National Governors Association (NGA) Eyes New Frontier of Telecommunications

With the advancement and expansion of Internet telephone technology, it is inevitable that changes occur in intrastate telecommunications and in phone regulations. The nation’s governors addressed the future of this new technology and its impact on the states during the recently concluded National Governors Association (NGA) Winter Meeting in Washington.

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The discussion occurred in NGA’s Economic Development & Commerce (EDC) Committee meeting. The governors discussed the wide-ranging implications and challenges posed by the evolution of voice communications services to the Internet, commonly referred to as Voice over Internet Protocol or VoIP http://www.iec.org/online/tutorials/int_tele . Currently, about 1 million people use the online technology, but industry experts estimate nearly 40 percent of all U.S. calls in five years will be Internet-based.

In light of pending Congressional legislation and possible Federal Communication Commission (FCC) regulation http://www.appanet.org/legislativeregulatory/voip.cfm that threatens to preempt state authority to regulate Internet telephone service, the EDC Committee decided to explore how governors might best protect states’ interest in developing and adopting this new technology without unfairly burdening the emerging industry with regulation.

"We are facing enormous regulatory challenges regarding this new communications technology," said Oklahoma Gov. Brad Henry, chair of the EDC Committee, prior to the committee meeting. "It’s vital for us to discuss these issues as well as the numerous tax and financial implications of VoIP so we can be in a position to craft policy rather than simply react to proposed legislation."

"As Internet telephone technology continues to advance, it’s vitally important for governors to have a strong voice in the ongoing dialog about this issue which has such important financial implications for state governments," said South Dakota Gov. Mike Rounds, vice chair of the committee. During the meeting, Gov. Rounds added that it was also important for rural communities to be an integral part of the future of telecommunications.

Five diverse speakers from the telecommunications industry, federal government and state government addressed the governors during their Sunday afternoon meeting. The discussion helped governors to begin charting an appropriate role for states regarding regulation, consumer protection and taxation in the wake of VoIP. Guest speakers included Jonathan S. Adelstein, FCC commissioner; Leonard J. Cali, vice president of
AT&T; Jeffrey Citron, CEO of Vonage; Robert Nelson, a Michigan public service commissioner; and Loren L. Chumley, Tennessee Dept. of Revenue commissioner.

"Governors need a federal framework that is broad enough to allow states the flexibility to retain state and territorial authority over intrastate communications," said NGA Executive Director Ray Scheppach. "This meeting gave governors the tools and information they were looking for to thoroughly examine the financial implications this new technology may have on the states."