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California regulators advance VoIP plans

The state's Public Utilities Commission decides to move forward with plans to regulate the Internet telephone industry, as the FCC prepares to weigh in on the issue.

California's Public Utilities Commission decided Wednesday to move forward with plans to regulate the Internet telephone industry.

In a unanimous vote, the commission tentatively assumed jurisdiction over any Internet phone call that connects with traditional phone networks, what's known as voice over Internet Protocol (VoIP) technology. It also decided to begin drafting Net phone regulations, meaning it's unlikely the commission will immediately take any enforcement action until the 18-month process is completed.

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The decision was not popular with at least one VoIP insider. "Maybe the commission isn't aware of what's happening in Washington, D.C.," said Jeff Pulver, founder of the free Internet phone service Free World Dialup.

The vote took place a day before the Federal Communications Commission is expected to issue a closely watched decision on Internet phone services that could reshape the telecommunications industry. The rules would, presumably, pre-empt state Internet phone mandates.

But states will still have a regulatory role, because federal rules won't cover, for instance, what information Internet phone service providers such as Vonage and 8x8 must disclose on a subscriber's bill, said California Commissioner Carl Wood. "We owe it to the rate payers to weigh in on this."

Wednesday's vote sent a message to the FCC that states still believe they have a regulatory role when it comes to Internet phone providers. California is the most influential of 25 states that are drafting Internet phone rules out of concern that as more conversation flows onto the Internet, there will be less funding for state public services paid for by taxes on traditional telephone companies.

"It's incredibly important that states step up to the plate and take this on," said Commissioner Susan Kennedy.

An FCC representative was not immediately available for comment.