A recently enacted California statute authorizes the California PUC to require interconnected voice over Internet protocol (VoIP) service providers to begin collecting and remitting fees to support the state’s universal service fund. The measure is intended to capture lost revenue arising from the continued migration from traditional wireline telephony to VoIP services, and the estimated two and a half million VoIP consumers in California. The state’s enactment of this law follows the FCC’s 2010 decision not to preempt states from imposing state fund contribution obligations on nomadic interconnected VoIP providers, and may prompt similar action in other states.

On Oct. 9, 2011 California Governor Brown signed AB 841, which adds a new section (285) to the California Public Utilities Code. This provision of the Code authorizes the California Public Utilities Commission (CPUC) to require interconnected VoIP service providers to collect and remit surcharges to fund six programs under the State’s universal service fund. The new measure requires interconnected VoIP providers to collect and remit surcharges upon their “California intrastate revenues.” The law defines “interconnected VoIP service” as having the same meaning as federal law (per FCC regulations).