Wyoming Legislature Advances IP Bill, Poised to Limit PSC Regulation

"We just don’t feel [IP] needs to be regulated by the public service commission,” said former Republican Rep. Pete Illoway. He was House chair of the Joint Committee on Corporations, Elections and Political Subdivisions, the bill’s stated sponsor, until his term ended last December, and helped guide the bill’s formation. All telcos had input in recent months, he said: “The reason it has gone so well is because all people have come together.” Like bills in other states, House Bill 18 would cut the Wyoming Public Service Commission’s authority: “The commission shall not regulate IP enabled service or voice over internet protocol service,” the bill said.

"Pete was the catalyst for this,” said Tony Young, Republican Gov. Matt Mead’s deputy chief of staff. Mead’s office, with Young as the point person, intervened to help negotiate what Young called “a good compromise” on the bill’s language last year, starting in summer and negotiated -- not without “struggle,” according to Young -- throughout fall. Stakeholders included everyone from telcos to AARP to the PSC, Young said. The trick to the language was balancing the bill advocates’ concerns with those of the legacy providers, he said: “You don’t want to walk past an old friend to shake the hand of a new one."

Mead knows Wyoming is scheduled to revisit telecom regulation in 2015 but didn’t want to wait until then on IP, Young said, citing the desire for the state to be “on the front end” of tech growth. Big companies like AT&T, Verizon and others “may not want to invest a lot of money in the state” if the PSC regulated IP, he said. “This is such an important statement to the decision-makers in our company,” said AT&T spokeswoman Cheryl Riley, who was at the House when the bill passed Thursday. She acknowledged a “difficult” negotiation process last year but praised the “persistence” of stakeholders and the governor’s office for keeping everyone at the table. Both Young and Riley stressed that Wyoming wanted to be business friendly.

"I'd say 95 percent chance it will pass” [into law], said Art Schmidt, telecom supervisor for the PSC, describing “strong support.” The American Legislative Exchange Council (ALEC) played a role, Schmidt said. “It was sponsored by ALEC,” he told us, describing support from ALEC member companies AT&T and Verizon. “They [and the big telcos] want to totally deregulate VoIP in the state.” Illoway said he was a member of ALEC for his 14 years as a legislator. “Everybody likes to pick on ALEC a little bit,” he said. But other organizations have also “been preaching for broadband and more openness” and “keeping the regulatory environment the hell out of things,” he said. He doesn’t remember whether the bill text began as ALEC model legislation, he said, though ALEC listed the legislation’s concern as one of its 2013 priorities in December (CD Dec 11 p7). Verizon and AT&T were “anxious” to see this bill advance, Illoway said.

ALEC didn’t request anyone sponsor the bill or lobby anyone to do so, said John Stephenson, director of its Communications and Technology Task Force. But the bill coincides with ALEC’s model legislation in spirit and will preserve the “model for Internet governance” that allows it to succeed and thrive, he said: “Wyoming, in my opinion, gets it.” This law would help preserve innovation and investment in that state, he added.

The proposed law creates some obligations if VoIP providers voluntarily accept USF money. The companies “shall be subject to all laws and rules governing the receipt of such funds,” the bill text said, “and the support provided to those services shall not exceed the support that would be provided to eligible noncompetitive essential local exchange services on a per-access-line basis.” The relevant rules -- and subsequent obligations -- cover the creation, contributions to and distribution of the Wyoming USF as well as the USF eligibility and distribution to wireless carriers.

VoIP providers are subject to “any required assessments” under these rules as well any required assessments for Wyoming’s 911 or E911, intrastate message relay service and rules governing how utilities report intrastate retail revenue, which include potential penalties for failing to comply of up to $5,000 per offense. Mead’s compromise was predicated on retaining the state’s ability to collect fees, Schmidt said. The law wouldn’t have much impact on the PSC due to that funding provision and its lack of authority over the state’s big VoIP provider as is, he said. Optimum, a division of Cablevision, is the state’s primary VoIP provider and only files a report with the PSC once a year anyway, he said. There'll be “no process for a formal complaint” from consumers about VoIP service, he added. The PSC itself hasn’t gotten involved in the debate beyond monitoring and answering questions and “cannot lobby the Legislature at all,” Schmidt said. The PSC was “vehemently opposed” to the bill until the funding provision was added, Young said.

Wyoming’s law would go into effect July 1 if passed, as the bill text is currently written. Schmidt expects legislators will pass the bill by the end of February when the current session finishes, he said.