Consumer Federation of California

A California State Senate bill designed to deregulate VOIP services in the Golden State has passed the Senate Energy, Utilities and Telecommunications Committee by a vote of 11-0.  

The bill, known formally as SB 1331, would eliminate the power of the state’s Public Utilities Commission to regulate VOIP services, which historically has had regulatory authority over public utilities, including telephone companies. Critics of SB 1331 charge that the bill would eliminate key government oversight, while its proponents argue that it would provide freedom for the industry to innovate as much as it sees fit.

"We see this as a withering away and the elimination of PUC regulation over telecommunication," said Richard Holober, executive director of the Consumer Federation of California, in an interview with the Los Angeles Times. "We think that would be bad public policy."

Meanwhile, a lobbyist for TechAmerica, a Silicon Valley telecom industry group, told the paper that the bill would ensure that California’s innovative environment "will continue tomorrow." The state deregulated nearly all landline service six years ago, but the PUC has retained some limited authority to maintain standards for quality and availability of service.

Major telecommunications corporations, including AT&T and Verizon, have supported the bill, and would stand to benefit the most from its passage. According to the non-profit, non-partisan research organization MapLight, the bill’s author, Sen. Alex Padilla, received $23,900 in campaign donations from AT&T between 2007 and 2010, and a total of nearly $70,000 from all telecom firms.