March 24, 2021 – The Kansas Corporation Commission (“KCC”) has issued an order clarifying certain VoIP interconnection and number porting issues in Kansas.[1] Specifically, the KCC concluded that VoIP providers are not telecommunications carriers and thus are not entitled to interconnection.

The KCC’s order is the result of an investigation of issues following complaints filed by IdeaTek, LLC, a Kansas broadband and VoIP provider, against two Kansas rural local exchange carriers (“RLECs”) – Nex-Tech and Wamego.

What Was happening In The IdeaTek Wamego Dispute?

In a March 2019 complaint, IdeaTek, asked the KCC to issue an order requiring Wamego Telecommunications Company, Inc., a Kansas RLEC, to port IdeaTek customers’ phone numbers and ensure calls are completed between IdeaTek and Wamego’s customers.[2] ldeaTek claimed the Communications Act, Kansas statutes, and the FCC “obligate Wamego to interconnect, provide local number portability, and complete calls to providers, including [VoIP] providers.” Ideatek operates as a VoIP service provider in Wamego’s local exchange service area.[3]

IdeaTek is directly connected with AT&T Kansas at an access tandem within AT&T’s its local exchange network, and uses this set up to transmit traffic indirectly to Wamego and complete calls. So what was the problem? There were instances where Wamego did not port numbers over to IdeaTek customers.

According to IdeaTek, in February 2019, Wamego proposed a commercial agreement as an absolute prerequisite to porting and traffic exchange, in substantially in the form of an interconnection agreement, but according to IdeaTek, “with terms and conditions that would contractually strip Ideatek of its rights as a telecommunications carrier.”[4]

Rather than enter into that agreement, IdeaTek filed a complaint with the KCC, alleging: (1) Wamego has failed to perform obligatory port-out requests to IdeaTek of customer telephone numbers, in violation of state and federal laws, and (2) Wamego is threatening to refuse to perform fundamental and routine tasks related to the routing of telephone calls over the Public Switched Telephone Network (“PSTN”).

A few months prior, Ideatek had filed a complaint to resolve an identical dispute with Nex-Tech, another Kansas RLEC.[5] That proceeding was then suspended and the complaint was eventually dismissed after the parties reached a resolution on the issues.

Wamego, in response to the complaint, argued IdeaTek’s VoIP service is an information service, not a telecommunications service; IdeaTek is not a telecommunications provider; the KCC is pre-empted from adjudicating the substance of the complaint; and Wamego is not obligated under the Communications Act to interconnect directly or indirectly with IdeaTek because IdeaTek is an information service provider, not a telecommunications carrier.

A month after the instant complaint was filed, IdeaTek and Wamego entered into an agreement to establish temporary direct VoIP interconnection trunks to exchange local traffic, with IdeaTek paying 50% of Wamego’s retail VoIP trunk rate.[6] IdeaTek and Wamego entered into the agreement on the understanding that the KCC would open a generic docket to investigate the VoIP interconnection and number porting issues raised in IdeaTek’s complaint. On March 12, 2020, the KCC opened a general investigation of the issues raised by IdeaTek in its complaint against Wamego (Docket 19-393) and Nex-Tech (Docket 19-277), and the impact of those issues on all Kansas ILECs and Kansas consumers.[7]

The KCC’s March 23, 2021, Order completes that investigation. To summarize, the KCC concluded it should not regulate VoIP; VoIP providers are not telecommunications carriers under Kansas law; and VoIP providers are not entitled to the interconnection provisions applicable to such entities.

KCC Staff Recommended The KCC Find It Has Jurisdiction To Investigate The Subject Matter Of Ideatek’s Complaint – The KCC Said Nope

The KCC’s telecommunications staff “requested the [KCC] find it has jurisdiction to investigate the subject matter of IdeaTek's complaint,” which concerned VoIP interconnection and number porting issues. The KCC disagreed, concluding this determination conflicts with Section 66-2017(a) of the Kansas statutes, which limits KCC regulation of VoIP services. The KCC determined the legislative intent of that statute is clear – VoIP service is to remain free from KCC jurisdiction and regulation:

Staffs proposal undercuts this intention and subjects VoIP service to increased Commission jurisdiction and regulation. For example, finding VoIP providers are telecommunications carriers’ results in VoIP providers needing Commission approval of applications and certificates of convenience and necessity, a process which VoIP providers and VoIP service are currently not subject to.[8]

