# Amicus Curiae Brief — Cincinnati Smsa Limited Partnership v. Public Utilities Commission of Ohio

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1615%3A6

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2003
- **Citation:** 540 U.S. 938

## Text

Supreme Cou
FILE > U.S.

No. 02-1711 Mt
f [OFFICE OF Te CLERK

IN THE

Supreme Court of the Anited States

CINCINNATI SMSA LIMITED PARTNERSHIP.
a Petitioner,
q;

PUBLIC UTILITIES COMMISSION OF OHIO,
| Respondent.

On Petition for a Writ of Certiorari to the
Supreme Court of Ohio

BRIEF AMICUS CURIAE OF THE
CELLULAR TELECOMMUNICATIONS & INTERNET
ASSOCIATION IN SUPPORT OF PETITIONERS

MICHAEL F. ALTSCHUL HOWARD J. SYMONS
CELLULAR | Counsel of Record
TELECOMMUNICATIONS & SARA F. LEIBMAN
INTERNET ASSOCIATION ANGELA F. COLLINS
1250 Connecticut Avenue. N.W. MINTZ, LEVIN, COHN, FERRIS,
Suite 800 GLOVSKY AND PoPEO, P.C.
Washington. D.C. 20036 701 Pennsylvania Avenue, N.W.
(202) 785-0081 Suite 900
Washington, D.C. 20004
(202) 434-7300

July 21, 2003 Counsel for Amicus Curiae

AES ANNO NN ENN RNMREE IE AGATE SEARS EG
WILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D. C. 20001

TABLE OF CONTENTS

BPs PE FART EGE BMI orcccesncossnvsvessisvsersnvesesonenesese
INTEREST OF AMICUS CURIAE.............:ccsssseeeees ees
REASONS FOR GRANTING THE PETITION ............

‘

Il.

III.

STATES ARE FORBIDDEN FROM EN-
GAGING IN RATE REGULATION OF
FE Re GN ner nsonensvinsasennserserncinsons

A. Congress Created a New Regulatory Para-
digm for Wireless Services in Section 332..

B. Congress’s Deregulatory Scheme Bene-
fits Wireless Competition and CMRS
I hisidlsrihaacnr irinechebiinechiateedieaibniniins

THE OHIO SUPREME COURT’S DECI-
SION HAS NATIONAL CONSEQUENCES...

A. The Ohio Decision Regulates Wireless
Rates in Direct Violation of Section 332.....

B. The Ohio Decision Regulates Wireless
Entry in Contravention of Section 332 ........

C. Review by this Court Is Necessary To
Prevent the Destruction of Congress’

THE OHIO SUPREME COURT’S DECI-
SION CONFLICTS WITH CONGRES-
PCs ET sa:issiulcnileitisitesantaibinentcaeinnisunaion

GR a sdisa ti invnesdicdcninsliasiebanninncinbiessrsdsaaplonintacniocen

Page

11

13
16

il
TABLE OF AUTHORITIES
FEDERAL CASES Page

American Telegraph & Telegraph Co. v. Central

Office Telegraph, Inc., 524 U.S. 214 (1998) ..... fz, §3
Aubrey v. Ameritech Mobile Communications,

Inc., No. 00-CV-75080, 2002 U.S. Dist.

LEXIS 15918 (E.D. Mich. June 17, 2002)........ 1]
Bastien v. AT&T Wireless Services, Inc., 205

B35 SES CRE, Re tiitertieniesdicccamence 10
Brown v. Washington/Baltimore Cellular, Inc.,

109 F. Supp. 2d 421 (D. Md. 2000)... 1]
Cellnet Communications, Inc. v. FCC, 149 F.3d

479 GO CH. FRG ic sceretelhanen 4
DeCastro v. AWACS, Inc., 935 F. Supp. 541

CED ET. TR xcciccescinntiecciaenabacaaaencmibatecan 12

Fedor v. Cingular Wireless Corp., No. 01-CV-
6849, 2002 U.S. Dist. LEXIS 14786 (N.D. IIL.

