Eliminates state regulation of voice over internet protocol service

BILL NUMBER:S1341

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

Voice over Internet Protocol (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.

Justification

VoIP service converts voice communications into digital packets that travel over the Internet. When a VolP call is placed to a traditional telephone number, the digital packet is converted to a traditional Public Switched Telephone Network (PSTN) signal before it reaches its destination. VoIP allows a call to be made directly from a computer, a special VoIP phone, or a landline phone connected to an adaptor.

VoIP brings increased efficiency, reliability 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, IP networks offers a more economical and robust means for providing communication connections than the traditional networks.

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 oversees, 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 to grown in New York.

Summary of the bill

This bill updates the Public Service Law to encourage the deployment of new technologies. The legislation does not affect the assessment of E-911 fees, telecommunications relay service fees, or federal or state Universal Service Fund fees on VoIP service. Payment of intercarrier compensation that applies to a VoIP carrier's use of the public switched telephone network is also

preserved. Finally, New York State consumer protections still apply (e.g., unfair or deceptive trade practices, payment and/or billing - request paper bill and/or pay by mail).

Legislative history

S5769/A8459 of 2011-12; Referred to Corporations, Authorities & Commissions

Fiscal implications

No fiscal costs to the state or localities. The state as a whole should see increased economic activity and investment when the right business model is developed to lure broadband investment in the state.

Effective date

This act shall take effect immediately.