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News

Voice over Internet Protocol (VoIP) Regulatory Certainty
2012-13 Executive Budget

FACTS

The VoIP budget language expressly maintains consumer protections.

• The Governor’s budget language does not affect traditional telephone services; they remain regulated in all ways including rates and customer service obligations.
• The legislation does not affect the FCC’s substantial regulation of VoIP.  E-911, federal universal service support mechanisms, telecommunications relay services (TRS) for the hearing impaired, and various other consumer protections for VoIP customers.
• VoIP is nothing new: cable companies have offered these services for more than 10 years, with only positive outcomes for consumers.
• Under the state’s existing regulatory structure, VoIP providers respond to customer complaints generated through the Public Service Commission and the NYS Attorney General’s office.  Nothing in this legislation prevents this from continuing.

CWA supported similar legislation for VoIP regulatory certainty in other states.

• In 2007 and 2009, in Maryland and Washington State, CWA testified to the benefits of similar legislation, indicating that unnecessary new regulation would discourage continued investments in VoIP.
• CWA highlighted the job creation, competition and continued private investment that would result from such legislation.  
• When neighboring New Jersey passed almost identical legislation in 2007, CWA did not even submit testimony on the bill that later became law.

20 other states have already adopted this forward-looking legislation.

• Maryland and 19 other states and Washington D.C have already enacted legislation that would provide the regulatory certainty VoIP providers are looking for here in New York, which bring innovative and cost-cutting services to consumers.

The VoIP budget language is not “major” or “permanent” deregulation of VoIP technology. In fact, it doesn’t “deregulate” VoIP at all.

• This legislation maintains the status quo, and also reaffirms the Legislature’s authority to direct important public policy on VoIP now and in the future.

VoIP regulatory certainty will benefit seniors and low Income New Yorkers.

• Governor Cuomo’s VoIP budget language will spur more broadband infrastructure investment and will help the state continue to close the digital divide among senior and low income New Yorkers. 
• The flat rate, unlimited calling plans offered by VoIP providers allow all customers, and perhaps most importantly, seniors and low-income customers, to save money and stay in touch with families and friends without being forced to pay per minute charges.

VoIP regulatory certainty is pro-consumer.

• VoIP has provided substantial savings for New York consumers. In 2010 alone, VoIP services provided by New York’s cable telecommunications companies saved consumers $326.5 million.

VoIP regulatory certainty is pro-New York business.

• VoIP services created nearly 3,000 more jobs and an additional $435 million in economic activity in New York.   
• In 2010, New York’s cable telecommunications companies directly employed 27,400 people with wages and salaries of nearly $2 billion annually; they spent nearly $2.5 billion on goods and services from other New York State companies; cable companies invested nearly $1.7 billion improving and expanding their services.

VoIP regulatory certainty will not prevent the PSC from creating/establishing/continuing a Universal Fund.

• Nothing in the bill precludes the creation of any such fund, should the PSC decide it is necessary.
• VoIP providers already generously contribute to the federal Universal Service Fund, and while no state USF exists in New York, cable companies providing regulated telecommunications service currently pay into the rural company support fund that exists to assist small rural phone companies.