TELECOM Digest OnLine - Sorted: FCC Expected to Exempt VoIP From State Rules

FCC Expected to Exempt VoIP From State Rules

Lisa Minter (
Tue, 09 Nov 2004 04:30:27 -0500

By Paul Davidson, USA TODAY

The Federal Communications Commission is expected to vote today to
exempt Internet-based phone companies from state regulation, a step
that could help boost the emerging services.

But the vote is likely to anger some local officials who say the FCC
is usurping local authority.

Among other things, the ruling would mean states could not force
Vonage and other Internet phone companies to provide 911 service or
comply with local consumer fraud laws, FCC officials told USA TODAY.


The agency does plan to impose its own requirements that VoIP services
provide 911 and make their networks wiretap-friendly for the FBI. But
state officials say they are better equipped to oversee issues such as
911 and consumer fraud.

"Our main concern is: What's left for the states here?" says
Commissioner Bob Nelson of the Michigan Public Service
Commission. State and local officials have flooded FCC commissioners
with letters voicing concerns about the proposed ruling. One of their
concerns is they could not collect revenue from VoIP providers to
subsidize high-cost rural phone service.

[Jack Decker comment: Dear Mr. Nelson: Considering the track record of
the Michigan Public Service Commission and the way they have allowed
the independent phone companies to avoid coming into full compliance
with the Michigan Telecommunications Act of 2000, which (if they
request a rate increase) requires them to provide local calling to
adjacent exchanges (but the MPSC has in effect allowed some of the
companies to redefine the meaning of a local call, so that in some
cases it is charged like a toll call even though they still call it
local, in a fine example of Orwellian "newspeak"), I would say that
there should be *nothing* left for the states here. The very last
thing I would ever want to see is the Michigan Public Service
Commission attempting to regulate VoIP.

You and your fellow Commissioners have shown that you cannot be
trusted to uphold the law as the Michigan legislature intended, nor to
put the interests of telephone customers first. Besides those
associated with some of the second- and third-tier incumbent phone
companies, which stand to lose their defacto monopolies if VoIP gains
traction, about the only people that are going to be upset if the FCC
rules as expected are you and some of the other state Commissioners
(in Michigan and other states), who in my opinion seem to be more
concerned about your own jobs than the public interest. Not to
mention that you seem to love being quoted by the press!

One reason the courts tend to give a lot of weight to the "commerce
clause" of the U.S. Constitution (article I, section 8) is that if the
states were free to regulate every industry at will, it would be so
costly for any company to do business nationwide that few companies
would be able to. In the area of telecommunications regulation, state
commissions have in many cases shown that they cannot be trusted to
put the overall public interest ahead of the narrow interests of the
companies they are supposed to be regulating. The Michigan Public
Service Commission may be among the worst in that regard, particularly
when they apparently let some of the smaller rural phone companies
gouge their customers just about any way they can think of.

Mr. Nelson, would it be too much to ask that you get out of the
limelight for a while, and start doing a much better job of regulating
those companies you're already supposed to be regulating, before you
try to broaden your influence to encompass a very competitive industry
for which there is NO need for the traditional form of regulation?]

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