WASHINGTON-The mobile phone industry’s campaign to further reign in state regulations was potentially dealt a serious blow last week when a key lawmaker hinted federal pre-emption of state and local regulations would not be included in telecom reform legislation in Congress, a prospect that could force cellular carriers to rely on the Federal Communications Commissions and the courts for more relief.
Senate Commerce Committee Chairman Ted Stevens (R-Alaska) said that-instead of opting for federal pre-emption in telecom reform legislation-he is considering authorizing one or more federal-state joint boards to come up with solutions to issues of dual jurisdiction. Stevens specifically mentioned cell-phone bills.
“We are interested in how Congress can simplify regulation of national companies without sacrificing the benefits of state regulation. There are a number of other questions to pursue, including how to ensure that the goals of consumer protection are finally met. One option our committee has discussed with your leadership is the idea of creating joint boards to work out common national standards on key issues. A joint board made up of the Federal Communications Commission and state regulators could develop a national standard outlining how cell-phone bills should be printed. The FCC could adopt the standards but leave it to the states to enforce it at the local level. That may be the best of both worlds-state involvement in creating national standards that are enforced locally,” Stevens told attendees at the winter meeting of the National Association of Regulatory Utility Commissioners.
Stevens’ remarks came on the first day of a week-long odyssey of comments that had the Alaskan lawmaker at one point even saying there might not be a telecom rewrite bill at all.
“We’re just trying to open up the doors to everything to see how it’s going to affect the law that we want to pass. Or whether we should pass a law. It may be that technology is so that we don’t have to have a new law. Did you ever think about that? We’re learning more and more about the ability of the country to adapt to new technology in a way despite the federal law that exists that is very productive,” said Stevens following a hearing last Tuesday on municipal broadband.
It is unclear whether Stevens can get consensus for his joint-board idea. Previously, he has touted his close working relationship with Sen. Daniel Inouye (D-Hawaii), ranking member of the Senate Commerce Committee. But on this concept Stevens does not appear to have consulted with his Democratic colleague.
Stevens sparked confusion when he floated, and then appeared to back away from, authorizing a joint board for video franchising-a major goal of the Bell operating companies in any telecommunications-reform bill. But even as he backtracked on a joint board for video franchising, he kept the concept alive for state cell-phone regulation.
Under Stevens’ plan, the authorization language for the creation of a joint board would be included in the telecom-reform bill. This board, composed of both state regulators and FCC members, would make recommendations to Congress about further changes in law sometime next year.
The mobile-phone industry has been fighting on multiple fronts to stop states from setting rules that govern billing, contracts, marketing, service and other wireless business practices. Cellular operators and states are at loggerheads over the dual jurisdiction of mobile-phone service established in 1993 by Congress. Legislation passed that year pre-empted state regulation of rates and market entry of wireless carriers, but left to states oversight of other terms and conditions of wireless service.
Mobile-phone carriers have challenged state wireless regulations in courts, state legislatures, public-utility commissions and at the FCC.
While Congress could simplify matters by strengthening federal pre-emption, the cellular industry is not depending solely on help from Capitol Hill. Indeed, cellular carriers on their own are making solid progress across the board.
The 8th U.S. Circuit Court of Appeals in December sided with wireless carriers by throwing out Minnesota’s wireless consumer-protection law. The appeals court said Minnesota’s law requiring cellular carriers give subscribers 60 days written notice of proposed contract changes is pre-empted by federal statute.
The five-member California Public Utilities Commission is poised soon to overhaul a bill of rights for telecom subscribers, though consumer groups, disability advocates and state Attorney General Bill Lockyer are backing an alternate proposal penned by Commissioner Dian Grueneich. The Grueneich plan would reinstate wireless regulations otherwise absent in a proposal backed by CPUC President Michael Peevey. Peevey appears to have the three votes needed to essentially gut the existing bill of rights and replace it with improved enforcement and education. The mobile-phone industry and Gov. Arnold Schwarzenegger were highly critical of the bill of rights passed by the CPUC in May 2004.
In addition to gains at the CPUC and the 8th Circuit, the cellular industry is making headway at the FCC.
The FCC last year pre-empted state regulation of line-items in wireless bills-including carrier-imposed regulatory recovery fees-even as the agency brought cellular carriers under the federal truth-in-billing regime. The 2005 truth-in-billing decision is being challenged by the National Association of State Utility Consumer Advocates and the Vermont Public Service Board in the 11th U.S. Court of Appeals in Atlanta.
A ruling in the 11th Circuit could impact a separate case in Kentucky. National mobile-phone carriers sued state officials last year to protest a new law prohibiting telecom operators from passing through to subscribers a 1.3-percent gross receipts tax.
The FCC may be getting close to further curtailing state regulation of wireless carriers.
The commission this year is expected to rule on its initial determination that inconsistent state-based truth-in-billing regulations are pre-empted. The FCC has said future pre-emption would not limit the ability of states to enforce their own consumer-protection laws.
The FCC also is set to decide whether states are pre-empted from regulating early termination fees. ETFs are charges imposed on subscribers who break service contracts. CTIA, the cellular operator trade group, asked the FCC to conclude early termination fees fall within “rates charged” under the 1993 law and therefore are excluded from state regulation.
Last week, CTIA said FCC rulemakings on truth-in-billing and ETFs are the association’s top two priorities in 2006.
