Industry Urges CPUC to Hit the Brakes on State VoIP Rules

With the California Public Utilities Commission planning a vote within days about regulating VoIP, AT&T and the cable industry urged that commissioners at least delay -- if not outright reject -- the controversial item. Industry groups representing voice technologies stressed in comments last week in docket R.22-08-008 that the CPUC lacks legal authority to regulate VoIP.

The VoIP item remains on the schedule for Thursday's meeting, said the CPUC's agenda as of Oct. 10. That's despite a recent one-week delay to the comments deadlines (see 2409300006), under which replies are due two days before the meeting. The commission could postpone the vote, however. A CPUC spokesperson said to check the agency's hold list, which would be posted Monday and could be updated later this week.

Text of the commission’s proposed decision says that interconnected VoIP providers are telephone corporations subject to the same laws and rules as other wireline and wireless telcos (see 2409130046). That’s despite repeated industry arguments in this proceeding and elsewhere that VoIP regulation is federally preempted. Under its proposal, the CPUC would create two utility type designations. Digital voice nomadic (DVN) providers, covering those with only nomadic interconnected VoIP services, would be subject to a registration process similar to the CPUC's wireless identification registration, it said. Digital voice fixed (DVF) providers that sell fixed interconnected VoIP would "continue to be subject to operating authority requirements similar to traditional wireline service providers,” the draft said.

The CPUC should withdraw the VoIP item, which would allow parties to “be fully heard,” commented AT&T. Otherwise, the CPUC should “conclude that federal law preempts [the state agency] from instituting any market-entry or common carrier-style regulation of VoIP service.”

The CPUC should reject the proposal owing to “legal and technical errors,” said the California Broadband and Video Association (CalBroadband). If not, it should at least delay the item to allow additional review and discussion, it added. The CPUC, it continued, should first hold at least one technical workshop, conduct an economic impact assessment and seek more comments on the new proposed requirements and regulatory framework.

The proposal fails to recognize that VoIP has "flourished" without CPUC regulation for two decades, said CalBroadband. "With good reason, the Commission has recognized the lack of clear statutory authority to [regulate VoIP], targeted federal oversight, and the difficulty of applying such a regulatory framework given the operational and technological differences between today’s interconnected VoIP providers and the" traditional wireline carriers "for which common carrier rules were adopted."

The proposal exceeds the CPUC's "authority under state law, conflicts with federal law and policy, and violates the federal Cable Act,” added Comcast, supporting the call for rejection or delay. Rulemaking is incomplete, said Cox Communications: The draft fails "to substantively consider and adopt findings on the record" concerning whether the CPUC has jurisdiction to regulate VoIP, and then takes "the overbroad step of subjecting interconnected VoIP providers to all laws applicable to" traditional telcos.

The Voice-on-the-Net Coalition said the CPUC’s plan is “contrary to well-established law pre-empting state regulation of nomadic interconnected VoIP providers." At least cut registration, reporting, transfer of control and performance bond rules for nomadic VoIP providers because they could create barriers to entry, it said. The proposed registration process for nomadic VoIP "will violate federal law and undermine” longstanding light-touch regulation, it added. “By ignoring the large body of federal law upholding federal preemption … and without any relevant state authority, this Commission alone wanders down an unsteady regulatory path that will likely result in litigation” and benefit no users.

The CPUC shouldn't adopt licensing or other requirements for any type of VoIP provider, said USTelecom, whose members offer switch- and IP-based services. With competition and private broadband investment, "additional regulation only serves to increase the administrative burden of providers.” Besides, the CPUC's jurisdictional claim hangs on a "mistaken assertion" that VoIP providers can separate intrastate and interstate service, said the association. "It is our members’ experience that interconnected VoIP providers did not deploy their services in a manner capable of separating intrastate traffic from interstate traffic."

Other industry opponents included Frontier Communications, Consolidated Communications, Sonic Telecom, the Cloud Communications Alliance and small local exchange carriers. Like others, they raised jurisdictional and procedural concerns.

But the CPUC received support for regulating VoIP from advocates including The Utility Reform Network (TURN) and Center for Accessible Technology. The draft "properly recognizes the constitutional and statutory authorities, which confer broad jurisdiction to the Commission over telephone corporations, including interconnected VoIP providers," while rejecting industry arguments to the contrary, commented TURN.