For Guidance, The KCC Relied On The FCC’s Amicus Brief In Charter Advanced Servs. (MN), LLC v. Lange From The Eighth Circuit

In Charter Advanced Services (MN), LLC v. Nancy Lange, the U.S. Court of Appeals for the Eighth Circuit affirmed a lower court’s ruling classifying Charter’s interconnected, fixed VoIP service as an “information service” under the Communications Act. As a result, state regulation of Charter’s VoIP services was preempted.[9]

For guidance on whether it has or should have jurisdiction over VoIP issues, the KCC relied on the court’s order in the Charter case and the FCC’s amicus brief:

The FCC filed an amicus brief asserting state regulatory commissions with VoIP regulation concerns should raise them with the FCC, as this allows the FCC to offer a solution and avoid the risk that VoIP providers are subject to a patchwork of different and potentially conflicting rules across the states and local jurisdictions.[10]

The KCC agreed with the FCC’s reasoning set out in the amicus brief, and with respect to the issues presented by the IdeaTek complaint, concluded  “VoIP providers are not telecommunications carriers under Kansas law and are therefore not entitled to the interconnection provisions applicable to such entities.”[11]

What Did The KCC Say Is IdeaTek’s Solution? Negotiate & Enter Into A Commercial Agreement

The KCC found IdeaTek is not entitled to interconnection under the Communications Act. But, that does not prevent IdeaTek from reaching a commercial agreement with local exchange carriers for the direct exchange of traffic and number porting. As the record makes clear, Kansas LECs have entered into such agreements with Kansas VoIP providers. This is the solution the KCC offers to IdeaTek. In fact, this was the exact solution Wamego proposed to IdeaTek.

Kansas Rural LECs’ View

What was this really about? Costs. VoIP providers typically use other entities’ facilities to transport traffic to and from the public phone network. Why? Because VoIP providers usually do not have their own facilities, or, rather, they have a very limited amount of last-mile facilities. Kansas rural LECs (“RLECs”) summarized the issue like this:

VoIP providers often do not have facilities located in the RLECs’ respective service areas and must exchange traffic with RLECs indirectly through other carriers, or by sending traffic through the “Internet cloud.” In either case, the cost of transporting VoIP traffic should not be imposed on RLECs if the VoIP provider does not have a point of presence (“POP”) in the LEC’s service footprint.[12]

If an RLEC’s customer places a local telephone call to a VoIP customer, the call must be transported to the VoIP network so that the VoIP provider can meet its service obligation to complete the call to the VoIP provider’s customer. If the VoIP carrier’s POP is located outside of the RLEC’s service area, transport over third-party facilities is needed to transmit the call to the VoIP POP. The Commission should not force RLECs, rather than the VoIP provider, to pay the third-party transiting carrier for transporting traffic to the VoIP POP outside the LECs’ service areas when such transport is necessary to satisfy a statutorily defined element (K.S.A. 66-2017(d)( 4)(C)) of the VoIP service offered to consumers for a fee.[13]

Transit Traffic – Another Solution? Extend Your Network

IdeaTek is directly connected with AT&T Kansas at an access tandem within AT&T’s local exchange network, and uses this set up to exchange traffic with AT&T, and to transmit traffic indirectly to RLECs outside of AT&T’s service area. IdeaTek wanted to treat this “as a common source of interconnection for a variety of service providers using a variety of technologies.”[14]

With the help of AT&T’s comments and FCC precedent, the KCC shot this down.

Under IdeaTek’s proposal, the traffic being exchanged by IdeaTek and a Kansas RLEC would be “transit traffic,” not “exchange access traffic.” Transiting occurs when two carriers that are not directly interconnected exchange non-access traffic by routing the traffic through an intermediary carrier’s network.[15] Stated another way, the traffic would be interexchange traffic, not exchange access traffic.

As the KCC noted, the FCC has concluded that this is not allowed – interconnection agreements may not solely be used for the transmission of interexchange traffic.[16]

What’s IdeaTek’s other solution? It can extend its network facilities into RLECs’ service areas and directly interconnect. Commit to better service. This will make number porting possible (a/k/a technically feasible). Costs will be more transparent because there will be no third-party in between. Things will go more smoothly between carriers, etc. etc.

