VoIP Classification Fight Flares in Iowa

IUB member wrestled aloud with the question of jurisdiction (see 1608090021). AT&T and Verizon supported complete deregulation of fixed interconnected VoIP, but T-Mobile and Windstream said the board should maintain regulation at least for wholesale VoIP services. The Office of Consumer Advocate and the Iowa Communications Alliance said the board should continue regulation for all interconnected VoIP services. FCC indecision on VoIP classification shouldn’t be read as an interpretation that fixed VoIP is a telecommunications service, Verizon commented. Regulation of fixed VoIP services, it said, “would undeniably result in discriminatory treatment of the subset of VoIP services offered by companies actually investing in deploying broadband facilities in Iowa … dissuading the sort of growth and investment the Board should instead strive to encourage.” VoIP is already an information service, AT&T said. “Mere deregulation of the service simply preserves the status quo and leaves it improperly classified as a ‘telecommunications service,’ far short of what the Board must do to bring its rules into conformity with federal law.” Windstream urged the IUB to deregulate retail but not wholesale VoIP, expressly retaining jurisdiction over customer complaints and intercarrier disputes including interconnection and switched access issues. Regulation is still needed for wholesale, T-Mobile commented. "ILEC networks remain the only way for competitive carriers to indirectly exchange traffic with many networks within Iowa. As a result, the largest ILECs continue to have market power in the wholesale market that, absent a regulatory backstop, could empower them to dictate unreasonable terms for traffic exchange and interconnection that would harm competition if exchange of IP-enabled traffic between carriers is outside the scope of the Board’s jurisdiction." But the Office of Consumer Advocate said state law requires the board to regulate all “communications services,” and the legislature never excluded VoIP from the definition. "The Board may not use the device of promulgating rules to change or add to the law," the office said. If companies seek deregulation, they should file a petition under Iowa’s statutory process for deregulation, it said. The Iowa Communications Alliance, an association of community-based telcos, said the FCC never preempted state regulation of VoIP. Since most LECs use VoIP to deliver landline, deregulating VoIP could remove board jurisdiction over most voice calls, it said. "The Board must regulate essential communications services based on core public interests, not based on the technology used to deliver the service,” it said. “Suggestions that the Board should single out VoIP services for deregulation -- or that the Board should single out VoIP services for regulation only on the wholesale level -- are inconsistent with Iowa law and ignore the Board’s important public interest functions.”