California's Regulation of VoIP Remains an Issue Not Yet Addressed by FCC
A top regulatory issue for VoIP providers remains federal preemption of state rules and what that means in states like California, said Brendan Kasper, data protection officer at telecom provider 8x8, during a webcast with former FCC Commissioner Mike O’Rielly, part of a series for the Free State Foundation. Kasper, the former president of the Voice on the Net Coalition and a former Vonage executive, noted that the FCC has yet to respond to California actions.
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Based on FCC data, about 80% of wired calls are now made over VoIP, Kasper said. “In a lot of ways, VoIP is becoming voice communications,” he said. It “has been a great success,” based in part on how it has been regulated. The Voice on the Net Coalition was founded to protect VoIP from “unnecessary” regulation, he added.
O’Rielly noted that there has been a renewed interest in regulating VoIP services, led by California (see 2512030030). He asked if recent actions are a response from a state that wasn’t happy with the FCC’s 2004 Vonage order (see 0411100121), which broadly preempted state regulation of nomadic VoIP. The FCC later clarified that the rules apply to some extent to fixed VoIP as well.
California is “clearly trying to leverage any lack of clarity” in the Vonage order to impose regulation, Kasper said. It “has definitely been more aggressive,” while more than 30 legislatures in other states have passed bills limiting the authority of state commissions to regulate VoIP, he said.
California implemented registration requirements for nomadic VoIP and put more substantive requirements on fixed VoIP, Kasper said. Even the registration requirements for nomadic providers may violate the Vonage order, he argued, since the statement on the registration form says “in the event that we grant this registration,” giving the state authority over providers that goes beyond FCC rules. The state is trying to “protect” the kind of regulations it has traditionally imposed, he said.
Kasper also noted that in January, the Cloud Communications Alliance and the Cloud Voice Alliance filed a petition at the FCC asking for a declaratory ruling that the California Public Utilities Commission's regulatory framework for interconnected VoIP is preempted by federal law and the Vonage order. The FCC has yet to seek comment, he said. The groups challenged CPUC Decision 24-11-003, which was approved in 2024 and established market entry requirements for interconnected VoIP services.
O’Rielly said he’s not sure why the FCC wouldn’t put the petition out for comment. “Clearly, this administration has no love for California.” Kasper said the agency probably just has “other priorities,” adding that VoIP providers can still challenge the CPUC decision in court.
The kind of regulations created for carriers when they were a monopoly don’t make sense for providers in a competitive market, Kasper said. “If people are unhappy with 8x8, it’s not that hard to find someone else who can provide service,” he said. “We’re not alone in this space. There are a lot of people who compete with us.” Even incumbents are moving to IP-based services, he noted.
In addition, Kasper pointed to changes in the voice market. Companies used to buy business voice services, but that has been replaced by “unified platforms that offer a lot more.” There’s nothing unique about business voice that makes sense to offer it as a stand-alone service, he said. With many business calls moving to video platforms, voice calls are just “slowly becoming less important as a service.”
VoIP doesn’t require the use of telephone numbers, but they remain a “convenient identifier that cuts across service providers,” and they’re likely to be around for years to come, Kasper said.
He also expressed disappointment about the extent to which FCC Stir/Shaken requirements have led to fewer unwanted robocalls. “It hasn’t done as much as people had hoped,” he said. “We’re doing” Stir/Shaken, “but there are still lots of problems … identifying the calling parties.”