AT&T Reply Comments 10-26-16.pdf

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October 26, 2016

Via E-Mail to [e-mail]
Joseph W. Cusick
Idaho Public Utilities Commission
472 W. Washington Street
Boise, Idaho 83702
Re: Comments on Draft Report to Idaho Legislature Regarding Proposed VoIP Legislation
Dear Mr. Cusick:
AT&T appreciates the opportunity to submit these comments in response to your draft
report to the Idaho Legislature regarding legislation that would exempt Voice over Internet
Protocol (“VoIP”) and IP-enabled services from regulation by the Idaho Public Utility
Commission (“PUC”).
As an initial matter, AT&T agrees with a number of points already made in the comments
submitted by the VON Coalition and Verizon:

 VoIP is a service and not a technology. As Verizon discussed in its comments,
VoIP is clearly an “information service” as defined by federal law which thereby
preempts state regulation of those services. Although the draft report offers up
what it calls the “almost universally accepted definition of VoIP [as] a
technology, not a unique service” attributed to the FCC and NECA1, it does so
without citation and ignores the codified FCC definition of “interconnected VoIP
service” as discussed in Verizon’s comments. It makes much more sense for
Idaho to follow the example of the FCC in defining VoIP as a service. Doing so
also follows the example of more than 30 other states that have defined VoIP as a
service and then exempted it from state regulation.

 Federal Law clearly prevents state regulation of VoIP and IP-enabled
services. In addition to the well-established fact that VoIP should be considered
an information service which is thereby exempted from state regulation, the
Vonage Preemption Order explicitly preempted state telecommunications
regulation of VoIP services, as discussed in depth in the VON Coalition’s
September 2, 2016 comments and again in its October 26, 2016 comments.
Verizon also lists in footnote 3 of its comments a number of federal cases that
have found that VoIP’s integrated capabilities qualify VoIP as an information
service under federal law, exempting VoIP from state regulation.

1 Neither the FCC-attributed nor the NECA-attributed definition appear with citation in the draft report. The FCC
definition appears to be a lay definition borrowed from the portion of the FCC’s website devoted to its Disability
Rights Office and intended for consumers. See https://www.fcc.gov/general/voice-over-internet-protocol-voip.
Because it is neither a legal nor technical definition, it should not be used for the purposes of the report to the
legislature.
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 Regulatory certainty for VoIP and IP-enabled services will promote
investment. The draft report asserts that “VoIP is not the service that will
provide that [investment] incentive” and dismisses VoIP offerings as
“giveaways” when offered by cable companies to residential customers, without
consideration of VoIP providers who serve businesses, who are not cable
companies, and who do not bundle VoIP with other offerings. To the contrary, as
the VON Coalition comments in its October letter, “the availability of VoIP
encourages broadband deployment and adoption, since VoIP cannot be
provisioned without broadband access.” Moreover, as Verizon comments, the
cost of providing VoIP services will necessarily increase if those services are
regulated, thereby discouraging investment where there is no regulatory safe-
harbor.

 The report to the legislature should focus on “the narrow question of
whether preemption should be enacted and what form it should take.”
Senate President Pro Tempore Hill and Speaker Bedke set forth a specific task in
their March 28, 2016 letter, asking for a recommendation based on a “review
[limited] to the question of preemption of regulation for VoIP and IP-enabled
Services and the effect that action might have on the need for revision of other
Idaho statutes.” In fact, the draft report not only fails to make a recommendation
on the preemption question, it addresses issues raised by commenters that exceed
the scope of the inquiry. As Verizon notes in its comments, tying deregulation to
USF and ITSAP reform, new fees on VoIP services, and assertion of PUC
jurisdiction over interconnection will simply make the provision of VoIP services
in Idaho more expensive for providers and end consumers, thereby driving
broadband investments to other states with regulatory safe harbors without such
constrictions.

Given these points, AT&T notes that not a single commenter is opposed to exemption
of VoIP and IP-enabled services from regulation. Based on this lack of opposition and on the
arguments in favor of preemption to promote regulatory certainty thereby encouraging
broadband investment, the next inquiry is how deregulation should be achieved to address
concerns raised in the draft report and by the commenters.

