PUC to Look Into Regulating Net Telephony

California regulators agreed Wednesday to investigate whether companies using Internet technology to handle phone calls should be regulated -- and, if so, with how heavy a hand.

The Public Utilities Commission’s unanimous vote mirrors efforts at the Federal Communications Commission, which is expected today to launch a similar look at the growing use of voice over Internet protocol, or VoIP, which sends voice signals much like e-mail over data networks.

A number of small companies like Vonage Holdings Corp. in Edison, N.J., are offering VoIP telephone services over high-speed DSL or cable modem lines, and the major regional and national telecommunications companies also said they expected to start offering consumer service this year.

Voice-over-IP telephony has grown quickly in an unregulated market as an information service not subject to telecommunications rules.

The service avoids taxes and surcharges, including a universal service contribution to help pay for service to rural and poorer residents, and does not ensure such public safety capabilities as automatic address identification on 911 emergency calls.

Commissioners of both the FCC and the state PUC have said they didn’t want to stifle VoIP growth with a heavy regulatory hand, but they thought the public safety issues ought to be addressed.

“This starts us on the formal path to determining the appropriate regulation of voice-over-IP telephony,” said PUC member Loretta Lynch.

Commissioner Susan P. Kennedy said she was glad the state was moving forward and not waiting for the FCC to act.

“California should be a leader in this and help define the debate and the role of voice over IP,” she said.

VoIP service is provided in a number of ways. Some companies, like Free World Dialup in New York, allow members to talk to each other over the Internet through their computers. Vonage requires a broadband Internet connection to make a call, but the call can go to a regular telephone customer. And bigger companies are looking at using IP-enabled lines to carry voice traffic, but calls could start and end on the public network.

California plans to look into 11 VoIP issues, including the effect on 911 service, the universal service fund, access payments for using the public telephone network and basic consumer protection rules, such as customer privacy and billing information.