize state
    jurisdiction over DigitalVoice to the extent it enables "intrastate"
    communications to occur completely ignore the considerations that
    dictate preemption here.[^84] Indeed, the fact that a particular
    service enables communication within a state does not necessarily
    subject it to state economic regulation. We have acknowledged
    similar "intrastate" communications capabilities in other services
    involving the Internet, where for regulatory purposes, treatment as
    an interstate service prevailed despite this "intrastate"
    capability.[^85]

### Preemption Based on "Impossibility" 

23. In this section, we examine whether there is any plausible approach
    to separating DigitalVoice into interstate and intrastate components
    for purposes of enabling dual federal and state regulations to
    coexist without "negating" federal policy and rules.[^86] We find
    none. Without a practical means to separate the service, the
    *Minnesota Vonage Order* unavoidably reaches the interstate
    components of the DigitalVoice service that are subject to exclusive
    federal jurisdiction. Vonage has no means of directly or indirectly
    identifying the geographic location of a DigitalVoice subscriber.
    Even, however, if this information were reliably obtainable,
    Vonage's service is far too multifaceted for simple identification
    of the user's location to indicate jurisdiction. Moreover, the
    significant costs and operational complexities associated with
    modifying or procuring systems to track, record and process
    geographic location information as a necessary aspect of the service
    would substantially reduce the benefits of using the Internet to
    provide the service, and potentially inhibit its deployment and
    continued availability to consumers.[^87]

24. DigitalVoice harnesses the power of the Internet to enable its users
    to establish a virtual presence in multiple locations
    simultaneously, to be reachable anywhere they may find a broadband
    connection, and to manage their communications needs from any
    broadband connection. The Internet's inherently global and open
    architecture obviates the need for any correlation between Vonage's
    DigitalVoice service and its end users' geographic locations. As we
    noted above, however, the Commission has historically applied the
    geographic "end-to-end" analysis to distinguish interstate from
    intrastate communications.[^88] As networks have changed and the
    services provided over them have evolved, the Commission has
    increasingly acknowledged the difficulty of using an end-to-end
    analysis when the services at issue involve the Internet.[^89]
    DigitalVoice shares many of the same characteristics as these other
    services involving the Internet, thus making jurisdictional
    determinations about particular DigitalVoice communications based on
    an end-point approach difficult, if not impossible.[^90]

25. In fact, the geographic location of the end user at any particular
    time is only one clue to a jurisdictional finding under the
    end-to-end analysis. The geographic location of the "termination" of
    the communication is the other clue; yet this is similarly difficult
    or impossible to pinpoint. This "impossibility" results from the
    inherent capability of IP-based services to enable subscribers to
    utilize multiple service features that access different websites or
    IP addresses during the same communication session and to perform
    different types of communications simultaneously, none of which the
    provider has a means to separately track or record.[^91] For
    example, a DigitalVoice user checking voicemail or reconfiguring
    service options would be communicating with a Vonage server. A user
    forwarding a voicemail via e-mail to a colleague using an
    Internet-based e-mail service would be "communicating" with a
    different Internet server or user. An incoming call to a user
    invoking forwarding features could "terminate" anywhere the
    DigitalVoice user has programmed. A communication from a
    DigitalVoice user to a similar IP-enabled provider's user would
    "terminate" to a geographic location unknown either to Vonage or to
    the other provider.[^92] These functionalities in all their
    combinations form an integrated communications service designed to
    overcome geography, not track it. Indeed, it is the total lack of
    dependence on *any* geographically defined location that most
    distinguishes DigitalVoice from other services whose federal or
    state jurisdiction is determined based on the geographic end points
    of the communications.[^93] Consequently, Vonage has no
    service-driven reason to know users' locations,[^94] and Vonage
    asserts it presently has no way to know.[^95] Furthermore, to
    require Vonage to attempt to incorporate geographic "end-point"
    identification capabilities into its service solely to facilitate
    the use of an end-to-end approach would serve no legitimate policy
    purpose.[^96] Rather than encouraging and promoting the development
    of innovative, competitive advanced service offerings,[^97] we would
    be taking the opposite course, molding this new service into the
    same old familiar shape.

26. In the absence of a capability to identify *directly* DigitalVoice
    communications that originate and terminate within the boundaries of
    Minnesota, we still consider whether some method exists to identify
    such communications *indirectly*, such that Minnesota's regulations
    could nonetheless apply to only that "intrastate" usage such as
    voice calls between persons located in the same state.[^98] For
    example, assume Minnesota were to use DigitalVoice subscribers'
    NPA/NXXs as a proxy for those subscribers' geographic locations when
    making or receiving calls. If a subscriber's NPA/NXX were associated
    with Minnesota under the NANP, Minnesota's telephone company
    regulations would attach to every DigitalVoice communication that
    occurred between that subscriber and any other party having a
    Minnesota NPA/NXX. But because subscribers residing anywhere could
    obtain a Minnesota NPA/NXX, a subscriber may never be present in
    Minnesota when communicating with another party that is, yet
    Minnesota would treat those calls as subject to its
    jurisdiction.[^99]

27. Similarly, if a Minnesota NPA/NXX subscriber residing in Minnesota
    used its service outside the state to call someone in Minnesota,
    that call would appear to be an intrastate call when it is actually
    interstate. Some commenters suggest that because Vonage markets
    DigitalVoice to provide "local" and "long distance" calls it surely
    has an ability to distinguish between intrastate and interstate
    calls.[^100] These commenters fail to recognize that these calls are
    not "local" and "long distance" in the sense that they are for
    traditional wireline telephone services. Rather, like we have seen
    with the proxy example above, Vonage describes these calling
    capabilities for convenience in terms that its subscribers
    understand. A DigitalVoice call that would be deemed "local," for
    example, is actually a call between two NPA/NXXs associated with
    particular rate centers in a particular state, yet when the actual
    communication occurs one or both parties can be located outside
    those rate centers, outside the state, or even on opposite ends of
    the world.

28. We further consider whether Minnesota could assert jurisdiction over
    DigitalVoice communications based on whether the subscriber's
    billing address or address of residence are in Minnesota. This too
    fails. When a subscriber with a Minnesota billing address or address
    of residence uses DigitalVoice from any location outside the state
    to call a party located in Minnesota, Minnesota would treat that
    communication as "intrastate" based on the address proxy for that
    subscriber's location, yet in actuality it would be an interstate
    call.[^101]

29. These proxies are very poor fits, yet even their implementation
    would impose substantial costs retrofitting DigitalVoice into a
    traditional voice service model for the sole purpose of making it
    easier to apply traditional voice regulations to only a small aspect
    of Vonage's integrated service.[^102] Forcing such changes to this
    service would greatly diminish the advantages of the Internet\'s
    ubiquitous and open nature that inspire the offering of services
    such as DigitalVoice in the first instance.[^103] Indeed, Vonage
    would have to change multiple aspects of its service operations that
    are not nor were ever designed to incorporate geographic
    considerations, including modifications to systems that track and
    identify subscribers' communications activity and facilitate
    billing; the development of new rate and service structures; and
    sales and marketing efforts,[^104] just for regulatory
    purposes.[^105] The Commission has previously recognized the
    significant efforts and inefficiency to attempt to separate out an
    intrastate component of other services for certain regulatory
    purposes where the provider, like Vonage here, *had no
    service-driven reason to incorporate such capability into its
    operations*.[^106] We have declined to require such separation in
    those circumstances, treating the services at issue as
    jurisdictionally interstate for the particular regulatory purpose at
    issue and preempting state regulation where necessary.[^107] For
    example, in preempting a state regulation specifying default per
    line blocking of a customer's "Caller ID" for intrastate calls based
    on "impossibility," the Commission found that "we need not
    demonstrate absolute future impossibility to justify federal
    preemption here. We need only show that interstate and intrastate
    aspects of a regulated service or facility are inseverable as a
    practical matter in light of prevailing technological and economic
    conditions."[^108]

30. In the case of DigitalVoice, Vonage could not even avoid violating
    Minnesota's order by trying *not* to provide intrastate
    communications in that state.[^109] For the same reasons that Vonage
    cannot identify a communication that occurs within the boundaries of
    a single state, it cannot prevent its users from making such calls
    by attempting to block any calls between people in Minnesota.[^110]
    Indeed, Vonage could not avoid similar "intrastate" regulations if
    imposed by any of the other more than 50 separate jurisdictions. Due
    to the intrinsic ubiquity of the Internet, *nothing short of Vonage
    ceasing to offer its service entirely* could guarantee that any
    subscriber would not engage in some communications where a state may
    deem that communication to be "intrastate" thereby subjecting Vonage
    to its economic regulations absent preemption.

31. There is, quite simply, no practical way to sever DigitalVoice into
    interstate and intrastate communications that enables the *Minnesota
    Vonage Order* to apply only to intrastate calling functionalities
    without also reaching the interstate aspects of DigitalVoice, nor is
    there any way for Vonage to choose to avoid violating that order if
    it continues to offer DigitalVoice anywhere in the world.[^111]
    Thus, to whatever extent, if any, DigitalVoice includes an
    intrastate component, because of the impossibility of separating out
    such a component, we must preempt the *Minnesota Vonage Order*
    because it outright conflicts with federal rules and policies
    governing interstate DigitalVoice communications.

32. Indeed, the practical inseverability of other types of IP-enabled
    services having basic characteristics similar to DigitalVoice would
    likewise preclude state regulation to the same extent as described
    herein. Specifically, these basic characteristics include: a
    requirement for a broadband connection from the user's location; a
    need for IP-compatible CPE; and a service offering that includes a
    suite of integrated capabilities and features, able to be invoked
    sequentially or simultaneously, that allows customers to manage
    personal communications dynamically, including enabling them to
    originate and receive voice communications and access other features
    and capabilities, even video.[^112] In particular, the provision of
    tightly integrated communications capabilities greatly complicates
    the isolation of intrastate communication and counsels against
    patchwork regulation. Accordingly, to the extent other entities,
    such as cable companies, provide VoIP services,[^113] we would
    preempt state regulation to an extent comparable to what we have
    done in this Order.

### Policies **and** Goals of the 1996 Act Consistent With Preemption of Minnesota's Regulations 

33. We find that Congress's directives in sections 230 and 706 of the
    1996 Act are consistent with our decision to preempt Minnesota's
    order. As we have noted, Congress has included a number of
    provisions in the 1996 Act that counsel a single national policy for
    services like DigitalVoice.[^114]

34. Congress's definition of the Internet in the Act recognizes its
    global nature.[^115] In addition to defining the Internet in section
    230 of the Act, Congress used section 230 to articulate its national
    Internet policy. There, Congress stated that "\[i\]t is the policy
    of the United States - to preserve the vibrant and competitive free
    market that presently exists for the Internet and other interactive
    computer services, unfettered by Federal or State regulation."[^116]
    We have already determined in a prior order that section 230(b)(2)
    expresses Congress's clear preference for a national policy to
    accomplish this objective.[^117] In *Pulver*, we found this policy
    to provide support for preventing state attempts to promulgate
    regulations that would apply to Pulver's service.[^118] While we
    found Pulver's FWD service to be an information service, the
    Internet policy Congress included in section 230 is indifferent to
    the statutory classification of services that may "promote its
    continued development."[^119] Rather, it speaks generally to the
    "Internet and other interactive computer services," a phrase that
    plainly embraces DigitalVoice service.[^120] Thus, irrespective of
    the statutory classification of DigitalVoice, it is embraced by
    Congress's policy to "promote the continued development" and
    "preserve the vibrant and competitive *free* market" for these types
    of services.[^121]

35. While the majority of those commenting on the applicability of
    section 230 in this proceeding share this view,[^122] others claim
    that section 230 relates only to content-based services and
    DigitalVoice is not the type of content-based service Congress
    intended to reach.[^123] We are cognizant, as we must be, of context
    as we review the statute, but we look primarily to the words
    Congress chose to use.[^124] While we acknowledge that the title of
    section 230 refers to "offensive material," the general policy
    statements regarding the Internet and interactive computer services
    contained in the section are not similarly confined to offensive
    material. In the case of section 230, Congress articulated a very
    broad policy regarding the "Internet and other interactive computer
    services" without limitation to content-based services. Through
    codifying its Internet policy in the Commission's organic statute,
    Congress charges the Commission with the ongoing responsibility to
    advance that policy consistent with our other statutory obligations.
    Accordingly, in interpreting section 230's phrase "unfettered by
    Federal or State regulation," we cannot permit more than 50
    different jurisdictions to impose traditional common carrier
    economic regulations such as Minnesota's on DigitalVoice and still
    meet our responsibility to realize Congress's objective.

36. We are also guided by section 706 of the 1996 Act, which directs the
    Commission (and state commissions with jurisdiction over
    telecommunications services) to encourage the deployment of advanced
    telecommunications capability to all Americans by using measures
    that "promote competition in the local telecommunications market"
    and removing "barriers to infrastructure investment."[^125]
    Internet-based services such as DigitalVoice are capable of being
    accessed only via broadband facilities, *i.e.,* advanced
    telecommunications capabilities under the 1996 Act,[^126] thus
    driving consumer demand for broadband connections, and consequently
    encouraging more broadband investment and deployment consistent with
    the goals of section 706.[^127] Indeed, the Commission's most recent
    *Fourth Section 706 Report* to Congress recognizes the nexus between
    VoIP services and accomplishing the goals of section 706.[^128]
    Thus, precluding multiple disparate attempts to impose economic
    regulations on DigitalVoice that would thwart its development and
    potentially result in it exiting the market will advance the goals
    and objectives of section 706.

37. Allowing Minnesota's order to stand would invite similar imposition
    of 50 or more additional sets of different economic regulations on
    DigitalVoice, which could severely inhibit the development of this
    and similar VoIP services.[^129] We cannot, and will not, risk
    eliminating or hampering this innovative advanced service that
    facilitates additional consumer choice, spurs technological
    development and growth of broadband infrastructure, and promotes
    continued development and use of the Internet. To do so would ignore
    the Act's express mandates and directives with which we must comply,
    in contravention of the pro-competitive deregulatory policies the
    Commission is striving to further.

## Commerce Clause

38. We note that our decision today is fully consistent with the
    Commerce Clause of the United States Constitution. The Commerce
    Clause provides that "\[t\]he Congress shall have Power ... \[t\]o
    regulate Commerce ... among the several States."[^130] As explained
    by the Supreme Court, "\[t\]hough phrased as a grant of regulatory
    power to Congress, the Clause has long been understood to have a
    'negative' aspect that denies the States the power unjustifiably to
    discriminate against or burden the interstate flow of articles of
    commerce."[^131] Under the Commerce Clause jurisprudence, a state
    law that "has the 'practical effect' of regulating commerce
    occurring wholly outside that \[s\]tate's borders" is a violation of
    the Commerce Clause.[^132] In addition, state regulation violates
    the Commerce Clause if the burdens imposed on interstate commerce by
    state regulation would be "clearly excessive in relation to the
    putative local benefits."[^133] Finally, courts have held that
    "state regulation of those aspects of commerce that by their unique
    nature demand cohesive national treatment is offensive to the
    Commerce Clause."[^134]

39. Minnesota's regulation likely has "the 'practical effect' of
    regulating commerce occurring wholly outside that \[s\]tate's
    borders."[^135] Because the location of Vonage's users cannot
    practically be determined,[^136] Vonage would likely be required to
    comply with Minnesota's regulation for all use of DigitalVoice --
    including communications that do not originate or terminate in
    Minnesota, or even involve facilities or equipment in Minnesota --
    in order to ensure that it could fully comply with the regulations
    for services in Minnesota. And, as we have explained above, this
    would likely be the result even if Vonage elected to discontinue
    seeking subscribers in Minnesota, given that end users could use the
    service from any broadband connection in Minnesota.[^137] While
    states can and should serve as laboratories for different regulatory
    approaches, we have here a very different situation because of the
    nature of the service -- our federal system does not allow the
    strictest regulatory predilections of a single state to crowd out
    the policies of all others for a service that unavoidably reaches
    all of them. For these reasons, Minnesota's regulation would likely
    have the "practical effect" of regulating beyond its borders and
    therefore would likely violate the Commerce Clause.[^138]

40. In addition, we believe the burdens imposed on interstate commerce
    by the Minnesota Commission's regulation would likely be "clearly
    excessive in relation to the putative local benefits."[^139] The
    Minnesota regulation would impose significant burdens on interstate
    commerce.[^140] As discussed above, even if it were relevant and
    possible to track the geographic location of packets and isolate
    traffic for the purpose of ascertaining jurisdiction over a
    theoretical intrastate component of an otherwise integrated bit
    stream, such efforts would be impractical and costly.[^141] At the
    same time, we believe that the local benefits of state economic
    regulation would be limited. In a dynamic market such as the market
    for Internet-based services, we believe that imposing this
    substantial burden on Vonage would serve no useful purpose and would
    almost certainly be significant and negative for the development of
    new and innovative interstate Internet-based services.

