Pittencrieff Communications Inc. is seeking federal action regarding a 1995 Texas state law requiring the company and other commercial mobile radio service providers to pay an assessment of $75 million.
The Abilene, Texas-based provider of specialized mobile radio service maintains the Texas statute violates the Communications Act of 1934, as amended in the 1993 Omnibus Budget Reconciliation Act, which says states do not have authority to regulate CMRS providers’ entry or rates.
Earlier this month, the company filed a petition with the Federal Communications Commission requesting that it supply an order to pre-empt Texas’ Public Utility Act of 1995, which requires an endowment of $150 million be paid in equal parts by the community of CMRS companies and the community of telecommunications utilities companies, annually, for 10 years. Telecom utilities include long-distance, exchange and interexchange carriers. The amount any company must pay, according to the act, will be figured as a percentage of gross revenues. The state’s first collection of fees is slated for this month.
The assessment directly operates as a condition of entry, maintains Pittencrieff, and indirectly affects rates of CMRS providers. Therefore the state act is pre-empted by federal law, says the company in its petition for declaratory ruling prepared by Washington, D.C., attorneys Russell Fox, Jocelyn Roy and Susan Jones of Gardner, Carton & Douglas.
Pittencrieff added that provisions in the Texas law “frustrate Congressional intent to relax state regulatory burdens to foster the growth and development of communications services.”
“The assessments are absolutely unrealistic,” said Alan Shark, president of the American Mobile Telecommunications Association in Washington, D.C. “We will come on the side of Pittencrieff. This affects all SMR,” he said, because “the states talk to each other.” He fears others may follow Texas’ example, based on the perception telecom is a high-growth area. “They don’t understand the SMR industry. There’s a clear misunderstanding of what our industry is about.”
Fox said Pittencrieff’s petition was filed Jan. 11. The FCC has not formally responded but indicated interest in the matter, he said. Fox expects the commission will post public notice for comments. If the FCC issues an order pre-empting the Texas statute, Fox said Pittencrieff would take the order to Texas court and request the state be enjoined from collecting money from CMRS providers under the Telecommunications Infrastructure Fund.
Other wireless communications providers in Texas are fighting the assessment on grounds CMRS providers’ fees are disproportionate, as total revenues of the CMRS community fall far below those of utility companies.
The fund was established to provide loans to public institutions, including schools, for computers and other media equipment, supplemental wiring and costs of installation, program development and training.
An adjunct to Pittencrieff’s pursuit for federal intervention in Texas is a provision in the 1993 budget act that accords SMR providers a three-year transition period before they must abide by rules governing CMRS providers. That term ends in August.
