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New York Governor Andrew Cuomo pulled a bill from his annual budget, likely preventing the state's Public Service Commission from regulating VoIP phone service, according to the Times Union.

The move doesn't have any immediate and direct impact as Internet phone service is not currently regulated, but the decision could foster opportunities for consumer interest groups to push for a provision down the road.

Telecom companies promoting legislation that would ban state regulation say scrapping the bill will create a significant trickledown effect, eventually harming consumers and the economy at large.

Telecom giants like Time Warner (News - Alert) and Verizon have pointed to the fact that Cuomo's own budget documents suggest that anti-regulation legislation would lead to greater capital investment in broadband networks – technologies that governments around the country believe are crucial to the economy, according to the Times Union.

Telecoms have also argued that the lack of investment would also hinder their ability to create new jobs and increase competition, which would eventually yield better products and lower prices for consumers.

"It's about new technologies, it's about new services," Rory Whelan, regional vice president of government relations for Time Warner Cable, told the paper. "We want New York to be at the forefront of where we roll out our new products and services."

While pulling the anti-regulation legislation, Cuomo is still looking to allocate millions of dollars in stimulus funds to expand broadband access to the most rural and underserved areas in the state.

Cuomo and other legislators look to apportion $25 million of the $75 million New York Works Economic Development Fund to broadband projects in an effort to create new jobs and expand the economy. Much of upstate New York doesn't have decent Internet or even cell phone coverage, making it extremely difficult for small businesses to remain viable, lawmakers argue.

Cuomo's broadband push reflects President Obama's plan, first revealed at last year's Inaugural Address, which has a goal of releasing high-speed wireless to 98 percent of all Americans within the next five years.