41. Finally, DigitalVoice, like other Internet services, is likely the
    type of commerce that is of such a "unique nature" that it
    "demand\[s\] cohesive national treatment" under the Commerce
    Clause.[^142] Because DigitalVoice is not constrained by geographic
    boundaries and cannot be excluded from any particular state,
    inconsistent state economic regulation could cripple development of
    DigitalVoice and services like it. If Vonage's DigitalVoice service
    were subject to state regulation, it would have to satisfy the
    requirements of more than 50 jurisdictions with more than 50
    different sets of regulatory obligations.[^143] As discussed above,
    because of the unbounded characteristics of the Internet, Vonage
    would likely be required in practical effect to subject its service
    to all customers across the country to the regulations imposed by
    Minnesota. Moreover, state regulation of Internet-based services,
    such as DigitalVoice, would make them unique among Internet services
    as the only Internet service to be subject to such state
    obligations. Indeed, allowing the imposition of state regulation on
    Vonage would likely eliminate any benefit of using the Internet to
    provide the service. The Internet enables individuals and small
    providers to reach a global market simply by attaching a server to
    the Internet; requiring Vonage to submit to more than 50 different
    regulatory regimes as soon as it did so would eliminate this
    fundamental advantage of Internet-based communication. Thus,
    services, such as DigitalVoice, are likely of a "unique nature" that
    "demand\[s\] cohesive national treatment," and therefore,
    inconsistent state regulations would likely violate the Commerce
    Clause.[^144]

## Public Safety Issues

42. As discussed above, we preempt the *Minnesota Vonage Order* because
    it imposes entry and other requirements on Vonage that impermissibly
    interfere with this Commission's valid exercise of authority. As
    Vonage indicates in its Petition, Minnesota includes as one of its
    entry conditions the approval of a 911 service plan "comparable to
    the provision of 911 service by the \[incumbent\] local exchange
    carrier."[^145] In the *Minnesota Vonage Order*, the Minnesota
    Commission specifically subjected Vonage to this requirement.[^146]
    Because Minnesota inextricably links pre-approval of a 911 plan to
    becoming certificated to offer service in the state, the application
    of its 911 requirements operates as an entry regulation. Vonage
    explains that there is no practicable way for it to comply with this
    requirement: it cannot today identify with sufficient accuracy the
    geographic location of a caller, and it has not obtained access in
    all cases to incumbent LEC E911 trunks that carry calls to
    specialized operators at public safety answering points
    (PSAPs).[^147] Under the Minnesota "telephone company" rules,
    therefore, this requirement bars Vonage from entry in Minnesota. To
    that extent, this requirement is preempted along with all other
    entry requirements contained in Minnesota's "telephone company"
    regulations as applied to DigitalVoice.[^148] Although we preempt
    Minnesota from imposing its 911 requirements on Vonage as a
    condition of entry, this does not mean that Vonage should cease the
    efforts it has undertaken to date and we understand is continuing to
    take both to develop a workable public safety solution for its
    DigitalVoice service and to offer its customers equivalent access to
    emergency services.

43. There is no question that innovative services like DigitalVoice are
    having a profound and beneficial impact on American consumers.[^149]
    While we do not agree with unnecessary economic regulation of
    DigitalVoice designed for different services, we do believe that
    important social policy issues surrounding services like
    DigitalVoice should be considered and resolved.[^150] Access to
    emergency services, a critically important public safety matter, is
    one of these important social policy issues. In this proceeding,
    Vonage has indicated that it is devoting substantial resources
    toward the development of standards and technology necessary to
    facilitate some type of 911 service, working cooperatively with
    Minnesota agencies and other state commissions, public safety
    officials and PSAPs, the National Emergency Number Association
    (NENA), and the Association of Public-Safety Communications
    Officials (APCO).[^151] Moreover, it has demonstrated that it is
    offering its version of 911 capability to all its customers,
    including those in Minnesota, and has provided us information
    indicating what actions its customers must take to activate this 911
    capability.[^152] We are also aware that Vonage recently announced
    the successful completion of an E911 trial in Rhode Island, a state
    that has not, to our knowledge, attempted to regulate DigitalVoice.
    In collaboration with the State of Rhode Island, Vonage has
    developed a technical solution to deliver a caller's location and
    call back number to emergency service personnel for 911 calls placed
    in that state by DigitalVoice users.[^153] We fully expect Vonage to
    continue its 911 development efforts and to continue to offer some
    type of public safety capability during the pendency of our
    *IP-Enabled Services Proceeding*.[^154]

44. We emphasize that while we have decided the jurisdictional question
    for Vonage's DigitalVoice here, we have yet to determine final rules
    for the variety of issues discussed in the *IP-Enabled Services
    Proceeding*. While we intend to address the 911 issue as soon as
    possible, perhaps even separately, we anticipate addressing other
    critical issues such as universal service, intercarrier
    compensation, section 251 rights and obligations,[^155] numbering,
    disability access, and consumer protection in that proceeding.[^156]

45. Furthermore, we acknowledge that a U.S. District Court in New York
    has recently ordered Vonage "to continue to provide the same
    emergency 911 calling services currently available to Vonage
    customers" within that state[^157] and to "make reasonable good
    faith efforts to participate on a voluntary basis" in workshops
    pertaining to the development of VoIP 911 calling
    capabilities.[^158] Because DigitalVoice is a national service for
    which Vonage cannot single out New York "intrastate" calls (any more
    than it can Minnesota "intrastate" calls), as a practical matter,
    the District Court's order reaches DigitalVoice wherever it is
    used.[^159] Thus, we need not be concerned that as a result of our
    action today, Vonage will cease its efforts to continue developing
    and offering a public safety capability in Minnesota. The District
    Court order ensures that these efforts must continue while we work
    cooperatively with our state colleagues and industry to determine
    how best to address 911/E911-type capabilities for IP-enabled
    services in a comprehensive manner in the context of our *IP-Enabled
    Services Proceeding*.[^160]

# CONCLUSION

46. For the reasons set forth above, we preempt the *Minnesota Vonage
    Order*. As a result, the Minnesota Commission may not require Vonage
    to comply with its certification, tariffing or other related
    requirements as conditions to offering DigitalVoice in that state.
    Moreover, for services having the same capabilities as DigitalVoice,
    the regulations of other states must likewise yield to important
    federal objectives. To the extent other entities, such as cable
    companies, provide VoIP services, we would preempt state regulation
    to an extent comparable to what we have done in this Order.

# ORDERING CLAUSES

47. Accordingly, IT IS ORDERED, pursuant to sections 1, 2, 3, 4(i) and
    303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§
    151-53, 154(i), 303(r), and section 1.2 of the Commission\'s rules,
    47 C.F.R. § 1.2, that Vonage's Petition for Declaratory Ruling IS
    GRANTED in part and the *Minnesota Vonage Order* IS PREEMPTED.

48. IT IS HEREBY FURTHER ORDERED, pursuant to section 1.103(a) of the
    Commission's rules, 47 C.F.R. § 1.103(a), that this Memorandum
    Opinion and Order SHALL BE EFFECTIVE upon release.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Marlene H. Dortch
>
> Secretary

APPENDIX

LIST OF COMMENTERS

**Comments in WC Docket No. 03-211**

+------------------------------------+---------------------------------+
| **[Comments]{.underline}**         | **[Abbreviation]{.underline}**  |
+------------------------------------+---------------------------------+
| 8x8, Inc.                          | 8x8                             |
+------------------------------------+---------------------------------+
| Alliance for Public Technology     | APT                             |
+------------------------------------+---------------------------------+
| Association of Public-Safety       | APCO                            |
| Communications Officials           |                                 |
+------------------------------------+---------------------------------+
| Beacon Telecommunications          | Beacon                          |
| Advisors, LLC                      |                                 |
+------------------------------------+---------------------------------+
| BellSouth Corporation              | BellSouth                       |
+------------------------------------+---------------------------------+
| California Public Utilities        | California Commission           |
| Commission                         |                                 |
+------------------------------------+---------------------------------+
| CenturyTel, Inc.                   | CenturyTel                      |
+------------------------------------+---------------------------------+
| Cinergy Communications Company     | Cinergy                         |
+------------------------------------+---------------------------------+
| Cisco Systems, Inc.                | Cisco                           |
+------------------------------------+---------------------------------+
| Dr. Robert A. Collinge             | Collinge                        |
+------------------------------------+---------------------------------+
| Communications Workers of America  | CWA                             |
+------------------------------------+---------------------------------+
| DJE Teleconsulting, LLC            | DJE Teleconsulting              |
+------------------------------------+---------------------------------+
| Frontier and Citizens Telephone    | Frontier/Citizens               |
| Companies                          |                                 |
+------------------------------------+---------------------------------+
| The High Tech Broadband Coalition  | High Tech Broadband Coalition   |
+------------------------------------+---------------------------------+
| ICORE, Inc.                        | ICORE                           |
+------------------------------------+---------------------------------+
| Independent Telephone and          | ITTA                            |
| Telecommunications Alliance        |                                 |
+------------------------------------+---------------------------------+
| Iowa Utilities Board               | Iowa Commission                 |
+------------------------------------+---------------------------------+
| Level 3 Communications, LLC        | Level 3                         |
+------------------------------------+---------------------------------+
| MCI                                | MCI/CompTel                     |
|                                    |                                 |
| > CompTel                          |                                 |
+------------------------------------+---------------------------------+
| Metropolitan 911 Board             | Metropolitan 911 Board          |
+------------------------------------+---------------------------------+
| Minnesota Attorney General's       | Minnesota AG                    |
| Office                             |                                 |
+------------------------------------+---------------------------------+
| Minnesota Department of Commerce   | Minnesota Department of         |
|                                    | Commerce                        |
+------------------------------------+---------------------------------+
| Minnesota Independent Coalition    | Minnesota Independent Coalition |
+------------------------------------+---------------------------------+
| Minnesota Public Utilities         | Minnesota Commission            |
| Commission                         |                                 |
+------------------------------------+---------------------------------+
| Minnesota Statewide 911 Program    | Minnesota Statewide 911 Program |
+------------------------------------+---------------------------------+
| Montana Independent                | Montana Independent             |
| Telecommunications Systems         | Telecommunications Systems      |
+------------------------------------+---------------------------------+
| Montana Telecommunications         | MTA                             |
| Association                        |                                 |
+------------------------------------+---------------------------------+
| Motorola, Inc.                     | Motorola                        |
+------------------------------------+---------------------------------+
| National Association of State      | NASUCA                          |
| Utility Consumer Advocates         |                                 |
+------------------------------------+---------------------------------+
| National Exchange Carrier          | NECA                            |
| Association                        |                                 |
+------------------------------------+---------------------------------+
| National Telecommunications        | NTCA                            |
| Cooperative Association            |                                 |
+------------------------------------+---------------------------------+
| New York State Department of       | New York Commission             |
| Public Service                     |                                 |
+------------------------------------+---------------------------------+
| Organization for the Promotion and | OPASTCO                         |
| Advancement of Small               |                                 |
| Telecommunications Companies       |                                 |
+------------------------------------+---------------------------------+
| PAETEC Communications, Inc.        | PAETEC                          |
+------------------------------------+---------------------------------+
| Public Utilities Commission of     | Ohio Commission                 |
| Ohio                               |                                 |
+------------------------------------+---------------------------------+
| Qwest Communications International | Qwest                           |
| Inc.                               |                                 |
+------------------------------------+---------------------------------+
| Rural Iowa Independent Telephone   | RIITA                           |
| Association                        |                                 |
+------------------------------------+---------------------------------+
| SBC Communications Inc.            | SBC                             |
+------------------------------------+---------------------------------+
| Sprint Corporation                 | Sprint                          |
+------------------------------------+---------------------------------+
| SureWest Communications            | SureWest                        |
+------------------------------------+---------------------------------+
| Telcom Consulting Associates, Inc. | TCA                             |
+------------------------------------+---------------------------------+
| Texas Commission on State          | Texas 911 Agencies              |
| Emergency Communications and Texas |                                 |
| Emergency Communications Districts |                                 |
+------------------------------------+---------------------------------+
| Texas Coalition of Cities for      | TCCFUI                          |
| Utility Issues                     |                                 |
+------------------------------------+---------------------------------+
| Time Warner Telecom, Inc.          | Time Warner Telecom             |
+------------------------------------+---------------------------------+
| USA DataNet                        | USA DataNet                     |
+------------------------------------+---------------------------------+
| U.S. Department of Justice         | USDOJ/FBI                       |
|                                    |                                 |
| > Federal Bureau of Investigation  |                                 |
+------------------------------------+---------------------------------+
| United States Telecom Association  | USTA                            |
+------------------------------------+---------------------------------+
| The Verizon Telephone Companies    | Verizon                         |
+------------------------------------+---------------------------------+
| The Voice on the Net Coalition     | VON Coalition                   |
+------------------------------------+---------------------------------+
| Warinner, Gesinger & Associates,   | WG&A                            |
| LLC                                |                                 |
+------------------------------------+---------------------------------+
| Washington Enhanced 911 Program    | Washington E911 Program         |
+------------------------------------+---------------------------------+

