E-Commerce Law Week, Issue 459

DC Circuit Generally Upholds FCC Order Imposing USF Obligations on VoIP...

A year after the DC Circuit upheld the Federal Communication Commission's extension of Communications Assistance for Law Enforcement Act (CALEA) obligations to "interconnected" VoIP services, the same court, in Vonage Holdings Corp. v. FCC, has affirmed an FCC Order requiring such services to contribute to the Universal Service Fund, which subsidizes telecommunications in schools, libraries, and rural and low-income areas. But the court vacated parts of the Order that addressed how the level of contributions by VoIP services is determined. Specifically, the court vacated the requirement that the FCC pre-approve traffic studies used by VoIP services to determine their percentage of interstate and international calls. It also vacated the Commission's suspension of the so-called "carrier's carrier rule" for VoIP services, which would have resulted in interconnected VoIP providers' making double payments to the Fund. In its ruling, the court repeatedly referred to the FCC's continuing refusal to classify VoIP as a telecommunications service or an information service, calling this "perhaps [the] most significant[] [question] for VoIP's future" and "tomorrow's battle." For now, the FCC seems content to put off the day of reckoning by using statutory gymnastics and grants of discretionary authority and ancillary jurisdiction to impose social obligations on VoIP providers.

While FCC Adds New Requirement for VoIP to Comply with Disability Access Requirements

On that same note, the FCC recently announced that interconnected VoIP providers and manufacturers of equipment used to provide such VoIP services will now have to comply with the disability access requirements of Sections 225 and 255 of the Communications Act. Although the accompanying order is not yet available, the FCC's news release suggests that, among other things, interconnected VoIP providers will have to contribute to the Telecommunications Relay Services Fund, offer 711 abbreviated dialing for access to relay services, and – where "readily achievable" – ensure that their products and services are "accessible" to those with disabilities, as currently required for telecom services and telecom equipment manufacturers under the Commission's existing Section 255 rules. The Commission also recently released a Notice of Proposed Rulemaking which suggests new standards for wireless Enhanced 911 (E-911) location technology and "tentatively conclude[s]" that these call location identification requirements should also apply to mobile VoIP services. These actions indicate that the FCC intends to continue to extend the reach of telecom regulations to cover VoIP providers – at least the "interconnected" variety, for now.

Ninth Circuit Reaffirms CDA Immunity From State Intellectual Property Claims. Will Other Courts Follow?

The Ninth Circuit has reaffirmed its ruling that the Communications Decency Act (CDA) shields websites from claims based on state intellectual property law. Courts have interpreted section 230(c)(1) of the CDA as immunizing a "provider" (or "user") of an "interactive computer service" from suits based on content provided by a third party. But section 230(e)(2) of the CDA also explicitly states that "[n]othing in this section shall be construed to limit or expand any law pertaining to intellectual property." This provision has been interpreted to mean that there is no immunity for intellectual property claims. As we previously reported, in Perfect 10, Inc. v. CCBill LLC, the Ninth Circuit held that this exception to immunity applies only to federal intellectual property claims, and not state claims. Thus, the court found that Section 230 immunity shielded the defendants against all of Perfect 10's state claims, including its right of publicity claim. Perfect 10 subsequently petitioned for rehearing and rehearing en banc, arguing that the court's ruling on this point conflicted with First Circuit precedent. The Ninth Circuit denied the petition, but amended its original opinion to note that it saw no conflict since the First Circuit had not actually decided the question of whether the exception to immunity applied to state law claims. We doubt that this is the final word on the subject of CDA immunity for state intellectual property claims. While the Ninth Circuit's policy rationale is convincing, other courts might not find it so easy to get beyond the apparently plain language of section 230(e)(2), which refers to "any law pertaining to intellectual property."

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