Optical/IP Networks

California Backs Off VOIP Regs

The California Public Utilities Commission (CPUC), which first wanted to regulate VOIP on a statewide level, now appears to be yielding to the Feds.

Last week, the PUC voted to withdraw its appeal of a November Federal Communications Commission (FCC) ruling that barred states from imposing regulations on VOIP services (see FCC Shields VOIP From States).

The commission had been a key stalwart against the pivotal FCC order, or “Vonage order,” as it has been called.

To complete its about-face, the PUC will also file papers supporting the FCC's rule, according to a report in the Los Angeles Times last week.

The decision passed three to one in a behind-closed-doors session, the Times report said. The issue was pushed to a vote last week by commissioner Susan P. Kennedy, who has proven to favor a hands-off approach toward regulating new communications technologies like VOIP.

The decision is a significant development, as California’s PUC is influential in national regulatory circles, and because the remaining opponents of the FCC order now number only three: Ohio, New York, and Minnesota.

Vonage Holdings Corp. was pleased with the development (see Citron: Some Bills Are 'Weirdly Weird' ). “We applaud the decision by the California Public Utilities Commission, and we appreciate Commissioner Kennedy’s efforts,” Vonage’s Brooke Shulz told Light Reading on Friday. “We also think it indicates the strength of the FCC’s decision and the reasoning behind the decision that it is an interstate service.”

The November 9 “Vonage order” preempted an order by the Minnesota Public Utilities Commission to apply the state’s “telephone company” regulations to Vonage service. When Vonage sought protection from the FCC under Michael Powell, it was promptly granted.

The Minnesota Public Utilities Commission (MPUC) quickly appealed the order, calling it “arbitrary, capricious, [and] an abuse of discretion and otherwise not in accordance with law.” At the time, California agreed and filed an appeal to the Ninth Circuit in San Francisco.

The Minnesota commissioners declined comment for this story.

Consumer protection interests find the California PUC’s action troubling at best. “The California PUC is just saying ‘OK, never mind, we don’t have any role in protecting consumers who are being sold this service,’ ” says Consumers Union policy analyst Janee Briesemeister. “They are just ceding their authority to the FCC.”

Briesemeister believes that the current FCC is neither inclined nor equipped to handle the job of protecting voice service consumers.

“The FCC is working under the assumption that there is so much competition that the market is working to protect consumers, which anyone in a cell phone contract knows is not true.”

— Mark Sullivan, Reporter, Light Reading

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