Technology Convergence and Federalism: The Case of VoIP Regulation

Abstract

The Vermont Supreme Court may soon consider whether federal law permits the Public Service Board to regulate certain voice-over-internet-protocol (VoIP) services. Across the Hudson, Governor Andrew Cuomo recently sought to bar the New York Public Service Commission from adopting similar regulations. And these states are not alone: from Maine to Florida, several states are considering whether their jurisdiction over traditional telephone service encompasses this new technology, through which nearly one-third of American landline households receive telephone service. If so, nationwide VoIP providers could face up to fifty new legal regimes with which they must comply before offering service. If not, consumer migration away from traditional telephone service could leave state regulators with little to regulate. The VoIP battle is the latest example of regulatory confusion caused by the increasingly anachronistic Communications Act. The Act allocates jurisdiction between the federal government and the states based on the nature of the service and the network over which it is offered. As convergence increasingly blurs lines that the Act seeks to keep distinct, companies and regulators struggle in vain to fit new technologies into outdated regulatory categories. The fight illustrates the need for a new platform-neutral model that avoids the uncertainty and disparity that the silo-based model engenders.