Before the PUBLIC SERVICE COMMISSION OF WISCONSIN Madison Wisconsin

Transcription

1 Before the PUBLIC SERVICE COMMISSION OF WISCONSIN Madison Wisconsin Investigation of Voice over ) Case No. 5-TI-2071 Internet Protocol in Wisconsin ) Public Comments of Communications Workers of America Frank Mathews CWA Representative, Wisconsin and Illinois 106 S. Wynstone Park Drive, Suite 104 North Barrington, Illinois fmathews@cwa-union.org February 15, 2011

2 The Communications Workers of America (CWA) submits these public comments in the Commission Investigation of Voice over Internet Protocol in Wisconsin. 1 CWA represents more than 5,600 employees in Wisconsin who work at AT&T (wireline and wireless), Frontier, CenturyLink, and other telecommunications companies. CWA members have an interest in this proceeding as consumers as well as workers in the industry. The Commission seeks comment on the appropriate level of regulation that should apply to fixed, interconnected VoIP service. Fixed, interconnected VoIP service ( VoIP service ), such as A&T s U-Verse Voice offering or Time Warner s Digital Home Phone offering, is the practical equivalent of traditional telephone service. It is simply a means to transmit voice telephone calls from one end user to another via the telecommunications network, and as such, falls squarely within the Commission s definition of a telecommunications service. Federal law does not preempt state regulation of fixed, interconnected VoIP service. Since regulatory oversight to protect consumers should be based on the service offered, not on how it is delivered, the Commission should regulate VoIP service as a telecommunications service, subject to the same rules and consumer protections that apply to traditional telephone service. I. Interconnected, fixed VoIP service is a telecommunications service The Wisconsin statute (9m) defines a telecommunications service as the offering for sale of the conveyance of voice, data or other information at any frequency over any part of the electromagnetic spectrum, including the sale of service for collection, storage, forwarding, switching and delivery incidental to such communication and including the regulated sale of customer premises equipment. Wisconsin statute (10) defines a telecommunications 1 Public Service Commission of Wisconsin, Investigation of Voice over Internet Protocol (VoIP) in Wisconsin, Case No. 5-TI-2071, Notice of Proceeding and Prehearing Conference, Oct. 26, 2010; Second Amended Prehearing Conference Memorandum, Nov. 16, 2010; Third Amended Prehearing Conference Memorandum, Jan. 19,

3 utility as any organization that owns, operates, manages or controls any plant or equipment used to furnish telecommunications services within the state directly or indirectly to the public. Clearly, VoIP service meets the plain language definition of a telecommunications service. A VoIP service such as AT&T s U-Verse or Time Warner s Digital Home Phone offers for sale the conveyance of voice, data or other information at any frequency over any part of the electromagnetic spectrum. A VoIP service allows customers to make voice telephone calls to any other person or entity with an assigned telephone number. The statute is agnostic as to how such a call is transmitted or processed. The utilization by AT&T s U-Verse or Time Warner s Digital Home Phone of devices that permit the translation of analog voice signals into digitized signals with Internet Protocol (IP) codes that direct the data bits through the network is virtually identical, from a customer s perspective, to the service offered through traditional analog plain old telephone service. (POTS) The Federal Communications Commission (FCC) has had an open proceeding to determine, among other things, whether IP-enabled services such as VoIP should be categorized as either a telecommunications or information service, and what, if any, federal regulations should govern such services in the future. To date, the FCC has not issued a final order or administrative rule in this matter. 2 However, in a number of proceedings the FCC has indicated that it sees merit in the conclusion that VoIP service is a telecommunications and not an information service. In a 2009 letter, the Federal Communications Commission (FCC) Wireline Competition Bureau indicated that it would appear that Comcast s VoIP service is a telecommunications service subject to 2 See IP-Enabled Services Proceeding, 19 FCC Rcd

