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The Federal Communications Commission was wrong when it said that states cannot regulate the appearance of cellphone bills, the 11th U.S. Circuit Court of Appeals has ruled. The unanimous ruling by a three-judge panel means that the Georgia Public Service Commission and similar commissions around the country can enforce laws limiting what wireless providers can put on their bills. Rulings from the 11th Circuit usually control law in only Georgia, Florida and Alabama, but this decision has nationwide impact because it vacates the order of a federal agency. “A lot of the state laws that were under a cloud, that cloud has been removed,” said Patrick W. Pearlman, who argued the case for the state consumer advocates against the Federal Communications Commission (FCC). The case dealt with laws, such as Georgia’s, that forbids a telecommunications company from passing the company’s contribution to the state’s universal access fund onto a customer in the form of a separate line-item surcharge on the customer’s bill. Instead, if the provider wants to recoup the money, it has to raise its basic rate. Pearlman, deputy consumer advocate for the West Virginia Public Service Commission, said that allowing cellphone companies to set out charges for taxes, fees and surcharges on the bills they send to consumers makes it harder for consumers to compare rates. State consumer advocates argued that sometimes bill line items carry descriptions that suggest falsely that they are taxes being passed to the consumer. ‘Overbroad’ regulations In March 2005, the FCC issued an order saying that states couldn’t make those kinds of rules, because “overbroad state regulations” might “frustrate” the federal government’s objective to minimize regulation on the wireless industry. Both the National Association of State Utility Consumer Advocates-a nonprofit organization of consumer advocates from 42 states-and the Vermont Public Service Board filed separate petitions asking federal courts of appeal to review the FCC order. The multidistrict litigation panel ordered that the petitions be consolidated, and the 2d Circuit transferred the Vermont board’s petition to the 11th Circuit, where the petition of the advocates’ association had been filed. National Association of State Utility Consumer Advocates v. FCC, No. 05-11682, and Vermont Public Service Board v. FCC, No. 05-12601. Federal law puts the federal government in charge of regulation of cellphone rates, and the FCC, backed by the major wireless carriers and their Cellular Telecommunications & Internet Association, argued that its order was right because restrictions on line items in wireless bills affect the manner in which cellphone companies set rates. The 11th Circuit panel rejected both the FCC’s defense of its March 2005 order and arguments by the wireless industry that the consumer advocates’ association lacked standing to bring the case. Writing for the panel, William H. Pryor Jr. said that the FCC had exceeded its authority in issuing that order because the federal statute at issue “unambiguously preserved the ability of the States to regulate the use of line items in cellular wireless bills.” “Although the term ‘rates charged’ is not defined in the Communications Act, the meaning of this term is clear in this context,” wrote Pryor. “A straightforward reading of the complementary phrases ‘regulate entry of or the rates charged’ and ‘other terms and conditions,’ 47 U.S.C. � 332(c)(3)(A), evidences the ‘clear and manifest purpose of Congress’ to leave the regulation of line items to the states.” FCC counsel Laurel R. Bergold declined to comment on whether the FCC would seek further review.

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