**Replies in WC Docket No. 03-211**

+------------------------------------+---------------------------------+
| **[Replies]{.underline}**          | **[Abbreviation]{.underline}**  |
+------------------------------------+---------------------------------+
| 8x8, Inc.                          | 8x8                             |
+------------------------------------+---------------------------------+
| AT&T Corp.                         | AT&T                            |
+------------------------------------+---------------------------------+
| BellSouth Corporation              | BellSouth                       |
+------------------------------------+---------------------------------+
| Earthlink, Inc.                    | Earthlink                       |
+------------------------------------+---------------------------------+
| GVNW Consulting, Inc.              | GVNW                            |
+------------------------------------+---------------------------------+
| Inclusive Technologies             | Inclusive Technologies          |
+------------------------------------+---------------------------------+
| Iowa Utilities Board               | Iowa Commission                 |
+------------------------------------+---------------------------------+
| MCI                                | MCI/CompTel                     |
|                                    |                                 |
| > CompTel                          |                                 |
+------------------------------------+---------------------------------+
| Michigan Public Service Commission | Michigan Commission             |
+------------------------------------+---------------------------------+
| Minnesota Public Utilities         | Minnesota Commission            |
| Commission                         |                                 |
+------------------------------------+---------------------------------+
| Montana Telecommunications         | MTA                             |
| Association                        |                                 |
+------------------------------------+---------------------------------+
| National Association of Regulatory | NARUC                           |
| Utility Commissioners              |                                 |
+------------------------------------+---------------------------------+
| National Association of State      | NASUCA                          |
| Utility Consumer Advocates         |                                 |
+------------------------------------+---------------------------------+
| National Association of            | NATOA *et al.*                  |
| Telecommunications Officers and    |                                 |
| Advisors                           |                                 |
|                                    |                                 |
| > National League of Cities        |                                 |
| >                                  |                                 |
| > The National Association of      |                                 |
| > Counties                         |                                 |
| >                                  |                                 |
| > The Alliance for Community Media |                                 |
+------------------------------------+---------------------------------+
| National Emergency Number          | NENA                            |
| Association                        |                                 |
+------------------------------------+---------------------------------+
| Attorney General of the State of   | New York State AG               |
| New York                           |                                 |
+------------------------------------+---------------------------------+
| Oregon Telecommunications          | OTA/WIT                         |
| Association                        |                                 |
|                                    |                                 |
| > Washington Independent Telephone |                                 |
+------------------------------------+---------------------------------+
| PacWest Telecom, Inc.              | PacWest/RCN                     |
|                                    |                                 |
| > RCN Corporation                  |                                 |
+------------------------------------+---------------------------------+
| Pennsylvania Public Utility        | Pennsylvania Commission         |
| Commission                         |                                 |
+------------------------------------+---------------------------------+
| Sprint Corporation                 | Sprint                          |
+------------------------------------+---------------------------------+
| Telecommunications for the Deaf,   | TDI                             |
| Inc.                               |                                 |
+------------------------------------+---------------------------------+
| Texas Coalition of Cities for      | TCCFUI                          |
| Utility Issues                     |                                 |
+------------------------------------+---------------------------------+
| U.S. Department of Justice         | USDOJ/FBI                       |
|                                    |                                 |
| > Federal Bureau of Investigation  |                                 |
+------------------------------------+---------------------------------+
| The Verizon Telephone Companies    | Verizon                         |
+------------------------------------+---------------------------------+
| Vonage Holdings Corp.              | Vonage                          |
+------------------------------------+---------------------------------+

**STATEMENT OF**

**CHAIRMAN MICHAEL K. POWELL**

> *Re: Vonage Holdings Corporation Petition for Declaratory Ruling
> Concerning an Order of the Minnesota Public Utilities Commission*,
> Memorandum Opinion and Order in WC Docket No. 03-211.

Since 1870 home telephone service has been essentially the same---two
phones connected by a wire. This landmark order recognizes that a
revolution has occurred. Internet voice services have cracked the 19^th^
Century mold, to the great benefit of consumers. VoIP services certainly
enable voice communications between two or more people, just as the
traditional telephone network does, but that is where the similarity
ends. Internet voice is an internet application that takes its place
alongside email and instant messaging as an incredibly versatile tool
for communicating with people all over the world. As such it has truly
unique characteristics.

*Internet Voice is More Personal:* VOIP services allow people to
dynamically structure the way they communicate and to customize and
personalize messages in a way that is impossible with traditional
telephones. Just as consumers personalize their cell phones with ring
tones, pictures and applications, the same is possible with internet
voice. Consumers have come to expect technology to be tailored to their
preferences---"My Amazon," "My Tivo," "My Ipod." Internet voice, ushers
in the era of "My Telephone." Adding enhancements to voice is no longer
a highly complex and expensive modification to the network -- now it is
just a matter of adding to the next software release. 

*Internet Voice is Cheaper:* Consumers always want to pay less and VOIP
promises enormous value. Because of the efficient technology and
underlying economics of the service, Consumers can expect flat rate
prices, for unlimited services and features. Just as consumers have
responded strongly to buckets of minutes at low fixed prices in mobile
phone service, the same characteristics will bring these innovative
pricing models to the wired phone world. The proof is in the pudding,
VOIP is barely a few years old as a retail offering and providers have
already cut prices several times to compete for  consumers.  VoIP
providers have begun offering local and long-distance calling plans for
as low as \$14.99 and \$19.99 per month. Most recently, Vonage and AT&T
slashed the monthly prices of their unlimited local and long-distance
calling plans by \$5 per month.  If we let competition and innovation
rage, unencumbered by the high cost of regulation, Consumers can expect
more of the same---lower prices, more choice, and more innovative
offerings.

*Internet Voice is Global:* Today's decision lays a jurisdictional
foundation for what consumers already know -- that the Internet is
global in scope. The genius of the Internet is that it knows no
boundaries. In cyberspace, distance is dead. Communication and
information can race around the planet and back with ease. The Order
recognizes that several technical factors demonstrate that VoIP services
are unquestionably interstate in nature. VoIP services are nomadic and
presence-oriented, making identification of the end points of any given
communications session completely impractical and, frankly, unwise. In
this sense, Internet applications such as VoIP are more border busting
than either long distance or mobile telephony-- each inherently, and
properly classified, interstate services.

To subject a global network to disparate local regulatory treatment by
51 different jurisdictions would be to destroy the very qualities that
embody the technological marvel that is the Internet. The founding
fathers understood the danger of crushing interstate commerce and
enshrined the principle of federal jurisdiction over interstate services
in the commerce clause of the U.S. Constitution. In the same vein,
Congress rightly recognized the borderless nature of mobile telephone
service and classified it an interstate communication. VOIP properly
stands in this category and the Commission is merely affirming the
obvious in reaching today's jurisdictional decision.

This is not to say that there is no governmental interest in VOIP. There
will remain very important questions about emergency services, consumer
protections from waste, fraud and abuse and recovering the fair costs of
the network. It is not true that states are or should be complete
bystanders with regard to these issues. Indeed, there is a long
tradition of federal/state partnership in addressing such issues, even
with regard to interstate services. For example, in long distance
services, the FCC and state commissions have structured a true
partnership to combat slamming and cramming. We have also worked closely
with the states to strike a balance in the area of do-not-call
enforcement. In the mobile services area, the FCC has worked closely
with states on E911 implementation. With regard to critical 911
capability for VOIP, I note already that several Internet voice
providers have entered into an agreement with the National Emergency
Number Association to extend 911 capabilities to Internet voice services
to "promote a fully functional 9-1-1 system that responds any time,
anywhere from every device." Efforts such as these are essential to
educating policy makers and providing a basis for solutions to complex
technical problems. These can and will serve as models for VOIP.

While today's item preempts an order of the Minnesota Commission
applying its traditional "telephone company" regulations to Vonage's
DigitalVoice service, it is important that I emphasize that the
Commission expresses no opinion here on the applicability to Vonage of
state's general laws governing entities conducting business within the
state, such as laws concerning taxation; fraud; general commercial
dealings; marketing and advertising. Just as this ruling does not alter
traditional state powers, we do not alter facilities-based competitor
rights, or state authority pursuant to section 252 of the Act. It is my
hope that the Commission's decision today will focus the debate and
permit our colleagues in the industry and at the state commissions to
direct their resources toward helping the Commission answer the
important questions that remain after today's Order.

**STATEMENT OF**

**COMMISSIONER KATHLEEN Q. ABERNATHY**

> *Re: Vonage Holdings Corporation Petition for Declaratory Ruling
> Concerning an Order of the Minnesota Public Utilities Commission,
> Memorandum Opinion and Order in WC Docket No. 03-211.*

This decision provides much-needed clarity regarding the jurisdictional
status of Vonage's DigitalVoice service and other VoIP services. By
fencing off these services from unnecessary regulation, this Order will
help unleash a torrent of innovation. Indeed, by facilitating the IP
revolution, rather than erecting roadblocks, our action will drive
greater broadband adoption and deployment, and thereby promote economic
development and consumer welfare.

There is no doubt that VoIP services of the type provided by Vonage are
inherently interstate in nature. As the Order describes in detail,
several factors combine to make it impossible to isolate any
intrastate-only component of such services. These factors include the
architecture of packet-switched networks and the enhanced features that
are offered as an integral part of VoIP services. Together, these
attributes necessarily result in the interstate routing of at least some
packets. These services are also marked ― in striking contrast to
circuit-switched communications ― by a complete disconnect between the
subscriber's physical location and the ability to use the service. A
subscriber's physical location is not only unknown in many instances,
but also completely irrelevant. Allowing state commissions to impose
traditional public-utility regulations on these interstate
communications services would frustrate important federal policy
objectives, including the congressional directive to "preserve the
vibrant and competitive free market that presently exists for the
Internet and other interactive computer services, unfettered by Federal
or State regulation."[^161]

Thus, while I do not lightly arrive at any decision to preempt state
regulatory authority, I believe it is imperative for the Commission to
do so here. Allowing the Minnesota utility regulations ― or comparable
state regulations ― to stand would authorize a single state to establish
default national rules for all VoIP providers, given the impossibility
of isolating any intrastate-only component. Equally troubling is the
prospect of subjecting providers of these innovative new services ―
which are being rolled out on a regional, national, and even global
scale ― to a patchwork of *inconsistent* state regulations. In short,
failure to preempt state utility regulations would likely sound the
death knell for many IP-enabled services and would deprive consumers of
the cost savings and exciting features they can deliver.

As necessary as preemption may be, I want to underscore my view that our
assertion of exclusive federal jurisdiction still permits states to play
an important role in facilitating the rollout of IP-enabled services. To
begin with, as the Order makes clear, states will continue to enforce
generally applicable consumer protection laws, such as provisions
barring fraud and deceptive trade practices. Moreover, I have often
emphasized that, even where the FCC alone possesses the ultimate
decisionmaking authority, this Commission and state regulators can and
should collaborate in the development of sound policy ― much as we have
done through our Federal-State Joint Boards and Joint Conferences, the
approval of Section 271 applications, and in other contexts. Indeed, I
am encouraged that an increasing number of state commissioners agree
that "preemption . . . does not preclude collaboration with States on
key issues including public safety, consumer protection and reform of
intercarrier compensation and universal service."[^162] These state
commissioners further note that "clearly establishing the domain in
which the regulatory treatment of IP-enabled services will be determined
will facilitate resolution of these issues in a more streamlined manner
and with less incentive for costly and protracted litigation."[^163]

I also want to acknowledge the concerns expressed by commenters who
argued that the Commission should resolve outstanding questions about
access to E911, the preservation of universal service, and other
important policy matters before addressing this jurisdictional issue.
Ideally, the Commission would have decided the jurisdictional issue in
tandem with the various rulemaking issues. But the decision of several
states to impose utility regulations on VoIP services, and the ensuing
litigation arising from such forays, makes it imperative for the
Commission to establish our exclusive jurisdiction as the first order of
business. This Commission runs significant risks if we remain on the
sidelines and leave it to the courts to grapple with such issues of
national import without the benefit of the expert agency's views.[^164]
Looking ahead, I agree that the Commission should proceed with the
rulemaking on IP-enabled services as expeditiously as possible. We
should adopt rules to the extent necessary to ensure the fulfillment of
our core policy goals, including access to E911, the ability of law
enforcement to conduct lawful surveillance, access for persons with
disabilities, and the preservation of universal service. And we should
provide a thorough and careful analysis of whether IP-enabled services
are information services or telecommunications services, given the
potentially far-reaching implications of that classification.

Finally, by the same token, I sympathize with parties who contend that
the Commission should conclusively resolve the jurisdictional status of
*all* VoIP services, rather than limiting our analysis to a subset of
VoIP. I have endeavored to make our jurisdictional analysis as inclusive
as possible, given the state of the record and the scope of the
Declaratory Ruling Petition. This Order should make clear the
Commission's view that all VoIP services that integrate voice
communications capabilities with enhanced features and entail the
interstate routing of packets ― whether provided by application service
providers, cable operators, LECs, or others ― will not be subject to
state utility regulation.

**CONCURRING STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

Re: *Vonage Holdings Corporation Petition for Declaratory Ruling
Concerning an*

*Order of the Minnesota Public Utilities Commission*, Memorandum Opinion
and

Order (WC Docket No. 03-211)

We all marvel at the tremendous and transformative potential of IP
services. They have the power significantly to remake the
telecommunications landscape by flooding the market with innovative new
services and providers. But to unleash the full potential of this new
technology and to ensure that these services succeed, we need rules of
the road---clear, predictable and confidence-building.

Today's decision finds that VoIP services like Vonage's DigitalVoice
have an undeniably interstate character. That's fine as far as it
goes---but it doesn't go very far. Proclaiming the service "interstate"
does not mean that everything magically falls into place, the curtains
are raised, the technology is liberated, and all questions are answered.
There are, in fact, difficult and urgent questions flowing from our
jurisdictional conclusion and they are no closer to an answer after we
act today than they were before we walked in here. So rather than
sailing boldly into a revolutionary new Voice Over communications era,
we are, I think, still lying at anchor. By not supplying answers, we are
clouding the future of new technology that has the power to carry us
over the horizon.

So I can only concur in today's decision. While I agree that traditional
jurisdictional boundaries are eroding in our new Internet-centric world,
we need a clear and comprehensive framework for addressing this new
reality. Instead the Commission moves bit-by-bit through individual
company petitions, in effect checking off business plans as they walk
through the door. This is not the way we should be proceeding. We need a
framework for all carriers and all services, not a stream of incremental
decisions based on the needs of individual companies. We need a
framework to explain the consequences for homeland security, public
safety and 911. We need a framework for consumer protection. We need a
framework to address intercarrier compensation, state and federal
universal service, and the impact on rural America. But all I see coming
out of this particular decision is . . . more questions.

The Commission's constricted approach denies consumers, carriers,
investors and state and local officials the clarity they deserve. These
are not just my musings. A growing chorus of voices is urging the
Commission to stop its cherry-picking approach to VoIP issues. When the
National Governors Association, the Association of Public Safety
Communications Officials, the National Association of Counties, the
National League of Cities, the United States Conference of Mayors, the
Communications Workers of America, AARP, the Independent Telephone and
Telecommunications Alliance, the National Telecommunications Cooperative
Association, the Organization for the Promotion and Advancement of Small
Telecommunications Companies, the Western Telecommunications Alliance,
the National Association of Regulatory Utility Commissioners, the
National Association of Telecommunications Officers and Advisors, the
National Consumers League and local directors of 911 service in cities
and counties around the country all suggest that moving ahead in
piecemeal fashion is irresponsible, I think we should take heed.

I want to point to language in this item---albeit it's in a
footnote---that warns people not to draw unwarranted conclusions from
the narrow jurisdictional finding that we make. What we do today should
not be interpreted as anything more than it is. Yes, Vonage's
DigitalVoice service has an interstate character. But what exactly that
entails we do not say. All that important work lies ahead. Wouldn't it
be sad if we were to let it go at this, pretending we have done
something truly responsive to the questions that need to be answered,
and then not proceed to tackle the related issues quickly and
comprehensively? And wouldn't it be tragic if the blunt instrument of
preemption was permitted to erode our partnership with the states? We
have worked long and hard to nourish a common federal-state commitment
to a pro-competitive telecommunications environment. This is no time to
abandon that commitment.

Sometimes I wonder what the strategy is in this Commission's approach to
VoIP. Some warn that it may be a camel's nose under the tent strategy,
proceeding inch-by-inch to far-reaching conclusions that a more
straight-forward approach could not sustain. I hope that is not the case
and this decision should not be so interpreted. What I hope this
decision does is to force us finally to face up to the larger issues. We
are, after all, face-to-face here with issues that go to the very core
of our statutory responsibilities. These issues can't be ducked and they
can't be dodged if we are truly serious about these technologies
realizing their full transformative potentials. So I'll withhold my
approval for that happy day when we step up to the plate and begin
answering the hard questions about what these technologies and services
are and how they fit into America's communications landscape.

