BEFORE THE NEBRASKA PUBLIC SERVICE COMMISSION
In the matter of the Commission )
on its own motion seeking to ) Application No. NUSF-1
establish guidelines for )
administration of the Nebraska ) PROGRESSION ORDER NO. 18
Universal Service Fund )
TESTIMONY OF GREG L. ROGERS
ON BEHALF OF LEVEL 3 COMMUNICATIONS, LLC
Q. PLEASE STATE YOUR NAME, POSITION, EMPLOYER, AND
A. My name is Greg Rogers. I am Director of State Regulatory Affairs with Level 3
Communications, LLC (“Level 3”). My business address is 1025 Eldorado
Boulevard, Broomfield, Colorado 80021.
Q. ON WHOSE BEHALF ARE YOU FILING THIS TESTIMONY?
A. I am filing this testimony on behalf of Level 3.
Q. PLEASE REVIEW YOUR EDUCATION AND RELEVANT WORK
A. I have an undergraduate degree in Political Science from Colorado College and a
Juris Doctor from the University of Colorado School of Law. I have been
employed by Level 3 since June, 1998. I have worked in a number of capacities
at Level 3 over the course of those years but have been principally responsible for
federal and state regulatory matters. My current duties include managing Level
3’s state regulatory compliance in all 50 states where Level 3 is certificated,
representing Level 3’s legal and public policy positions before state and federal
regulators, and providing regulatory guidance to Level 3 business clients
concerning Level 3’s products and services.
Q: HAVE YOU EVER TESTIFIED BEFORE THIS COMMISSION?
Q. WHY IS LEVEL 3 SUBMITTING TESTIMONY IN APPLICATION NO.
NUSF-1 IN RESPONSE TO THE NEBRASKA PUBLIC SERVICE
COMMISSION’S (“COMMISSION”) PROGRESSION ORDER NO. 18?
A. Level 3 is primarily a wholesale provider of communications services to
bandwidth intensive customers and Internet Protocol (“IP”) based resellers.
Among the services that Level 3 provides are wholesale voice and IP services to
enhanced service provider (“ESP”) customers, who in turn offer retail VoIP
services to end users. Because Level 3 is not a retail provider of VoIP services,
the proposal to apply the Nebraska Administrative Code’s definition of
“telecommunications service” to interconnected VoIP providers as defined by the
Federal Communications Commission (“FCC”) for the purposes of Nebraska
Universal Service Fund (“NUSF”) contributions would not appear to implicate
Level 3 directly. However, because its customers would be impacted and because
Level 3 is witnessing a great deal of debate and confusion in the regulatory arena
concerning VoIP services, Level 3 opposes the adoption of rules that would seek
to impose state level regulations on VoIP services at this time.
Q. WHAT IS LEVEL 3’S POSITION REGARDING WHETHER
INTERCONNECTED VOIP PROVIDERS PROVIDE “TELECOM-
MUNICATIONS SERVICE” AS DEFINED IN NEBRASKA, AND
WHETHER THE FCC’S NEW SAFE HARBOR ALLOCATION
METHODOLOGY PROVIDES AN AVENUE FOR THE ASSESSMENT
A. In the Vonage Preemption Order the FCC asserted its exclusive jurisdiction over
interconnected VoIP services and preempted state utilities commissions from
1asserting separate jurisdiction over interconnected VoIP services. The FCC also
continues to pursue a broad effort to study the appropriate regulatory and public
2policy treatments for IP-enabled services generally. In limited instances thus far,
the FCC has adopted certain federal regulations for a defined sub-set of VoIP
services (“interconnected VoIP’) that are in the marketplace today. To date, the
FCC has asserted its exclusive jurisdiction and set forth regulations concerning
interconnected VoIP services in the areas of 911, CALEA and now Federal USF.
In light of the FCC’s assertion of exclusive jurisdiction and its explicit refusal to
define interconnected VoIP as a “telecommunications service,” it would be
inappropriate and beyond the Nebraska Commission’s authority to define
1 In re Vonage Holdings Corp. Petition for Declaratory Ruling Concerning an Order of the Minn. Pub. Util.
Comm’n, WC Docket No. 03-211, FCC 04-267 (FCC rel. Nov. 12, 2004) (“Vonage Preemption Order”). 2 IP-Enabled Services, WC Docket No. 04-36, Notice of Proposed Rulemaking, 19 FCC Rcd 4863 (2004)
(“IP-Enabled Services Proceeding”).
interconnected VoIP as “telecommunications service” in order to collect state
USF on VoIP revenues in Nebraska as it has proposed to do.
Q. PLEASE DISCUSS IN FURTHER DETAIL WHY THE NEBRASKA
COMMISSION’S PROPOSAL IS NOT A VIABLE COURSE OF ACTION.
