More Work Needed to Determine VoIP, Tariff Requirements for Iowa Utilities Board, Says Staff Report

The IUB held off its decision on regulating non-nomadic VoIP in its staff recommendations. It asked interested parties to comment on how voice calls through VoIP differ from calls made using traditional technology. AT&T, Verizon and Voice Over the Net agreed that VoIP cannot be regulated by the IUB due to FCC and federal court decisions. The Office of the Consumer Advocate argued that the IUB needs to continue regulating interconnected VoIP services to promote the Legislature’s public policy goals to promote competition and protect consumers. The staff’s recommendations said the arguments against state regulation of VoIP come from assertions that interconnected VoIP is subject to the jurisdiction of the FCC, but the FCC has not yet made any decision on its regulatory classification in the National Broadband Plan or the NPRM on reforming the USF from February 2011.

"Given the Board’s history, it’s not surprising,” said Dublinske. Legislation was introduced in the last legislative session to get the IUB out of regulating IP services, and this part of the inquiry was the IUB reacting and becoming part of the discussion, said Dublinske. Duncan was also not surprised that the IUB decided not to act. “The IUB wanted to know if anything had changed in the technology since the last proceeding to change their rulemaking on the issue,” said Duncan.

The IUB needs to continue dealing with consumer protection and complaint resolution, Iowa Consumer Advocate Mark Schuling told us. The staff’s report said the Office of the Consumer Advocate maintains that the IUB should retain jurisdiction over unauthorized changes in service to protect consumers and identify “unfriendly utility consumer policies.” OCA argues that wireless cramming is a consumer protection priority and the IUB should be authorized to update the cramming issue to apply to voice services in general. The IUB should “open a dialogue” with the Iowa Office of Consumer Protection, which currently oversees wireless cramming, to get a better understanding of the volume of wireless cramming complaints and their resolution, but it does not recommend changing a statute to grant the IUB jurisdiction over wireless cramming. Staff recommends the IUB initiate a rulemaking to make statutory changes to incorporate recent FCC rule changes covering unauthorized changes in telecommunications services.

Most of the telcos agreed that intrastate tariff requirements should remain in place, and local exchange tariffs no longer need to be filed with the IUB, said the staff report. The IUB had taken an incremental approach to detariffing, and the last detariffing policy change in Iowa occurred in July 2005, when the Legislature deregulated all local exchange rates in the state and the LECs removed their rates and services associated with those rates from their local exchange tariffs, said the staff report. Detariffing local exchange services would not undermine the IUB’s authority over local exchange service quality, and the utilities would continue to abide by the same statutes and rules governing service quality, said the report. Staff recommends that statutes be changed to clarify that telephone utilities would no longer be required to file local exchange tariffs.

It would better for consumers if retail local exchange were still regulated by the IUB, said Schuling. “We understand why the IUB made these recommendations, but we were satisfied with the requirements on local exchanges before,” said Schuling. More work is needed to push regulations with detariffing, said Duncan. “The IUB recognized that they need to clean up the legislation, and the hard work lies ahead to go through the rulemakings,” he said. The detariffing will depend on the terms and conditions of service since the local exchange rates have changed incrementally, said Dublinske. “I got the sense from the workshop that any statutory changes made will not be controversial, and it will be taken up in the next legislative session,” said Dublinske.

An Iowa USF is not necessary at this time because penetration rates are high with telephone services, said telcos in the staff report. Cox said the IUB should not adopt an Iowa USF when the impact of the federal USF order is still unknown. At the present time, the staff report said the IUB cannot determine whether an Iowa USF is appropriate or what level of support would be needed to maintain reasonable rates for Iowa consumers, so no action should be taken. In terms of broadband deployment, the staff report recommends the IUB continue its “indirect role” in encouraging it by designating eligible telecommunications carriers and certifying the use of federal USF to support voice and broadband networks. The Connect Every Iowan initiative introduced by Gov. Terry Branstad (R) could redefine the IUB’s role in broadband deployment and adoption (CD Sept 4 p8) and staff recommends that the IUB be prepared to implement any legislative changes that could be enacted in 2014. “With the Connect Every Iowan initiative, we will have to wait and see about broadband, but there is no evidence that a state fund is needed at this point,” said Dublinske.