By Sharla Sikes

At issue: Should VoIP providers be required to pay local fees for providing service? In Nebraska, Vonage recently fought against having to pay into the state’s Universal Service Fund, a fund that subsidizes phone and Internet services for schools, libraries and poor or rural areas.

The Nebraska Public Service Commission was barred from collecting these fees from Vonage. The PSC may appeal the federal court decision. Vonage argued that it provides information, rather than voice, services in order to avoid the fee that all “traditional” phone companies in the state pay. Other phone providers say Vonage should be held to the same requirements as they, while Vonage and other VoIP providers prefer to be classified with cable TV companies—which are not subject to fees.

Vonage had previously won a similar battle in Minnesota against the state’s Public Utilities Commission, and U.S. District Court Judge Laurie Smith Camp ruled similarly in the Nebraska case. Her order barring the PSC from “asserting state jurisdiction over (Vonage) to force them to contribute to the Nebraska Universal Fund” won’t net Vonage any returned funds, since it never paid into the funds, but other VoIP providers did.

“We have had only two inquiries to date from VoIP providers,” Boyle said. “We’ve told them that if they do not intend to pay, that we’ll agree to that, but if they want any refunds, it would be pending the outcome of whatever it is we decide to do.”

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