Indeed, AT&T’s proposed 2015 legislation (“AT&T 2015 Proposal”) addresses the
primary concerns of commenters regarding deregulation of VoIP and IP-enabled services:

 VON Coalition, whose comments were not addressed in the draft report, supports
the AT&T 2015 Proposal.

 CenturyLink is concerned with fee parity, and the AT&T 2015 Proposal
specifically provides that nothing in the bill should affect any assessment on VoIP
services. See AT&T 2015 Proposal, p. 4, lines 19-45. AT&T and CenturyLink
really differ on only one point, whether VoIP providers should pay commission
support fees given that VoIP is not subject to PUC regulation. AT&T would be
amenable to paying support fees as articulated in its proposed 2016 legislation,
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where AT&T advocated for legislative provisions that would impose 911, IUSF,
ITSAP/lifeline, and TRS fees on interconnected VoIP services.

 Idaho Cable and Telecom Association and Charter Communications say that
although they do not necessarily support legislation that deregulates VoIP and IP-
enabled services, they do not oppose the AT&T 2015 Proposal. Both ICTA and
Charter think legislation that further deregulates VOIP services is unnecessary. In
fact, the AT&T 2015 Proposal would merely codify existing deregulation and
explicitly states that providers’ rights and obligations under the federal law would
not be modified. AT&T 2015 Proposal, p. 4, lines 36-40.

 Level 3 and T-Mobile are “not concerned with deregulation generally” but are
concerned with interconnection obligations under federal law. The AT&T 2015
Proposal addresses this concern by providing as follows: “Nothing in this title, or
title 61, Idaho Code, shall be construed to…(3) Modify or affect the rights or
obligations of any entity, including the Idaho public utilities commission, arising
from 47 U.S.C. Section 214(e), 47 U.S.C. section 251 or 47 U.S.C. section 252,
including a wholesale communications provider certification granted by the Idaho
public utilities commission…” AT&T 2015 Proposal, p. 4, lines 27-28, 36-40.
AT&T would not oppose the inclusion of the language from the North Dakota
statute, as proposed by Level 3 in their comments. Under either provision, the
legislation would make very clear that nothing about its terms shall change the
status quo in terms of PUC or FCC jurisdiction over interconnection under the
Federal Telecommunications Act.

In the discussion of “Option 1,” the draft report also asserts that the AT&T 2015
Proposal does not address a company’s obligation to interconnect with other
carriers. See Draft Report, p. 5. As discussed above, the AT&T 2015 Proposal
specifically states that nothing in the VoIP exemption shall modify or affect the
rights or obligations of any entity, including the PUC, under Sections 251 and 252
of the Federal Telecommunications Act. AT&T 2015 Proposal, p. 4, lines 36-40.
This provision completely addresses interconnection obligations by maintaining
the status quo for the FCC’s and the PUC’s authority.

 Idaho Telecom Association, which represents the rural carriers, does not oppose
legislation that would deregulate VoIP so long as state USF is not eliminated. The
AT&T 2015 Proposal would not eliminate state USF.

 Verizon supports codification of Idaho’s “existing ‘hands-off’ approach to the
regulation of [VoIP] and IP-enabled services.” Although Verizon’s comments
indicated it was not in support of AT&T’s proposed 2016 legislation, Verizon
advocated for the 2015 legislation at the time it was introduced.

In conclusion, AT&T’s position on the deregulation of VoIP and IP-services has been
consistent – exempting VoIP and IP-services from state regulation should be a narrow
codification of the Idaho’s current practice. Given the absence of opposition to deregulation
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which would more clearly align Idaho with federal law and the policy arguments in favor of a
regulatory safe harbor that would promote investment in broadband, exempting these services
from state regulation is uncontroversial. It is our position that the 2015 Legislative Proposal
addresses the primary concerns raised in the draft report and comments, and the remaining
details can likely be settled on with further discussion. AT&T believes that the draft report
should be amended to reflect these positions and to succinctly respond to the task set forth in the
March 28 letter.

Please do not hesitate to contact me if you have any questions. We look forward to the
final report to the legislature.

Sincerely,

Tara Thue
Director, External & Legislative Affairs—Idaho
AT&T