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Court Rejects Wireless Carriers' Appeal

  Court Watch  -   POSTED: 2008/01/22 13:43

In a loss for wireless communications providers, the Supreme Court on Tuesday let stand a lower court ruling preventing the industry from listing taxes and other government fees as separate line items on consumers' bills.

Sprint Nextel Corp. and T-Mobile USA Inc., which is owned by Deutsche Telecom, asked the justices to overturn the ruling. They said in court papers that state and local governments try to "hide" taxes and fees by barring carriers from listing them as separate items, requiring the companies instead to fold them in with the rest of their charges.

Consumer advocates, who support the lower court's ruling, responded that wireless companies frequently add a confusing array of charges that are not always the result of government taxes. Such complaints led the Federal Communications Commission to extend "truth in billing" rules to cell phones in 2005.

The legal question in dispute is whether the FCC was correct when it ruled in 2005 that federal law prohibits the states from barring separate line items. Federal communications law bars state regulation of rates but allows states to regulate "other terms and conditions" of service.

The 11th U.S. Circuit Court of Appeals overturned the FCC in 2006, ruling that line items on bills were "other terms and conditions" that states could prohibit. The justices' decision Tuesday allows that ruling to stand.

The issue is not completely settled, however. The Justice Department's Solicitor General, the Bush administration's lawyer, urged the court to turn down the case, even though the Solicitor General disagreed with the appeals court's ruling.

That's because the appeals court sent the case back to the FCC, and the agency is considering additional grounds for preempting state regulation of the wireless industry, the Solicitor General said. As a result, the issue is not yet ripe for Supreme Court review, the Solictor General said.


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