CPUC Greenlights VoIP Rules, Awards More Broadband Cash

California Public Utilities Commission members Thursday supported regulating interconnected VoIP. Commissioners at the livestreamed meeting backed the controversial order as part of a unanimous vote on a consent agenda. Also at the meeting, the CPUC waived penalties for Verizon related to migrating Tracfone customers and approved nearly $160 million in last-mile broadband grants from the agency’s federal funding account and $50 million from the broadband loan loss reserve program.

The CPUC will establish “a new regulatory framework applicable to interconnected VoIP services in order to evenly extend to all voice customers the safeguards and consumer protection avenues administered by the Commission, regardless of the technology underlying the voice service,” a revised draft order posted Wednesday said. Revisions to the initial order (docket R.22-08-008) included additional emphasis on the state agency’s legal authority over VoIP, and a choice to open a second phase of the proceeding “to address implementation and technical issues associated with integrating interconnected VoIP services providers into the regulatory framework.”

The CPUC’s revised draft order responded to criticisms from the telecom industry and academics that questioned the state commission’s authority and raised concerns about possible burdens and unintended consequences (see 2410160044 and 2410110040). The commission previously delayed voting on the proposal at the Oct. 17 meeting (see 2410150033).

"Despite their public utility status, interconnected VoIP service providers have operated in California for decades without any formal licensing or registration requirements, which the Commission has applied to other wireline and wireless voice service providers,” said the CPUC draft order: Adding such requirements to interconnected VoIP is a “a straightforward exercise of our core authority.” The commission rejects “parties’ unfounded arguments in this proceeding claiming that their voice service, which serves the same telephony functionality as other wireline and wireless voice services, somehow does not involve their direct or indirect control or use of telephone lines,” it said. “All of these voice providers are in the public utility telephone business and we find no reasonable basis to find otherwise."

Also, the CPUC disputed an argument some companies raised that including interconnected VoIP in regulatory frameworks would be “an unnecessary imposition of licensing requirements and associated regulatory obligations.” That argument fails “to acknowledge that the new regulatory framework for interconnected VoIP service providers is modeled upon an already existing and less burdensome regulatory framework developed for [non-dominant interexchange carriers] and [competitive local carriers], where the Commission already disposed of public utility type obligations such as rate regulation applicable to the monopoly providers,” it said. “In fact, many commenters acknowledge the new regulatory framework will have little to no impact on their business operations and register opposition in principle.”

Through the same 5-0 vote on the consent agenda, commissioners agreed to waive penalties from a condition in the CPUC’s November 2021 decision that approved Verizon buying Tracfone. The condition required that Verizon migrate all Tracfone wireless customers to the Verizon network within two years, which the company failed to do. The agreed-to resolution T-17849 waives what would have been a $60,000 daily penalty (see 2410040012).

In addition, the CPUC awarded $50 million from the broadband loan loss program to Golden State Connect Authority (GSCA), a rural counties association. The program is meant to support broadband deployment costs for nonprofits, local and tribal governments. There was originally $750 million available, but the state pared funding to $50 million due to a budget deficit (see 2409120047 and 2405150035). The CPUC approved draft resolution T-17858 as part of the unanimous consent vote.

In addition, the commission voted 5-0 in separate considerations of two proposed resolutions to approve broadband grants using federal cash. Through resolution T-17855, the CPUC awarded three grants totaling more than $96 million for Los Angeles County. The awardees included Plenary Broadband Infrastructure Crenshaw ($25 million), Gateway Cities Council of Governments ($45.1 million) and Huntington Park, California ($25.4 million). Under resolution T-17853, the commission approved five grants totaling nearly $61 million for two other counties. Winners included GSCA (about $57 million) and Vallejo, California ($3.8 million).

CPUC staff delayed for the fifth time a commission vote on a plan that would allow people without Social Security numbers to apply for state LifeLine support (see 2410150033). The CPUC gave no reason for the delay in a hold list released Tuesday.