The question at hand for Iowa lawmakers is whether it should retain its right to regulate telecommunications or relinquish control to the Federal level in the name of standardization.

Currently, Iowa regulates VoIP on the state level. Along with Vermont, it is one of only two states that currently have such regulations. A bill introduced last year and now being reviewed, Iowa’s House Study Bill 590, would deregulate VoIP and bring the state in line with the rest of the country.

“While little attention has been given to it, you’d be hard pressed to find a Commerce Committee member in either chamber who has not been lobbied — likely multiple times — on this,” said Anthony Carroll, a lobbyist for AARP.

For companies such as AT&T (News - Alert) and CenturyLink, deregulation is essential for investment; as having to conform to both state and federal restrictions is an onerous extra step, one that they argue could discourage telecommunications investment in the state.

Verizon (News - Alert) said last week that it is looking for “regulatory certainty” on the matter. Other states have chosen to deregulate VoIP because they recognize that IP-enabled services can play a critical role in expanding their broadband ecosystems, and the company warned that Iowa could be left in the cold if it doesn’t play along.

On the other hand, representatives of the Iowa Utilities Board and the Attorney General’s Office warned that moving too soon might eliminate consumer protections.

Some telecommunications firms, notably Sprint (News - Alert) and US Cellular, also argue that VoIP deregulation in the state could mean that they are muscled out of providing competitive service because carriers like AT&T could refuse to adequately provide the interconnection necessary to complete their VoIP calls in the state.

Last week, the subcommittee on House Study Bill 590 concluded that there’s more work to do on the bill before it goes to the full Commerce Committee, to the consternation of the lobbyists pushing for deregulation. This is just a delay, however, and the possibility of deregulation looks increasingly likely despite hesitation by the subcommittee.

The threat of being left behind is too great, so it is likely that the bill or some form of deregulation will occur after a protracted hearing process.

In the mean time, lawmakers tasked with reviewing the bill are getting an earful.

“I’m not an expert on VoIP,” said Rep. Bob Kressig, D-Cedar Falls, who is leading the subcommittee, “but I’m growing close.”