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California VoIP Deregulation Proposal

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Senate Bill 1161 recently passed the California Senate and only needs Governor Jerry Brown’s signature to become state law. The bill seeks to preempt the California Public Utilities Commission (CPUC) and other state entities from regulating Voice over Internet Protocol (VoIP)-enabled voice and data transmissions unless expressly authorized by federal law and state statute.

One executive member of a California state agency who voted for the bill believes the bill would “ensure California maintains its competitive edge and continues to provide a regulatory environment that promotes advancements in internet technology.” But critics disagree, believing the bill would strip CPUC of its oversight authority over landline and cellular phone services, deregulating telecommunications in California and ultimately putting consumers at a disadvantage.

The issue isn’t just within the California borders. Twenty-four states are working to prohibit its Public Utilities Commissions from imposing such regulations. Because of required infrastructure investment, public utilities are monopolies that have sole discretion on setting rates, taxes and service coverage. Unfortunately they also have a history of scandal and corruption. Supporters of the bill in all states would like to keep the Internet a free open source that encourages innovation, competition and low (if any) costs.

At ShoreTel, we agree with the push to keep VoIP deregulated and not treated as an “indispensible” public utility like gas or water. Without a specific infrastructure to support or eminent domain to build software, there’s no reason to monopolize VoIP. Consumers should continue to have the freedom to choose from hundreds of VoIP providers, encouraging better service, better rates and constant innovation.  Any regulation that diminishes or prohibits that kind of liberty should give citizens reason for pause.