Wood Asserts Calif. PUC Has A Role In VoIP's Future

As the lone voice for regulation in a sea of free-market sharks, you had to feel a bit sorry for California PUC Commissioner Carl Wood Monday morning.

Even though he was outnumbered, Wood held his ground during a state-regulation panel at the VON (Voice on the Net) show at the Santa Clara Convention Center, giving more than a few solid reasons why he thinks some regulation and taxes are necessary as the communications world melds with the largely unregulated arena of IP broadband applications.

"I have the feeling that I was invited so you can put a face on the enemy," joked Woods, who was preceded by a range of speakers both from vendors and from other political entities who all seemed to call for little or light regulation of VoIP and other emerging services. But regulation, Woods contended, is not necessarily bad, and does not exist simply for its own sake.

"The purpose of regulation is an attempt to accommodate social goals," Wood said, using meat inspection as an example of regulation that does not inhibit competition in the industry it affects, while producing real, important results for consumers.

In the communications arena, Wood said, if technologies like VoIP aren't taxed or regulated, they have the potential to rapidly eliminate the source of funding that states like California use to provide service to low-income and rural residents. "It costs money to provide [those services], and the money has to come from somewhere," Wood said. "And there's not a lot of indication that the market is willing [to provide the money by itself]."Wood also noted that by decreeing VoIP and similar services to be free of regulation (and accompanying taxes), regulators could be setting up a regulatory arbitrage situation, where existing voice carriers could use the IP infrastructure to decrease the amounts they currently pay.

"The large incumbents have unregulated affiliates who are poised to offer VoIP, if this regulatory arbitrage takes place," Wood said. What happens then, he said, could be "a very sudden de-financing" of subsidies for programs like basic voice communications for low-income residents, and for library Internet services. "There are serious consequences [of a loss of funding] that have to be considered," he said.

Wood agreed with most of the other speakers Monday, in the opinion that the regulatory issues being raised by VoIP and other broadband technologies are neither easy to understand, nor quick to be solved. Even the California PUC itself has flip-flopped on whether or not to regulate, with the matter currently under consideration.

"Even the whole question over who has jurisdiction is not understood," Wood said. "The feds may indeed make a decision that pre-empts the states. No regulation [of VoIP] is certainly a choice you can make."

But if Wood has his way, California's PUC will take a leadership role in ensuring that important public needs -- such as the need to have emergency 911 services in VoIP connections, for instance -- aren't left up to the good will of the industry."Having 911 service might not seem that important, until there's an emergency at your house and your babysitter doesn't know the address," Wood said. "Do you leave things like that up to the industry, or do you establish a regulation so all [users] have that functionality? I just want to make sure we get it right."