Paramy, 02, DBRS iiistncasiisatcesaeteannbeasoiclecaiaiipeinipliadtie 8
Geier v. American Honda Motor Co., Inc., 529

U.S. Bb) Ge iisincscticcec ies 13, 14, 15
Gilmore v. Southwestern Bell Mobile System,

L.L.C., 210 F.R.D. 212 (N.D. Ill. 2001)............. 8
Hines v. Davidowitz, 312 U.S. 52 (1941) ........... 15

ITT World Communications, Inc. v. New York
Telegraph Co., 381 F. Supp. 113 (S.D.N.Y.
RD TAD:.....sssiceviiiisiisionsibepciadae eeaaacdaiaalaadiaalaaliliadiiibecasis 8
Lee v. Contel Cellular of the South, Inc., No. CV-
95-1057-JH, 1996 U.S. Dist. LEXIS 19636

(S.D. Alm. New. £5, FRR ccscsnicsivncantiiaienonsne 12
T.1.M.E. Inc. v. United States, 359 U.S. 464

Lj Sen een rar oe cn Ciosorekr rss Us we wen 8
TPS Utilicom Services, Inc. v. AT&T Corp., 223

F. Supp. 2d 1089 (C.D. Cal. 2002).................... 10, 14
Texas & Pacific Railway Co. v. Abilene Cotton

Oil Cor, FOR. SRF ccsiceseneeneirsitninicsianene 8

iil
TABLE OF AUTHORITIES—Continued

Page
United States v. Locke, 529 U.S. 89 (2000)........... 13
In re Wireless Telephone Radio Frequency Emis-
sions Products Liability Litigation, 248 F.
Supp. 2d 452 (D. Md. 2003) .0..... ee eeeeeeneeeees 13
STATE CASES
Ball v. GTE Mobilnet of California, 96 Cal. Rptr.
2d 801 (Cal. Ct. App. 2000)............. Sieialadanicincion 12.

Bryceland v. AT&T Corp., No. 05-01-00552-CV,
2002 Tex. App. LEXIS 8511 (Tex. App. Dec.
Be IIE tied a trian tat Marahiabiseitictienestoacbiadisaddebievins 12
Spielholz v. Superior Court of Los Angeles
County, 104 Cal. Rptr. 2d 197 (Cal. Ct. App.
iil AE UNts Caaliciacsicebacosednidostecsictvurrsniesinailbicbaxs 10

FEDERAL COMMUNICATIONS
COMMISSION DECISIONS

Developing a Unified Intercarrier Compensation
Regime, Notice of Proposed Rulemaking, 16
Fe es CEE Devices svnaiinca nienvinnssbteinnveiannines 10
Implementation of Sections 3(n) and 332 of the .
Communications Act, Regulatory Treatment of
Mobile Services, Second Report and Order, 9
Fs ae Pe © BITE icciitantsnssenssvisrssvcasareinecsoncts me tke
Implementation of Section 6002(b) of the Omni-
bus Budget Reconciliation Act of 1993, Annual
Report and Anaiysis of Competitive Market
Conditions With Respect to Commercial
Mobile Services, Seventh Report, 17 F.C.C.R.
ihc nkickiinchsieiaeuidainxiaananseriarstonnens 7
Interconnection and Resale Obligations Pertain-
ing to Commercial Mobile Radio Services,
First Report and Order, I! F.C.C.R. 18455 ~
RR icsptisticetabdenonvsihen verositarnincsnntonisheanseseewininnrensve 14

iV -
_ TABLE OF AUTHORITIES—Continued
‘ Page

Interconnection Between Local Exchange Car-

riers and Commercial Mobile Radio Service

Providers, Notice of Proposed Rulemaking, | |

Fh Six Pe Ce inert ehitenieailadcesinbsisnininiiin 10
Petition of Arizona Corporation Commission, To

Extend State Authority Over Rate and Entry

Regulation of All Commercial Mobile Radio

Services; Implementation of Sections 3(n) and

332 of the Communications Act, Regulatory

Treatment of Mobile Services, Report and

Order and Order on Reconsideration, 10

Pi Ren, CORE eee circa rchtlciaubihincebensbintibinis 5
Petition of New York State Public Service Com-

mission To Extend Rate Regulation, Report

and Order, 10 F.C.C.R. 8187 (1995)..............006 5
Petition of the Connecticut Department Public

Utility Control To Retain Regulatory Control

of the Rates of Wholesale Cellular Service

Providers in the State of Connecticut, Report

and Order, 10 F.C.C.R. 7625 (1995), aff'd sub

nom. Connecticut Dep’t Pub. Util. Control v.

FCC, 78 F.3d 842 (2d Cir. 1996).............scccsssees 5
Petition of the People of the State of California -

and the Public Utilities Commission of the

State of California To Retain Regulatory

Authority over Intrastate Cellular Service

Rates, Report and Order, 10 F.C.C.R. 7486

(1995), recon. denied, Order on Reconsid-

eration, 11 F.C.C:R. 706 (1995). 0.......ccseccseeccsenss 5
Petition of the State of Ohio for Authority To

Continue To Regulate Commercial Mobile

Radio Services, Report and Order, 10 F.C.C.R.

