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New CA Law Makes VoIP Providers Fund State Universal Service 

Interconnected VoIP carriers with terminating traffic in California will now have to pay into the state’s universal service fund. On October 9, Governor Edmund Brown signed into law a provision requiring this group of VoIP service providers to collect and remit surcharges on CA intrastate revenues.

The new law takes effect immediately.

Interconnected VoIP service providers can determine intrasate revenue by any of the following methods:

• The inverse of the interstate safe harbor percentage established by the FCC for interconnected VoIP service (currently 64.9%, which means the intrastate portion would be 35.1%). 
• A traffic study specific to the VoIP service provider allocating revenues between federal and state jurisdictions.
• Another means of accurately apportioning interconnected VoIP service between federal and state jurisdictions.

Any method used must be consistent with federal universal service contribution obligations.

The bill, authored by Assemblymember Joan Buchanan and supported by AT&T, is an attempt to recoup declining revenue from traditional wireline carriers. According to the California Public Utilities Commission (CPUC), there are two-and-a-half million VoIP users in the state. About 80%, or two million, are residential subscribers.