Vermont PSB to Rule on VoIP Regulation as States Mull Regulatory Role
LA QUINTA, California -- The Vermont Public Service Board will soon rule on state authority over VoIP services, PSB member Sarah Hofmann said on a panel at the NARUC annual conference. The ruling would come more than three years after a state court ordered the regulator to decide the classification of fixed VoIP as either a telecom or information service. While the telecom industry has argued that states may not regulate IP services, telecom consultant Earl Comstock -- formerly CEO of CompTel (now Incompas) -- said states wanting to regulate them need only assert themselves with fact-based determinations.
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The Vermont board has been examining whether fixed VoIP is an information or telecom service since 2013, when the Vermont Supreme Court remanded the board’s past VoIP decision (see 1306110080). The proceeding focuses on how Comcast’s fixed VoIP service meets that definition under federal law. The Vermont board previously ruled that interconnected VoIP is a telecom service rather than information, arguing that federal law doesn't pre-empt state regulation due to the ability to divide interstate and intrastate traffic. Comcast appealed the regulators’ decision. The court agreed with its appeal, but remanded to the board on the classification question.
“It will be coming out in the next few days,” Hofmann said of the impending Vermont decision. “The board is going to rule on the extent of the board’s jurisdiction over VoIP and the matter in which that jurisdiction should be exercised.” Hofmann said she would leave it a “cliffhanger” as to what the ruling would say.
Consumers want “good, fast and reliable voice and broadband, and they don’t care if it’s by TDM or IP or … fast carrier pigeons,” Hofmann said earlier on Monday's panel. Regulators should ensure good service quality, she said. It’s important to remember that some people, like in mountainous Vermont, want "any kind of broadband they can get,” and some do not have a choice, she said. Competition is “fairly robust” in urban but not rural areas, she said.
Other states have disputes about regulation of VoIP services. A federal court in Minnesota will hear argument next month on Charter’s lawsuit against the Public Utilities Commission on whether the PUC can regulate the cable operator’s VoIP service. Iowa is considering excluding VoIP and IP services from the definition of phone utilities, and Idaho legislators are deciding whether to codify the state’s current practice of not regulating VoIP or other IP services (see 1611020037).
States must carefully analyze what regulations to keep and which to remove on a rule-by-rule basis, said NARUC Telecom Committee Chairman Chris Nelson. Industry argues that the change in network technology supports removing rules, and deregulation spurs innovation, said Nelson, the Republican chairman of the South Dakota Public Utilities Commission. “The flip side of that though is we still have responsibility to protect consumers.”
It’s a “myth” that states can’t regulate information services, Comstock said. The 1996 Telecom Act gave states the opportunity to regulate broadband, and nothing in the statute says that an information service isn't a common-carrier service, he said. To regulate VoIP or broadband internet access service, states would have to make a fact-based determination and there may be political challenges, but there’s no legal barrier, he claimed. “Make factual findings that will allow you to defend it in court.”
Comstock disagreed that IP services are fully interstate and therefore cannot be regulated by states, which have intrastate authority. The traffic can be separated just like on older networks, he said. “There’s a local piece, there’s potentially an intermediate piece [and] there’s a long-distance piece.” The Communications Act “very specifically says that service that originates and terminates in the same state, even if it goes out of that state, is not an interstate service,” he said. If using VoIP to call someone locally, “the fact that it went all the way out to Timbuktu and back doesn’t make a difference,” he argued. On the Internet, if a user requests information from home and receives it at home, it’s arguably not an interstate transaction, he said.
Industry lobbyists probably will go to state legislatures for help if commissions seek to regulate IP services, Comstock acknowledged. If states make their case properly, they’ll keep their authority, he said. President-elect Donald Trump may support a state role, he said, because a large base of Trump’s support came from rural voters who want better broadband, said Comstock. “If you’re going to have economic vitality in those rural areas, you have to get broadband out to them. It’s not going to happen by industry. That’s not industry’s fault. It’s basic economics.”