11th Circuit Throws Out FCC Truth in Billing Decision
Wireless carriers and the FCC had a big loss in a battle with NASUCA and NARUC over truth in billing regulation, as a panel of the 11th U.S. Appeals Court, Atlanta unanimously threw out a March 2005 FCC truth in billing (TIB) order. The order said state rules requiring or barring line items on mobile carrier bills are rate regulation preempted by federal law.
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“The scope of federal authority to regulate ‘rates’ or ‘entry’ does not include the presentation of line items on cellular wireless bills,” the court held, 3-0. “This billing practice is a matter of ‘other terms and conditions’ that Congress intended to be regulable by the states.” The court said the FCC “exceeded its authority” in preempting states from requiring or prohibiting use of line items on bills carriers send customers.
The decision shows dramatically the need for Congress to shore up FCC authority, CTIA said Tues. It’s not clear if the FCC will appeal the decision to the Supreme Court or seek review by the entire circuit court.
Comrs. Copps and Adelstein dissented in part from the 2005 order, questioning the FCC’s assertion of authority over states. In comments presaging the 11th Circuit decision, Copps called the FCC reading of the law “an incredibly cramped interpretation that ignores the plain meaning of the statute.”
CTIA Pres. Steve Largent blasted the 1lth Circuit ruling. “Creating a mishmash of inconsistent state-by-state wireless regulations will do nothing to benefit consumers and doesn’t make sense,” he said, predicting piecemeal controls will break down business models wireless that companies have used to deliver “highly innovative products and services at lower prices.” He added: “Forcing wireless providers to establish different business models in different states, whether it’s in all 50 or just a handful, for the sole purpose of complying with disparate regulatory regimes will only increase consumer costs and slow innovation.”
States sounded a victory call. “The court made a very sound decision properly construing the Congress’s intent in the 1993 amendments to the [Communications] Act in carving out broad authority that states retain over other terms and conditions of wireless service,” said Patrick Pearlman, deputy consumer advocate for the W. Va. PSC: “The FCC’s argument would have left virtually nothing to the reservation of state authority contained in the act.” Pearlman added: “Now it does sort of turn to the question of what Congress will do.”
The decision was written by Judge William Pryor, newly appointed to the court and seen as a strong backer of states’ rights. Pryor was among a handful of controversial judicial nominees by President Bush cleared after a long, tough Senate fight. The former attorney general of Ala., he was painted by Democrats as archconservative due to his stances on abortion and homosexuality and for allowing the 10 Commandments to be displayed the state judicial building. Pryor took the lead in oral arguments on the case and appeared skeptical of FCC and wireless carrier arguments, sources said.
No similar cases are now before other appeals courts that could give wireless carriers a win. But in a Dec. 2005 order on appeal to the Supreme Court, the 8th U.S. Appeals Court, St. Louis, overturned a Minn. law requiring wireless carriers to give advance notice of changes and get customer permission before implementing any change increasing a service contract’s cost or duration. The 8th Circuit agreed with wireless carriers led by Verizon Wireless and Cellco that the state’s law constituted impermissible rate regulation.
Pearlman said the 11th Circuit decision would boost chances the Supreme Court will hear an appeal of the Minn. case. “In the Cellco cert proceeding the wireless carriers cite to this 11th Circuit proceeding,” he said. “I don’t think it’s a conflict between circuits but it should provide some additional impetus for the Supreme Court to take up the Cellco case.”
The FCC handed down the TIB order after NASUCA sought a declaratory ruling on the reasonableness of carrier billing practices. “The FCC’s response to NASUCA’s petition was, to say the least, unexpected,” a NASUCA pleading before the 11th Circuit said: “Rather than limiting the growth of line item charges, the FCC gave a ‘green light’ to their continuing proliferation. Worse, the FCC undermined state authority to deal with such billing practices, even where the state laws were central to their sovereign powers.”