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CONTACT: David Fish
October 14, 2004
(202) 289-8928
State Barriers to VoIP are Documented
Gifford and Lassman Catalog Wave of Regulatory Activity

WASHINGTON D.C. - With the communications policy community focused on the Federal Communications Commission, many people may be unaware of dozens of state regulatory actions related to Voice over Internet Protocol (VoIP). Today, The Progress & Freedom Foundation released a new survey of this activity cataloging developments in 25 states. Ray Gifford, the president of PFF and a former state utility commission chairman, and PFF research fellow Kent Lassman, have detailed a range of regulatory hurdles to the deployment of VoIP.

Among their findings: the Alabama Public Service Commission is considering whether to regulate VoIP providers as "transportation" companies, in California an open proceeding has tentatively concluded that VoIP services should be subject to the full-blown supervision of the Public Utility Commission, and in Iowa regulators have barred VoIP providers from access to telephone numbers. Several states have open dockets and ongoing investigations into VoIP.

According to Ray Gifford, "VoIP sparks tremendous interest. Consumers as well as state officials want to know more. Unfortunately, without a better understanding of state activity, the prerogatives of regulators may unnecessarily slow the deployment of a breakthrough technology." He went on to say, " Unless, and until, the FCC declares that VoIP is an interstate service, providers as well as consumers have good reason to worry about the erection of unnecessary entry barriers in the states."

With respect to VoIP, Lassman said "State officials are in a difficult position.  They won't rely on the FCC to make all of the VoIP decisions, and are actively shaping the policy landscape.  Despite the tremendous amount of activity at the state level, a laudable hesitancy is emerging.  Commission after commission has endeavored not to regulate a new service according to the strictures of an old regulatory model."

The authors concluded, "State regulatory commissions, either through exercise of regulatory will or duty, find themselves inevitably confronted with the question of what to do with VoIP in its various permutations. More than anything, we believe that VoIP crystallizes the imperative for clarity and certainty going-forward in the age of IP-based communications. Where states can forbear from regulation and hence allow VoIP services to flourish, we urge them to do so."

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation