WASHINGTON-Rep. Chip Pickering (R-Miss.), co-chairman of the Congressional Wireless Caucus, led a group of lawmakers last week in writing a letter urging the Federal Communications Commission to declare that states have no jurisdiction over early-termination fees.
“In our view, there is no question that ETFs are part of a wireless carrier’s rates or rate structure. This is true because ETFs are part of the price customers agree to pay for wireless service and because they are part of carriers’ business plans for recovering their service costs,” according to the letter. “State legislation, litigation and regulatory efforts will spread if the FCC does not act quickly to stop these actions under its clear authority. State action to regulate this one aspect of rates charged by carriers would do more harm than good for consumers. Even one state law or court decision could jeopardize the nationwide or regional wireless calling plans that have benefited so many Americans, potentially resulting in higher costs and fewer service plans.”
The National Association of Regulatory Utility Commissioners released a draft of the letter July 21 and said Pickering was leading the effort to gather signatures.
“Congress intended to restrict state regulation of wireless services to allow for growth and expansion and better consumer service across the country. We believe that early-termination fees are `rates charged’ type fees which are part of the regulation restriction. Our letter to the FCC explains that this was and is the will of Congress with the legislation and asks them to rule accordingly,” said Pickering.
The letter appears to be a consolation prize since pre-emption of wireless state regulation was left out of the telecommunications-reform bill passed by the House of Representatives. Wireless pre-emption-what the industry likes to call a nationwide framework-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.
No state commissions are contemplating regulating early-termination fees today, NARUC President Diane Munns, a member of the Iowa Utilities Board, told RCR Wireless News.
“If they are not regulating anything, why are they worried about it?” asked K. Dane Snowden, vice president of state & external affairs for wireless trade association CTIA.
States should not be cut out of the process, said Munns, noting that early-termination fees are a part of the contracts that wireless consumers sign.
“State courts deal with contracts all of the time,” said Munns. “If it is a contract issue, you shouldn’t have to go to the FCC.”
Allowing state regulators to oversee early-termination fees would ensure that wireless carriers abide by the contracts signed by customers. “Cell-phone companies should keep up with their end of the bargain,” said Munns.
CTIA asked the FCC more than a year ago to assert federal jurisdiction over early-termination fees. Snowden says three states-Michigan, New York and South Carolina-are considering legislation to allow state regulation of ETFs.
Snowden believes that customers with service issues should first start with the carrier. “When people call we have one of the highest resolution rates,” he said.
