This past Friday, California Governor Jerry Brown approved a ban on state VoIP regulation (SB-1161). The legislation would prohibit the California Public Utilities Commission (CAPUC) or any other California state agency from regulating VoIP and IP-enabled services until the year 2020 without a federal mandate.
While at first blush this seems like an outright prohibition against VoIP regulation in the state, this law operates to make California regulation of VoIP and IP-enabled services congruous with FCC requirements. The goal of this and other similar state laws is to avoid a patchwork of regulations across the country and move toward a simplified, uniform national set of rules governing VoIP.
The CAPUC and other industry groups had argued that the ban on VoIP regulation could limit or supersede the commission’s regulatory authority over traditional telecom providers. In response, the California legislature included language to clarify that this law does not affect the commission’s authority over non-VoIP and other non-IP-enabled wireline or wireless services. Also, the law does not affect state laws that expressly provide for regulation of VoIP and IP-enabled services. For example, the law does not supersede the requirement that providers of VoIP services register and contribute to support programs, such as the state universal service program, just like traditional telecom providers.
California is now the 25th state to enact a law that clarifies that VoIP services are not subject to state regulation. It is worth noting, however, that nearly all states currently require providers of VoIP services to fund state and local 911 and, in addition, there are at least 22 states requiring providers of either fixed and/or nomadic VoIP services to contribute to certain state programs, such as Universal Service and Telecommunications Relay Service funds. Indeed, several of the states with laws declaring VoIP services immune from state regulation still require VoIP service providers to Register and Contribute to state programs; California is one such state. A common misperception is that immunity from State Regulation includes immunity from ALL state-mandated requirements. A more appropriate way to view laws like the one adopted by California is as follows: If it’s good enough for the FCC and if it’s required by the FCC, then the same regulation can be adopted by the state regulator without violating the ban on regulation.
Technology trade associations strongly supported the legislation, suggesting it would promote innovation through a deregulatory framework. Consumer advocates, however, expressed concern about the movement toward a single, national standard coming from the states. The concern is that powerful industry players who can influence regulation at the FCC can be assured that any relaxation of rules they procure at the federal level will automatically be extended to the states. As more and more states hand over their own authority to enact regulations over VoIP and IP-enabled services, the states will erode consumer and competitive protections that could come from political involvement by these interested parties at the state and local level. Further, because the FCC has not promulgated clear guidelines about the regulation of VoIP and IP-enabled services, consumers and other interested participants could be left without government oversight over cost, quality of service, or access to information.
If you have any questions regarding the new California law or about VoIP regulation, in general, please contact the attorney assigned to your account or contact Jonathan Marashlian at jsm@commlawgroup.com.
