Judges Reaffirm States Rights for Wireless Truth-in-Billing August 2006

A federal appeals court has reaffirmed legal support for states rights to require or prohibit the use of line items on wireless bills. The so-called truth in billing matter directly affects providers including MVNOs and cellular carriers.

Judges for the 11th Circuit Court of Appeals in late July sided with organizations including the National Association of Regulatory Utility Commissioners (NARUC) and the National Association of State Utility Advocates (NASUCA) and shot down the FCCs attempt to put line item billing under federal auspices. The commission had argued that overseeing line-item billing includes the rates charged section, which is federally regulated. Representatives for states rights, on the other hand, contended that segment falls under the other terms and conditions portion of wireless services, which the states regulate.

The ruling comes against a backdrop of congressional attempts to reform the 1996 Telecom Act. Most notably, at the end of June, the Senate Commerce Committee added a wireless preemption clause to the Consumers Choice, and Broadband Deployment Act of 2006. The amendment, if passed, would halt the power of state regulators to oversee consumer complaints about their wireless phone services, moving enforcement to an overburdened FCC.

CTIA The Wireless Association lobbied for the amendment, arguing state preemptions were positive because they would lead to lower prices, more providers and rate plans from which to choose, and the innovative design of new devices. NARUC and NASUCA balked at the contention, questioning who would help wireless customers when the industry does not respond; what could happen to current agreements; and service concessions.

NARUC leaders, at the associations summer meeting this week, hailed the 11th Circuit Courts July 31 decision, while proponents who included Sprint Nextel Corp. and Cingular Wireless LLC lamented it. Steve Largent, president and CEO of CTIA, said the judges ruling underscores the need for a consistent national regulatory framework for wireless services.

Creating a mish-mash of inconsistent state-by-state wireless regulations will do nothing to benefit consumers and doesn’t make sense, he noted in a statement. 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.

The judges disagreed with that take, stating, The prohibition or requirement of a line item affects the presentation of the charge on the users bill, but it does not affect the amount that a user is charged for service. State regulations of line items regulate the billing practices of cellular wireless providers, not the charges that are imposed on the consumer.

FCC www.fcc.gov
NARUC www.naruc.org
NASUCA www.nasuca.org