Last week, NARUC President Stan Wise testified at the Senate Commerce Committee hearing on the VoIP Regulatory Freedom Act of 2004. He took the opportunity to trot out the tired argument of regulators everywhere: We regulate telephones; VoIP service looks like telephone service. Ipso facto, we should regulate VoIP too.
Wise calls for regulation based on the "functional nature" of a service. By this standard, any service that includes voice is fair game for state officials. Look out wireless. Look out cable. Look out BPL. More useful would be an examination of the underlying networks and economic forces at work in a given market. Compare this with the following from Wise's testimony: "If the physical structure of a particular service makes its carrier unable to exert market power, for example, that may impact whether the full panoply of economic regulation should apply."
Wise gives voice to the opinion of state officials who advocate a default position of "the full panoply of economic regulation." Such was the case in New York where a recent VoIP decision of the NY PSC lumped Vonage in with traditional telecom providers. At the time I predicted, "the decision will become a rhetorical feather to the cap of the pro-regulation folks." Sadly, Wise has made an honest man of me.