7842 (1995), recon. denied, Order on Recon-

sideration, 10 F.C.C.R. 12427 (1995)................ passim

aaa aii

Vv
TABLE OF AUTHORITIES—Continued

Page

Petition on Behalf of the Louisiana Public
Service Commission for Authority To Retain
Existing Jurisdiction over Commercial Mobile
Radio Services Offered Within the State of
Louisiana, Report and Order, 10 F.C.C.R.

TODD COG inci cciscrticsinsitcsscsinbiaaoniminnins 5 z

Petition on Behalf of the State of Hawaii, Public
Utility Commission, for Authority To Extend |
Its Rate Regulation of Commercial Mobile
Radio Services in the State of Hawaii, Report
and Order, 10 F.C.C.R. 7872 (1995)...........:s:08 6

Petitions for Rule Making Concerning Proposed
Changes to the Commission’s Cellular Resale
Policies, Notice of Proposed Rulemaking and
Onder, 6 FCC. UTED. CISPL) .ccccotconssnsenvevsvens 14, 15

Wireless Consumers Alliance, Inc. Petition for a
Declaratory Ruling Concerning Whether the
Provisions of the Communications Act of
1934, As Amended, or the Jurisdiction of the
Federal Communications Commission There-
under, Serve to Preempt State Courts From
Awarding Monetary Relief Against Commer-
cial Mobile Radio Service (CMRS) Providers

(a) from Violating State Consumer Protection
Laws Prohibiting False Advertising and other
Fraudulent Business Practices, and/or (b) in
the Context of Contractual Disputes and Tort
Actions Adjudicated under State Contract and
Torts Laws, Memorandum Opinion and Order,
ES FC ALE. FE CI vecccsccneenicerisivsincerensons 9

vi
TABLE OF AUTHORITIES—Continued

PUBLIC UTILITIES COMMISSION
OF OHIO DECISIONS

Commission Investigation into the Alternative
Regulatory Treatment of Commercial Mobile
Radio Service Providers, No. 97-1700-TP-
COI, 1999 Ohio PUC LEXIS 745 (Dec. 16,

FEDERAL STATUTES

4745.3... S5Fa} Ge i icccoenicaseiodision
AT UGA. © S52CG I ie Bdssirioeen nine
Omnibus Budget Reconciliation Act of 1993,
Pub. L. No. 103-66, Title VI, §§ 6002(b)
(2)(A), 6002(b)(2)(B), 107 Stat. 312, 392

MISCELLANEOUS

Cellular Telecomm. & Internet Ass’n, Semi- -

Annual Wireless Industry Survey Results June
1985—December 2002, available at http://
www.wow-com.com/industry/stats/surveys/
(last visited June 18, 2003) ...........cscsssoscossoseessees
Dan Meyer, Carriers Try To Pick up Marginal
Users With Cheap Calling Plans, RCR WIRE-
LESS PRR WE, ERE, 10, ZOE prssnncsicssnninsnsisesngpencente
H.R. Rep. No. 103-111, at 260-61 (1993), re-
printed in 1993 U.S.C.C.A.N. 378, 587.........000
H.R. Rep. No. 103-213, at 480-81 (1993), re-
printed in 1993 U.S.C.C.A.N. 378, 1169-70 .....

Page

Vii -
TABLE OF AUTHORITIES—Continued
Page

Rulemaking 00-02-004, Order Instituting Rule-
making on the Commission's Own Motion to
Establish Consumer Rights and Consumer Pro
tection Rules Applicable to All Telecommu-
nications Utilities, Draft Decision of Commis-
sioner Wood (Cal. PUC June 6, 2002)............... 13

SS ig Re A CIF a acekcenccnicnnenessentnineeniiimens 15

Sam Omatseye, Uptake in Services Will Require
Infrastructure Spending, RCR WIRELESS
POE, FAIR, Fg BOD eekartennscinsisninnnascasnnnedeiniaceninten 7

IN THE

Supreme Court of the Anited States
No. 02-1711

CINCINNATI SMSA LIMITED PARTNERSHIP,
Petitioner,
Vv.

PUBLIC UTILITIES COMMISSION OF OHIO,
Respondent.

