During oral arguments last week, the Eighth Circuit Court tackled another key telecom-related question in a case that concerns a dispute between voice-over-Internet protocol (VoIP) provider Vonage Holdings and the Nebraska Public Service Commission (NPSC) over the obligations of VoIP operators to contribute to state universal service (USF) funds. At issue is the FCC’s 2004 “Vonage preemption order”—which barred the states from applying “traditional telecom regulation” to VoiP providers—and the extent, if any, to which USF requirements are included in the definition of traditional telecom regulation. Concluding that USF requirements fall outside the scope of traditional telecom regulation, the NPSC ordered Vonage to contribute to the state USF fund. Vonage won a preliminary injunction earlier this year from a Nebraska federal district court that blocks enforcement of the NPSC directive. Noting that, in its 2004 order, the FCC dealt with Minnesota state regulations that subjected Vonage to certification, tariffing, and other traditional telecom requirements that pertain to market entry, counsel for NPSC told the court that USF obligations fall outside the scope of preemption because they do not pertain to market entry. Challenging NPSC to provide “any case law or independent court ruling that supports your position,” Judge William Jay Riley questioned the NPSC’s argument, adding: “I know there are cases that go against you.” Turning his attention to FCC Deputy General Counsel Joseph Palmore, who appeared as a “friend of the court” on behalf of the NPSC, Riley took issue with Palmore’s contention that there is no conflict between the NPSC’s imposition of USF obligations on Vonage and the FCC’s rules. Although Palmore said that the FCC had made its position clear that it did not intend to preempt the rights of states to impose USF requirements on VoIP providers, Riley cast doubt on that notion, as he proclaimed that “federal judges” do not agree.