The Public Utility Commission says Vermont can regulate Voice over Internet Protocol, or VoIP, service.
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VoIP is a technology that allows telephone service to be delivered over the internet, instead of over traditional phone lines.
Ever since the technology was introduced, states have been fighting with cable companies about whether the service should be regulated, like telephone service, or if it is merely information traveling over the internet, which states do not have the authority to regulate.
In a unanimous decision, the Public Utility Commission found that Vermont can regulate the service under federal law.
Jim Porter, the Vermont Department of Public Service's director for public advocacy, says the decision follows years of legal wrangling with the cable company Comcast, which vigorously fought the state's authority to regulate VoIP service.
"From a legal perspective, it's a very significant decision," Porter said. "It once again asserts that the provision of fixed VoIP service is a telecommunications service in Vermont. And certainly anyone involved in telecom law in the country will be interested in this decision."
Fixed VoIP is when someone picks up a telephone in their home and makes a call which is carried over the internet.
However services like Skype are called "nomadic," because the user can access it anywhere, and Porter says the courts have made it very clear that states can't regulate the nomadic service.
The Public Utility Commission decision goes all the way back to 2007 when Comcast first rolled out its VoIP service in Vermont.
Comcast said state law did not grant authority to regulate the internet service, and the case went all the way to the Vermont Supreme Court, which ruled against the company.
The court then sent the case back to the Public Utility Commission to figure out if VoIP can also be regulated, like other telecommunications services, under federal law. And last week the court said that Vermont could indeed regulate the service.
In the decision, the Public Utility Commission said that "VoIP service offered essentially the same service as traditional telecommunications service and that providers of VoIP service had marketed it as a substitute for traditional land-line telecommunications service."
Comcast vigorously fought the case, filing a number of objections to the state's arguments.
In a prepared statement, Comcast said it was reviewing the order and "though we are disappointed with the outcome, we look forward to continuing to offer our services in Vermont."
"Consumers have been able to enjoy a highly competitive environment for voice services for over a decade since Comcast rolled out Xfinity Voice," said Kristen Roberts, Comcast's vice president of communications for the western New England region, in that statement. "The competition and investment Comcast brings to the Green Mountain State provides consumers with more choices and innovative products and services.”
Comcast received support from the companies AT&T and Verizon in arguing against Vermont's authority to regulate VoIP service.
While the decision says Vermont does have the authority to regulate VoIP service under federal law, the state now has to decide if — and how — it will regulate the service.
And the decision might also get Vermont involved in a debate that's going at the federal level.
The Federal Communications Commission is weighing in on a dispute between the state of Minnesota and the Charter cable company over VoIP regulations. That case is being heard in federal court.
Disclosure: Comcast is a VPR underwriter.