PSC Tells FCC to Require VoIP Providers to Pay to Access Local Networks

In brief comments submitted to the FCC on April 2, 2010, the New York State Public Service Commission (“PSC”) stated its opposition to positions taken by Global NAPS defending its refusal to pay access charges to carriers that terminate its traffic. Global NAPS maintained that because it is a Voice over Internet Protocol (“VoIP”) provider, like the voice services offered by the cable companies, federal law has preempted states from applying access charges to it.

The PSC correctly (in PULP’s view) argued that VoIP is a telecommunications service subject to access charges: “every carrier is obligated to pay a terminating carrier for the use of its network.” It went on to note that granting Global NAPS' request would “undermine[] our ability to develop fair and balanced telecommunications policies” when competing sets of rules apply to competing providers. The PSC cited to an ongoing state proceeding involving Global NAPS where it refuses to pay a small competitive local exchange carrier to terminate traffic from its customers. The local carrier has now asked the PSC for permission to block incoming traffic from Global NAPS because the company continues to not pay. As a result, the PSC is seeking a declaration from the FCC that it is imperative to “treat[] traffic that is functionally equivalent to similar pricing rules.”

Now the PSC needs to apply this philosophy to more than just access charges. Why should VoIP providers, including the cable television companies which offer voice services which have captured nearly half of the local exchange market in the state, be exempt from the PSC’s consumer protections, service quality standards, and regulatory assessments – which apply to the incumbent carriers? PULP supports reasonable consumer protections and service quality standards that apply to all providers along with consistent regulatory assessments for all providers. See

• VoIP Phone Providers to Start Collecting E-911 Surcharge;
• PSC Tells FCC to Permit States to Assess VoIP for State Universal Service Funds;
• Staff Report Released after State Senate Hearing on Telecom Taxes; Acknowledges Need for Consumer Protections for Telecom Customers;
• PULP Testifies at State Senate Hearing on Telecom Taxes.
  

On March 31, 2010, the US District Court for the Southern District of New York issued a decision in Manhattan Telecommunications Corp. v. Global NAPS, Inc. that Global NAPS owed a different competitive local exchange carrier in New York for accessing its network to terminate calls and must pay them at the local carrier’s federal access rate. The Court rejected Global NAPS' argument that it is exempt because it is a VoIP provider.

The tide may be beginning to turn.

Lou Manuta