FCC Asks U.S. Court To Rehear Lost Truth-In-Billing Case

FCC Asks U.S. Court To Rehear Lost Truth-In-Billing Case

The Federal Communications Commission (FCC) has asked a U.S. court to reconsider an earlier decision ruling the regulator exceeded its authority in truth-in-billing orders that preempted state regulators on what types line-item details they can require or prohibit on wireless bills to consumers (Telecom Policy Report, Aug. 6).

In a legal dispute with the National Association of State Utility Consumer Advocates (NASUCA) over whether the FCC erred in several truth-in- billing decisions (Telecom Policy Report, March 30, 2005), FCC lawyers have gone back to the U.S. Court of Appeals for the Eleventh Circuit that had upheld other court rulings in NASUCA’s favor. The FCC asked the court to reconsider its determination that U.S. statues unambiguously permit states to require or prohibit line items in wireless bills, and it also sought to correct what it called “a technical error” in the opinion that would have invalidated amended truth-in-billing rules that weren’t challenged on review.

The federal appellate court had sided with NASUCA against the FCC, reckoning that state rules regarding wireless bills constituted forms of state rate regulation already banned in federal law. The legal issue surrounded wording in a 1993 amendment to the Communications Act of 1934 that permitted states to oversee “other terms and conditions” connected with wireless bills – other than rates. In its 44-page decision, the court said the scope of federal authority to regulate rates doesn’t include “the presentation of line items on cellular wireless bills” and this aspect of billing practice is a matter of other terms and conditions that the U.S. Congress intended states to regulate.

Says Federal Court Is Mistaken

In bouncing back, the FCC petition has the agency requesting a full-panel rehearing on the legal matter, which involves three separate reports, orders and rulings on truth-in-billing regulations and clarifications. In essence, the FCC says U.S. statutory language doesn’t clearly authorize states to require or prohibit line items in wireless bills, and an overall lack of clarity and undefined terms meant that Congress implicitly delegated authority to the FCC to elucidate meanings. “In short, the court’s determination that the commission’s interpretation of the statute violated the express language (in the communications act amendment) was mistaken,” according to the FCC, adding that the court should have upheld – and was bound to defer to – the commission’s interpretation so long as the interpretation is reasonable.

On that technicality request, the FCC said the court should correct “a technical error of significance in its opinion” by ordering a “remand rather than vacate” on at least one of the three commission decisions in dispute. Vacating a decision is an extraordinary remedy, according to the FCC, while remand is appropriate when there is a “serious possibility” that an agency will be able to substantiate its decision. As a result, the FCC suggested the court change or essentially soften some of the precise language in its August ruling.

NASUCA, the National Association of Regulatory Utility Commissioners (NARUC, which also intervened in the case) and individual state regulators had been complaining to the FCC that wireless carriers arbitrarily were listing bogus government-related charges on bills, and that these misrepresentations amount to deceptive telephone charges that violate truth-in-billing rules. The FCC decision ostensibly strengthened specific truth-in-billing provisos, including expanding coverage of its existing inadequate rules to cellular by removing wireless exemptions yet, at the same time, it trumped state authority. NASUCA’s legal action maintained the FCC denied states the ability to protect consumers from deceptive billing and didn’t impose any meaningful enhancements.

Tunney Review Gets More Interesting

In an unrelated court matter, sparring during the past two weeks continued in the formal Tunney Act review of last year’s U.S. Department of Justice (DoJ) antitrust settlement deal on the SBC Communications/AT&T and Verizon Communications/MCI mega mergers (Telecom Policy Report, July 29). Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia said his court needs additional time and evidence to consider DoJ’s proposed final judgments (PFJs) with the four carriers.

In saying there isn’t enough information for him to make a determination on the public interest arguments in the case, and in seeking additional data from all the parties, Sullivan last week granted a motion by the Competitive Telecommunications Association (CompTel) to supplement its recent filing in the court’s review based on a comparable DoJ legal and competitive impact statement process with Alltel Corporation in exchange for government approval of its proposed $1.075 billion purchase of Midwest Wireless Holdings LLC (TelecomWeb news break, Nov. 18, 2005).

By agreeing to divest its rural Minnesota wireless carrier assets (TelecomWeb news break, Sept. 12), Little Rock, Ark.-based Alltel and Mankato, Minn.-based Midwest cut deals pertaining to a civil lawsuit and consent decree that were simultaneously filed by DoJ in the U.S. District Court for the District of Minnesota in Minneapolis to block the proposed transaction and then subsequently to settle the matter. So as it relates to the SBC/AT&T and Verizon/MCI merger reviews, CompTel argued that the divestiture requirements being placed on Alltel and Midwest “demonstrate just how woefully inadequate” the DoJ’s proposed remedies are for the former Bell companies.

CompTel noted that the DoJ determined the combination originally envisioned by Alltel and Midwest “would have resulted in higher prices, lower quality and diminished investment in network improvements for consumers of mobile wireless telecommunications services in four areas” where both companies currently operate. U.S. Cellular Corp., in particular, reportedly had raised the questions about the Alltel/Midwest combination in the Minnesota markets. And under the Tunney Act, the proposed settlement and the DoJ’s competitive impact statement allows public comment in the Minnesota federal court during a 60-day period.

Alltel/Midwest applications for asset/license transfers have been pending at the FCC since earlier this year, and the regulator is expected essentially to follow the DoJ’s conditions when it completes its review (anticipated by month’s end). The DoJ pointed out it has coordinated its investigation with the FCC, and it also disclosed that the state of Minnesota joined the DoJ lawsuit and proposed consent decree.

Under terms of the DoJ’s proposed consent decree – if court approved – the combined company must sell off the Minnesota wireless business, spectrum and customer lists in four market areas comprised of 28 counties. Alltel is becoming a wireless-only operator following the $9.1 billion deal to spin off its wireline operations to the Valor Communications Group (TelecomWeb news break, Dec. 9, 2005). That deal was approved by federal government agencies early this year (TelecomWeb news break, Jan. 27).

[Copyright 2006 Access Intelligence, LLC. All rights reserved.]

COPYRIGHT 2006 Access Intelligence, LLC.

COPYRIGHT 2006 Gale Group