No one knows for sure, but the many pending cases and disputes on VoIP access charges collectively probably have hundreds of millions of dollars at stake. The FCC has exerted much effort to avoid making a decision on the court referrals and various petitions that it has received on the subject since 2005.

Always hopeful that it will moot the question with a comprehensive reform of "intercarrier compensation" within the next 12 months, the FCC has allowed the issue to stay undecided for five years and counting. Paetec and the 14 organizations on the Joint Brief, believe things have dragged on long enough and want the Court of Appeals to rule where the FCC is apparently afraid to tread.

As described in our February 19 posting on the Paetec case, Paetec sued CommPartners in federal district court seeking to collect terminating access charges on interconnected VoIP traffic sent to Paetec by CommPartners. The district court ruled against Paetec, concluding that "the access charge regime is inapplicable to VoIP-originated traffic" because such transmissions qualify for the FCC's "information services" exemption from access on the basis that IP-to-TDM calls involve "net protocol conversion." The district court went on to deny Paetec's claims on unjust enrichment and quantum meruit as well, concluding that the Telecom Act's access charge regime creates a statutory bar to those equitable legal arguments. This ruling, if allowed to stand, would be a huge policy victory for VoIP providers and ISPs and a very expensive defeat for ILECs.

Paetec sought and was granted permission to file an immediate appeal of the Court's rulings. Because the case is not complete, the appeal is "interlocutory" and may be heard only if the district court allows it (it did) and the Court of Appeals agrees to hear it. Paetec has filed its request with the Court of Appeals in D.C. The Joint Brief in support was filed May 20.

We are starting to see the impact of the closure. The FCC's open meeting originally scheduled for today has been postponed a week, to February 18th. The FCC's electronic docketing systems have not been updated since mid-day on Friday, February 5th, putting significant strains on many proceedings before the Commission. I have one proceeding, for example, where comments were due on the 5th. Maybe half of all comments appear in the docket so far, and the February 22 reply date is rapidly approaching. I hope the FCC will grant an extension of the reply date when it finally opens again.

Kudos to all those snowplow operators, emergency services personnel and utility technicians who have toiled so long and hard in what turned out to be a blizzard we will remember forever.

The D.C. Circuit has examined the issue several times since 1999, including a 2002 decision that the FCC rate cap could not be justified on the basis of 47 USC 251(g). WorldCom, Inc. v. FCC, 288 F.3d 429 (D.C. Cir. 2002). In that case, the Court rejected and remanded the FCC's rationale for the rate cap but did not vacate it, recognizing that there might be other legitimate bases for the policy. Subsequently, in June 2004, Core Communications asked the Court to order the FCC to respond to the remand, which remained pending. The Court declined, but in 2007 granted a renewed request for mandamus from Core. The FCC followed that order with the November 5, 2008 ruling which was the subject of the recent Court affirmation. The key legal discussion in the new decision is Court agreement that the FCC is legally empowered to rely on Section 201 of the Communications Act as the supporting basis for the rate cap.

The January 12 opinion reviews and rejects each of the Core Communications challenges to the FCC action. First, the Court finds that Section 201 is not a "general" provision superceded by the more specific Sections 251 and 252 in the area of compensation for ISP bound traffic (which has been found to be interstate, not local in nature). It also rejected arguments that the calls are "local" rather than interstate because they terminate at the ISP. The Court found that it has already been established and accepted that dial up internet calls do not stop at the ISP interface, but instead continue on to the websites being contacted. Similarly, the Court rejected a claim that the FCC was impermissibly discriminating against ISP bound calls by treating them differently from other calls. Finally, the Court rejected other arguments without discussion because they had been improperly raised before the Court.