**CONCURRING STATEMENT OF**

**JONATHAN S. ADELSTEIN**

*Re: Vonage Holdings Corporation Petition for Declaratory Ruling
Concerning an Order of the Minnesota Public Utilities Commission*, WC
Docket No. 03-211, FCC 04-267 (2004).

While this Order rightly acknowledges the importance and unique
qualities of Internet-based services, including Voice over Internet
Protocol (VoIP) services, I am concerned that the Commission overlooks
important public policy issues that will impact consumers across our
country, and particularly in Rural America.

I concur to this item because it appropriately recognizes the unique
nature of many IP-enabled services and the importance of reducing
barriers to entry for Internet-based services. Indeed, I share my
colleagues' enthusiasm for the promise of Internet Protocol (IP)-enabled
services. All indications are that IP is becoming the building block for
the future of telecommunications and its use is integral to the
explosion of choices for consumers. It is becoming increasingly apparent
that IP-based services will play an important role in our global
economic competitiveness, by enabling economic productivity, providing a
platform for innovation, and driving demand for broadband facilities.
Whether through PDA phones, voice through Instant Messaging, or
countless other innovative services, this technology is giving customers
far greater control over, and flexibility in the use of, their
communications services. With that control, consumers can convert
messages with ease from voice-to-text and back, and can take their
IP-services wherever they go. Though I am not comfortable with all of
the analysis in this item, the Order reasonably reflects the unique
qualities of Vonage's service and recognizes the challenges that this
service poses for the Commission's traditional jurisdictional analysis.

Where this Order falls short is its failure to account in a meaningful
way for essential policy issues, including universal service, public
safety, law enforcement, consumer privacy, disabilities access, and
intercarrier compensation, and the effect of our preemption here. In
February of this year, we opened a VoIP-specific rulemaking proceeding
to address not only the issue raised here, the jurisdiction of IP-based
services, but to address the broader implications of VoIP services in a
comprehensive and coordinated fashion. At that time, we acknowledged the
social importance of these Congressionally-mandated policy objectives
and the need to assess the potentially disparate impact of our decisions
on particular communities. I am concerned that this Order may have
dramatic implications for these Congressional objectives, yet we afford
them no meaningful or comprehensive consideration here. I am also
concerned that our inability to specify the exact parameters of the
services at issue and the breadth of our preemption will have unintended
effects, including effects on incentives for investment in these
technologies, that could have been avoided with a more comprehensive
approach. I highlight, below, two of the most pressing concerns --
universal service and public safety.

The Act charges this Commission with maintaining universal service,
which is crucial in delivering communications services to our nation's
schools, libraries, low income consumers, and rural communities.
Universal service has been the cornerstone of telecommunications policy
for over 70 years and has enabled this country to enjoy unparalleled
levels of access to essential communications services. That access has
improved our economic productivity and our public safety in immeasurable
ways and has been vital in fostering economic development in rural and
underserved areas. The Act also expressly permits States to adopt
consistent approaches to preserve and advance universal service. At
least 24 States have answered that call, disbursing over \$1.9 billion
annually from their own universal service programs. Many of those States
and other commenters express legitimate concern that our decision here
could increase pressure on the federal universal service mechanisms and
could potentially lead to rate increases for rural and low income
consumers. With those reasons in mind, I've called for the Commission to
quickly convene a universal service solutions summit modeled after the
ones we've held for other public policy issues. Regrettably, this item
does not acknowledge its potential impact on those programs, nor does it
propose any solutions, or even make firm commitments to resolving these
issues. We are left to hope that these unaddressed issues do not
gridlock or curtail the full reach of the promised IP superhighway.

I also have reservations about our preemption of a State's efforts to
ensure the public safety of its citizens, based here on the linkage of
the 911 requirement with a State certification. Our approach of
overriding States' public safety efforts without clear federal direction
takes us into a dangerous territory in which consumers may come to rely
on services without the benefit of the critical safety net that they
have come to expect.

Ultimately, I cannot fully endorse an approach that leaves unanswered so
many important questions about the future of communications services for
so many Americans. Rural and low-income Americans, the countless
governmental and public interest groups who have expressed concern about
our piecemeal approach, and the communications industry, itself, all
deserve more from this Commission. If this Commission is to ensure that
innovative services are widely available and also achieve the important
public policy goals that Congress has articulated, the Commission must
begin to wrestle in earnest with difficult issues that are largely
ignored this Order. We simply cannot afford to slow roll these issues.

[^1]: *Petition for Declaratory Ruling that pulver.com's Free World
    Dialup is Neither Telecommunications Nor a Telecommunications
    Service*, WC Docket No. 03-45, Memorandum Opinion and Order, 19 FCC
    Rcd 3307 (2004) (*Pulver Declaratory Ruling* or *Pulver*).

[^2]: *Petition for Declaratory Ruling that AT&T's Phone-to-Phone IP
    Telephony Services are Exempt from Access Charges*, WC Docket No.
    02-361, Order, 19 FCC Rcd 7457 (2004) (*AT&T Declaratory Ruling*).

[^3]: *See infra* para. 31 and notes Error: Reference source not found,
    Error: Reference source not found (referring to VoIP services of
    other providers, including facilities-based providers).

[^4]: *IP-Enabled Services*, WC Docket No. 04-36, Notice of Proposed
    Rulemaking, 19 FCC Rcd 4863 (2004) (*IP‑Enabled Services
    Proceeding*).

[^5]: 47 U.S.C. § 230(b)(1).

[^6]: 47 U.S.C. § 157 nt. (incorporating section 706 of the
    Telecommunications Act of 1996 (1996 Act)).

[^7]: *See* Vonage Holdings Corporation Petition for Declaratory Ruling
    Concerning an Order of the Minnesota Public Utilities Commission, WC
    03-211 (filed Sept. 22, 2003) (Vonage Petition). The Commission
    requested and received comment on the Vonage Petition. *See Pleading
    Cycle Established for Comments on Vonage Petition for Declaratory
    Ruling*, WC Docket No. 03-211, Public Notice, 18 FCC Rcd 19325
    (2003). See Appendix for a list of commenters.

[^8]: *In the Matter of Complaint of the Minnesota Department of
    Commerce Against Vonage Holding Corp. Regarding Lack of Authority to
    Operate in Minnesota*, Docket No. P-6214/C-03-108, Order Finding
    Jurisdiction and Requiring Compliance (issued Sept. 11, 2003)
    (*Minnesota Vonage Order*).

[^9]: DigitalVoice provides VoIP, among other capabilities. Although the
    Commission has adopted no formal definition of "VoIP," we use the
    term generally to include any IP‑enabled services offering
    real-time, multidirectional voice functionality, including, but not
    limited to, services that mimic traditional telephony. *See
    IP-Enabled Services Proceeding*, 19 FCC at 4866, para. 3 n.7. VoIP
    services are available in a number of different forms*. See, e.g*.,
    Minnesota Commission Reply at 3 ("\[VoIP\] is a technology that has
    many current applications and potentially many more future
    applications."); *see also* *Availability of Advanced
    Telecommunications Capability in the United States*, GN Docket No.
    04-54, Fourth Report to Congress, FCC 04-208, at 24-26 (rel. Sept.
    9, 2004) (*Fourth Section 706 Report*) (describing VoIP services
    generally).

[^10]: We use the term "Internet" in this Order similarly to how the
    Commission has used it previously, inclusive of interconnected
    public, private, managed, and non-managed IP networks. *See, e.g.,
    Pulver*, 19 FCC Rcd at 3309, para. 4 (citing *GTE Telephone
    Operating Cos., GTE Tariff No. 1, GTOC Transmittal No. 1148*, CC
    Docket No. 98-79, Memorandum Opinion and Order, 13 FCC Rcd 22466,
    22468, para. 5 (1998) (*GTE ADSL Order*)); *see also* *Inquiry
    Concerning High-Speed Access to the Internet Over Cable and Other
    Facilities; Internet Over Cable Declaratory Ruling; Appropriate
    Regulatory Treatment for Broadband Access to the Internet Over Cable
    Facilities*, GN Docket No. 00-185; CS Docket No. 02-52, Declaratory
    Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd 4798, 4799 n.1
    (2002) (*Cable Modem Declaratory Ruling*), *aff'd in part, vacated
    in part, and remanded*, *Brand X Internet Services v. FCC*, 345 F.3d
    1120 (9th Cir. 2003), *stay granted pending cert*. (April 9, 2004),
    *petitions for cert. filed*, Nos. 04-277 (Aug. 30, 2004), 04-281
    (Aug. 27, 2004).

[^11]: *See* Vonage Petition at 4; Letter from William B. Wilhelm, Jr.,
    Counsel for Vonage, to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 03-211, at 2 (filed Oct. 1, 2004) (Vonage Oct. 1 *Ex Parte*
    Letter) (suggesting a minimum upstream connection speed of 128k).

[^12]: *See* Vonage Petition at 7, 15; Vonage Reply at 8. According to
    Vonage, its service operates with any type of broadband connection
    (*e.g.*, cable modem, digital subscriber line, or satellite), but
    will not work with dial-up Internet access. *See* Vonage Petition at
    4.

[^13]: *See* Vonage Petition at 4; Vonage Oct. 1 *Ex Parte* Letter at 2.

[^14]: *See* Vonage Petition at 2, 5, 28-29.

[^15]: *See id.* at 5.

[^16]: *See id.* at 5; Vonage Reply at 8-9; *see also* 8x8 Comments at
    8-10. Vonage states that most of its customers use an MTA. In
    addition to the CPE to convert voice signals, as a practical matter,
    most users also require a router. *See* Vonage Petition at 5.

[^17]: *See* Vonage Petition at 5; Vonage Reply at 8 ("\[A\]n analog
    telephone device is neither necessary nor sufficient for use with
    Vonage's service."); *see also* 8x8 Comments at 9.

[^18]: *See* Vonage Petition at 4; *see also IP-Enabled Services
    Proceeding*, 19 FCC Rcd at 4866, para. 3 n.7.

[^19]: *See, e.g.,* Vonage Oct. 1 *Ex Parte* Letter at 4-5; Vonage,
    *Take Your Number With You* (visited Oct. 28, 2004)
    \<http://www.vonage.com/features.php?feature=traveling\>.

[^20]: *See* Vonage Oct. 1 *Ex Parte* Letter at 4; *see also* Vonage,
    *Real-Time Online Account Management* (visited Oct. 28, 2004)
    \<http://www.vonage.com/features.php?feature=online_account_mgt\>.
    For example, the voicemail service integrated into DigitalVoice
    allows the user to access voicemail and select delivery options
    through interaction with the customer's web account on the Internet.

[^21]: Vonage is currently adding functionality so that users may
    customize voicemail controls by scheduling recorded greetings for
    different hours of the day and different days of the year. *See*
    Oct. 1 *Ex Parte* Letter at 5; *see also* Vonage, *Voicemail Plus*
    (visited Oct. 28, 2004)
    \<http://www.vonage.com/features.php?feature=voicemail\>.

[^22]: *See, e.g.,* Vonage, *Call Forwarding* (visited Oct. 28, 2004)
    \<http://www.vonage.com/features.php?feature=call_forwarding\>.

[^23]: *See* Vonage Petition at 6.

[^24]: Vonage-to-Vonage calls are not transmitted over the PSTN. *See
    id.* at 7. Calls from Vonage customers to customers of certain other
    IP service providers with which Vonage has a peering arrangement
    also are not transmitted over the PSTN, but solely over the
    Internet. *See* Vonage Oct. 1 *Ex Parte* Letter at 3-4. In this
    respect, the communication is similar to communications that occur
    over Pulver's Free World Dialup (FWD) service between FWD members.
    *See Pulver*, 19 FCC Rcd at 3309-10, paras. 5-6. If Vonage does not
    have a peering arrangement with a particular VoIP provider, calls
    between users of the two services are routed in part over the PSTN
    but originate and terminate via the Internet. *See* Vonage Oct. 1
    *Ex Parte* Letter at 4.

[^25]: *See* Vonage Petition at 5-8; *see* *also* 8x8 Comments at 10.

[^26]: *See* Vonage Petition at 8.

[^27]: For calls to and from other VoIP users, Vonage could choose to
    use other identifiers to match the IP address. NANP numbers are not
    necessarily required for VoIP calls that remain on the Internet and
    do not connect with the PSTN. *See Pulver*, 19 FCC Rcd at 3309,
    para. 5 (explaining that Pulver's FWD service uses five or six digit
    FWD identification numbers rather than NANP numbers); *see also*
    Vonage Petition at 7-8; Vonage Oct. 1 *Ex Parte* Letter at 3-5.

[^28]: *See* Minn. Stat. §§ 237.07, 237.16, 237.49, 237.74(12); Minn.
    Rules §§ 7812.0200(1), 7812.0550(1).

[^29]: *See* Vonage Oct. 1 *Ex Parte* Letter, Exh. 3 at 5-12.

[^30]: *See, e.g., Minnesota Vonage Order* at 8. While the order states
    "the Commission will require that Vonage comply with Minnesota
    Statutes and Rules, including certification requirements and the
    provisioning of 911 service," the order does not enumerate the
    statutory and rule provisions to which it is referring other than
    those specifically listed in note 27 above. *See supra* note Error:
    Reference source not found. We will refer to these requirements,
    collectively, throughout this Order as either "telephone company
    regulations" or "economic regulations." It appears, however, that
    many Minnesota Commission rules other than those specifically
    mentioned in the *Minnesota Vonage Order* would only apply to Vonage
    as a result of its status as a certificated entity in Minnesota.
    *See* Minn. Stat. § 237.16(a). As a result, because, as described
    below, we specifically preempt Minnesota's certification
    requirements for DigitalVoice in this Order, regulations applicable
    to certificated entities would not be applicable to Vonage for
    DigitalVoice.

[^31]: *See Vonage Holding Corp. v. Minnesota Pub. Utils. Comm'n*, 290
    F. Supp. 2d 993 (D. Minn. 2003), *appeal pending*, *Vonage Holdings
    Corp. v. Minnesota Pub. Utils. Comm'n*, No. 04-1434 (8th Cir.). We
    reject commenters' contentions that we should dismiss the Vonage
    Petition as moot because the Minnesota district court granted a
    permanent injunction. *See, e.g.*, Minnesota Commission Comments at
    4; Qwest Comments at 2; New York State AG Reply at 3. The Minnesota
    district court's permanent injunction is currently subject to
    appeal, and other courts and state commissions have open proceedings
    considering these issues. Accordingly, we find that this petition
    continues to present a "controversy" or "uncertainty" regarding the
    jurisdictional nature of DigitalVoice that may be addressed in a
    declaratory ruling. *See* 47 C.F.R. § 1.2. We also disagree that
    these issues are not ripe because Vonage can seek waivers of the
    Minnesota requirements. *See, e.g.*, MTA Comments at 8. The
    Minnesota order directs Vonage to comply with Minnesota Statutes and
    Rules within 30 days without mentioning the possibility of waiver.
    *See Minnesota Vonage Order* at 9. The possibility of waiver,
    however, does not eliminate the conflict with our rules and
    policies.

[^32]: *See Vonage Holding Corp. v. Minnesota Pub. Utils. Comm'n*, 290
    F. Supp. 2d at 996-1003.

[^33]: *Id.* at 1002.

[^34]: *See Vonage Holdings Corp. v. Minnesota Pub. Utils. Comm'n*, No.
    04-1434 (8th Cir.). The Commission sought a primary jurisdiction
    referral from the Eighth Circuit on the issues presented in this
    case. *See* Brief for the United States and the Federal
    Communications Commission as *Amici Curiae*, *Vonage Holdings Corp.
    v. Minnesota Pub. Utils. Comm'n*, No. 04‑1434 (8th Cir. filed Apr.
    21, 2004) (requesting a primary jurisdiction referral). The Eighth
    Circuit has not yet ruled on the primary jurisdiction referral. Oral
    argument is scheduled for November 17, 2004.

