OFFICIAL OPINION NO. 06-09, Collection of Monthly 911 Surcharges Pursuant to SDCL ch. 34-45 from Voice over Internet Protocol (VOIP) Providers.

  
OFFICIAL OPINION NO. 06-09, Collection of Monthly 911 Surcharges Pursuant to SDCL ch. 34-45 from Voice over Internet Protocol (VOIP) Providers.

December 18, 2006

Mr. Bob Wilcox 
Executive Director 
South Dakota Association of County Commissioners
222 East Capitol Avenue, Suite 1 
PierreSD 57501

OFFICIAL OPINION NO. 06-09

Collection of Monthly 911 Surcharges Pursuant to SDCL ch. 34-45 from Voice over Internet Protocol (VOIP) Providers. 

Dear Mr. Wilcox: 

You have requested an official opinion from this Office based upon the following factual situation:

FACTS:  

South Dakota law allows the governing body of a public corporation to authorize by ordinance a 911 emergency reporting system.  SDCL 34-45-2.  The governing body may impose a monthly surcharge on local exchange access lines within the governing body's jurisdiction for which the 911 system will be provided.  SDCL 34-45-3 & 4.  The surcharges imposed upon these local exchange access lines are collected by the local exchange access company and then passed on to the proper county.  SDCL 24-45-5.   All of the counties within South Dakota have adopted such an ordinance.  The 911 surcharges are critical to carrying out the continued operation of emergency 911 service.  

Recently, VOIP providers (Voice Over Internet Protocol) have begun doing business within the state, and specifically in the more populous areas of South Dakota.  VOIP is an internet based telephone like system used to manage the delivery of discreet digital voice packets over an internet connection rather than using traditional public telephone networks.  

VOIP service consists of two different types of connections.  The first type of connection, known as peer-to-peer, is a connection between one VOIP customer, solely over an internet connection, with another VOIP customer.  The second type, known as an integrated connection, is a connection between a VOIP customer and a traditional telephone subscriber or cellular telephone user.  This type of connection may either originate or terminate on the traditional public telephone network.  

VOIP services are offered by a host of providers that include telephone companies, cable television service providers, internet service providers, and stand alone VOIP providers that operate on an internet connect that they themselves do not supply.  VOIP has emerged as a viable and economical alternative to traditional telephone service.  

Based upon the above facts you have requested answers to the following questions:

QUESTIONS

  1. Are VOIP providers included in the definitions of Local Exchange Access Company or Local Exchange Access Lines found in SDCL 34-45-1(4) & (5)?  
  2. Do the counties of South Dakota have the legal authority to impose 911 surcharge fees on VOIP providers pursuant to SDCL 34-45-4?  
  3. Do the counties of South Dakota have the legal authority to accept and receive 911 surcharge fees collected by a VOIP provider?  

IN RE QUESTION 1

State law allows 911 surcharges to be imposed only upon local exchange access lines.  SDCL 34-45-1(5) defines a local exchange access line as "any telephone line or cellular telephone that connects a telephone subscriber to the local switching office and has the capability of reaching local public safety service agencies."  Whether this definition applies to VOIP connections is the dispositive question that must be addressed.  

In analyzing SDCL 34-45-1(5) and its application to the VOIP issue, it is my opinion that the plain and commonly held definitions of telephone line, cellular telephone, and telephone subscriber prevent the imposition of 911 surcharges upon VOIP connections.  Peer-to-peer VOIP connections operate solely over an internet connection and involve only VOIP customers; there is no telephone line, cellular telephone, or telephone subscriber involved.  The definition of a "local exchange access line," as currently found in SDCL 34-45-1(5), does not apply to peer-to-peer VOIP connections.  An integrated VOIP connection may originate or terminate on a telephone or cellular line, and may ultimately connect the user to a local switching office.  A VOIP customer attempting to communicate on an integrated VOIP connection cannot, however, be considered a telephone subscriber merely because the person they are attempting to contact is using a traditional phone line or cellular telephone. It may be the VOIP customer's desire not to be a telephone subscriber that has specifically led him or her to the use of VOIP services.  It is my conclusion that SDCL 34-45-1(5) does not apply to integrated VOIP connections either.  The answer to your question is "no."  

With the advent of new technology, statutes have been amended to meet new developments in our ability to communicate.  In 1995, the South Dakota Legislature amended SDCL 34-45-1(5) to add cellular telephones to the definition of a local exchange access line.  Arguably, cellular telephones could have been considered a telephone line that connects a telephone subscriber to a local switching office and has the capability of reaching public safety service agencies.  The Legislature's action, however, clearly shows that cellular telephones were not intended to be included in the previous definition of a local exchange access line.  If it was necessary to amend the statute to include cellular telephones within the definition of a local exchange access line, the statute cannot now be stretched to cover the imposition of surcharges upon VOIP connections.  If the Legislature desires to include VOIP connections within the definition of a local exchange access line it must further amend this definition.  

Having determined that the current statutory definition of a local exchange access line does not include VOIP connections, it is not necessary to reach a determination as to whether VOIP providers can be considered "local exchange access companies."  

IN RE QUESTIONS 2 & 3:  

Generally, a county may only do those things specifically allowed by statute.  Having determined that VOIP connections do not fall under the current statutory definition of a local exchange access line, it is my opinion that the counties of South Dakota may not impose or collect 911 surcharge fees from VOIP providers.   

The definition of a "local exchange access line," contained within SDCL 34-45-1(5), does not cover VOIP connections.  As such, it is my opinion that the imposition of 911 surcharge fees upon VOIP providers is not allowed by statute.  The counties of South Dakota currently have no statutory authority to impose or collect surcharge fees from VOIP providers.  

Respectfully Submitted, 

LARRY LONG
ATTORNEY GENERAL

LL/SRB/kak