Industry loses bid for Supreme Court review: States to continue oversight of line items in monthly bills

The Supreme Court rejected a request by two national mobile-phone carriers to review a lower court’s decision overturning a Federal Communications Commission rule preempting state regulation of line-items on subscribers’ monthly bills. The move stands as a blow to the carriers, which have argued that states should not have oversight of monthly bills.
“By determining that it should not review this case, the Supreme Court is underscoring the important role that state commissioners play. This decision is a big win for consumers and it ensures that their state regulatory commissions will remain on the customer-protection beat,” stated Marsha Smith, an Idaho regulator who is president of the National Association of Regulatory Utility Commissioners, and Tennessee regulator Ron Jones, who chairs NARUC’s Consumer Affairs Committee.
The high court’s denial of Sprint Nextel Corp. and T-Mobile USA Inc.’s petition came as little surprise, following the Bush administration’s recommendation last month that further review of the pro-state ruling by the 11th U.S. Circuit Court of Appeals was not warranted.
“While we are disappointed in the court’s decision, it would be a mistake to interpret this decision as an endorsement of increased state regulation of the wireless industry,” Sprint Nextel said in a statement. “This decision demonstrates why Congress needs to stand up for consumers and reaffirm the national framework it articulated in 1993, which allows wireless carriers to be transparent with consumers regarding taxes, surcharges and fees. Because of Congress’s decision, the wireless industry has become more competitive, prices are lower, usage is higher, and network quality has improved.”
The FCC preempted state regulation of wireless line items in bills in 2005, only to lose an appeal in the 11th Circuit brought by the National Association of State Utility Consumer Advocates and the Vermont Public Service Board. NARUC was heavily involved in the litigation.
Line items are intended to recoup carriers’ costs associated with mandates and taxes imposed at the federal, state and local levels. Wireless carriers argue the line items help consumers better understand what they’re paying for.
Congress in 1993 significantly preempted state regulation of mobile-phone carriers, but left some powers to states in the wireless space.
The cellular industry has made expanded federal preemption its top legislative priority in recent years, with jurisdiction often a key legal issue in consumer, health and tax lawsuits. So far, however, the Democratic-controlled Congress has not moved to strengthen existing preemption law.
Industry has not fared much better at the Federal Communications Commission, which is unlikely to grant trade group CTIA’s petition to declare state regulation of early termination fees as preempted by federal law. However, FCC Chairman Kevin Martin said he plans to hold a hearing this year to examine such charges levied by the wireless industry and other communications sectors. As such, the FCC could pursue other legal avenues to prevent states from meddling with ETFs.