As we scanned our VoIP tax news, we noticed this interesting article about VoIP regulation.
California recently signed Senate Bill 1161 into law. SB 1161, "Communications: Voice over Internet Protocol and Internet Protocol enabled communications service", prohibits the California PUC from regulating VoIP services until at least 2020.
As we know from the VoIP tax calculation side, IP services can be complex when it comes to taxation and bundling. VoIP, an obvious substitute for landline PSTN service, is an IP voice service. So, is it voice and regulated like the PSTN or is it IP and not regulated by the PUC?
In California, the answer is clear. It's not regulated by the PUC.
California, the leader in tech innovation, knows that government is always a step behind innovation. This move is designed to allow VoIP to continue to grow and evolve.
California is now the 25th state to enact a law that clarifies that VoIP services are not subject to state regulation.
It is worth noting, however, that nearly all states currently require providers of VoIP services to fund state and local 911 and, in addition, there are at least 22 states requiring providers of either fixed and/or nomadic VoIP services to contribute to certain state programs, such as Universal Service and Telecommunications Relay Service funds. Indeed, several of the states with laws declaring VoIP services immune from state regulation still require VoIP service providers to Register and Contribute to state programs; California is one such state. A common misconception is that immunity from State Regulation includes immunity from ALL state-mandated requirements. A more appropriate way to view laws like the one adopted by California is as follows: If it's good enough for the FCC and if it's required by the FCC, then the same regulation can be adopted by the state regulator without violating the ban on regulation.