WASHINGTON-Wireless industry trade association CTIA is pushing Congress to overturn a federal appeals court ruling that said the Federal Communications Commission overreached when it said states could not prohibit wireless carriers from putting certain line items on their bills.
“Creating a mish-mash of inconsistent state-by-state wireless regulations will do nothing to benefit consumers and doesn’t make sense. Quite the contrary, this type of piecemeal regulation will dismantle the national business models that wireless companies have built to deliver consumers highly innovative products and services at lower prices,” said CTIA President Steve Largent.
The National Association of State Utility Consumer Advocates sought to have the FCC ban regulatory-recovery fees-charges levied by wireless carriers to defray the cost of state and/or federal mandates such as local number portability, enhanced 911 and universal service. NASUCA said the charges are deceptive because they appear to consumers that they are mandated state and federal charges. Mobile-phone operators have argued that they are.
In its 2005 decision, the FCC said rules either requiring or prohibiting line items on wireless bills amounted to illegal rate regulation. However, in its July 31 ruling, the U.S. Court of Appeals for the 11th Circuit said the agency did not have the authority to do this.
“The FCC exceeded its authority when it pre-empted the states from requiring or prohibiting the use of line items. The scope of federal authority to regulate `rate’ or `entry’ does not include the presentation of line items on cellular wireless bills. This billing practice is a matter of `other terms and conditions’ that Congress intended to be regulable by the states,” wrote Judge William Pryor Jr.
Congress is already involved with the issue. Although pre-emption of wireless state regulation was left out of the telecommunications-reform bill passed by the House, wireless pre-emption was included in the bill passed by the Senate Commerce Committee. The Senate bill, however, faces a significant hurdle since strong network-neutrality language was not included.
Either way, it’s doubtful this latest appeals court ruling is the end of the matter, said Rick Joyce, chairman of the telecommunications group of Venable L.L.P.
“Another court could easily have found that the form and content of wireless bills are so intrinsically related to the cost of providing wireless service that it was reasonable for the FCC to want to pre-empt in this area. … Another court might easily have sided with the commission, and found that in the absence of express language in the Communications Act granting the state’s jurisdiction over wireless-phone bills, it was not unreasonable for the agency to assert exclusive jurisdiction,” said Joyce. “The 11th Circuit surely will not have the final say over this unfortunate conflict between the state and federal regulation of the wireless industry.”
The 11th Circuit ruling could also impact other state-federal issues across the country.
Last year, Cingular Wireless L.L.C., Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA Inc. sued the state of Kentucky to challenge a new tax signed into law by Republican Gov. Ernie Fletcher. The law, which forbids telecom carriers from passing on to consumers a 1.3-percent gross receipts tax, was to have gone into effect Jan. 1. However, in December U.S. District Judge Karen Caldwell temporarily suspended the Kentucky lawsuit pending a ruling in the 11th Circuit’s truth-in-billing case. Mobile-phone carriers argue non-Kentucky cellular customers on national calling plans would have to absorb most of the cost of the state tax without gaining any benefit.
