TaxConnex Sales Tax Blog

Never miss an update! Subscribe to our blog.

California Prohibits Public Utility Commission from Regulating VoIP

Posted by Brian Greer on Wed, Nov 07, 2012 @ 12:13 PM

At TaxConnex, we provide VoIP Tax outsourcing services to many of our clients.  We follow the VoIP/Telecom space with interest as IP based services continue to replace the PSTN.

This news story made it onto our radar. 

Recently, California Governor Jerry Brown signed California SB-1161, "Communications: Voice over Internet Protocol and Internet Protocol enabled communications service.(2011-2012)" into law.  The law prohibits the California PUC from regulating VoIP services.

Traditionally, voice telecom services are viewed as public utilities and regulated by state PUCs.  But, VoIP, an IP service that is a substitute for traditional wireline voice, has been in a gray area.  This law makes a clear delineation.

The stated purpose of the SB-1161 is:

(1) Preserve the future of the Internet by encouraging continued investment and technological advances and supporting continued consumer choice and access to innovative services that benefit California.

(2) Ensure a vibrant and competitive open Internet that allows California’s technology businesses to continue to flourish and contribute to economic development throughout the state.

SB-1161 reads:

"Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations, as defined.

This bill would, until January 1, 2020, prohibit the commission from regulating Voice over Internet Protocol (VoIP) and Internet Protocol enabled service (IP enabled service), as defined, except as required or delegated by federal law or expressly provided otherwise in statute. The bill would prohibit any department, agency, commission, or political subdivision of the state from enacting, adopting, or enforcing any law, rule, regulation, ordinance, standard, order, or other provision having the force or effect of law, that regulates VoIP or other IP enabled service, unless required or delegated by federal law or expressly authorized by statute. The bill would specify certain areas of law that are expressly applicable to VoIP and IP enabled service providers. The bill would provide that its limitations upon the commission’s regulation of VoIP and IP enabled services do not affect the commission’s existing authority over non-VoIP and other non-IP enabled wireline or wireless service and do not affect the enforcement of any state or federal criminal law or local ordinances of general applicability that apply to the conduct of business, the California Environmental Quality Act, or a local utility user tax, among other things."
At least two dozen other states are contemplating similar laws to allow VoIP to grow in a less regulated environment.

Topics: VoIP tax, VoIP, telecom tax, telecommunications tax, VoIP services, VoIP provider, telecommunications