Kansas Legislature Pitted Against State Regulators on Fixed VoIP Authority
State legislators in Kansas are considering a bill on Internet Protocol-enabled services that’s at odds with a January ruling of the Kansas Corporation Commission. The state regulators asserted authority over fixed interconnected VoIP, while sponsors of Kansas’s House Bill 2326 propose, like more than two dozen other states, that state utility commissions should have very limited authority over IP-enabled technology. The Kansas bill attracted initial supporters from the American Legislative Exchange Council and the Voice on the Net Coalition. Other state bills limiting IP regulation are moving forward in Wyoming (CD Feb 1 p7), Arizona and other states.
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This Kansas bill would prevent any state body from regulating or even monitoring IP, with some exceptions: “No VoIP service, IP-enabled service, or any combination thereof, shall be subject to the jurisdiction of, regulation by, supervision of or control by any state agency or political subdivision of the state,” said the bill (http://xrl.us/bohz3z). Provisions would subject VoIP providers to regulation associated with the Kansas USF, the Video Competition Act and the state’s 911 act. The bill was introduced last Wednesday and was subject to a House committee hearing Monday.
"I think the Legislature is concerned there could be a mission creep,” ALEC Communications and Technology Task Force Director John Stephenson told us about the state commission’s recent assertion of authority, calling the regulator’s decision “out of the blue.” The chair of the Kansas House Committee on Commerce, Labor and Economic Development had contacted him about supplying testimony over the weekend, Stephenson added. “This critical legislation -- which must be passed this session -- will ensure the continued availability of these broadband communications offerings and open new high-tech economic opportunities by prohibiting regulation of innovative IP-based services, consistent with Federal law,” Voice on the Net Coalition Executive Director Glenn Richards told the committee in written testimony Monday. “Everyone in Kansas has much to gain from a regulatory environment that allows innovative IP enabled applications and services to remain free from regulations originally intended for plain old telephone services.”
The FCC’s 2004 Vonage order doesn’t extend to fixed interconnected VoIP, Kansas regulators said in their Jan. 30 order (http://1.usa.gov/Xnf0UU). “The central rationale for preemption enunciated in the Vonage Order would not apply when the geographic location of the VoIP communication could be easily identified.” The state commission was examining a case where it’s “possible to separate the interstate and intrastate components” and judged that “state regulation of the intrastate usage of TWC’s fixed interconnected VoIP services would not interfere with the FCC’s regulation of the interstate usage of TWC’s VoIP services” and said “preemption is not appropriate here.” The Kansas Corporation Commission declined comment on this proposed bill beyond pointing to its January order and the House Bill 2326 provisions maintaining limited regulation.
Stephenson and Richards criticized the state commission’s order. “Most importantly, this legislation will moot a problematic order,” Richards noted in his testimony. That order was “asserting jurisdiction over what it calls ‘fixed’ VOIP and requiring Time Warner Cable to obtain a Certificate of Convenience and Authority to offer its Digital Phone Service in Kansas,” he said. “In my opinion, this Commission order will not survive judicial scrutiny, if appealed.” The ruling “effectively applies state utility law to the global Internet, which is in stark contrast to our nation’s light touch approach to regulating the Internet,” Stephenson told legislators in written testimony. He called the “hands off” approach of the Kansas bill “consistent” with what ALEC advocates.
"The order also creates a terrible precedent, and will likely have a chilling effect on the 80 companies providing VoIP services in Kansas, possibly leading to their exodus from the market and reducing competition, rather than subject themselves to state telephone regulations, including the filing of tariffs,” Richards added. “I am aware of only one other state, Vermont, that has a similar regulatory decision in place, and that has been appealed to the state supreme court.”
Stephenson slammed the cost and time associated with traditional regulation, noting that “a government bureaucrat” would need to approve every new feature a VoIP provider would want to add to its service. He cited Google’s decision not to offer VoIP as part of its Google Fiber project in the Kansas City area as a consequence of such proceedings. ALEC has long advocated for limited IP regulation (CD Dec 11 p7), as have its telecom industry members. “Our model Advanced Voice Services Availability Act exempts interconnected VoIP service from state utility regulation, but also preserves several rights and responsibilities for states and providers,” Stephenson told legislators. “Our model Act also preserves state authority for resolving interconnection disputes as guaranteed under Sections 251 and 252 of the Telecommunications Act.”
The bill wouldn’t affect the state budget, Budget Director Steven Anderson told legislators Friday (http://xrl.us/bohz2y). The committee didn’t vote Monday on the bill but is expected to vote later this week, Richards told us.