WASHINGTON—The Federal Communications Commission and major mobile phone carriers asked the 11th U.S. Circuit Court of Appeals to reconsider last month’s decision vacating the agency’s truth-in-billing regulations. The regulations pre-empted states from regulating line items on subscribers’ monthly bills.
“The panel opinion improperly rejected the FCC’s pre-emption decision by substituting its own reading of isolated statutory terms for the FCC’s reasonable construction of the prohibition on state ‘rate regulation,’” stated the FCC. “The panel refused to accord the agency’s interpretation any deference, elevating its own views regarding federal pre-emption above the specific policy decisions that Congress and the FCC have made. Whatever the merits of a system of dual state-federal regulation, Congress made a conscious and express decision to discard that model for CMRS (commercial mobile radio service), finding that state regulation was hindering the development of nationwide wireless communications services. The panel opinion fails to honor that legislative choice.”
The FCC’s reference to congressional intent flows from legislation signed into law in 1993 prohibiting state regulation of wireless rates and market entry, while reserving to states oversight of other terms and conditions of wireless service.
The FCC last year ruled states cannot regulate non-tax line items on wireless bills as part of a broader decision extending federal truth-in-billing regulations to mobile-phone operators. The decision prompted challenges from the National Association of State Utility Consumer Advocates and the Vermont Public Service Board.
The line-items in question are regulatory recovery fees routinely levied by cellular operators to defray the cost of federal and state mandates such as local number portability, enhanced 911 and universal service. NASUCA asserted such charges are deceptive because they may appear to consumers as state and federal taxes. Operators insist regulatory recovery fees broken out in bills help consumers see exactly what they are paying for.
“The statutory language does not clearly authorize states to require or prohibit line items in wireless telephone bills,” stated Cingular Wireless L.LC., Verizon Communications Inc., Sprint Nextel Corp., T-Mobile USA Inc., Leap Wireless International Inc. and cell phone association CTIA.
If the three-judge panel decides not to rehear the case, the FCC and cellular carriers can seek a review by the full 11th Circuit in Atlanta.
Federal pre-emption is the top policy priority for the mobile phone industry, with wireless carriers hopeful that Congress will further rein in states in telecom reform legislation. Given the importance of the issue to industry, it would not be surprising if cellular carriers and the FCC seek Supreme Court review if they fail to get relief from the 11th Circuit.
Industry points to results of a newly-released survey of 1,000 cell phone users nationwide to buttress its argument that consumers are largely satisfied with their cell phone service and skeptical of attempts to impose new government regulations.
The polling data, collected by McLaughlin & Associates and underwritten by the cellular industry’s advocate arm, found:
—86 percent are satisfied with their wireless phone service.
—78 percent would not be willing to pay a penny more for a wireless “consumer bill of rights,” and 59 percent believe “a cell phone `bill of rights’ would just add unneeded government regulations that would cause consumers to pay higher prices and have fewer choices for cell phone services.”
—73 percent believe new government regulations on cell phone service would make cell phone service more expensive.
—72 percent support a 3-year nationwide freeze on new wireless taxes, currently in the Senate communications bill, which would prohibit states and localities from raising taxes on wireless services.
—71percent believe adding new government regulations on wireless phone service would either make their cell phone service worse or make no difference at all.
—57 percent of consumers said they were likely to contact policymakers if they knew new taxes or more government regulations were being proposed on their wireless phone service.
“This data shows there is very strong consumer satisfaction among wireless consumers. It also shows that there is no consumer support for state and local governments adding complicated and costly new regulations on wireless phone service, even when they spin it as a ‘consumer bill of rights.’ In fact, the majority of wireless consumers polled, by more than a 2 to 1 margin, were against adding new regulations on wireless services,” said Kimberly Kuo of MyWireless.org, an affiliate of CTIA.
