Communications Law Bulletin Special Edition: Nebraska Preempted and Enjoined from Applying State USF to VoIP Services

The Eighth Circuit Court of Appeals has affirmed the Nebraska federal district court holding that Nebraska was preempted and enjoined from enforcing its state universal service fund (“USF”) surcharge fee against a Voice over Internet Protocol (“VoIP”) service provider. Vonage Holdings Corp. v. Nebraska Public Service, --- F.3d ----, 2009, WL 1161584 (C.A.8 Neb. May 1, 2009) (“Nebraska PSC”) This decision, though binding only on the states in the Eighth Circuit, could have the potentially far-reaching effect of prohibiting all states from imposing their state USF fees against any nomadic interconnected VoIP service providers, such as Vonage. However, on May 14, 2009, the NPSC filed a petition with the federal Court of Appeals requesting a rehearing en banc.

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