On Petition for a Writ of Certiorari to the
Supreme Court of Ohio

BRIEF AMICUS CURIAE OF THE
CELLULAR TELECOMMUNICATIONS & INTERNET
ASSOCIATION IN SUPPORT OF PETITIONERS

INTEREST OF AMICUS CURIAE

The Cellular Telecommunications & Internet Association
(“CTIA”) is the international organization of the wireless
communications industry for both wireless carriers and manu-
facturers.' Membership in the association covers commercial
mobile radio service (“CMRS”) providers* and manufac-

' No counsel for any party in this case authored this brief in whole or in
part, and no person or entity other than amicus curiae and its mem-
bers made any monetary contribution to the preparation or submission of
this brief.

2 CMRS includes any mobile service “that is provided for profit and

makes interconnected service available (A) to the public or (B) to such
classes of eligible users as to be effectively available to a substantial

alice a aia

turers. CTIA represents more broadband Personal Communi-
cations Service carriers and more cellular carriers than any
other trade association. As such, CTIA is uniquely situated to
represent the interests of the wireless industry with respect to
the pending petition for writ of certiorari.”

REASONS FOR GRANTING THE PETITION

Wireless providers are an “integral part of the national
telecommunications infrastructure” and, “by their nature,
operate without regard to state lines.” H.R. REP. No. 103-
111, at 260 (1993), reprinted in 1993 U.S.C.C.A.N. 378, 587.
Given the inherently interstate nature of wireless services and
their increasing importance to the economy, Congress recog-
nized that allowing the creation of more than fifty disparate
regimes for rate and entry regulation would inhibit the
wireless industry’s growth, undermine competition, and harm
consumers. Congress therefore expressly preempted states
from regulating the rates charged by wireless carriers or their
entry into the marketplace.

Congress provided states with limited jurisdiction to
regulate “the other terms and conditions” of wireless services,
but some states have been using this delegation as a backdoor
means to assert authority over wireless rates and entry. The
Public Utilities Commission of Ohio’s (the “PUCO’s”) deci-
sion in the lawsuit below, as affirmed by the Ohio Supreme
Court, is a case in point. The PUCO adjudicated a complaint

portion of the public.” 47 U.S.C. § 332(d)(1) (2003); see also Imple-
mentation of Sections 3(n) and 332 of the Communications Act,
Regulatory Treatment of Mobile Services, Second Report and Order, 9
F.C.C.R. 1411, 1443-63, 1508 (1994) (“CMRS Second Report and
Order”) (CMRS encompasses cellular service, personal communications
service, paging, airplane telephone service, and certain mobile satellite
services).

> CTIA has obtained consent from the Petitioner and the Respondent to
file this brief.

3

alleging unreasonable rate discrimination, found that Peti-
tioner had violated Ohio law, calculated how much the
complainant had been “overcharged,” and enforced a separate
affiliate requirement for wholesale and retail CMRS opera-
tions. Based on the PUCO’s findings, an Ohic trial court
ruled that the complainant was entitled to damages in the
amount of the so-called overcharges and lost profits.

Each of Ohio’s decisions in this case—the PUCO’s in
assessing the reasonableness of Petitioner’s charges, the Ohio
Supreme Court’s in upholding the state agency’s unlawful
assumption of jurisdiction, and the Ohio trial court’s award of
damages—while framed as the adjudication of a rate dis-
crimination claim, is in fact tantamount to the state rate
regulation proscribed by federal law. Courts and the FCC
have consistently held that if a complaint challenges the
reasonableness of a wireless rate—even if the claim alleges
that the rate is unreasonably discriminatory—states lack juris-
diction to hear it. Moreover, as this Court has made clear, the
term “rates” must be interpreted broadly because rates are
significant only to the extent one knows what service is being
provided in return.

Although Ohio’s actions are especially blatant violations of
the prohibition against state ratemaking and entry regulation,
a number of other states and plaintiffs asserting state-law
causes of action also have begun chipping away at the
boundaries established by Congress. It was to avoid a
patchwork of precisely this kind of regulation that Congress
preempted states from imposing their traditional telecom-
munications regimes on wireless operations. Accordingly,
CTIA urges this Court to grant the petition and reverse the
decision of the Ohio Supreme Court.

