Vermont Hears Opposition to VoIP Authority; Iowa Finds State Lacks Jurisdiction

A possible act rewrite could settle the debate about state authority over VoIP services, said state and industry officials. Congressional aides told NARUC this week a rewrite could happen, though probably not until next year and after a decision on net neutrality (see 1702130020). NARUC Telecom Committee Chairman Paul Kjellander said in an interview Wednesday an Idaho Public Utilities Commission report to state legislators raised the possibility of an imminent federal decision. Kjellander, an Idaho PUC commissioner, wrote the cover letter to the report on possible legislative options for VoIP (see 1612080040). One option was that “this might be a good time to wait and see,” he told us. “What happens if we get in there, do all that work, get people convinced to actually go down that path, and then there's a rewrite of the Telecom Act and most of this stuff is moot? We just get to come back the following year and try to implement what was passed at the federal level.”

States should wait and see what happens with the rewrite, said Glenn Richards, executive director of the Voice on the Net (VON) Coalition, which represents VoIP providers and argued states lack authority over IP services. Regardless, states may be intent to move forward, he emailed. “The VoIP numbering oral argument last week and this week’s NARUC resolutions make clear that the states still believe that they have a role to play in telecommunications regulation.” NARUC in three resolutions stressed the importance of maintaining a state role in telecom regulation (see 1702140003).

In oral argument Thursday, Comcast urged Vermont board members to reject a proposed decision in docket 7316 declaring VoIP a telecom service that the state may regulate. The hearing followed opposition to the draft last month by AT&T, Comcast and Verizon and other VoIP providers (see 1701250062). Luke Platzer, a Jenner & Block attorney representing Comcast, said the cable company’s VoIP offering includes many more features than merely replacing traditional voice. But board member Sarah Hofmann asked Platzer whether most consumers perceive the IP-based service as different from traditional voice. The answer to that shouldn’t affect the classification of VoIP, the Comcast attorney responded: “Consumers may not appreciate the capability that's actually being provided, but it's still being provided.” Platzer said he couldn’t predict when there might be a definitive federal ruling on the subject.

A separate Vermont proceeding on 911 reliability also teed up VoIP authority issues. The PSB is considering a proposal requiring VoIP providers to provide backup power. The VON Coalition opposed such a mandate because it said federal law pre-empts state regulation of VoIP (see 1611250019). Comments are due Feb. 22 in docket 8842.

The Iowa Utilities Board ruled VoIP is an information service in a decision published Wednesday in the Iowa Administrative Bulletin (PDF, p.115). The board revised definitions of phone utility, IP-enabled service and voice-over-internet service to clarify it couldn't regulate retail VoIP. But the board maintained a distinction between retail and wholesale VoIP that was hotly debated between incumbents and competitive providers (see 1611230040). The board agreed with competitors, revising its definition of wholesale services to say the state would maintain authority over all wholesale services including VoIP. The rules are effective March 22.

The definition of phone utility under revised Iowa rules is "any person, partnership, business association, or corporation, domestic or foreign, owning or operating any facilities for furnishing communications service to the public for compensation, but does not include a provider of Internet protocol-enabled service or voice over Internet protocol service with regard to the provider’s provision of such service to retail customers,” the regulator said. “The board shall not directly or indirectly regulate the entry, rates, terms, or conditions for Internet protocol-enabled service or voice over Internet protocol service, but voice over Internet protocol service may be subject to fees subsequently established by state or federal statute, rule, or requirement such as 911 or dual party relay service.”

The VON Coalition supported the Iowa order, in a letter sent Tuesday to the Iowa Legislature’s Administrative Rules Committee. “Adoption of these rule changes would align Iowa with federal law and promote a competitive VoIP market,” Richards wrote. “At least 31 states and the District of Columbia have already codified regulatory ‘safe harbors’ for VoIP or IP-enabled communications. These states have recognized that there is no benefit to imposing legacy telephone regulations on VoIP, and that investment will be lost and competition restrained if regulatory ambiguities are allowed to remain in place.”

Elsewhere, a West Virginia senator floated a bill (SB-180) to prohibit the state PSC from exercising authority over IP or VoIP services. State Sen. Craig Blair (R) introduced the eight-page bill on Feb. 8. It amends the West Virginia code to add: “The commission does not have jurisdiction of Internet protocol-enabled service or voice over Internet protocol-enabled service.”

Meanwhile, states and industry await a federal court decision on VoIP authority from U.S. District Court in St. Paul, Minnesota. The U.S. District Court in St. Paul heard argument Jan. 9 on Charter’s lawsuit against the PUC on whether the PUC can regulate the cable operator’s VoIP service (see 1612120031). In July, the court denied a motion by the PUC to dismiss Charter’s challenge. “The court did not give any indication of when the decision would be issued,” a Minnesota PUC spokesman emailed Thursday.