Friday, May 21, 2010

Maine PUC Staff Calls for Regulation of VoIP

In an Examiners’ Report released on May 18th, the Maine Public Utilities Commission (“MPUC”) Staff found that the Voice over Internet Protocol (“VoIP”) services provided by Time Warner Cable and Comcast constitute “telephone services” under Maine law and are subject to the MPUC’s regulations. The Staff also found that its conclusion is not preempted by federal law. While the issue is now set for final decision by the full Commission in Maine, the positions taken in the Examiners’ Report and the analysis provided are very illuminating for the marketplace changes taking place in New York State.

As we’ve reported here and here, the regulated local exchange carriers across our state have lost about half of their access lines in the past 10 years, with most of them migrating from Verizon to the unregulated VoIP services offered by the cable companies. As in Maine, these providers are not subject to the New York State Public Service Commission (“PSC”) protection or service quality requirements and do not pay regulatory assessments to the PSC, creating a disjointed and, yes, broken regulatory environment in our state.

As in New York, the cable companies offering VoIP services in Maine obtain wholesale services from certificated (that is, regulated) providers. These companies execute interconnection agreements with other providers, receive telephone numbering resources for the VoIP operations, and permit telephone number porting but, because they do not provide service to the end user customers and the VoIP provider does, the state’s regulatory requirements are currently inapplicable. The Maine Office of the Public Advocate argued that since the VoIP providers “transmit communications by telephone” they are offering a “telephone service” under the Maine Statutes and because they offer this service within the state for compensation, they are a “telephone utility.” As such, they must receive a certificate of public convenience and necessity from the MPUC. The Maine Statutes also provide that a cable television company that offers services like those of the telephone utilities is subject to the MPUC’s jurisdiction. In addition, it was argued that neither Congress or the FCC have explicitly preempted state regulation of voice services offered by cable companies.

The Examiners’ Report agreed with the Public Advocate and found that VoIP is a telephone service under the Maine Statute:
Indeed, VoIP service is offered to consumers as a substitute for traditional, circuit-switched telephone service, and the experience of placing or receiving a VoIP call is indistinguishable from that of placing or receiving a circuit-switched call: a consumer picks up a telephone handset, dials a telephone number, and waits until the called party joins the call by picking up the ringing telephone handset. Likewise, the experience of conversing with another person on a call placed or received by a party subscribing to VoIP service is indistinguishable from the experience of conversing on a purely circuit-switched call.
The Report also found that Maine is not preempted in regulating these services. While states were specifically preempted by the FCC from regulating so-called “nomadic” VoIP providers such as Vonage, that was because the mobility aspect of the service made it impossible to determine the terminating points of the call, rendering the service to be “interstate only.” With “fixed” VoIP services, like those offered by Time Warner Cable and Comcast, the FCC has not preempted enforcement.

PULP believes every Commissioner at the New York PSC should read this important decision from Maine and begin the process to exercise proper authority over the VoIP service offered by the cable companies. Otherwise, our present course will result in the PSC having necessary regulatory oversight over a significant minority of the state’s telephone providers and customers, leaving the customers whose telephone service is via VoIP without the necessary protections to ensure reliable, affordable,universal service at reasonable rates, terms and conditions.

Lou Manuta

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