More on Today’s CVSG
on Jun 11, 2007 at 12:59 pm
Today, the Supreme Court called for the views of the Solicitor General on the petition in Sprint Nextel Corp. v. National Assâ€™n of State Utility Consumer Advocates, No. 06-1184. The case poses the question whether the Federal Communications Act pre-empts state laws that regulate whether certain items can be separately itemized in cell phone bills.
A provision of the Communications Act, 47 U.S.C. 332(c)(3)(A), generally prohibits States from regulating the â€œrates charged byâ€ wireless carriers, but permits States to regulate â€œother terms and conditionsâ€ of wireless service. National wireless companies frequently advertise a particular monthly rate for their service. The actual bills then charge that rate, plus provide separate line items for certain taxes and other fees imposed by state and local governments (for example, fees to support 911 service). Some states, however, have laws prohibiting such line items, which has the effect of either requiring providers to eat those costs or to roll them into their general rate. The State justify these rules as necessary to prevent wireless providers from advertising misleadingly low rates, which do not encompass the true cost of receiving service. The wireless service providers, on the other hand, say that these items are billed separately from the advertised rate in order to inform consumers about the source of these expenses and to allow a uniform national service rate that does not vary from one taxing jurisdiction to another. The question in this case is whether the prohibition against such line items is a regulation of â€œrates charged byâ€ the carriers (in which case it is pre-empted by the Communications Act) or instead the regulation of â€œother terms and conditions (in which case the Act expressly permits local regulation).
The Federal Communications Commission (FCC), which administers the Act, issued an order concluding that the prohibition against line items was rate regulation and therefore pre-empted. A consortium of state utility consumer advocate offices challenged that ruling in the Eleventh Circuit, which vacated the order. The court of appeals reviewed the order under the Chevron deference framework and concluded that although the FCC is due deference on the construction of ambiguous statutory provisions, the statute clearly treated line items as a kind of â€œother terms and conditionsâ€ subject to state regulation. In the course of that analysis, the court explained that it viewed the statute in light of a traditional â€œpresumption against preemption.â€
The petition poses two questions:
“1. Whether the Eleventh Circuit correctly held, under Step One of the analysis set forth in Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), that the FCC erred in ruling that state and local laws prohibiting line item charges on wireless bills were preempted under Section 332(a)(c)(A).
2. Whether the Eleventh Circuit erred by applying the presumption against preemption to guide its analysis of Section 332(c)(3)(A) under Chevron Step One.
This morning, the Court asked the Solicitor General to file a brief addressing whether cert. should be granted to decide these two questions. The SGâ€™s response will likely be filed next fall.