4

I. STATES ARE FORBIDDEN FROM ENGAGING
IN RATE REGULATION OF WIRELESS
~ CARRIERS

A. Congress Created a New Regulatory Paradigm
for Wireless Services in Section 332

Seeking to promote competition in an industry that already
was exhibiting the potential for extraordinary growth and
innovation, in 1993, Congress amended the Communications
Act* “to dramatically revise the regulation of the wireless
telecommunications industry.” Cellnet Communications, Inc.
v. FCC, 149 F.3d 429, 433 (6th Cir. 1998). The statutory
amendments reduced regulation by, among other things,
establishing a comprehensive and consistent national regula-
tory framework for the various types of wireless providers
and gave the Federal Communications Commission (“FCC”)
flexibility to modulate the -levels of regulation based on
market conditions.

The most significant aspect of the 1993 changes was
Congress’s express preemption of states from regulating
wireless rates or entry:

Notwithstanding section[] 2(b) [which otherwise gives
states jurisdiction over intrastate rates] . . . no State or
local government shall have any authority to regulate the
entry of or the rates charged by any commercial mobile

_ service or any private mobile service, except that this
paragraph shall not prohibit a State from regulating the
other terms and conditions of commercial mobile
Services.

47 U.S.C. § 332(c)(3)(A). Section 332(c)(3) demonstrates
“an unambiguous congressional intent to foreclose state
regulation in the first instance [and] reflects a general

* See Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66,
Title VI, §§ 6002(b)(2)(A), 6002(b)(2)(B), 107 Stat. 312, 392 (1993).

OF

5

preference in favor of reliance on market forces rather than
regulation.” Petition of the State of Ohio for Authority To
Continue To Regulate Commercial Mobile Radio Services,
Report and Order, 10 F.C.C.R. 7842, 7844 4 8 (1995) (“Ohio
CMRS Order’), recon. denied, Order on Reconsideration, 10
F.C.C.R. 12427 (1995). Although states may continue to
regulate the “other terms and conditions” of wireless service,
such residual authority is necessarily limited. To the extent a
state touches on rate or entry regulation, it is not an other
term or condition and it is not permissible.

Ohio has been- rebuffed twice in its attempt to maintain
jurisdiction over wireless rates, which section 332(c)(1)(B)
permits only if a state can demonstrate the existence of cer-
tain conditions. See Ohio CMRS Order, 10 F.C.C.R. 7842.°

°47 U.S.C. § 332(c)(1)(B) (permitting states that regulated wireless
rates before enactment of the 1993 restrictions to continue regulation if
they could demonstrate to the FCC that market conditions fail to protect
consumers from unjust and unreasonable rates and practices). None of the
other six petitioning states was granted such approval either. See Petition
on Behalf of the Louisiana Public Service Commission for Authority To
Retain Existing Jurisdiction over Commercial Mobile Radio Services
Offered Within the State of Louisiana, Report and Order, 10 F.C.C.R.
7898 (1995); Petition of Arizona Corporation Commission, To Extend
State Authority Over Rate and Entry Regulation of All Commercial
Mobile Radio Services; Implementation of Sections 3(n) and 332 of the
Communications Act, Regulatory Treatment of Mobile Services, Report
and Order and Order on Reconsideration, 10 F.C.C.R. 7824 (1995);
Petition of New York State Public Service Commission To Extend Rate
Regulation, Report and Order, 10 F.C.C.R. 8187 (1995); Petition of the
People of the State of California and the Public Utilities Commission of
the State of California To Retain. Regulatory Authority over Intrastate
Cellular Service Rates, Report and Order, 10 F.C.C.R. 7486 (1995),
recon. denied, Order on Reconsideration, 11 F.C.C.R. 796 (1995); Peti-
tion of the Connecticut Department Public Utility Control To Retain
Regulatory Control of the Rates of Wholesale Cellular Service Providers
in the State of Connecticut, Report and Order, 10 F.C.C.R. 7025 (1995),
aff'd sub nom. Connecticut Dep't Pub. Util. Control v. FCC, 78 F.3d 842
(2d Cir. 1996); Petition on Behalf of the State of Hawaii, Public Utility

6

The FCC held that “given the rapidly evolving market struc-
ture in which mobile services are provided,” the PUCO had
not met its heavy burden of demonstrating that “the conduct
and performance of CMRS providers ill-serve consumer
interests by producing rates that are not just and reasonable,
or are unreasonably discriminatory.” Ohio CMRS Order, 10
F.C.C.R. at 7843 4 6. In light of the addition of five or six
new wireless competitors in almost every market in the
decade since the PUCO made its request, as well as the
hundreds of new services and innovative rates plans carriers
have introduced, the burden imposed on Ohio and other states
seeking to increase their involvement in wireless regulation
has only gotten heavier.