4 regulation under Title II of the Communications Act, as amended. 3 Further, in determining the eligibility of VoIP providers for federal E-Rate support, the Commission stated: We also adopt the USAC s proposal that interconnected VoIP be listed in both the telecommunications and Internet access categories of the ESL, despite the fact that the Commission has not yet determined the regulatory classification of interconnected VOIP. 4 Recently, the FCC issued a Declaratory Ruling in response to petitions from the Nebraska and Kansas commissions which authorized states to extend their universal service contribution requirements to nomadic interconnected VoIP services providers. 5 Universal service contributions are typically assessed on telecommunications carriers. The FCC in a series of other proceedings has ruled that VoIP providers are subject to a number of regulatory obligations, including contributions to the federal Universal Service Fund, 911 obligations, disability access, customer privacy, local number portability and numbering administration, discontinuance notifications, and public safety requirements. 6 3 Letter from Dana Shaffer, Chief, Wireline Competition Bureau and Matthew Berry, General Counsel, Federal Communications Bureau, to Kathryn A. Zachem, Vice President, Regulatory Affairs, Comcast Corporation, dated Jan. 18, Federal Communications Commission, Report and Order and Further Notice of Proposed Rulemaking, CC Docket No. 02-6, Dec. 2, 2009, para Federal Communications Commission, Declaratory Ruling, In the Matter of Universal Service Contribution Methodology, Petition of Nebraska Public Service Commission and Kansas Corporation Commission for Declaratory Ruling or, in the Alternative, Adoption of Rule Declaring that State Universal Service Funds May Assess Nomadic VoIP Intrastate Revenues, WC Docket No , Nov. 5, See, e.g., IP-Enabled Services; 911 Requirements for IP-Enabled Service Providers, WC Docket Nos , , First Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd (2005) (VoIP E911 Order) (E911), aff d, Nuvio Corp. v. FCC, 473 F.3d 302 (D.C. Cir. 2006); Communications Assistance for Law Enforcement Act and Broadband Access and Services, ET Docket No , First Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd (2005) (assistance for law enforcement); IP-Enabled Services, WC Docket No , Report and Order, 22 FCC Rcd (2007) (disability access); Implementation of the Telecommunications Act of 1996: Telecommunications Carriers Use of Customer Proprietary Network Information and Other Customer Information, CC Docket No , Report and Order and Further Notice of Proposed Rulemaking, 22 FCC Rcd 6927 (2007) (customer privacy); Telephone Number Requirements for IP-Enabled Services Providers, WC Docket No , Report and Order, Declaratory Ruling, Order on Remand, and Notice 4

5 The Wisconsin statutory definition of telecommunications closely tracks the federal statute. Both the federal and Wisconsin statutes make clear that use of information processing for the management, control, or operations of a telecommunications network or the management of a telecommunications service (quoting the federal statute) does not transform a telecommunications service into an information service. 7 As the Wisconsin law makes clear, such information processing is incidental to the telecommunications service. Using Internet Protocol to transmit a voice telephone call does not magically transform the call from a telecommunications to a more lightly regulated information service. Recently, the Maine Public Utilities Commission (PUC), after a two-year investigation into the proper classification of fixed VoIP services, concluded that VoIP services meet the definition of telecommunications under federal law. The Maine PUC noted that in the absence of any action from the FCC, the Maine Commission made its own independent judgment that VoIP services met both the state and federal statutory definitions of of Proposed Rulemaking, 22 FCC Rcd (2007) (local number portability and numbering administration); IP- Enabled Services, WC Docket No , Report and Order, 24 FCC Rcd 6039 (2009) (discontinuance notifications); Universal Service Contribution Methodology; Federal-State Joint Board on Universal Service; 1998 Biennial Regulatory Review Streamlined Contributor Reporting Requirements Associated with Administration of Telecommunications Relay Service, North American Numbering Plan, Local Number Portability, and Universal Service Support Mechanisms; Telecommunications Services for Individuals with Hearing and Speech Disabilities, and the Americans with Disabilities Act of 1990; Administration of the North American Numbering Plan and North American Numbering Plan Cost Recovery Contribution Factor and Fund Size; Number Resource Optimization; Telephone Number Portability; Truth-in-Billing and Billing Format; IP-Enabled Services, WC Docket Nos , , CC Docket Nos , , , 96-45, , , , NSD File No. L-OO-72, Report and Order and Notice of Proposed Rulemaking, 21 FCC Rcd 7518, 7536, para. 34 (2006) (Interim Contribution Methodology Order), aff d in part and rev d in part, Vonage Holdings Corp. v. FCC, 489 F.3d 1232 (D.C. Cir. 2007). 7 The federal definition of telecommunications is the transmission, between or among points specified by the user, of information of the user s choosing, without change in the form or content of the information as sent and received. 47 U.S.C. 153(43). The term telecommunications service means the offering of telecommunications for a fee directly to the public, or to such classes or users as to be effectively available directly to the public, regardless of the facilities used. 47 U.S.C. 153(46). In contrast, the federal Communications Act, as amended, defines information service as the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operations of a telecommunications network or the management of a telecommunications services. 47 U.S.C. 153(20). 5