[^35]: *See* 47 U.S.C. § 153(20) (defining "information service"); 47
    U.S.C. § 153(43) (defining "telecommunications"); 47 U.S.C.
    § 153(44) (defining "telecommunications carrier"); 47 U.S.C. §
    153(46) (defining "telecommunications service").

[^36]: *See* Vonage Petition at 1.

[^37]: *Id.*

[^38]: *Id.*; *see also* 8x8 Comments at 15-17.

[^39]: *See* Letter from William B. Wilhelm, Jr., Counsel for Vonage, to
    Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 03-211, 04-36, at
    1-2 (filed Aug. 13, 2004) (Vonage Aug. 13 *Ex Parte* Letter).

[^40]: *See, e.g.,* *Order Instituting Investigation on the Commission's
    Own Motion to Determine the Extent to Which the Public Utility
    Telephone Service Known as Voice over Internet Protocol Should Be
    Exempted from Regulatory Requirements*, Investigation 04-02-007,
    Order Instituting Investigation (issued Feb. 11, 2004) (initiating a
    proceeding by the California Public Utilities Commission to
    investigate VoIP services).

[^41]: *See Complaint of Frontier Telephone of Rochester, Inc. against
    Vonage Holdings Corporation Concerning Provision of Local Exchange
    and Interexchange Telephone Service in New York State in Violation
    of the Public Service Law*, Case 03-C-1285, Order Establishing
    Balanced Regulatory Framework for Vonage Holdings Corporation at 10
    (issued May 21, 2004) (*New York Vonage Order*).

[^42]: *See id.* at 17.

[^43]: *See Vonage Holdings Corp. v. New York State Public Service
    Comm'n,* 04 Civ. 4306 (DFE) (S.D.N.Y. July 16, 2004) (Order of
    Magistrate Judge Eaton) (*New York Preliminary Injunction*)
    (entering a preliminary injunction against the New York Commission's
    order).

[^44]: *Id.* at 2-3.

[^45]: *See id.* at 3.

[^46]: We do not determine the statutory classification of DigitalVoice
    under the Communications Act, and thus do not decide here the
    appropriate federal regulations, if any, that will govern this
    service in the future. These issues are currently the subject of our
    *IP‑Enabled Services Proceeding* where the Commission is
    comprehensively examining numerous types of IP‑enabled services,
    including services like DigitalVoice. *See generally* *IP-Enabled
    Services Proceeding*, 19 FCC Rcd 4863. That proceeding will resolve
    important regulatory matters with respect to IP‑enabled services
    generally, including services such as DigitalVoice, concerning
    issues such as the Universal Service Fund, intercarrier
    compensation, 911/E911, consumer protection, disability access
    requirements, and the extent to which states have a role in such
    matters. In addition, the Commission recently initiated a rulemaking
    proceeding to address law enforcement\'s needs relative to the
    Communications Assistance for Law Enforcement Act (CALEA), including
    the scope of services that are covered, who bears responsibility for
    compliance, the wiretap capabilities required by law enforcement,
    and acceptable compliance standards. Our decision in this Order does
    not prejudice the outcome of our proceeding on CALEA*. See*
    *Communications Assistance for Law Enforcement Act and Broadband
    Access and Services*, ET Docket No. 04-295; RM-10865, Notice of
    Proposed Rulemaking and Declaratory Ruling, 19 FCC Rcd 15676 (2004);
    *see also* DOJ/FBI Comments at 10-13; DOJ/FBI Reply at 7-10. These
    issues are complex and critically important matters. While these
    matters are being comprehensively addressed, however, it is
    essential that we take action to bring some greater measure of
    certainty to the industry to permit services like DigitalVoice to
    evolve. By ruling on the narrow jurisdictional question here, we
    enable this Commission and the states to focus resources in working
    together along with the industry to address the numerous other
    unresolved issues related to this and other IP-enabled and advanced
    communications services that are of paramount importance to the
    future of the communications industry. *See, e.g.*, PacWest/RCN
    Reply at 5; USA DataNet Comments at 2-3 (urging the Commission to
    act on the Vonage Petition). *But see, e.g.*, DOJ/FBI Comments at 9;
    Minnesota Commission Comments at 4; Montana Independent
    Telecommunications Systems Comments at 5; Qwest Comments at 3-4;
    USTA Comments at 3-4; DOJ/FBI Reply at 5-7; Minnesota Commission
    Reply at 3; Verizon Reply at 6 (urging the Commission not to act on
    the Vonage Petition, but instead to decide these issues in a
    comprehensive rulemaking proceeding).

[^47]: As we noted above, this Order does not address Minnesota's
    general laws governing entities conducting business within the
    state, such as laws concerning taxation; fraud; general commercial
    dealings; marketing, advertising, billing and other business
    practices. *See supra* para. 1.

[^48]: Telecommunications Act of 1996, Pub. Law No. 104-104, 110 Stat.
    56 (1996) (1996 Act).

[^49]: Access to emergency services for VoIP services, including 911, is
    a critical public safety issue. This issue, and the extent to which
    states may have a role in such matters, will be addressed in the
    *IP-Enabled Services Proceeding*. We address this issue in a limited
    manner in this Order only because of the manner in which Minnesota
    ties its 911 requirements to entry authority. *See infra* paras.
    42-44.

[^50]: *See Bell Atl. Tel. Cos. v. FCC*, 131 F.3d 1044 (D.C. Cir. 1997).

[^51]: *See generally* 47 U.S.C. § 152.

[^52]: 47 U.S.C. § 152(a). Congress defined "interstate communication"
    as "communication or transmission . . . from any State, Territory,
    or possession of the United States. . . to any other State,
    Territory, or possession of the United States . . . but shall not .
    . . include wire or radio communication between points in the same
    State . . . through any place outside thereof, if such communication
    is regulated by a State commission." 47 U.S.C. § 153(22).

[^53]: 47 U.S.C. § 152(b). "\[I\]ntrastate communications" is not
    separately defined in the Act except to the extent it is described
    in the definition of "interstate communication" as a "wire or radio
    communication between *points* in the same State." 47 U.S.C. §
    153(22) (emphasis added). We note that section 2(b) reserves to the
    states only matters connected with "carriers," which means "common
    carriers" or "telecommunications carriers" under sections 3(10) and
    3(44) of the Act. 47 U.S.C. § 153(10), (44). Here, we do not
    determine whether Vonage is a "carrier"; however, our analysis with
    respect to section 2(b) assumes that it is. This assumption for
    purposes of this Order, however, in no way prejudges how the
    Commission may ultimately classify DigitalVoice.

[^54]: *See, e.g.,* *Bell Atl. Tel. Cos. v. FCC*, 206 F.3d 1, 3 (D.C.
    Cir. 2000); *see infra* para. 24 (addressing difficulties with an
    end-to-end approach for services involving the Internet).

[^55]: *See, e.g.,* *Pulver*, 19 FCC Rcd at 3320-21, para. 21.

[^56]: *See* 47 U.S.C. § 152(b)(1).

[^57]: *See* 47 U.S.C. § 153(22).

[^58]: *See, e.g., MTS and WATS Market Structure Amendment of Part 67 of
    the Commission's Rules and Establishment of a Joint Board*, CC
    Docket Nos. 78-72, 80-286, Memorandum Opinion and Order on
    Reconsideration and Order Inviting Comments, 1 FCC Rcd 1287 (1987);
    *Petition for Emergency Relief and Declaratory Ruling Filed by the
    BellSouth Corporation*, Memorandum Opinion and Order, 7 FCC Rcd
    1619, 1620, para. 7 (1992) (*BellSouth MemoryCall*); *Southwestern
    Bell Tel. Co. v. FCC,* 153 F.3d 523, 543 (8th Cir. 1998).

[^59]: *See Louisiana Pub. Serv. Comm'n v. FCC*, 476 U.S. 355, 368
    (1986) (finding a basis for Commission preemption where compliance
    with both federal and state law is in effect physically impossible)
    (citing *Florida Lime & Avocado Growers, Inc. v. Paul,* 373 U.S. 132
    (1963)); *BellSouth MemoryCall*, 7 FCC Rcd at 1622-23, paras. 18-19.

[^60]: Indeed, the Eighth Circuit has recently noted the Commission's
    authority to preempt in the area of jurisdictionally mixed special
    access services. *See* *Qwest Corp. v. Minnesota Pub. Utils.
    Comm'n,* 380 F.3d 367, 374 (8th Cir. 2004) (finding that, with
    respect to special access services, the Commission "*certainly has
    the wherewithal to preempt state regulation in this area if it so
    desires*") (emphasis added).

[^61]: We need not address in this Order the case of purely intrastate
    service, which is not the service we have before us in this
    petition.

[^62]: *See* Vonage Oct. 1 *Ex Parte* Letter at 2 (explaining that its
    subscribers have billing addresses in each of the 50 states, the
    District of Columbia and throughout Canada, that its subscribers
    regularly use the service from countries outside North America,
    including "Argentina, Australia . . . and the United Kingdom," and
    that customers have used the service "from virtually every
    inhabitable continent in the world").

[^63]: We analyze DigitalVoice for purposes of preemption as a
    jurisdictionally mixed service due to its recognized capability to
    enable communications to occur not only between different states but
    within a particular state. This notwithstanding, it is possible that
    the Commission may find, in the context of the *IP-Enabled Services
    Proceeding*, that this type of service simply has no intrastate
    component.

[^64]: *See Louisiana Pub. Serv. Comm\'n*, 476 U.S. at 360 (explaining
    how the Act would seem to divide the world of domestic telephone
    service into two hemispheres -- one comprised of interstate service,
    over which the Commission has "plenary authority"); *see also Ivy
    Broad. Co. v. American Tel. & Tel. Co.*, 391 F.2d 486, 490 (2d Cir.
    1968) ("The Supreme Court has held that the establishment of this
    broad scheme for the regulation of interstate service by
    communications carriers indicates an intent on the part of Congress
    to occupy the field to the exclusion of state law.").

[^65]: *See* *Louisiana Pub. Serv. Comm'n*, 476 U.S. at 375 n.4 (citing
    *North Carolina Utils. Comm'n v. FCC*, 537 F.2d 787 (4th Cir. 1976),
    *cert. denied*, 429 U.S. 1027 (1976); *North Carolina Utils. Comm'n
    v. FCC*, 552 F.2d 1036 (4th Cir. 1977) *cert. denied*, 434 U.S. 874
    (1977) (upholding Commission preemption of state regulation because
    it was not possible to separate the interstate and intrastate
    components of the asserted Commission regulation)); *see also New
    York State Comm'n on Cable Television v. FCC,* 749 F.2d 804 (D.C.
    Cir. 1984) (affirming Commission order preempting state and local
    entry regulation of satellite master antenna television); *Promotion
    of Competitive Networks in Local Telecommunications Markets;
    Wireless Communications Association International, Inc. Petition for
    Rulemaking to Amend Section 1.4000 of the Commission's Rules to
    Preempt Restrictions on Subscriber Premises Reception or
    Transmission Antennas Designed to Provide Fixed Wireless Services;
    Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996; Review of Sections 68.104, and
    68.213 of the Commission's Rules Concerning Connection of Simple
    Inside Wiring to the Telephone Network*, WT Docket No. 99-217; CC
    Docket Nos. 96-98, 88-57, First Report and Order and Further Notice
    of Proposed Rulemaking; Fifth Report and Order and Memorandum
    Opinion and Order; Fourth Report and Order and Memorandum Opinion
    and Order, 15 FCC Rcd 22983, 23031-32, para. 107 (2000) (preempting
    state regulation of fixed wireless antennas as an impediment to the
    full achievement of important federal objectives).

[^66]: *See Louisiana Pub. Serv. Comm'n*, 476 U.S. at 368-69. The Court
    also said that the "critical question in any pre-emption analysis is
    always whether Congress intended that federal regulation supersede
    state law." *Id.* at 369. As summarized by the Supreme Court,
    federal law and policy preempt state action in several
    circumstances: (1) where compliance with both federal and state law
    is in effect physically impossible (citing *Florida Lime & Avocado
    Growers, Inc. v. Paul,* 373 U.S. 132); (2) when there is outright or
    actual conflict between federal and state law (citing *Free v.
    Bland,* 369 U.S. 663 (1962)); (3) where the state law stands as an
    obstacle to the accomplishment and execution of the full objectives
    of Congress (citing *Hines v. Davidowitz,* 312 U.S. 52 (1941)); (4)
    when Congress expresses a clear intent to preempt state law; (5)
    where there is implicit in federal law a barrier to state
    regulation; and (6) where Congress has legislated comprehensively,
    thus occupying an entire field of regulation. Additionally, the
    Supreme Court has held that preemption may result not only from
    action taken by Congress but also from a federal agency action that
    is within the scope of the agency's congressionally delegated
    authority. *Louisiana Pub. Serv. Comm'n*, 476 U.S. at 369 (citing
    *Fidelity Federal Savings & Loan Ass'n v. De la Cuesta,* 458 U.S.
    141 (1982); *Capital Cities Cable, Inc. v. Crisp,* 467 U.S. 691
    (1984)).

[^67]: *See Pub. Serv. Comm'n of Maryland v. FCC,* 909 F.2d 1510 (D.C.
    Cir. 1990).

[^68]: *Id*. at 1515 (citing *National Ass\'n of Regulatory Util.
    Comm'rs v. FCC,* 880 F.2d 422, 429-31 (D.C. Cir. 1989); *Illinois
    Bell Tel. Co. v. FCC,* 883 F.2d 104, 113 (D.C. Cir. 1989); *Public
    Util. Comm'n of Texas v. FCC,* 886 F.2d 1325, 1329, 1331-33 (D.C.
    Cir. 1989)).

[^69]: While we do not rely on it as a basis for our action in this
    Order, we also note that section 253 of the Act provides the
    Commission additional preemption authority over state regulations
    that "prohibit or have the effect of prohibiting the ability of an
    entity to provide any interstate or intrastate telecommunications
    service." 47 U.S.C. § 253. *See* Vonage Petition at 28 n.55
    (indicating it does not submit its petition under section 253). Were
    DigitalVoice to be classified as a telecommunications service,
    however, it is possible that we could find state economic regulation
    such as that imposed by Minnesota to be a prohibition on the
    provision of an interstate and intrastate telecommunications
    services under section 253. *See* Vonage Petition at 11, 28
    (describing that it is technically and practically impossible to
    comply with Minnesota's "telephone company" rules).

[^70]: *See, e.g., Implementation of Section 402(b)(2)(A) of the
    Telecommunications Act of 1996; Petition for Forbearance of the
    Independent Telephone & Telecommunications Alliance*, CC Docket No.
    97-11; AAD File No. 98-43, Report and Order and Second Memorandum
    Opinion and Order, 14 FCC Rcd 11364, 11372-75, paras. 12-16 (1999)
    (*Section 214 Order*) (granting blanket section 214 authority for
    new lines of all domestic carriers including dominant carriers like
    the Bell operating companies (BOCs)); *Policy and Rules Concerning
    the Interstate, Interexchange Marketplace; Implementation of Section
    245(g) of the Communications Act of 1934*, CC Docket No. 96-61,
    Second Report and Order, 11 FCC Rcd 20730 (1996) (*Interexchange
    Detariffing Order*) (adopting mandatory detariffing of most domestic
    interstate, interexchange services); Order on Reconsideration, 12
    FCC 15014 (1997); Second Order on Reconsideration and Erratum, 14
    FCC Rcd 6004 (1999), *aff\'d, MCI WorldCom, Inc. v. FCC*, 209 F.3d
    760 (D.C. Cir. 2000); *Policy and Rules Concerning Rates for
    Competitive Common Carrier Services and Facilities Authorizations
    Therefor,* First Report and Order*,* 85 FCC 2d 1 (1980) (subsequent
    history omitted) (*Competitive Carrier Proceeding*) (adopting
    regulatory framework based on dominant or nondominant status of
    carriers).