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[1] General Investigation into Interconnection, Porting, Evolving Technology, and the Impacts on Consumer Choices in Kansas, Docket No. 20-GIMT-387-GIT, Order On Commission Jurisdiction (Mar. 23, 2021) (KCC Order), https://estar.kcc.ks.gov/estar/ViewFile.aspx/20210323102959.pdf?Id=199ec6bd-03c1-4a18-953c-c3d082bdb1f9.

[2] Complaint and Request for Interim Emergency Relief and Expedited Review, Docket No. 19-WTCT-393-COM (Mar. 26, 2019), https://estar.kcc.ks.gov/estar/ViewFile.aspx/S20190326104604.pdf?Id=1fa52e16-ecaf-42be-bbd5-f963112bc2bc.

[3] IdeaTek is authorized to provide service as a CLEC in AT&T and Embarq Communications (now CenturyLink) territories in Kansas.

[4] IdeaTek Complaint at ¶ 12.

[5] Complaint of Ideatek Telecom, LLC Against Nex-Tech and Rural Telephone Service Company Regarding Disconnection of Service, Request for Interim Ruling and Request for Expedited Review, 19-RRLT-277-COM, Complaint And Request For Expedited Review and Request For Interim Ruling (Jan. 18, 2019), https://estar.kcc.ks.gov/estar/ViewFile.aspx/S20190118120703.pdf?Id=ab52c877-cdf5-461f-a6fb-6b194dfce53d.

[6] Complaint of Ideatek Telecom, LLC against Wamego Telecommunications Company, Inc., to Require Wamego to (1) Port Customers and (2) Refrain from Taking any Action that Could Result in the Blocking of Customer Calls, Docket No. 19-WTCT-393-COM, Interim Order On Porting (Mar. 26, 2019), https://estar.kcc.ks.gov/estar/ViewFile.aspx/20190426104617.pdf?Id=f92b1b6c-8954-4866-ac21-5a11a2cdac1a.

[7] In the Matter of a General Investigation into Interconnection, Porting, Evolving Technology, and the Impacts on Consumer Choices in Kansas, Docket No. 20-GIMT-387-GIT, Order Opening General Investigation Into Interconnection, Porting, Evolving Technology, And The Impact On Consumer Choices In Kansas (Mar. 12, 2020), https://estar.kcc.ks.gov/estar/ViewFile.aspx/20200312103926.pdf?Id=05af2158-2569-43f3-8ab9-9cf7578c48f8.

[8] KCC Order at ¶ 15.

[9] Charter Advanced Services (MN), LLC v. Nancy Lange, 259 F.3d 715 (8th Cir. 2018).

[10] KCC Order at ¶ 17.

[11] KCC Order at ¶ 18.

[12] General Investigation into Interconnection, Porting, Evolving Technology, and the Impacts on Consumer Choices in Kansas, Docket No. 20-GIMT-387-GIT, Initial Comments Of The Rural Local Exchange Carriers, ¶ 8 (June 15, 2020), https://estar.kcc.ks.gov/estar/ViewFile.aspx/S20200615160422.pdf?Id=3d3535af-50f2-49b0-b65f-8cb00c8f6d64.

[13] Id. at ¶ 11.

[14] General Investigation into Interconnection, Porting, Evolving Technology, and the Impacts on Consumer Choices in Kansas, Docket No. 20-GIMT-387-GIT, Comments Of Ideatek Telcom, LLC, ¶ 34 (June 15, 2020), https://estar.kcc.ks.gov/estar/ViewFile.aspx/S20200615155618.pdf?Id=52a0ab9e-c114-4412-acff-e915fa649e8b.

[15] Connect America Fund et al., WC Docket Nos. 10-90 et al., Report and Order et al., FCC 11-161, ¶ 1311 (2011) (USF/ICC Transformation Order), aff’d sub nom., In re: FCC 11-161, 753 F.3d 1015 (10th Cir. 2014). The term transport is often used interchangeably with transit service. These are two different services. Transport service is a tariffed exchanged access service. Transit service is typically offered via commercially-negotiated interconnection agreements rather than tariffs. Id. at footnote 2366.

[16] KCC Order at ¶ 9. The FCC has concluded “that section 251(c)(2) interconnection arrangements may not be used solely for the transmission of interexchange traffic because such arrangements are for the exchange of ‘telephone exchange service’ or ‘exchange access’ traffic – and interexchange traffic is neither.” USF/ICC Transformation Order at ¶ 972.