Observers Warn Of Impending Clash Between State And Federal Regulators Over VoIP

by Glen Shapiro, LawAndTax-News.com, New York

25 May 2004

Observers in the United States have suggested that a clash between state and federal authorities over the regulation of Voice over Internet Protocol (VoIP) services is likely.

Several US states, including California and New York have recently made moves towards introducing regulations targeted specifically at internet telephony.

Earlier this year, the Californian Public Utilities Commission (CPUC) announced that it was considering the creation of a regulatory framework for VoIP telephone calls.

This followed a review conducted by a Commission panel, which concluded that VoIP services are public utilities, and should therefore be regulated as such.

Estimates suggest that VoIP could represent as much as 40% of intrastate telecoms revenue by 2008, but VoIP providers in the state are not currently regulated as telecoms firms, and have therefore not been obliged to contribute to special state funds, pay interconnection charges, or provide free access for 911 callers.

The CPUC argued that if the rules governing VoIP calls are not changed, state programs supported by special contributions from the telecoms sector will lose between $183 million and $407 million in revenue over the next four years.

Speaking to the CNET News service last week, CPUC Commissioner, Carl Wood warned that:

"There will be a collision if the FCC (Federal Communications Commission) takes a position that's at variance with a state's."

The FCC is currently considering whether it will have a hand in the regulation of the growing VoIP sector, but is not expected to reach a decision for some months. If the federal body does decide to take a more active role, a lot of the work currently being done by the state authorities in their bids to regulate the technology is likely to duplicated or pre-empted.

However, the CPUC Commissioner went on to suggest that the relationship between state and federal authorities on this issue does not need to be a hostile one, explaining that:

"The FCC is interested in states' views, especially when they come from big and important states like California and New York. This could have some influence over the FCC's pending decision."

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