[^71]: *See Section 214 Order*, 14 FCC Rcd at 11373, para. 14 ("By its
    very terms, blanket authority removes regulatory hurdles to market
    entry, thereby promoting competition."); *id.* at 11373, para. 13
    ("Rather than maintaining \[entry requirements\] that may stifle new
    and innovative services\[,\] ... we believe it is more consistent
    with the goals of the 1996 Act to remove this hurdle.").

[^72]: *See* Minn. Rule § 7812.0200.

[^73]: *See* Minn. Stat. § 237.16(c)

[^74]: *See Interexchange Detariffing Order,* 11 FCC Rcd at 20760, para.
    52 (emphasis added) ("\[W\]e find that not permitting nondominant
    interexchange carriers to file tariffs with respect to interstate,
    domestic, interexchange services will enhance competition among
    providers of such services, promote competitive market conditions,
    and achieve other objectives that are in the public interest,
    including eliminating the possible invocation of the filed rate
    doctrine by nondominant interexchange carriers, and establishing
    market conditions that more closely resemble an unregulated
    environment."); *id.* at 20750, para. 37 ("We also adopt the
    tentative conclusion that in the interstate, domestic, interexchange
    market, requiring nondominant interexchange carriers to file tariffs
    for interstate, domestic, interexchange services may harm consumers
    by impeding the development of vigorous competition, which could
    lead to higher rates."). We note that certain exceptions to the
    Commission's mandatory detariffing rules exist; however, these
    exceptions would not apply to services like DigitalVoice were it to
    be classified a telecommunications service.

[^75]: *See* Minn. Stat. § 237.07; *see also, e.g*., Minn. Rules §§
    7812.0300(6), 7812.0350(6), 7812.2210(2).

[^76]: *See, e.g.,* Minn. Rule §§ 7812.2210(4),(8).

[^77]: *See Regulatory and Policy Problems Presented by the
    Interdependence of Computer and Communication Services and
    Facilities*, Docket No. 16979, Notice of Inquiry, 7 FCC 2d 11 (1966)
    (*Computer I* *NOI*); *Regulatory and Policy Problems Presented by
    the Interdependence of Computer and Communication Services and
    Facilities*, Docket No. 16979, Final Decision and Order, 28 FCC 2d
    267 (1971) (*Computer I Final Decision*); *Amendment of Section
    64.702 of the Commission\'s Rules and Regulations (Second Computer
    Inquiry)*, Docket No. 20828, Tentative Decision and Further Notice
    of Inquiry and Rulemaking, 72 FCC 2d 358 (1979) (*Computer II
    Tentative Decision*); *Computer II Final Decision,* 77 FCC 2d 384
    (1980); *Amendment of Section 64.702 of the Commission\'s Rules and
    Regulations (Third Computer Inquiry)*, CC Docket No. 85-229, Report
    and Order, 104 FCC 2d 958 (1986) (*Computer III*) (subsequent
    history omitted) (collectively the *Computer Inquiry Proceeding*).
    In its *Second Computer Inquiry* proceeding, the Commission "adopted
    a regulatory scheme that distinguished between the common carriage
    offering of basic transmission services and the offering of enhanced
    services." *Computer II Final Decision,* 77 FCC 2d at 387; *see
    also* *Computer III Further Remand Proceedings: Bell Operating
    Company Provision of Enhanced Services; 1998 Biennial Regulatory
    Review -- Review of Computer III and ONA Safeguards and
    Requirements*, 13 FCC Rcd 6040, 6064, para. 38 (1998). The former
    services are regulated under Title II and the latter services are
    not. *See Computer II Final Decision,* 77 FCC 2d at 428-30, 432-43,
    paras. 113-18, 124-49 (indicating it would not serve the public
    interest to subject enhanced service providers to traditional common
    carrier regulation under Title II because, among other things, the
    enhanced services market was "truly competitive"). The 1996 Act uses
    different terminology (*i.e.,* "telecommunications services" and
    "information services") than used by the Commission in its *Computer
    Inquiry* proceeding, but the Commission has determined that
    "enhanced services" and "information services" should be interpreted
    to extend to the same functions, although the definition in the 1996
    Act is even broader. *See Implementation of the Non-Accounting
    Safeguards of Sections 271 and 272 of the Communications Act of
    1934, as Amended*, CC Docket No. 96-149, First Report and Order and
    Further Notice of Proposed Rulemaking, 11 FCC Rcd 21905, 21955-56,
    para. 102 (1996) (*Non-Accounting Safeguards Order*) (subsequent
    history omitted) (explaining that all enhanced services are
    information services, but information services are broader and may
    not be enhanced services).

[^78]: *See, e.g*., *Pulver*, 19 FCC Rcd at 3317-20, paras. 17-20
    (explaining the Commission's policy of nonregulation for information
    services and how the 1996 Act reinforces this policy). This policy
    of nonregulation refers primarily to economic, public-utility type
    regulation, as opposed to generally applicable commercial consumer
    protection statutes, or similar generally applicable state laws.
    Indeed, the preeminence of federal authority over information
    services has prevailed unless a carrier-provided information service
    could be characterized as "purely intrastate," *see California v.
    FCC*, 905 F.2d 1217, 1239-42 (9th Cir. 1990), or it is possible to
    separate out the interstate and intrastate components and state
    regulation of the intrastate component would not negate valid
    Commission regulatory goals. *See* *California v. FCC*, 39 F.3d 919
    (9th Cir. 1994) (*California III*), *cert. denied*, 514 U.S. 1050
    (1995) (affirming Commission preemption of certain state
    requirements for separation of facilities and personnel in the BOC
    provision of jurisdictionally mixed enhanced services as state
    regulations would negate national policy).

[^79]: *See* *Computer II Final Decision,* 77 FCC 2d at 425-33, paras.
    109-27 (citing *Computer I*, *Tentative Decision*, 27 FCC 2d at
    297-298).

[^80]: *See, e.g.,* ITTA Comments at 10-12; Minnesota Commission
    Comments at 3; MTA Comments at 13-14; RIITA Comments at 2; Surewest
    Comments at 4-5; GVNW Reply at 2-3; Minnesota Commission Reply at
    4-5, 7; NASUCA Reply at 9, 11-12; Sprint Reply at 2-3. *But see*
    Verizon Reply at 2-6.

[^81]: *See Minnesota Vonage Order* at 8 (finding Vonage's service to be
    "functionally no different than any other telephone service").

[^82]: Indeed, other commenters note how DigitalVoice is like CMRS.
    *See, e.g.*, California Commission Comments at 20-22; HTBC Comments
    at 9.

[^83]: *See* 47 U.S.C. § 332(c)(3)(A). Pursuant to section 332 of the
    Act, state and local governments are specifically preempted from
    regulating the "*entry of or the rates charged* by any commercial
    mobile service or any private mobile service." *Id*. (emphasis
    added).

[^84]: *See, e.g.,* New York Commission Comments at 3; California
    Commission Comments at 4, 19; NASUCA Reply at 15; OTA/WIT Reply
    Comment at 8; Sprint Reply at 6-7.

[^85]: For example, the Commission concluded that some traffic over
    GTE's asymmetrical digital subscriber line (ADSL) service would, in
    fact, be terminated in the state where it originated, or even
    locally, but the service is "an interstate service and is properly
    tariffed at the federal level." *See* *GTE ADSL Order,* 13 FCC Rcd
    at 22466, 22478-79, paras. 1, 22. The Commission left open the
    possibility that a purely intrastate xDSL service may be offered
    which would be tariffed at the state level. *See id*. at 22481,
    para. 27. The Commission similarly determined that cable modem
    service is an interstate service because the points among which
    cable modem communications travel are often in different states and
    countries. *See Cable Modem Declaratory Ruling*, 17 FCC Rcd at 4832,
    para. 59. The jurisdictionally interstate finding of cable modem
    service was not an issue on appeal. *See* *Brand X Internet Services
    v. FCC*, 345 F.3d 1120. Finally, in *Pulver*, the Commission held
    that Pulver's "intrastate capabilities" should not remove the
    service from our jurisdiction. *See* *Pulver*, 19 FCC Rcd at
    3320-22, paras. 20-22.

[^86]: *See* *Louisiana Pub. Serv. Comm'n v. FCC*, 476 U.S. at 368
    (holding that the Supremacy Clause of Article VI of the Constitution
    provides Congress with the power to preempt state law and explaining
    the numerous bases for preemption); *see also* *Pub. Serv. Comm'n of
    Maryland v. FCC,* 909 F.2d at 1515 (citing *Nat'l Ass'n of
    Regulatory Util. Comm'rs v. FCC*, 880 F.2d at 429-31); *Nat'l Ass'n
    of Regulatory Util. Comm'rs*, 880 F.2d at 425 ("We conclude that the
    Commission may only preempt state regulation over intrastate wire
    communication to the degree necessary to keep such regulation from
    negating the Commission\'s exercise of its lawful authority over
    interstate communication service.").

[^87]: *See* Letter from William B. Wilhelm, Jr. and Ronald W. Del
    Sesto, Jr., Counsel for Vonage, to Marlene H. Dortch, Secretary,
    FCC, WC Docket No. 03-211, at 5 (filed Oct. 19, 2004) (Vonage Oct.
    19 *Ex Parte* Letter)

[^88]: *See supra* para. 17.

[^89]: For example, in attempting to apply an end-to-end analysis to an
    incumbent LEC's digital subscriber line (DSL) telecommunications
    service to determine whether federal or state tariffing requirements
    should attach, the Commission noted that "an Internet communication
    does not necessarily have a point of 'termination' in the
    traditional sense." *GTE ADSL Order*, 13 FCC Rcd at 22478-79, para.
    22. In a later proceeding involving the provision of
    Telecommunications Relay Service over the Internet, the Commission
    similarly noted the difficulty in pinpointing the origination of an
    IP-Relay call arising over the Internet because Internet addresses
    do not have geographic correlates equivalent to the PSTN's automatic
    number identifiers, which are tied to geographic locations, and
    thus, there is no automatic way to determine whether any call is
    intrastate or interstate. *See Provision of Improved
    Telecommunications Relay Services and Speech-to-Speech Services for
    Individuals with Hearing and Speech Disabilities*, CC Docket No.
    98-67, Declaratory Ruling and Second Further Notice of Proposed
    Rulemaking, 17 FCC 7779, 7784, para. 15 (2002) (*IP-Relay Second
    FNPRM*). Significantly, as recently as June, the Commission issued
    yet another Further Notice of Proposed Rulemaking in this
    proceeding, recognizing the continued technological inability to
    identify the location of an IP-Relay user. *See Telecommunications
    Relay Services and Speech-to-Speech Services for Individuals with
    Hearing and Speech Disabilities*, CC Docket Nos. 90-571, 98-67; CG
    Docket No. 03-123, Report and Order; Order on Reconsideration;
    Further Notice of Proposed Rulemaking, 19 FCC Rcd 12475, 12561,
    para. 221 (2004) (*2004 IP-Relay FNPRM*). In *Pulver*, the
    Commission concluded that the concept of "end points" and an
    end-to-end analysis were not relevant to Pulver's Internet-based
    VoIP information service. *See Pulver*, 19 FCC Rcd at 3316-23,
    paras. 15-25.

[^90]: *See* Vonage Petition at 5, 28.

[^91]: *See, e.g.,* Vonage Oct. 19 *Ex Parte* Letter at 4-5 (explaining
    that in addition to having no way to determine a geographic
    origination point, determining a geographic destination is not
    possible either); *see also* Letter from Glenn T. Reynolds,
    BellSouth Corp., to Marlene H. Dortch, Secretary, FCC, WC Docket
    Nos. 04-36; 03-211, Attach. at 6-12 (filed Oct.26, 2004) (BellSouth
    Oct. 26 *Ex Parte* Letter) (explaining the multitude of simultaneous
    capabilities during a single communication that makes a point of
    destination unknown); Letter from Howard Symons, Counsel for NTCA,
    to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 03-211, 04-36
    Attach. at 2-3 (filed Oct.28, 2004) (NCTA Oct. 28 *Ex Parte* Letter)
    (describing the core integrated features that "cable VoIP" provides
    to subscribers); Letter from Adam D. Krinsky, Counsel for CTIA, to
    Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 04-36; 03-211,
    (filed Oct.25, 2004) (CTIA Oct. 25 *Ex Parte* Letter) (explaining
    that IP-enabled services do not have definable termination points).

[^92]: *See* Vonage Oct. 19 *Ex Parte* Letter at 4-5.

[^93]: We note that these integrated capabilities and features are not
    unique to DigitalVoice, but are inherent features of most, if not
    all, IP-based services having basic characteristics found in
    DigitalVoice, including those offered or planned by facilities-based
    providers. *See infra* note Error: Reference source not found for a
    brief summary of these basic characteristics; *see also, e.g*.,
    Letter from Kathleen Grillo, Verizon, to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 03-211 at 1-3 (filed Nov. 1, 2004)
    (Verizon Nov. 1 *Ex Parte* Letter) (describing Verizon's VoiceWing
    service); Letter from Cronan O'Connell, Qwest, to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 03-211 (filed Sept. 27, 2004) (Qwest
    Sept. 27 *Ex Parte* Letter) (describing Qwest's VoIP architecture
    and service); Letter from Judy Sello, AT&T, to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 03-211 at 1-4, (filed Oct. 21, 2004)
    (AT&T Oct 21 *Ex Parte* Letter) (describing AT&T's CallVantage
    service); Letter from James K. Smith, Executive Director -- Federal
    Regulatory, SBC, to Marlene H. Dortch, Secretary, FCC, WC Docket
    Nos. 03-211, 04-29, 04-36, Attach. at 4-11 (filed Oct. 8, 2004) (SBC
    Oct. 8 *Ex Parte* Letter) (describing SBC's VoIP architecture and
    service); Letter from Glenn T. Reynolds, Vice President -- Federal
    Regulatory, BellSouth, to Marlene H. Dortch, Secretary, FCC, WC
    Docket Nos. 03-211, 04-36, Attach. at 6-12 (filed Oct. 26, 2004)
    (BellSouth Oct. 26 *Ex Parte* Letter) (describing BellSouth's VoIP
    architecture and service); Letter from Glenn T. Reynolds, Vice
    President -- Federal Regulatory, BellSouth, to Marlene H. Dortch,
    Secretary, FCC, WC Docket Nos. 03-211, 04-36, Attach. at 4 (filed
    Oct. 7, 2004) (BellSouth Oct. 7 *Ex Parte* Letter) (describing
    BellSouth's VoIP architecture and service); Letter from Howard J.
    Symons, Counsel for National Cable & Telecommunications Association
    (NCTA), to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 03-211,
    04-36, Attach. at 3-5 (filed Oct. 28, 2004) (NCTA Oct. 28 *Ex Parte*
    Letter) (describing cable VoIP architecture).

[^94]: *See American Libraries Ass'n v. Pataki*, 969 F. Supp. 160, 170
    (S.D.N.Y. 1997) ("Internet protocols were designed to ignore rather
    than document geographic location.").

