Texas Bills Seek to Exempt VoIP from Regulation

SB-985 would codify standing state policy by explicitly exempting IP-enabled services and VoIP from state regulation regarding rates, services, terms, conditions or market entry, said Erika Akpan, a policy analyst for Carona. The PUC’s authority isn’t codified regarding VoIP, she said. And the commission has taken limited action in regulating VoIP, she said. It’s likely that as the bill progresses it will be revised to limit the exemption to apply to VoIP only, she noted. SB-985 clarifies that the proposed rules don’t affect payment of right-of-way fees on VoIP, local government codes, obligations for the provision of video service, or require or prohibit assessment of enhanced-911, relay access service or Universal Service Fund fees on VoIP. The version as filed made no distinction between retail and wholesale VoIP, but that may change as a result of ongoing discussions, Akpan said. Carona is confident that there’s significant support “on both sides of the aisle,” she said. Akpan noted a joint sponsor for SB-980, which contains SB-985, is Democratic Sen. Leticia Van de Putte.

SB-985 says intercarrier compensation for VoIP, like switched access rates, shall be determined through FCC rules or commercial agreements, Akpan said. The provision is under discussion, she said. SB-980 also requires VoIP or IP-enabled services’ payment of access rates or other intercarrier compensation rates, to be determined through commercial agreements or by the FCC, said Glenn Richards, head of the VON Coalition. The bills wouldn’t conflict with the FCC’s efforts to revamp USF and intercarrier compensation, he said. At least 17 other states have already provided certainty to investors by codifying regulatory “safe harbors” for VoIP or IP-enabled communications, he said.

SB-980 also seeks to prohibit state regulators from expanding additional extended area service for local calling, and provides ILECs the option of maintaining or withdrawing tariffs. It seeks to eliminate filing requirements that the sponsor feels are outdated or unnecessary, like customer specific contracts and earnings reports, and updates the statute to reflect competition with modifications to tariffs requirements, extended area services and VoIP services.

Adoption of either bill would offer the state an innovation platform for improved broadband, increased competition and infrastructure investment, and accelerated broadband deployment, Richards said. It’s critical that state and local regulation not burden such innovation, he said. The bills recognize and retain federal preemption of state and local regulation, he said.

The Texas Cable Association doesn’t oppose attempts, in general, to deregulate incumbent local telephone providers on the retail level, but state regulators must maintain regulatory oversight of the carriers’ wholesale operations, said a spokeswoman. TCA will work to eliminate in 2012 any unnecessary government subsidies to AT&T, Verizon or other ILECs that give them “an unfair advantage in a competitive marketplace,” she said. The group’s primary legislative goal this year is to ensure competition on a level playing field, she said.

The retail deregulation of VoIP mustn’t diminish, in any way, the state regulator’s ability to oversee wholesale, carrier-to-carrier arrangements, including those supporting retail VoIP services, said Kristie Ince, a TW Telecom vice president. She said the Texas PUC will be “called upon to arbitrate new interconnection agreements to allow calls to pass between modern packet networks, and it must have the authority to do so.”