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VoIP Bill shelved in New York

New York Governor Andrew Cuomo, has removed legislation from his executive budget that would have shielded telecommunications companies offering Internet telephony from regulation.

Unions and consumer advocacy groups had opposed the VoIP Bill, which had the support of companies like Verizon and Time Warner Cable that argued the absence of the law laid an uncertain regulatory environment.

New York State currently does not regulate Internet phone service, although largely regulates traditional wire line phone service. Verizon is the largest provider in the state.

In recent years, the telecommunications industry has promoted the legislation throughout the country to prevent states from regulating Internet telephony. They argue that such regulation will stifle innovation and competition and would be almost impossible because of the wide range of providers such as Vonage and Skype that do not have a physical network in the state.

Cuomo spokesman Josh Vlasto confirmed that the bill was no longer included in the budget, but he said the governor did not immediately have a comment on why the legislation didn’t survive.
The Communications Workers of America, which represents Verizon workers, issued a statement recently that makes it appear that the leadership of the Assembly may have played a role in the disappearance of the legislation.

"We are grateful that Albany stood up to the powerful telecommunications industry," said Pete Sikora, CWA political director for the state of New York. "Because of the leadership of Speaker Sheldon Silver, President James Brennan and their colleagues in the Assembly, important consumer protections will be retained, as will upstate jobs."

Verizon FiOS, a leading options for VoIP coverage, has now been installed in many regions of the state, including most of downstate. However, Verizon has chosen not to offer service in the upstate cities such as Albany, Binghamton, Buffalo, Rochester, Syracuse and Utica. The result is both a virtual monopoly of cable companies in these areas and another blow to low-income families who work and live in cities. This is precisely why the state should be able to ensure common sense rules for VoIP service.

Verizon still receives a significant amount of its income from its traditional phone service, but has increased the supply of alternative phones offered in its attempt to compete with the cell phone and cable companies.

"Verizon is very disappointed that New York lawmakers, who want the public to believe that New York is open for business, do not act on this important measure to modernize outdated telecommunications laws in the state for this year’s budget," said Verizon spokesman John Bonomo.

The industry has argued that the law would have clarified that Internet telephony, also known as Voice over Internet Protocol, or VoIP, is regulated by the Federal Communications Commission, not states.