UC Law SF Communications and Entertainment Journal


In 1993 Congress passed the Omnibus Budget Reconciliation Act, which placed a limitation on state power to regulate rates of wireless carriers. This legislation explicitly reserved to the states the power to adjust the "terms and conditions" of a wireless provider's service. The FCC, however, interpreted the act as preempting states from requiring or prohibiting explicit line items. While many of the theoretical grounds for the FCC's 2005 Truthin- Billing Declaratory Ruling are correct, the empirical examples cited seem to conflict with its theoretical rulings, causing some of the Ruling to violate 5 U.S.C. § 706. Moreover, the two courts that have dealt with the Ruling both defined "rates" unambiguously.

This article argues that the FCC has the statutory authority to preempt line-item charges, but not line-item descriptions. For the purposes of this article, line-item charges are discrete charges, whereas line-item descriptions describe those charges. The difference is based on the aim of the state regulation. If the lineitem regulation affects the bottom line charged the customer, the state regulation could be considered a regulation of a line-item charge. If, however, the bottom line is unaffected, then the state regulation does nothing more than affect the charge's description and should not be considered a regulation of a line-item charge. Prohibiting or requiring a line-item description does not affect the overall amount of the charge because an agency can simply relabel the charge as something else. Regulations of line-item descriptions could be considered by courts to be within states' and outside the FCC's statutory authority under 47 U.S.C. § 332(c)(3)(A).