Wisconsin Draft Bill Would Update Telecom Law, Ignites Battles over VoIP Payment

Honadel said he hopes there will be bi-partisan support for the bill that he said would retain and create jobs and bring new investment to Wisconsin. The effort of updating the state telecom law has Gov. Scott Walker’s support, Honadel told us. The governor’s office couldn’t be reached immediately for comment, but Walker suggested during his campaign he’s open to new telecom legislation. The draft bill seeks to reduce the state telecom regulators’ authority over telecom utilities, imposes requirements on certain intrastate switched access rates, and eliminates mandatory tariffs except for intrastate switched access service. It also specifies the Public Service Commission’s authority over interconnected VoIP and seeks to change requirements for the use of another person’s transmission equipment and property by public utilities and telecom providers. The bill is about creating a level playing field between incumbent and competitive carriers, said Bill Esbeck, head of the Wisconsin State Telecom Association (WSTA). CenturyLink supports the proposed bill because it offers “the best opportunity to achieve meaningful regulatory reform in Wisconsin,” a spokesman said.

The bill would mandate the payment of intrastate switched access charges on VoIP traffic, creating “a new and costly assessment,” said Glenn Richards, head of the VON Coalition. That would mean higher rates for VoIP users in the state, he said. Only the FCC can establish rules for intercarrier compensation for VoIP traffic and it’s doing just that right now with its intercarrier compensation and universal service fund proceeding, he said. He urged adopting a bill that would prohibit state regulation of IP-enabled services. Two federal courts confirmed tariffed access charges don’t apply to VoIP, he said. Verizon shared similar concerns. Honadel said he’s aware of the VON Coalition’s concerns and hopes the issue will be raised at the public hearings so legislators can hear from all parties what they believe will be the bill’s impact on VoIP.

Another coalition, including AT&T, Wisconsin Cable Communications Association, WSTA and TDS Telecom, disagreed with the VON group, saying the proposed intrastate access provision would not result in any new assessment or new fees for current VoIP customers. The proposed bill, which provides for “significant deregulation of interconnected VoIP” in the state, “merely codifies the current practices” whereby all providers that currently offer interconnected VoIP both pay and charge intrastate access, the group said, noting AT&T, a VON Coalition member, already pays intrastate access in the state for its interconnected VoIP U-verse voice service. Additionally, recent state commission and court decisions have identified the appropriateness of applying intrastate access payments to interconnected VoIP, it said, citing the Iowa Utilities Board’s order that concluded Sprint must pay amounts owed to Iowa Telecom, in compliance with Iowa Telecom’s switched access tariff. The coalition agrees that federal action will likely preempt any state statutes regarding interconnected VoIP. But until the FCC makes a definitive statement on interconnected VoIP, Wisconsin should maintain the current practices of VoIP payment, the group said.

The coalition also questioned Verizon’s interest in VoIP in Wisconsin. In a current docket at the PSC, Verizon has said “Verizon Access does not offer any form of interconnected VoIP service” and “Verizon Business states that it does not currently provide VoIP services, including fixed, interconnected VoIP, to residential or small business customers in Wisconsin, nor does it intend to in calendar year 2011,” the coalition said. The 2010 annual report of Verizon Enterprise Solutions said it didn’t offer VoIP service in Wisconsin in 2010, the group said. Verizon doesn’t offer residential VoIP service in Wisconsin, but it certainly provides such services to some of its largest enterprise customers, many of which have operations in Wisconsin, a Verizon spokesman said. “Injecting the additional cost and uncertainty of access charges for VoIP service” isn’t the way to attract investments, he said. The coalition used “pick and choose” techniques “to present an inaccurate depiction” of Verizon’s services in Wisconsin by referring to filings from Verizon affiliates other than the one that offers VoIP services, he said. Verizon supports a legislative solution in Wisconsin that brings regulatory certainty to the market by “applying forward-looking policies” to new services like VoIP -- a solution that at least 17 other states have implemented (including Illinois, Indiana and Ohio), he said. But Verizon is against the imposition of access charges on VoIP, he said, saying VoIP is subject to the jurisdiction of the FCC.

The draft bill exempts providers of basic local exchange services from requirements relating to things like PSC classification of public utility service, PSC authority regarding production of records and filing of rates and PSC approval of rates. No later than 90 days after the bill’s effective date, an exchange service provider that offers intrastate switched access service would have to have on file with the PSC a tariff showing the rates, tolls and charges for the service. Meanwhile, the bill repeals certain requirements regarding PSC universal service fund rules and would require instead that some providers make available to their customers all essential services. In addition, the bill would eliminate advanced telecom services from the programs supported by the state’s universal service fund. In addition, the bill limits the requirements that the PSC may impose on a wireless service provider that receives support from the federal universal service fund but doesn’t receive support from the state’s USF. The Wisconsin Public Service Commission is still studying the proposal, said Gary Evenson, administrator of the telecom division.