California was truly a big cry baby when it attempted to appeal the FCC's decision to control and regulate VoIP. You see California wanted a "piece of the action" - the VoIP action that is, but alas, the Feds trumped the state's jurisdiction. Because VoIP traffic is transported over the Internet, it has been designated a data service by the FCC and therefore not subject to state and municipal regulations. But that ruling is being challenged. California, which was nearly bankrupted by the previous Democratic Governor, was concerned they would lose out on the huge tax revenues they collect from traditional phone lines as more customers migrate to "tax free" VoIP services..

Well, the California Public Utilities Commission decided to surrender by pulling out of its appeal of a Federal Communications Commission ruling designating VoIP as an interstate data service outside the control of state agencies. I'm guessing Arnold told them to back off and stop being "girley men" and cry-babies for trying to regulate VoIP in order to collect taxes.

California's PUC was the first state agency to oppose the FCC ruling. It was joined by a number of other states which filed the joint case in the U.S. Ninth Circuit Court of Appeals. But the California agency voted 3 to 1 last week to withdraw from the appeal.