Eliminates state regulation of voice over internet protocol service

Title of bill

An act to amend the public service law, in relation to eliminating state regulation of VoIP service in order to facilitate competition and ensure consumers receive the maximum benefit of competition

Purpose

Eliminates state regulation of voice over Internet protocol service in order to facilitate competition and ensure consumers receive the maximum benefit of competition.

Summary of provisions

This bill creates a free-standing act entitled "The Voice Growth Act of 2009." It prohibits the Public Service Commission from regulating the rates, terms and conditions of Voice over Internet Protocol (VoIP) service. The legislation does not affect the application or enforcement of consumer protection laws nor does it mandate or prohibit the assessment of E-911 fees, telecommunications relay service fees, or federal or state Universal Service Fund fees on VoIP service. Payment of access rates or other inter-carrier compensation that may be determined to apply to a VoIP carrier's use of the PSTN is also preserved.

Justification

VoIP is a technology application that uses a broadband Internet connection to transmit voice telecommunications over the Internet. The rates, terms and conditions of VoIP service, which has been offered in New York State since the early 2000's, are not regulated.

VoIP service converts voice communications into digital packets that travel over the Internet. When a VoIP call is placed to a traditional telephone number, the digital packets are converted to a traditional Public Switched Telephone Network (PSTN) signal before the call reaches its destination.

VoIP allows a call to be made directly from a computer, a special VoIP phone, or a tradition telephone connected to an Analog Telephone Adaptor (ATA).

VoIP brings increased efficiency and functionality to voice communications. The Internet's use of computer processing allows for decreased use of transmission facilities, and automatic rerouting around malfunctioning routers or damaged lines without relying on a separate telephone signaling network. Since the cost of computer processing is decreasing and the demand for communications bandwidth is increasing, Internet Protocol (IP) networks offer a more economical and robust means for providing communication connections than the traditional PSTN.

This legislation is especially important for consumers living in rural upstate New York who have yet to enjoy the benefits of broadband and voice competition. Adopting the legislation could help rural consumers to benefit from voice competition, rural telecommunications companies to extend broadband more affordably, remote businesses to transform the way they do business, rural communities to connect to a new world of remote job opportunities, and rural economies to become an engine for higher paying information age jobs. Rather than outsourcing jobs overseas, some progressive companies are now using VoIP to "home-source" jobs to rural communities.

This legislation will enable a consistent and predictable policy framework and thus foster VoIP innovation in New York.

Legislative history

S.7664-B (2007-2008) Passed Senate; A.11008 (2007-2008) - Corporations, Authorities and Commissions

Effective date

Immediately.