[^95]: We acknowledge that certain geolocation products may be capable
    of identifying, to some degree, the geographic location of a Vonage
    user in the future, *see, e.g.*, Sprint Reply at 7, but the record
    does not reflect that such information is readily obtainable at this
    time. *See, e.g.*, 8x8 Comments at 14-15. Should Vonage decide in
    the future to incorporate geolocation capabilities into its service
    to facilitate additional features that may be dependent on reliable
    location determining capabilities, *e.g.,* E911-type features or law
    enforcement surveillance capabilities, this would not alter the fact
    that the service enables the user's location to change continually.
    *See* Vonage Oct. 19 *Ex Parte* Letter at 3-6 (explaining how user
    location information for emergency services purposes would have no
    relevance to an end to end jurisdictional analysis for
    DigitalVoice).

[^96]: *See Pulver*, 19 FCC Rcd at 3320-21, para. 21 ("Attempting to
    require Pulver to locate its members for the purpose of adhering to
    a regulatory analysis that served another network would be forcing
    changes on this service for the sake of regulation itself, rather
    than for any particular policy purpose.").

[^97]: *See, e.g.,* Letter from Staci L. Pies, The VON Coalition, to
    Marlene H. Dortch, Secretary, FCC, CC Docket No. 01‑92; WC Docket
    Nos. 02-361, 03-211, 03-266, 04-36, Attach. at 1 (filed Aug. 19,
    2004) (VON Coalition Aug. 19 *Ex Parte* Letter).

[^98]: Where the Commission has found it difficult to apply an
    end-to-end approach for jurisdictional purposes, it has proposed or
    adopted proxy or allocation mechanisms to approximate an end-to-end
    result. *See, e.g., GTE ADSL Order,* 13 FCC Rcd at 22479, para. 23
    (applying the 10% rule for determining interstate jurisdiction for
    federal tariffing purposes); *IP-Relay Second FNPRM*, 17 FCC Rcd at
    7784, para. 15 (proposing either an allocator to approximate the mix
    of interstate/intrastate traffic or a user self-identification
    mechanism to identify its end-point location); *2004 IP-Relay
    FNPRM,* 19 FCC Rcd at 12561-64, paras. 221-30 (proposing either
    user-registration or allocation mechanisms to determine interstate
    or intrastate use; asking whether, in the alternative, all IP-Relay
    calls should simply be deemed interstate). We find a 'percentage'
    proxy to be unhelpful in addressing the conflict between the federal
    and state regulatory regimes (in particular, the tariffing and
    certification requirements) at issue in this proceeding, because
    using such a proxy would not avoid frustration of the Commission's
    policy objectives discussed above. *See supra* section III.A.3. *But
    see, e.g*., MTA Comments at 10.

[^99]: In this example, if we further assume Minnesota requires entry
    certification for Vonage, but has an entry condition that Vonage
    cannot meet, Vonage could be subject to state sanctions for
    "operating" in the state without authority to the extent any of its
    customers nationwide obtain Minnesota NPA/NXXs and use the service
    to communicate with someone in Minnesota even though that subscriber
    never had a physical presence in Minnesota.

[^100]: *See, e.g.,* NASUCA Reply at 15.

[^101]: In this example, if we further assume Minnesota has imposed a
    specific rate requirement on DigitalVoice's intrastate
    communications, this rate requirement would apply to all
    DigitalVoice communications made by that subscriber to someone in
    Minnesota even though many of those communications are interstate
    under the Act.

[^102]: *See Pulver*, 19 FCC Rcd at 3321-23, paras. 22, 24 (finding it
    similarly impossible to separate Pulver's VoIP service).

[^103]: *See, e.g*.*,* Vonage Oct. 19 *Ex Parte* Letter at 6.

[^104]: In reviewing a challenge to a Commission requirement for BOC
    joint CPE/service marketing because it would "surely 'affect'
    charges for" and regulate "intrastate communications services," and
    preemption of inconsistent state regulation, the D.C. Circuit
    affirmed the Commission stating that "\[e\]ven if \[it\] were a
    purely intrastate service, the FCC might well have authority to
    preemptive regulate its marketing if -- as would appear here -- it
    was typically sold in a package with interstate services. Marketing
    realities might themselves create inseparability." *Illinois Bell
    Tel. Co. v. FCC*, 883 F.2d 104, 112-13 & n.7 (D.C. Cir. 1989)
    (referencing *Louisiana Pub. Serv. Comm'n,* 476 U.S. 355).

[^105]: *See* *generally* Vonage Oct. 19 *Ex Parte* Letter.

[^106]: *See MTS and WATS Market Structure, Amendment of Part 36 of the
    Commission's Rules and Establishment of a Joint Board,* CC Docket
    Nos. 78-72, 80-286, Decision and Order, 4 FCC Rcd 5660, n.7 (1989)
    (*MTS/WATS Market Structure Separations Order*) (finding that "mixed
    use" special access lines carrying more than a *de minimis* amount
    of interstate traffic to private line systems are subject to the
    Commission's jurisdiction for jurisdictional separations purposes
    because separating interstate from intrastate traffic on many such
    lines could not be measured without "significant additional
    administrative efforts"); *see also* *Qwest Corp. v. Minnesota Pub.
    Utils. Comm'n,* 380 F.3d 367, 374 (finding that the Commission's
    preemptive intent concerning the *de minimis* rule relates to cost
    allocation for ratemaking purposes rather than plenary regulatory
    authority but stating that the Commission "*certainly has the
    wherewithal to preempt state regulation in this area if it so
    desires"*) (emphasis added); *BellSouth MemoryCall*, 7 FCC Rcd at
    1620, para. 7 (preempting order of a state commission imposing
    regulatory conditions on the offering of the intrastate portion of a
    jurisdictionally mixed service because of the expense, operational,
    and technical difficulties associated with identifying the
    intrastate portion and the effect it would likely have on the
    provider's continued offering of the interstate portion).

[^107]: *See, e.g*.*, MTS/WATS Market Structure Separations Order,* 4
    FCC Rcd 5660, n.7; *BellSouth MemoryCall*, 7 FCC Rcd at 1620, para.
    7

[^108]: *See Rules and Policies Regarding Calling Number Identification
    Service -- Caller ID,* Memorandum Opinion and Order on
    Reconsideration, Second Report and Order and Third Notice of
    Proposed Rulemaking*,* 10 FCC Rcd 11700*,* 11727-28, para. 77 (1995)
    (citing *California v. FCC,* 39 F.3d 919 (9th Cir. 1994)), *aff'd,
    California v. FCC,* 75 F.3d 1350 (9th Cir. 1996). The Ninth Circuit
    affirmed the Commission's preemption in this case, finding it to fit
    within the impossibility exception. *See* *California v. FCC*, 75
    F.3d at 1360. Indeed, when possible, this Commission prefers that
    economic and market considerations drive the development of
    technology, rather than regulatory requirements. *See,* *e.g.,*
    *Review of the Section 251 Unbundling Obligations of Incumbent Local
    Exchange Carriers; Implementation of the Local Competition
    Provisions of the Telecommunications Act of 1996; Deployment of
    Wireline Services Offering Advanced Telecommunications Capability*,
    Order on Reconsideration, CC Docket Nos. 01-338, 96-98, 98-147, FCC
    04-248, para. 19 (rel. Oct. 18, 2004) (concluding that decision
    regarding "which broadband technologies to deploy is best left to .
    . . the market . . . . We decline to second-guess or skew those
    technology choices . . . .").

[^109]: *See* Vonage Petition at v, 31; *see also* *American Libraries
    Ass'n v. Pataki*, 969 F. Supp. at 171 (explaining that no aspect of
    the Internet can fairly be closed off to users from any state).

[^110]: *See* Vonage Petition at v, 31.

[^111]: *See Public Util. Comm'n of Texas v. FCC*, 886 F.2d 1325 (citing
    *Louisiana Pub. Serv. Comm'n v. FCC*, 476 U.S. 355, 375, the court
    upheld preemption of a Texas Public Utility Commission order
    prohibiting an incumbent LEC from providing interconnection to the
    PSTN to a customer where the FCC cannot "separate the interstate and
    the intrastate components of \[its\] asserted regulation."); *Public
    Serv. Comm'n of Maryland v. FCC,* 909 F.2d at 1515 (citing
    *Louisiana Pub. Serv. Comm'n v. FCC*, 476 U.S. 355, 375, to uphold
    Commission's preemption of a state commission's prescribed rates for
    LEC charges to interexchange carriers for customer disconnections
    based on the impossibility exception).

[^112]: *See, e.g*., SBC Oct. 8 *Ex Parte* Letter, Attach. at 4-11;
    BellSouth Oct. 26 *Ex Parte* Letter, Attach. at 6-12; BellSouth Oct.
    7 *Ex Parte* Letter, Attach. at 4.

[^113]: *See, e.g*., Letter from J.G. Harrington, Counsel for Cox
    Communications, Inc., to Marlene H. Dortch, Secretary, FCC, WC
    Docket Nos. 03-211, 04-36, at 1-2 (filed Oct. 27, 2004) ("This
    network design also permits providers to offer a single, integrated
    service that includes both local and long distance calling and a
    host of other features that can be supported from national or
    regional data centers and accessed by users across state lines. . .
    . In addition to call setup, these functions include generation of
    call announcements, record-keeping, CALEA, voice mail and other
    features such as \*67, conferencing and call waiting. \... \[T\]here
    are no facilities at the local level of a managed voice over IP
    network that can perform these functions."); Letter from Henk
    Brands, Counsel for Time Warner Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket Nos. 03-211, 04-36, at 2, 9 (filed Oct.
    29, 2004) (Time Warner Oct. 29 *Ex Parte* Letter) ("\[T\]he
    Commission should take a broader approach by recognizing additional
    characteristics of IP-based voice services and extend the benefits
    of preemption to all VoIP providers. . . . \[B\]y its nature, VoIP
    is provided on a multistate basis, making different state regulatory
    requirements particularly debilitating."); NCTA Oct. 28 *Ex Parte*
    Letter, Attach. at 1 ("Cable VoIP offers consumers an integrated
    package of voice and enhanced features that are unavailable from
    traditional circuit-switched service. . . . A cable company may have
    no idea whether a customer is accessing these features from home or
    from a remote location. The integral nature of these features and
    functions renders cable VoIP service an interstate offering subject
    to exclusive FCC jurisdiction. . . . Not every cable VoIP service
    has the same mix of features and functionalities . . . , but all
    cable VoIP offers the types of enhancements that render it an
    interstate service. Similarly, while the network architecture of
    each cable VoIP system will not be identical, they share the same
    centralized network design that impart an interstate nature.");
    Letter from Daniel L. Brenner, Senior Vice President, Law &
    Regulatory Policy, NCTA, to Marlene H. Dortch, Secretary, FCC, WC
    Docket Nos. 03-211, 04-36, Attach. at 1 (filed Oct. 27, 2004)
    ("Functions integral to every call, such as CALEA compliance,
    voicemail recording, storage, and retrieval, call record-keeping,
    3-way calling and other functions are provided from these central
    facilities. These facilities are often located in a state different
    from the origin of the call.").

[^114]: *See supra* para*.* 14; *see also, e.g.,* BellSouth Comments at
    3; SBC Comments at 2; VON Coalition Comments at 13; MCI/CompTel
    Reply at 11; VON Coalition Aug. 19 *Ex Parte* Letter, Attach at
    12-13; Time Warner Oct. 29 *Ex Parte* Letter at 8-9; Letter from
    Carolyn W. Brandon, Vice President, Policy, CTIA, to Marlene H.
    Dortch, Secretary, FCC, WC Docket Nos. 03-211, 04-36, at 2 (filed
    Nov. 2, 2004).

[^115]: In section 230(f) of the Act, Congress describes the Internet as
    "an *international* network of federal and non-federal interoperable
    packet switched data networks." *See* 47 U.S.C. § 230(f)(1)
    (emphasis added). Similarly, in section 231, the Internet is defined
    in terms of computer facilities, transmission media, equipment and
    software "comprising the interconnected *worldwide* network of
    computer networks." 47 U.S.C. § 231(e)(3) (emphasis added). Courts
    have similarly described it. *See, e.g., Reno v. ACLU*, 521 U.S.
    844, 849 (1997) ("The Internet is an international network of
    interconnected computers."); *see also Zeran v. America Online,
    Inc.*, 129 F.3d 327, 334 (4th Cir. 1997) (stating that section 230
    represents Congress's approach to a problem of national and
    international dimension "whose international character is
    apparent"). DigitalVoice is a service that falls squarely within the
    phrase "Internet and other interactive computer services" as defined
    in sections 230(f)(1) & 230(f)(2), contrary to the claims of some
    commenters. *See* Minnesota Independent Coalition Comments at 5
    (claiming 230(f) definitions pertain to content services which
    DigitalVoice does not meet). While we do not decide the
    classification of DigitalVoice today so as to specify what type of
    "interactive computer service" it is under section 230(f)(2), that
    determination is unnecessary for purposes of demonstrating its nexus
    to section 230. DigitalVoice is unquestionably an "Internet" service
    as defined in section 230(f)(1), a definition which is not limited
    to any particular content as we discuss in more detail below.

[^116]: 47 U.S.C. § 230(b)(2).

[^117]: *See Pulver*, 19 FCC Rcd at 3319, para. 18 n.66.

[^118]: *See id*. We found Pulver's FWD service to be an information
    service -- a determination which further supported a national
    federal regulatory regime for that service. Indeed, were we to reach
    a similar statutory "information service" classification
    determination for DigitalVoice in this Order, there would be no
    question that Congress intended it to remain free from state-imposed
    economic, public-utility type regulation, consistent with the
    Commission's long-standing policy of non-regulation for information
    services. *See* *id.* at 3317-22, paras. 17-22. In *Pulver*, we
    explained that through codifying the Commission's decades old
    distinction between "basic services" and "enhanced services" as
    "telecommunications services" and "information services,"
    respectively, in the 1996 Act, and by specifically excluding
    information services from the ambit of Title II, Congress indicated,
    consistent with the Commission's long-standing policy of
    nonregulation, that information services not be regulated. *See id.*
    at 3318-19, para. 18; *see also* *Non-Accounting Safeguards Order*,
    11 FCC Rcd at 21955-56, para. 102; *IP‑Enabled Services Proceeding*,
    19 FCC Rcd at 4879-81, 4890-91, paras. 25-27, 39. While Congress has
    indicated that information services are not subject to the type of
    regulation inherent in Title II, Congress has provided the
    Commission with ancillary authority under Title I to impose such
    regulations as may be necessary to carry out its mandates under the
    Act. Although the Commission has clear authority to do so, it has
    only rarely sought to regulate information services using its Title
    I ancillary authority. *See Implementation of Section 255 and
    251(a)(2) of the Communications Act of 1934, as Enacted by the
    Telecommunications Act of 1996; Access to Telecommunications
    Service, Telecommunications Equipment and* Customer *Premises
    Equipment by Persons with Disabilities*, WT Docket No. 96-198,
    Report and Order and Further Notice of Inquiry, 16 FCC Rcd 6417
    (1999).

[^119]: 47 U.S.C. § 230(b)(1).

[^120]: 47 U.S.C. § 230(b)(1), (2) (emphasis added). Indeed, the
    communications that occur when a subscriber uses the DigitalVoice
    service are Internet communications, no less than e-mail, instant
    messaging, or chat rooms. *See, e.g.,* VON Coalition Aug. 19 *Ex
    Parte* Letter, Attach at 2. Although DigitalVoice may be
    functionally similar in some respects to voice communications that
    are not dependent upon the Internet, this does not change the fact
    that *DigitalVoice is an Internet-based communications service*.
    *See also supra* note Error: Reference source not found.

[^121]: 47 U.S.C. § 230(b)(1), (2) (emphasis added).

[^122]: *See, e.g.,* MCI/CompTel Comments at 11; Motorola Comments at
    12; SBC Comments at 2-4; VON Coalition Comments at 13; AT&T Reply at
    2; Vonage Aug. 13 *Ex Parte* Letter, Attach. at 3; VON Coalition
    Aug. 19 *Ex Parte* Letter, Attach. at 13.

