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Minnesota Commerce Department Investigation Leads to Landmark Ruling That Protects Phone Consumers

Public Utilities Commission Rules That Cable-Provided Phone Service Is Subject to State Oversight

5/8/2015 10:14:43 AM

 


For Immediate Release:

SAINT PAUL, MN – Responding to an investigation by the Minnesota Department of Commerce, the Minnesota Public Utilities Commission issued a landmark ruling today that phone service provided by a cable company is a “telecommunications service” subject to state oversight in order to protect consumers and the public interest. 

The Commission’s 5-0 decision makes Minnesota the first state in the country to establish jurisdiction over this kind of local phone service, known as “fixed interconnected Voice over Internet Protocol (VoIP).” 

“This unanimous ruling is a major victory to protect people,” said Commerce Commissioner Mike Rothman. “Phone companies cannot gain unfair advantage and evade their responsibility to deliver fundamental services, especially for disabled and low-income Minnesotans who depend on it.” 

VoIP service allows subscribers to make and receive calls using their cable company phone service with traditional phone numbers.  The Commission’s decision does not apply to computer-to-computer communications nor services like Skype or FaceTime that do not travel on the public switched telephone network. 

The Commerce Department investigation determined that, in March 2013, Charter Fiberlink Companies transferred all of its more than 100,000 Minnesota voice phone customers to an affiliate, Charter Advanced Services Companies, which provided VoIP phone service that was not certified by the State.  Charter did not notify or seek approval from the Public Utilities Commission. 

After the transfer, Charter also stopped complying with two state programs designed to support universal phone access for disabled and low-income Minnesotans.  

Specifically, Charter refused to collect the required fees for Telecommunications Access Minnesota (TAM) which provides accessibility equipment and supports the Minnesota Relay service that allows individuals who are deaf, hard-of-hearing, deaf-blind or speech disabled to communicate over the telephone. 

Charter also refused to collect required fees for the Telephone Assistance Plan (TAP), which provides a bill credit to make phone service, including 911, more accessible and affordable to low-income consumers.  Charter also discontinued offering the TAP credit to its qualifying customers. 

Charter’s unilateral refusal to support these universal access programs meant that customers of its competitors had to make up for the lost revenue to these programs. 

In fact, Charter advertised its business by claiming “No added fees like the phone company charges you.” 

“On its own, Charter decided it did not have to obey the same rules that other local phone companies do,” said Rothman.  “Today’s ruling makes it clear that phone companies must serve consumers and compete on a level playing field.” 

Charter claimed that federal law preempted state jurisdiction.  However, several Commissioners specifically pointed out that neither the courts nor the Federal Communications Commission (FCC) have established exclusive federal authority over this kind of phone service. 

In its ruling, the Public Utilities Commission ordered Charter to comply with all Minnesota laws and rules that apply to local phone service.  Within 30 days, Charter is required to file a plan describing how it will comply with the order. 

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