State groups said the Supreme Court need not review a lower court ruling that struck down a Federal Communications Commission decision pre-empting states from regulating line-item charges on cellphone bills.
Sprint Nextel Corp. and T-Mobile USA Inc., the third- and fourth-largest cellular carriers, respectively, asked the high court in April to review the FCC’s 2005 pre-emption ruling by the 11th U.S. Circuit Court of Appeals in Atlanta. Other national carriers, cellphone trade association CTIA and the FCC decided not to join Sprint Nextel and T-Mobile USA in pursuing the appeal before the Supreme Court.
“Rather than demonstrating a real and intolerable conflict among the circuits, or a conflict with this court’s prior rulings, the petition for review is based on petitioners’ claim that the 11th Circuit erred in vacating the FCC’s declaratory ruling. This is not a sufficient basis for review,” stated the National Association of State Utility Consumer Advocates and the National Association of Regulatory Utility Commissioners. “Recognizing this defect in their argument, petitioners seek to elevate the importance of the 11th Circuit’s decision by mischaracterizing its impact, both on wireless consumers and on the statutory schemed for regulating wireless telecommunications.”
Congress in 1993 largely pre-empted states from regulating wireless carriers, but reserved limited oversight to states. NASUCA and NARUC said the 11th Circuit correctly concluded wireless line-item fees do not fall within the scope of the 1993 law that stops states from regulating wireless rates, but rather within the “other terms and conditions” jurisdiction accorded to states.
In its Supreme Court petition, Sprint Nextel and T-Mobile USA said the errant 11th Circuit decision would encourage state and local governments to enact and hide new wireless taxes. Moreover, the operators warned that consumers’ bills would increase and that wireless carriers would be hampered in their ability to offer national rate plans that collect taxes from subscribers in different taxing jurisdictions.
Other pending suits and FCC rulemakings-several involving early termination fees-turn on the question of federal pre-emption. The reach and limits of the federal pre-emption also has been a core issue in antenna siting, wireless tax and health litigation.
State issues remain
Sprint Nextel, T-Mobile USA, Verizon Wireless and AT&T Mobility sued the state of Kentucky on federal pre-emption grounds in 2005, challenging a Kentucky law prohibiting carriers from passing onto subscribers a 1.3-percent gross receipts wireless tax. The law was to have become effective Jan. 1, 2006, but was put on hold during the 11th Circuit litigation. The case was put back on track earlier this year, but again the court stayed the order due to other telecom suits against the state based on claims other than federal pre-emption.
In February, Texas filed a deceptive billing lawsuit against Sprint Nextel that the carrier called an improper state assault on wireless rate regulation. Sens. John McCain (R-Ariz.) and Jim DeMint (R-S.C.) earlier this year introduced a bill that would put a three-year moratorium on new discriminatory wireless taxes by states, but the measure’s chances of passage are uncertain at best.
Meantime, the Democratic-led Congress shows no signs of wanting to expand wireless federal pre-emption along the lines of telecom legislation pursued by Senate Republicans last year.
