CTIA Says Wash. Decision Gives Carriers Regulatory Certainty

CTIA and wireless carriers asked the 9th U.S. Appeals Court, San Francisco to uphold a lower court’s decision overturning proposed state regulation of line charges on subscriber bills. The case touches on one of CTIA’s major focuses: Carriers’ need for the certainty of national rules rather than state-by-state regulation. If the court sides with CTIA, which filed an amicus brief, the issue may be headed for Supreme Court review, sources said.

If the 9th Circuit upholds carrier arguments in Jared Peck v. Cingular, it would counter an 11th U.S. Appeals Court, Atlanta decision vacating the FCC’s 2005 truth in billing (TIB) order. Peck appealed a decision by the U.S. Dist. Court, Western District of Wash. At issue in both cases is the FCC’s TIB order, which said state rules requiring or barring line items on mobile carrier bills are rate regulation preempted by federal law.

Wash. imposed a business and occupation tax on everyone doing business in the state. Cingular tried to pass the cost on to customers as a line item on wireless bills. Peck sued Cingular in behalf of subscribers, saying businesses are required by state law to absorb the cost of the tax. Dismissing the lawsuit, the district court held that a victory for Peck would mean impermissibly regulating Cingular’s rates in violation of a federal law ban on state regulation of wireless rates.

“The district court’s decision, in addition to being legally correct, vindicates the policy judgment of the Federal Communications Commission that line items affirmatively benefit consumers and promote competition,” CTIA said. CTIA also argued that the court correctly interpreted 1993 amendments to the Communications Act, which largely removed from states authority to regulate the rates charged by carriers. “These… amendments fundamentally altered the landscape of wireless regulation and replaced the old state-and-federal dual system with a new regime firmly tilted in favor of federal regulation,” CTIA said. The group argued that “a patchwork of inconsistent state regulations of line items” threatens “the ability of CTIA members to offer the regional and national rate plans that benefit wireless consumers.”

NASUCA raised procedural issues in a friend of the court brief, which countered that the court “committed reversible error” in basing a decision on an FCC order “vacated nearly three months earlier.” NASUCA said “courts generally, and this circuit in particular, have uniformly held that district courts have no jurisdiction to determine the validity of FCC orders subject to review under the Hobbs Act.” NASUCA also argued that the court failed to properly apply the Chevron doctrine, applying the 1984 Supreme Court case that set rules for judicial review of agency interpretations of statutes.