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 agency truth-in-billing regulations that pre-empt 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 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.
Meantime, in California, controversy over wireless billing is heating up. National wireless carriers–and their trade group, CTIA–oppose recently passed telecom consumer protection legislation awaiting action by Gov. Arnold Schwarzenegger. The measure would allow wireless and wireline subscribers to contest unauthorized charges on their monthly bills. A spokeswoman for the governor said Schwarzenegger has not taken a public position on the telecom `cramming’ bill. Schwarzenegger has until Sept. 30 to sign or veto the bill.
At the California Public Utilities Commission, differences have surfaced among consumers, wireless carriers and regulators over an agency draft report on challenges faced by state telecom consumers with limited English proficiency. The draft report is part of a proceeding that grew out of new rules–which largely supersede the short-lived bill of rights for telecom consumers–emphasizing education and enforcement to protect the state’s diverse collection of buyers of telecom services and equipment.