A. In its Vonage Preemption Order, the FCC preempted the Minnesota Public
Utilities Commission (“MPUC”) of its regulatory jurisdiction to impose 911
requirements on Vonage’s Digital Voice services. In asserting its exclusive
regulatory jurisdiction over VoIP services like Vonage’s Digital Voice service,
the FCC found “that the characteristics of Digital Voice preclude any practical
identification of, and separation into, interstate and intrastate communications for
purposes of effectuating a dual federal/state regulatory scheme, and that
3permitting Minnesota’s regulations would thwart federal law and policy.” Even
now that the FCC has established regulations concerning the assessment of FUSF
through a safe harbor mechanism, the preemptive effect and the basis for the
Vonage Preemption Order remain in effect. Therefore, Level 3 disagrees with the
Commission’s findings in NUSF-40/PI-86 and its current proposal that a legally
valid avenue to impose regulations in the form of NUSF on VoIP services exists
without a specific grant of authority from the FCC.
Q. WHY WOULDN’T THE REMAINING AMOUNT OF REVENUE NOT
ASSESSED UNDER THE FCC’S SAFE HARBOR BE LEFT TO STATE
AUTHORITIES TO ASSESS?
3 Vonage Preemption Order at ? 14
A. While the proposed state regulation at issue in the Vonage Preemption Order
concerned E-911 rather than USF, the FCC’s rationale for asserting its exclusive
applies with equal strength no matter what the regulatory issue may be. In its
order upholding the preemptive effect of the Vonage Preemption Orde, the United
States District Court and Court of Appeals for the Eighth Circuit supported the
FCC’s conclusion “that the interstate and int[ra]state [sic] components of
Vonage’s services are inseverable, such that it is not possible for [the] MPUC to
regulate the intrastate component of the service without impermissibly regulating
4the interstate component.” After the Vonage Preemption Order, any regulation
imposed on interconnected VoIP services by the FCC must be presumed to be
exclusive of any other form of regulation until the FCC itself revises its
jurisdictional exclusivity in some manner. Because the FCC has not amended its
assertion of exclusive jurisdiction in any way since the Vonage Preemption Order,
state regulators continue to be barred from regulating interconnected VoIP
services like Vonage’s Digital Voice service. Level 3 believes the “safe harbor”
5methodology the FCC established in its USF Contribution Order is simply a
continuation of the rationale for exclusive federal jurisdiction, which is that the
very nature of VoIP makes the separation of intrastate and interstate components
of VoIP services impractical. It follows, therefore, that there is no methodology
that the Nebraska Commission could legally adopt that would accurately identify
4th Vonage Holdings Corp. v. The Minn. Pub. Util. Comm’n; 394 F.3d 568 (8 Cir. 2004) [Citing ?31 of the
Vonage Preemption Order]. 5 In the Matter of Universal Service Contribution Methodology, WC Docket No. 06-122, FCC 06-94 (FCC
rel. June 27, 2006) (“USF Contribution Order”).
assessable retail intrastate VoIP service revenues for the purpose of funding
Nebraska’s USF program.
Q. WHAT IS LEVEL 3’S RECOMMENDATION?
A. With the FCC’s Vonage Preemption Order in effect and the IP-Enabled Services
Proceeding still open, state level USF programs must continue to operate based
upon the intrastate telecommunications service carriers provide that are subject to
their jurisdiction. This means that any intrastate telecommunications components
sold by carriers to ESP end users, like intrastate private lines or local exchange
interconnection services, that are incorporated into a retail VoIP service will
continue to be assessable. However, if the Commission does conclude that it has
the jurisdiction to apply NUSF to VoIP service providers it should follow the
FCC’s definition of “interconnected VoIP provider” and should remain consistent
with the FCC’s safe-harbor methodologies rather than attempting to create unique
state definitions and methodologies which will only slow down the effort to
establish a uniform regulatory environment that will be conducive to a
competitive communications marketplace.
Q. DOES THIS CONCLUDE YOUR TESTIMONY?
thRespectfully submitted this 17 day of November, 2006.
LEVEL 3 COMMUNICATIONS, LLC
Loel P. Brooks, #15352
BROOKS, PANSING BROOKS, PC, LLO
1248 “O” Street, Suite 984
Lincoln, NE 68508-1424
CERTIFICATE OF SERVICE
th The undersigned hereby certifies that on this 17day of November, 2006, an
original, five copies and an electronic copy of the Testimony of Greg L. Rogers on
Behalf of Level 3 Communications, LLC, in Application No. NUSF-1, Progression Order
No. 18, were delivered to:
Nebraska Public Service Commission
1200 “N” Street
300 The Atrium
Lincoln, NE 68508
Loel P. Brooks