South Carolina Finds Cable Phone Service to Be a Telecom Service; What about NY PSC?

The Public Service Commission of South Carolina ruled that Time Warner Cable’s digital voice service is a telecommunications service subject to its jurisdiction in a June 5, 2009 order. Most importantly, it found that neither the FCC nor any federal court has expressly preempted state regulation of telecommunications services offered by fixed interconnected Voice over Internet Protocol (“VoIP”) providers such as Time Warner Cable. As a result, the company must now contribute to the state universal service fund.

PULP considers this to be good news as we look to level the playing field between carriers providing fundamentally similar local telephone service using related, but different technologies. South Carolina now joins Kansas, Missouri, Nebraska, and New Mexico in requiring VoIP providers to contribute to the state universal service fund. Where is the New York PSC?

PULP has expressed our support for VoIP providers contributing to New York’s universal service fund, the Targeted Accessibility Fund (“TAF”). See The Time Is Now - New York Should Begin Requiring VoIP Providers to Support State Universal Service. We wrote:

Today, both nomadic and fixed VoIP providers have become vibrant competitors in New York. The cable companies, primarily Time Warner Cable and Cablevision, are the second and third largest local telephone service providers in the state. However, for every customer they migrate from the incumbent, the state loses regulatory assessment fees (which are used to run the Public Service Commission), gross receipts taxes, and TAF assessments. TAF is New York’s version of a state Universal Service Fund and supports Lifeline discount telephone service, 911 connectivity, and the relay service for the deaf. Contributions to TAF are dwindling due to migration of customers to unassessed cable telephone or other VoIP service, and the situation has reached the point where consideration of assessing VoIP providers has become not just a question of fairness, but one of necessity.”

There was a time when the New York State Public Service Commission (“PSC”) was one of the leading state regulatory agencies in the country. About 10 years ago, the PSC led the way with establishing the parameters for permitting the dominant local exchange carrier into the long distance business and with creating customer migration guidelines -- both of which have been duplicated around the country. Now, we are behind other states on this vital issue of fairness, which results in reduced state revenues, diminished benefits for the most needy New Yorkers, and an unfairly tilted playing field favoring some competing providers of similar services. The time for the PSC to bring VoIP into the fold is now.

Lou Manuta