Cal. PUC Comr. Susan Kennedy told Silicon Valley executives that ...

an address to the TechNet/Silicon Valley Mfg. Group in San Jose, Kennedy said Internet telephony had set off “a wave of abject fear in the regulatory world” because “it changes everything we know about telecommunications.” She said regulators fear losing jurisdiction, legislators fear loss of billions of tax dollars and millions in funding for social programs like universal service, plus rate increases. Incumbent carriers, she said, fear loss of access charges and rural carriers fear loss of subsidies. She said the carrier and service distinctions that are the source for regulatory authority have become meaningless in a VoIP world and while social programs depend on cost-based funding, but IP-based technology is driving down the cost of telephony across the board. She said current telecom regulations and laws aren’t designed for an era of technology convergence and intermodal competition and have become “so outdated and convoluted that competitors are using the regulatory process itself as a weapon.” She said the result is actions like the Cal. PUC decision that stopped Verizon from installing next-generation packet switching technology “while the PUC sorts out what rules it wants to apply.” Kennedy said she’s the presiding commissioner on a PUC docket to revamp the entire telecom regulatory framework in Cal., and said she intends to ensure that it accommodates the world of today and tomorrow, not yesterday’s era. She also said the PUC is developing a statewide broadband deployment plan to bring the full weight of the legislature and governor to bear.