CD/JML/oma Date of Issuance 1/20/2011
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking on the Commission's Own Motion to Require Interconnected Voice Over Internet Protocol Service Providers to Contribute to the Support of California's Public Purpose Programs. |
FILED |
ORDER INSTITUTING RULEMAKING
1. Summary
The California Public Utilities Commission (CPUC or Commission) institutes this Rulemaking to add California providers of interconnected Voice over Internet Protocol (VoIP) service to the category of voice service providers who are required to fund California's universal service programs. These programs include the California LifeLine Telephone Program (formerly known as the Universal Lifeline Telephone Service or ULTS), the California High-Cost Fund A, the California High-Cost Fund B, the California Advanced Services Fund, the California Teleconnect Fund, and the Deaf and Disabled Telecommunications Program.1
We are persuaded to require contributions from intrastate end-users of interconnected VoIP service in recognition that the Federal Communications Commission (FCC) has already determined that interconnected VoIP providers must report and contribute to the federal Universal Service Fund (USF) on all of their interstate and international end-user revenues, and has recently concluded that "the application of state universal service contribution requirements to interconnected VoIP providers does not conflict with federal policies, and could, in fact, promote them."2 It also ruled "that states may extend their universal service contribution requirements to future intrastate revenues of nomadic interconnected Voice over Internet Protocol (VoIP) service providers...."3 Currently there is no requirement for interconnected VoIP providers offering service in California, of which there are approximately 275, by FCC count, to contribute to California's universal service public purpose programs.
Our limited objective in this Rulemaking is to ensure that the California universal service programs are supported in a competitively and technologically neutral manner, and that contributions to the programs are sufficient to preserve and advance universal service. To carry out this objective, we rely upon prior decisions and policy determinations of the FCC as well as the authority of this Commission. VoIP services benefit from universal service through their interconnection with the Public Switched Telephone Network. Also the principle of competitive neutrality requires that universal service should neither unfairly advantage nor disadvantage one provider over another, and neither unfairly favor nor disfavor one technology over another. Further, absent inclusion of intrastate revenues of interconnected VoIP providers in the contribution base, California's universal service programs could be put at financial risk as the largest carriers migrate their end-users to Internet Protocol (IP)-enabled voice services.4
Accordingly, this Rulemaking seeks to require interconnected VoIP service providers within California to collect and remit state public purpose program surcharges on intrastate revenues, thereby treating IP-enabled voice services in the same manner as traditional wireline and wireless voice services for the purpose of surcharge contributions to universal service programs. Such surcharge requirement is consistent with FCC policy and will put California's surcharge policy in parity with FCC practice.
1 The Commission's Universal Service Public Programs are described at: http://www.cpuc.ca.gov/PUC/Telco/Public+Programs/.
2 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 No. 06-122, rel. November 5, 2010 (Declaratory Ruling), ¶16.
3 Id., ¶1; see also Universal Service Contribution Methodology Proceeding, Report and Order of Proposed Rulemaking (WC Docket No. 06-122) (2006) 21 FCC Rcd 7518 at ¶34. (VoIP Universal Service Order.)
4 The Commission previously concluded that because some of the new communications services are not currently subject to surcharges to fund the public policy programs, such as Internet-based telephone service, the funding mechanism may be undermined as customers migrate to other providers. While recognizing that no significant, near-term threat to the current intrastate surcharge methodology had been identified to that point, the ruling concluded that the prudent course was to monitor any impacts to our funding mechanism as well as track potential changes on the federal level and in the treatment of VoIP by other states. Rulemaking on the Commission's Own Motion to Review the Telecommunications Public Policy Programs, Rulemaking (R.)
06-05-028, Interim Decision Addressing California Teleconnect Fund, Payphone Enforcement and Public Policy Payphone Programs, and The Deaf and Disabled Telecommunications Program, D.08-06-020 (Cal. P.U.C. June 12, 2008).
