As of Friday September 29, 2012, California’s Governor Gerry Brown has officially signed Bill 1161 into law. The bill prevents the California Public Utilities Commission (CPUC) from monitoring VoIP communication services.
This bill has recently garnered a lot of attention in the telecom world. Telecom giants like AT&T and Verizon strongly support the bill, but critics have expressed their concerns that the bill does not provide adequate protection to the consumer.
The bill stipulates that the CPUC cannot regulate VoIP services in any way that might hurt their success as a business, and no agency can pass any laws or rules that enforce any regulation of VoIP.
The bill is meant to protect VoIP companies from interference so that they can continue to provide service anywhere in the state without limitation. The bill argues that VoIP gives customers a very cheap alternative to landline phones, and that developments in VoIP technology help to create jobs and improve California’s economy. Any improvements to the economy of California will in turn be beneficial to the growth of the nation’s economy as a whole.
Major telecoms claim that if the CPUC were allowed to regulate VoIP, then the productivity of the telecom industry could be significantly hurt. However, consumer advocates tend to take notice when any large company takes such an active interest in a bill.
Consumer advocates worry that without regulation, customers will be subjected to unchecked price increases and decreases in quality standards. Further, opponents fear that the bill foreshadows deregulation of all landline service, which could be detrimental to the consumer.
Supporters of the bill hold that the bill will ensure fair and healthy competition among telecoms, which will keep prices low for customers. The bill supports this point, noting that the VoIP industry has flourished and preserved fair cost under the current regulatory conditions.
According to Bloomberg BNA, over 31% of American households use VoIP for their residential phone service, and AT&T and Verizon recently saw a 29% increase in VoIP customers. The bill ensures that customers will have unlimited access to VoIP service, and as VoiP service is quickly gaining popularity, it will be very important for corporations to have free access to all customers so that they can provide service without any major impediments.
This bill supports the national trend away from regulation of the Internet. The bill says in Section 1, “The continued vitality and success of California’s technology and innovation sector of the economy is dependent on a business climate that supports the national and international nature of the Internet.” Unless federal law should eventually rule in favor of regulation of VoIP and the Internet, the bill will remain effective until January 2020.
The CPUC will still have the full right to regulate external structures like telephone poles, wires, and equipment facilities to ensure that the system is safe for workers, is energy efficient, and is well maintained. The CPUC also still has the full right to alert the FCC (Federal Communications Commision) in the event that they suspect a VoIP provider of bad service or foul play.