Calif. PUC To Withdraw Appeal Of FCC's Vonage Order

Voice over IP proponents on the California Public Utilities Commission made good on their pledge to withdraw the commission's original motion to appeal the FCC's Vonage Order, meaning that California's influential public utilities board no longer opposes the idea of federal-only regulation of Voice over IP.

In a closed session during the CPUC's meeting Thursday, the commission decided to withdraw its appeal, according to a source close to the proceedings. The CPUC is expected to make a formal announcement of its decision soon, either today or early next week.

How the California PUC's decision may affect other states' similar motions is unclear. But at the very least, it moves the influence of regulators from one of the country's largest telecommunications markets to the other side of the VoIP regulatory chessboard, the side in favor of national VoIP policymaking.

In an email message Thursday night, Vonage Holdings CEO Jeffrey Citron hailed the apparent decision.

"This is a real win for the FCC and for Vonage [and] just another example of how right the FCC is on this issue," Citron said. "It's also reflective of a broader trend among forward-thinking states that want to embrace technology and economic growth, not do the same old knee-jerk reaction to regulate first, ask questions later."

Jonathan Askin, general counsel for pulver.com (which last year won its own order from the FCC freeing its VoIP service from regulation), also praised the move by the California PUC, calling it "a strong sign of the realization by at least one state commission that the FCC has established the correct procedural structure to regulate IP-based communications."

The move by the CPUC seems to be a clear victory for commissioner Susan Kennedy, a Democrat who favors a lighter regulatory touch from states on new technologies like VoIP. Kennedy's beliefs on the issue led to other clashes with former CPUC commissioners Carl Wood and Loretta Lynch, whose terms expired at the end of last year.

Wood, who as a commissioner favored stronger state regulation of VoIP, was believed to have led the initial appeal effort, which was filed on Dec. 22, 2004, shortly before his and Lynch's departure from the commission. The CPUC did not reveal details of the proceedings that led to the initial filing of the appeal.

Initially, it was thought that the CPUC might move much faster to withdraw its appeal. But the delay and eventual withdrawl by CPUC appointee Steve Poizner from his nomination to the commission kept the matter from moving forward. Poizner, a Republican, was thought to have been in favor of withdrawing the appeal, and his vote would have made the reversal an easier political task.