6 telecommunications. 8 The Maine Commission stated that the correct way to construe the text of the (federal) statutory term telecommunications is to construe it literally, as Congress wrote it, and that a voice call is telecommunications 9 The Maine PUC identified three reasons to consider VoIP telecommunications. First, the user specifies the end points of the transmission by picking up the phone and dialing the number of the person he wishes to call; second, the user selects the form of the information to be transmitted by using his voice to speak into the phone and selects the content of the information by deciding what he wishes to say; and three, the form and content of what the user says into the phone is unchanged when it is heard by the recipient. The Maine PUC quotes extensively from the FCC s AT&T IP Telephony Order to support its conclusion that a conversion to IP packets is not a net protocol conversion when the form of the information, voice, is the same when sent and received. 10 The same reasoning applies in this instant proceeding. VoIP service such as AT&T s U-Verse or Time Warner s Digital Home Phone service are telecommunications services according to a plain reading of the Wisconsin and federal statutory definitions of the term. As such, they should be subject to the same regulatory framework as other telecommunications services. 8 Order, State of Maine Public Utilities Commission, Public Utilities Commission Investigation into Whether Providers of Time Warner Digital Phone Services and Comcast Digital Voice Service Must Obtain Certificate of Public Convenience and necessity to Offer Telephone Service, Docket No , Oct. 27, 2010, page Id., page Id., page See also Order, Petition for Declaratory Ruling that AT&T s Phone-to-Phone IP Telephony Services are Exempt from Access Charges, WC Docket No , FCC 04-97, April 14,

7 II. Federal statute and regulation do not preempt state regulation of interconnected, fixed VoIP as a telecommunications service As already noted, the Federal Communications Commission has not yet issued an order in the IP-Enabled Services Proceeding, and therefore has not ruled on whether fixed, interconnected VoIP service is an interstate service subject to federal regulatory preemption. It is important to differentiate between nomadic and fixed VoIP services. A nomadic VoIP service, such as Vonage, allows a customer to access the service from any device that has a broadband connection, regardless of the physical location. In contrast, a fixed VoIP service allows a customer to make a phone call from only a fixed location, such as a home or business. This instant proceeding deals with fixed VoIP service. The FCC, in its Vonage Order, ruled that nomadic VoIP service is an interstate service subject to federal preemption. But the FCC expressly declared, in argument before the Eighth Circuit Court of Appeals in a challenge to the Vonage Order that the FCC had not yet acted to preempt state regulation of fixed VoIP. The Eighth Circuit Court agreed, concluding that [the] contention that state regulation of fixed VoIP services should not be preempted remains an open issue. Minnesota 483 F.3d at The Wisconsin PUC should not refrain from subjecting fixed VoIP services to telecommunications regulation simply because the FCC may or may not, at some future date, issue an order that would have the effect of preempting state regulation of the service. To engage in preemptive preemption would be to abdicate this Commission s statutory responsibility to protect Wisconsin telecommunications consumers. 7

8 III. Interconnected, fixed VoIP services should be subject to the same regulations and consumer protections that apply to traditional telephone service The Wisconsin Commission has the obligation to treat providers of the same service the same. Imposing different regulatory treatment on similarly situated providers distorts the market, and provides competitive advantage based on regulatory arbitrage rather than superior service, innovation, or lower prices. There is simply no reason that a customer who purchases voice service transmitted with Internet protocol should be subject to fewer protections than a customer who purchases traditional voice telephony service. Telephone regulation is rooted in the fact that access to affordable, quality telephone service is essential to public safety, economic activity, and civic participation. In times of natural disaster, medical emergency, or criminal activity, a person simply must have access to telephone service. One cannot participate in economic or civic life without voice telephony. Because telephone service however delivered is an essential service, federal and state jurisdictions have long regulated voice telephony in the public interest. Recognizing that some regulatory requirements may no longer be necessary in a competitive environment, the Wisconsin legislature created a process by which the Commission can, upon petition and hearing, declare certain telecommunications services competitive and exempt from specific designated regulations. In making this determination, the legislature instructed the Commission to consider market conditions, including such factors as the availability of equivalent or substitutable service in the relevant market at comparable rates, the relevant market power of each telecommunications utility, and the existence of any significant barrier to entry or exit in the relevant market. 11 The statute does not consider provision of service by a different 11 Wis. Stat (2). 8

9 transmission protocol, such as IP, to be a relevant factor in considering whether to apply partial regulation to a particular service. Therefore, the Commission should subject VoIP service to the same regulatory obligations and consumer protections that are imposed on other similarly situated telecommunications services and telecommunications utilities. These include, but are not limited to, consumer protections and service standards (Wis. Admin. Code ch. PSC 165); universal service and educational telecommunications access program support (PSC 161 and PSC 162); relevant price regulation (PSC 163); filing and reporting requirements (PSC 164); and 911 emergency telecommunications services (PSC 173), among others. In summary, the Wisconsin Commission should protect consumers by adopting the same regulatory treatment for fixed VoIP services that it adopts for traditional telephone service to serve the public interest in quality, affordable telephone service. Telephone service is simply too vital to public health, safety, and economic life to leave to the whims of the marketplace. Moreover, equivalent treatment of VoIP services will preserve competitive neutrality, encouraging providers to compete based on service, innovation, and price rather than regulatory arbitrage. Finally, in the absence of federal preemption, the Wisconsin Commission has not only the authority but the obligation to regulate VoIP service to protect consumers. Respectfully submitted, Frank Mathews CWA Representative, Wisconsin and Illinois 106 S. Wynstone Park Drive, Suite 104 North Barrington, Illinois February 15,