[^123]: *See, e.g.,* California Commission Comments at 15-17; Minnesota
    Independent Coalition Comments at 4-6; MTA Comments at 6.

[^124]: *See* 47 U.S.C. § 230.

[^125]: 47 U.S.C. § 157 nt. Section 706 of the 1996 Act is located in
    the notes of section 7 of the Communication Act. To implement
    section 706's mandate, the Commission has considered, among other
    things, whether its rules promote the delivery of innovative
    advanced services offerings. *See Review of the Section 251
    Unbundling Obligations of Incumbent Local Exchange Carriers,
    Implementation of the Local Competition Provisions of the
    Telecommunications Act of 1996, Deployment of Wireline Services
    Offering Advanced Telecommunications Capability*, CC Docket Nos.
    01-338, 96-98, 98-147, Report and Order and Order on Remand and
    Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978 (2003)
    (*FNPRM*), *corrected by* Errata, 18 FCC Rcd 19020 (2003), *aff'd in
    part, remanded in part, vacated in part*, *United States Telecom
    Ass'n v. FCC*, 359 F.3d 554 (D.C. Cir. 2004), *cert. denied sub nom.
    Nat'l Ass'n Regulatory. Util. Comm'rs v. United States Telecom
    Ass'n*, 73 USLW 3234 (U.S. Oct. 12, 2004) (Nos. 04-12, 04-15,
    04-18). We find that our actions in this ruling are also consistent
    with this provision of the Act.

[^126]: *See* 47 U.S.C. § 157 nt. (c)(1) (defining "advanced
    telecommunications capability").

[^127]: *See* 8x8 Comments at 5; VON Coalition Aug. 19 *Ex Parte*
    Letter, Attach at 7-8.

[^128]: *See Fourth Section 706 Report* at 38 ("\[S\]ubscribership to
    broadband services will increase in the future as new applications
    that require broadband access, *such as VoIP*, are introduced into
    the marketplace, and consumers become more aware of such
    applications.") (emphasis added); *see also id*. at 3 (Statement of
    Chairman Powell) ("Disruptive VoIP services are acting as a
    demand-driver for broadband connections, lighting the industry's
    fuse, and exciting a moribund market."); APT Comments at 2; Motorola
    Comments at 12.

[^129]: *See Pulver*, 19 FCC Rcd at 3319-20, para. 19; *see also
    American Libraries Ass'n v. Pataki*, 969 F. Supp. at 183 ("Haphazard
    and uncoordinated state regulation \[of the Internet\] can only
    frustrate the growth of cyberspace.").

[^130]: U.S. Const. art. 1, § 8, cl. 3.

[^131]: *Oregon Waste Sys. v. Dep't of Envtl. Quality*, 511 U.S. 93, 98
    (1994) (citations omitted); *see also* *PSINet, Inc. v. Chapman*,
    362 F.3d 227, 239 (4th Cir. 2004) (quoting *General Motors Corp. v.
    Tracey*, 519 U.S. 278, 287 (1997)); *American Libraries Ass'n v.
    Pataki*, 969 F. Supp. at 173 (holding that the Internet is an
    instrument of "interstate commerce" under the Commerce Clause).

[^132]: *Healy v. Beer Institute*, 491 U.S. 324, 332 (1989); *see also*
    *Cotto Waxo Co. v. Williams*, 46 F.3d 790, 793 (8th Cir. 1995)
    ("Under the Commerce Clause, a state regulation is *per se* invalid
    when it has an 'extraterritorial reach,' that is, when the statute
    has the practical effect of controlling conduct beyond the
    boundaries of the state. The Commerce Clause precludes application
    of a state statute to commerce that takes place wholly outside of
    the state's borders.") (emphasis added) (citation omitted).

[^133]: *See Pike v. Bruce Church, Inc.*, 397 U.S. 137, 142 (1970); *see
    also* *Cotto Waxo Co. v. Williams*, 46 F.3d at 793 ("\[I\]f the
    challenged statute regulates evenhandedly, then it burdens
    interstate commerce indirectly and is subject to a balancing test.
    Under the balancing test, a state statute violates the Commerce
    Clause only if the burdens it imposes on interstate commerce are
    'clearly excessive in relation to the putative local benefits.'")
    (citation omitted).

[^134]: *American Libraries Ass'n v. Pataki*, 969 F. Supp. at 169
    (citing *Wabash, St. Louis & Pac. Ry. Co. v. Illinois*, 118 U.S. 557
    (1886)); *see id.* at 181 ("The courts have long recognized that
    certain types of commerce demand consistent treatment and are
    therefore susceptible to regulation only on a national level.");
    *American Civil Liberties Union v. Johnson*, 194 F.3d 1149, 1162
    (10th Cir. 1999).

[^135]: *Healy v. Beer Institute*, 491 U.S. at 332; *see also American
    Libraries Ass'n v. Pataki*, 969 F. Supp. at 173-74, 177; *American
    Booksellers Found. v. Dean*, 342 F.3d 96, 103 (2d Cir. 2003)
    (acknowledging that because of "the Internet's boundary-less
    nature," regulations of Internet communications may not be "wholly
    outside" a state's borders, but nonetheless may impose
    extraterritorial regulation in violation of the Commerce Clause).

[^136]: *See supra* para. **5**.

[^137]: *See supra* para. 30.

[^138]: *See* Vonage Petition at 29 ("Vonage has no way of assuring that
    it is in compliance with the \[*Minnesota Vonage Order*\] unless it
    blocks a substantial amount of interstate traffic as well."); *id.*
    at 31 ("\[S\]ince *any* Vonage customer could, in theory, travel to
    Minnesota at any time and connect their MTA computer to a broadband
    Internet connection, Vonage could never prevent *all* intrastate
    Minnesota use of its service unless it blocked *all* interstate
    'calls' as well.") (emphasis in original); *id.* at 25, 27; *see
    also American Libraries Ass'n v. Pataki*, 969 F. Supp. at 171
    ("\[N\]o aspect of the Internet can feasibly be closed off to users
    from another state.").

[^139]: *See Pike v. Bruce Church, Inc.*, 397 U.S. at 142; *see also*
    *Cotto Waxo Co. v. Williams*, 46 F.3d at 793. *See generally*
    Michael A. Bamberger*, The Clash Between the Commerce Clause and
    State Regulation of the Internet*, Internet Newsletter, Apr. 2002
    (explaining that "\[f\]or the most part, courts have analyzed the
    constitutionality of state Internet regulation under the test
    employed by the *Pike* court") (emphasis added).

[^140]: Indeed, one federal court has already determined, in the
    specific context of Vonage, that state entry regulation of
    DigitalVoice would interfere with interstate commerce. *See New York
    Preliminary Injunction* at 2; *see* *also* *American Booksellers
    Found. v. Dean*, 342 F.3d at 104 ("We think it likely that the
    \[I\]nternet will soon be seen as falling within the class of
    subjects that are protected from State regulation because they
    'imperatively demand \[\] a single uniform rule.'") (citing *Cooley
    v. Bd. of Wardens*, 53 U.S. 299 (1851)).

[^141]: *See* *supra* para. 29; *see also* *American Libraries Ass'n v.
    Pataki*, 969 F. Supp. at 170 ("The Internet is wholly insensitive to
    geographic distances. . . . Internet protocols were designed to
    ignore rather than document geographic location . . . .").

[^142]: *American Libraries Ass'n v. Pataki*, 969 F. Supp. at 69 (citing
    *Wabash, St. Louis & Pac. Ry. Co. v. Illinois*, 118 U.S. 557); *see
    also* *American Civil Liberties Union v. Johnson*, 194 F.3d at 1162
    ("As we observed, . . . certain types of commerce have been
    recognized as requiring national regulation. . . . The Internet is
    surely such a medium.").

[^143]: *See also* *American Libraries Ass'n v. Pataki*, 969 F. Supp. at
    169 ("The menace of inconsistent state regulation invites analysis
    under the Commerce Clause of the Constitution, because that clause
    represented the framers\' reaction to overreaching by the individual
    states that might jeopardize the growth of the nation ‑ and in
    particular, the national infrastructure of communications and trade
    ‑ as a whole.") (citing *Quill Corp. v. North Dakota,* 504 U.S. 298,
    312 (1992)).

[^144]: Federal court decisions applying the Commerce Clause to state
    regulation of Internet services have come to similar conclusions. In
    *American Libraries Ass'n v. Pataki*, a leading case on this issue,
    a federal district court struck down a New York state statute making
    it a crime to disseminate indecent material to minors over the
    Internet. The court held that the New York law violated the Commerce
    Clause because it (1) overreached by seeking to regulate conduct
    occurring outside its borders; (2) imposed burdens on interstate
    commerce that exceeded any local benefit; and (3) subjected
    interstate use of the Internet to inconsistent regulations. *See
    American Libraries Ass'n v. Pataki*, 969 F. Supp. at 183-84. In
    several subsequent cases, federal courts of appeal expressly adopted
    these holdings. *See PSINet, Inc. v. Chapman*, 362 F.3d 227;
    *American Booksellers Found. v. Dean*, 342 F.3d 96; *American Civil
    Liberties Union v. Johnson*, 194 F.3d 1149; *see also American
    Libraries Ass'n v. Pataki*, 969 F. Supp. at 182 ("The Internet . . .
    requires a cohesive national scheme of regulation so that users are
    reasonably able to determine their obligations.").

    We also note examples from other network-based industries where,
    although an intrastate component may exist, state authority must
    nonetheless yield to exclusive federal jurisdiction in the area of
    economic or other state regulations affecting interstate commerce.
    For example, in the case of railroads, the Supreme Court struck down
    a state regulation regarding the length of trains, holding that
    "examination of all the relevant factors makes it plain that the
    state interest is outweighed by the interest of the nation in an
    adequate, economical and efficient railway transportation service,
    which must prevail." *Southern Pac. Co. v. Arizona*, 325 U.S. 761,
    783-84 (1945). Similarly, in trucking cases, the Supreme Court has
    invalidated state laws regulating the length of trucks under the
    Commerce Clause when the regulation imposes a burden on interstate
    trucking that is not outweighed by the local interest. *See*
    *Raymond Motor Transportation, Inc. v. Rice*, 434 U.S. 429 (1978);
    *Kassel v. Consolidated Freightways Corp.*, 450 U.S. 662 (1981). In
    another transportation case, the Court struck down an Illinois law
    mandating a particular type of mudguards on trucks operating in the
    state, concluding that the regulation imposed significant burdens on
    interstate trucking with no countervailing benefits. *See Bibb v.
    Navajo Freight Lines, Inc.,* 359 U.S. 520 (1959).

[^145]: *See* Vonage Petition at 25 (citing Minn. Rule § 7812.0550 subp.
    1).

[^146]: *See Minnesota Vonage Order* at 8.

[^147]: *See* Vonage Petition at 8-9, 24-25.

[^148]: *See supra* paras. 20-22 (explaining preemption of entry
    requirements). Indeed, Vonage notes in its petition that "\[I\]f the
    Commission preempts Minnesota's certificate requirement . . . this
    issue \[911 comparability to an incumbent LEC\] will be moot." *See*
    Vonage Petition at 25. Similarly, to the extent the Minnesota
    Commission demands payment of 911 fees as a condition of entry, that
    requirement is preempted.

[^149]: *See* VON Coalition Aug. 19 *Ex Parte* Letter at 4.

[^150]: As explained above, these issues are currently being considered
    in pending proceedings before this Commission. *See supra* note
    Error: Reference source not found. *See also, e.g.*, Minnesota
    Commission Comments at 4; Surewest Comments at 12; Texas 911
    Agencies Comments at 2-3 (urging the Commission to consider public
    safety issues related to VoIP services).

[^151]: *See* NENA Reply at 1-2; Vonage Aug. 13 *Ex Parte* Letter at
    1-2; Minnesota Statewide 911 Program Comments at 4.

[^152]: In offering its "911" capability to its customers, Vonage has
    provided the Commission information regarding how and what it tells
    its customers about its limited 911 capabilities such that its
    customers are fully aware of those limitations when they subscribe
    to the service and clearly understand that it is not a comparable
    emergency service to the 911 capability they obtain with local
    exchange service. We fully expect Vonage to continue providing
    customers information such as this about its "911" capability. *See*
    Vonage Oct. 1 *Ex Parte* Letter at 3-4 & Exhibit 10.

[^153]: *See* Letter from William B. Wilhelm, Jr. and Ronald W. Del
    Sesto, Jr., Counsel for Vonage, to Marlene H. Dortch, Secretary,
    FCC, WC Docket Nos. 03-211, 04-36, at 1 (filed Oct. 14, 2004).

[^154]: We look beyond Vonage's efforts of today, however, toward work
    that remains to be done in the area of 911 and the opportunities
    that this new technology presents for public safety. To that end, we
    are aware of the six principles NENA has advanced: (1) establish a
    national E911 VoIP policy; (2) encourage vendor and technology
    neutral solutions and innovation; (3) retain consumer service
    quality expectations; (4) support dynamic, flexible, open
    architecture system design process for 911; (5) develop policies for
    911 compatible with the commercial environment for IP
    communications; and (6) promote a fully funded 911 system. *See*
    National Emergency Number Association, *E9-1-1, Internet Protocol &
    Emergency Communications*, Press Release (Mar. 22, 2004). We applaud
    NENA's vision in establishing these principles to support a process
    to "promote a fully functional 9-1-1 system that responds any time,
    anywhere from every device." *See id.*. We endorse these principles
    because they provide a sound blueprint for the development of a
    national 911 solution for VoIP services and we encourage all VoIP
    providers and industry participants to work toward their
    realization.

[^155]: We note that nothing in this Order addressing the Commission's
    jurisdictional determination of or regulatory treatment of
    particular retail IP-enabled services impacts competitive LEC access
    to the underlying facilities on which such retail services ride.
    *See* Letter from Jason D. Oxman, General Counsel, Association for
    Local Telecommunications Services, to Marlene Dortch, Secretary,
    FCC, WC Docket Nos. 04-29, 04-36 (filed Nov. 2, 2004).

[^156]: *See supra* note Error: Reference source not found.

[^157]: *See New York Preliminary Injunction* at 3. We note that
    Vonage's "emergency 911 calling service" is not a service that is
    provided pursuant to the New York Commission's rules or any other
    state commission's rules. This is a service Vonage has voluntarily
    undertaken in response to consumer demand.

[^158]: *See New York Preliminary Injunction* at 4.

[^159]: We recognize that Vonage's 911 capability relies on the
    cooperation of its customers in accurately registering and
    re-registering their user location when they move about with the
    service.

[^160]: *See IP-Enabled Services Proceeding*, 19 FCC Rcd at 4897-901,
    paras. 51-57.

[^161]: 47 U.S.C. § 230(b)(2).

[^162]: Letter of Gregory Sopkin, Chairman, Colorado Public Utilities
    Commission; Thomas Welch, Chairman, Maine Public Utilities
    Commission; Jack Goldberg, Vice-Chairman, Connecticut Department of
    Public Utility Control; James Connelly, Commissioner, Massachusetts
    Department of Telecommunications & Energy; Charles Davidson,
    Commissioner, Florida Public Service Commission; Susan Kennedy,
    Commissioner, California Public Utilities Commission; and Connie
    Murray, Commissioner, Missouri Public Service Commission, at 6
    (November 2, 2004).

[^163]: *Id.*

[^164]: *Cf. Brand X Internet Service v. FCC*, 345 F.3d 1120 (9th Cir.
    2003), *petition for cert. filed* (Aug. 27, 2004) (No. 04-281).