The California Public Utilities Commission has concluded tentatively that voice-over-internet protocol services that connect with the traditional phone network are public utilities and subject to its regulatory authority.
The panel unanimously voted to proceed with an investigation into a regulatory framework for Internet telephony services.
Executives of VoIP service providers have warned that regulation could stifle growth of such services and increase costs for customers.
The CPUC has predicted VoIP could account for as much as 40% of intrastate telecom revenues in California by 2008. The technology is used by companies such as Vonage and 8x8 to compete with established carriers, while those carriers are switching to VoIP technology to carry their voice and other services.
To date, VoIP providers in California have not been covered by the regulations affecting companies that do not use the internet as a primary component of call delivery. As a result, VoIP providers have not had to make the same contributions to special state funds, pay interconnection charges, or provide access to the emergency number.
The CPUC estimates that if the rules on these contributions do not change, state programmes supported by the contributions will lose between $183m and $407m in revenue by 2008. The programmes include telephone service for low-income and disabled Californians.
Although it concluded that some VoIP providers qualify as a public telecoms service providers under California law, the CPUC will investigate whether VoIP providers should fall under the same regulatory regime as traditional carriers. The commission expected a final decision to be made within 18 months.
Joris Evers writes for IDG News Service