(Times Union (Albany, NY) Via Acquire Media NewsEdge) March 25--ALBANY -- When Gov. Andrew Cuomo released his executive budget in January, the telecommunications industry was thrilled.
Nestled inside the various legislation needed to enact Cuomo's budget was a bill designed to ensure that the state would not start regulating Internet phone service, otherwise known as Voice-over-Internet Protocol, or VoIP.
For years, telecom companies -- notably Verizon and Time Warner Cable, fierce competitors in the marketplace -- have worked together to convince the Legislature that regulating Internet phone service is a bad idea for consumers and that the best thing to do is to pass a law saying that Internet phone, which is already subject to federal regulation, is not subject to state regulation.
But union and consumer groups say the opposite is true and that such a law would benefit the large phone and cable companies, while harming consumers.
Perhaps not wanting to get caught in the middle of such a fierce debate at a time when he has bigger priorities -- such as pension overhaul -- Cuomo quietly removed the VoIP bill from his budget, apparently at the urging of the Assembly.
Nothing fundamentally changes without such a law in place. Internet phone service is not currently regulated by the state Public Service Commission, which has wide-ranging oversight of the traditional landline business of Verizon and others.
But Verizon and Time Warner, which are engaged in a turf war in the Capital Region after Verizon launched its own cable TV service last year, say that withdrawing Cuomo's support on the issue is bad for consumers -- and the state economy.
After all, Cuomo's budget documents said the legislation was critical because it would encourage more capital investment in broadband networks that carry large amounts of data and voice service. Besides increasing broadband Internet access, the networks would also presumably create jobs and increase tax revenue in the state.
Instead, even though VoIP remains unregulated, the telecoms say Cuomo's move will have a chilling effect on their investment plans in New York -- which they say will be bad for consumers, who won't benefit from lower prices and better products that come from the heat of competition.
The Cable Telecommunications Association of New York estimates that VoIP service in New York allows consumers to save more than $326 million annually because of cheaper rates compared with traditional, regulated phone service.
"It's about new technologies, it's about new services," said Rory Whelan, regional vice president of government relations for Time Warner Cable. "We want New York to be at the forefront of where we roll out our new products and services."
But union leaders don't agree with that assessment and say it's a scare tactic. They say that the states that have enacted stronger anti-regulation laws haven't benefited more than states that haven't. About 20 have adopted VoIP protections.
"They are saying that this is going to open the flood gates to more investment," said Bob Master, political director for CWA District 1, which represents Verizon workers. "It's ridiculous."
In fact, Master says that the latest technology being deployed by companies like Verizon puts less money into the economy because fewer workers are needed. For instance, he says Verizon is using 4G wireless technology to replace parts of the old copper network of the regulated landline business, something Verizon disputes.
"There's no investment in that," Master said. "They're abandoning the network. There's no jobs with that."
Verizon spokesman John Bonomo says he knows of no instances in which wireless or cellular technologies are being used in the landline network in the state. But he said that Verizon does have a new service called Home Phone Connect that acts as a regular home phone but uses Verizon's cellphone network.
There is still a chance the VoIP legislation could be enacted outside of the budget process, and bills have been floating around both the Assembly and the Senate.
"With bipartisan support, the Senate approved similar legislation last year," Whelan of Time Warner said.
Count Verizon among those companies that will also keep pushing the Legislature.
"We intend to continue pushing for this important measure, and for other measures that will benefit the state's consumers and businesses to keep up with technological change and help the state thrive and succeed," Bonomo said.
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