California Outlaws Public Utility Commission Regulation of VoIP
The California bill prohibiting the state’s public utilities commission from regulating VoIP for the next eight years is officially law. Gov. Jerry Brown (D) signed SB-1161 late Friday, two days before a mandatory decision. The new law “encourages the continued growth” of VoIP and IP-enabled services while leaving “crucial” consumer protections “safeguarded,” Gov. Brown told the Legislature in a message with the bill’s signing. Despite vigorous debate, the bill passed both bodies of the Legislature by large margins this summer. Federal and state statute can change the commission’s authority in the next eight years if need be. The new law immediately provoked a wave of praise as well as some concern from not only California stakeholders but also national forces in the telecom world. California is the 25th state to limit regulation of VoIP, NARUC’s National Regulatory Research Institute Researcher Sherry Lichtenberg estimates. Glenn Richards, Voice on the Net Coalition executive director, estimates California is the 24th state and 25th jurisdiction, including Washington, D.C., to deregulate in this way.
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The real question is about “what type of oversight” this new product of VoIP will require for it to be working all the time, Lichtenberg told us. “I'm not surprised that this bill was enacted,” she said. “This has taken on a life of its own.” Verizon and AT&T have pushed for broader deregulation, which is where the next big question comes down, she said. The key concerns she has involve the ability to monitor these networks and the ability to do something. The Utility Reform Network (TURN) raised similar concerns about AT&T and Verizon’s plans in September after AT&T submitted a proposal to the FCC on how to transition away from legacy networks to IP (CD Sept 13 p11). “It’s good that they put that on the table,” Lichtenberg said of AT&T’s proposal, noting it was a frank entry to a necessary conversation.
FCC Commissioner Ajit Pai hailed the new law in a statement Friday night as an example of a “convergence” approach needed for telecom regulation. “Voice, video, and data are simply different bundles of packets traveling over next-generation networks, rather than different services supplied by niche providers,” Pai said. What’s coming is “an all-IP future” where competition rather than heavy regulation drives quality, he said.
The FCC should also “reach a consensus that IP networks should be free from intrusive government regulation,” Pai added. The FCC has not firmly weighed in on whether IP services should be interpreted as information or telecommunications services (CD June 25 p6). Advocates of the new law had pointed to the FCC’s 2004 Vonage decision as the FCC’s retreat from VoIP regulation while critics note the FCC’s consumer obligations, such as E911, have been imposed on VoIP in the interim years.
But some consumer groups lamented the bill, repeating criticisms expressed as the bill traveled through the Legislature. Gov. Brown “has thrown California phone customers to the wolves,” said TURN Executive Director Mark Toney. The bill gives telcos “a free pass on consumer protections” due to their acknowledged eventual shift toward IP technology, he said. California group Access Humboldt cites “telecommunications market failure and the lagging status of universal access to open internet in California” and beyond and, consequently, sees “a great need for localism, competition and diversity in the communication networks that form our marketplace of ideas,” Executive Director Sean McLaughlin said in a statement Saturday. Industry has failed these goals in many respects, he said. Media Alliance called the signing sad and happening “despite the spirited opposition of almost every public interest advocacy group in California,” it said (http://xrl.us/bnr7eh).
The governor’s decision was immediate praised by the tech industry . The Silicon Valley leadership Group, TechAmerica and TechNet released statements (http://xrl.us/bnr6ww) of gratitude and optimism for the new law, and predicted its benefits for companies, consumers and California investment.
The law exemplifies “a common sense, bipartisan approach to public policy,” Mobile Future Chairman Jonathan Spalter said in a Sunday Huffington Post op-ed (http://xrl.us/bnr6qq). Spalter underscored the mobile “revolution” of the last decade and points to wireless companies spending “hundreds of billions of dollars” in transitioning people away from “expensive” legacy networks to “smart” IP networks. Success depends on an “equally wise regulatory structure that encourages such a transition,” he said. The California law is “an important blueprint” to that end, he said.
Brown downplayed any concerns in his signing message. The CPUC “stands at the ready” to track and report on what’s happening with VoIP, and VoIP providers should “cooperate fully and promptly to resolve consumer complaints brought to the attention of the [California] Commission,” he said. The CPUC declined to comment. Lichtenberg hailed the ability of the CPUC to monitor VoIP concerns as an important piece of the new law. VoIP may be at risk when natural disasters come because VoIP “is not powered through the network,” she said. When power is lost, the service may also disappear after the first eight hours or so, she said. She described the risks at play with such disasters as this summer’s derecho storm on the east coast. The real question is about what’s happening “technically” with these networks to ensure consumers remain safe, she said.