Washington State Agency Enters VoIP Dispute

The Washington Utilities and Transportation Commission is the latest state agency to mull whether it can — or should — regulate voice-over-Internet protocol telephony.

The agency will mediate a dispute between the Washington Exchange Carrier Association and LocalDial Corp. of Portland, Ore. WECA collects tariffs from long-distance providers and remits the money to telephone companies which carry the traffic.

WECA sued LocalDial in U.S. District Court for the Western District of Washington in Tacoma, alleging the VoIP provider is subject to state tariffs but is not paying them.

In an apparent victory for LocalDial, Judge Ronald Leighton agreed with the provider's arguments that the WUTC is the proper forum for the dispute.

WUTC has "specialized competence" in telecommunications, the judge wrote, adding he didn't want to make a legal decision that might conflict with state regulatory schemes.

The Oregon Exchange Carrier Association also sued LocalDial in Clackamas County. That suit was also referred to the Oregon Public Utilities Commission.

In Washington state, the WUTC opened preliminary hearings late in October to determine if VoIP providers must register as telecommunications companies, if they're subject to tariffs for using WECA member's plant and to what extent VoIP technology should be regulated, if any.

Regulatory inquiries are popping up all over the country.

Minnesota utility regulators have already declared they have authority over VoIP. In a docket involving Vonage Holdings Corp., the regulators branded IP telephony no different from telephone service.

Minnesota's action is under challenge in court and before the FCC. But other regulators are looking at the issue, too. Alabama's Public Service Commission has asked for comments on whether VoIP is a telephone service.

This summer, the Public Service Commission of Wisconsin sent letters to VoIP providers notifying them that without certification, they can't serve consumers. Customer bills are void and uncollectable, the letters said. Utility regulators from other states have scheduled workshops to mull their own definitions of VoIP.

Cable operators have filed for certification of their VoIP projects, subjecting them to tariff payments in order to avoid the sort of revenue-based challenges of the product that are causing dockets to be opened elsewhere.

State activities are prompting cable operators and other providers to urge the Federal Communications Commission to act on its promise to have formal VoIP proceedings by year-end.

Without direction from the federal government, the U.S. could find itself with a patchwork quilt of inconsistent rules, creating uncertainty in the nascent VoIP market, industry representatives have argued in FCC filings.