B. Congress’s Deregulatory Scheme _ Benefits
Wireless Competition and CMRS Consumers

Congress’s expectation that a uniform national regulatory
regime would foster growth and benefit wireless consumers
has been borne out. As of December 2002, CMRS providers
had over 140 million subscribers and more than 190,000
employees in the United States. See Cellular Telecomm. &
Internet Ass’n, Semi-Annual Wireless Industry Survey Results
June 1985—December 2002, available at http://www.wow-
com.com/industry/stats/surveys/ (last visited June 18, 2003).
Wireless carriers have devised flexible rate plans and pricing
strategies to attract customers and respond to changes in
market demand, and there are more service options available
more now than ever before. See Dan Meyer, Carriers Try To
Pick up Marginal Users With Cheap Calling Plans, RCR
WIRELESS NEws, Mar. 11, 2002, at 3. Because new appli-
cations such as “Wireless Internet, third generation services,
unlicensed wireless network hubs, text messaging and the

oe
Commission, for Authority To Extend Its Rate Regulation of Commercial
Mobile Radio Services in the State of Hawaii, Report and Order, 10
F.C.C.R. 7872 (1995).

7

introduction of complex games and entertainment products
are driving the use of wireless networks” wireless infra-
structure spending is expected to rise between four and five
percent in the next two to three years. Sam Omatseye,
Uptake in Services Wili Require Infrastructure Spending,
RCR WIRELESS NEws, Apr. 7, 2003, at 16. Today, there are
six nationwide mobile telephony operators in the United
States and the price wars among those carriers can be fairly
characterized “as ‘competitive,’ ‘intense,’ and ‘aggressive.’”
Implementation of Section 6002(b) of the Omnibus Budget
Reconciliation Act of 1993, Annual Report and Analysis of
Competitive Market Conditions With Respect to Commercial
Mobile Services, Seventh Report, 17 F.C.C.R. 12985, 12990,
13012 (2002).

The FCC’s guiding principle in implementing section 332
was that the CMRS market should be “driven by techno-
logical innovation, service quality, competition-based pricing
decisions, and responsiveness to consumer needs—and not by
strategies in the regulatory arena.” CMRS Second Report and
Order, 9 F.C.C.R. at 1420 9 19. This goal is wholly under-
mined by state actions, such as the PUCO’s, that have the
potential to force wireless carriers to adhere to fifty plus
different sets of rules instead of allowing them to pass on to
consumers the savings gained from the exploitation of
nationwide business models.

Il. THE OHIO SUPREME COURT’S DECISION
HAS NATIONAL CONSEQUENCES

The PUCO’s decision to rule on a complaint challenging
the reasonableness of Petitioner’s rates for wireless services
was a direct violation of section 332(c)’s express preemption
provision and should be reversed. Ohio’s defiance of the
boundaries drawn by Congress, however, potentially has
adverse ramifications far beyond the state’s borders and for
many more wireless carriers than the petitioner in this case.

8

If the Ohio Supreme Court’s order affirming the state
agency’s impermissible action is allowed to stand, there is a
strong possibility that other states will view it as a green light
to implement or enforce policies that similarly fail to respect
section 332(c)’s restrictions on their power.

Considered in the context of the goals Congress hoped to
accomplish through preemption of state authority over wire-
less rates and entry, there is little question that the state’s
residual jurisdiction over “other terms and conditions” must
be read narrowly. If Congress’s express directive that states
have no role in wireless rate or entry regulation is to have any
meaning, “rate” and “entry” cannot be considered mere
subsets of “other terms and conditions.”

A. The Ohio Decision Regulates Wireless Rates in
Direct Violation of Section 332

The PUCO’s actions in the case at bar are not at all close to
the line between “rates” and “other terms and conditions.”
On the contrary, the agency proceeding that gave rise to this
case was the adjudication of a complaint directly alleging
unreasonable wireless rates, which is unmistakably rate
regulation. See Texas & Pac. Ry. Co. v. Abilene Cotton Oil
Co., 204 U.S. 426, 432, 440-42 (1907); see also T.I.M.E. Inc.
v. United States, 359 U.S. 464, 473-74 (1959) (the “crucial
question of reasonableness could not be decided by courts”).
“To the extent that there is complaint of the unreasonableness
of the rate . . . [e]ven if the complaint is that the rate is
discriminatory,” state agencies lack jurisdiction to hear it.
ITT World Communications, Inc. v. New York Tel. Co., 381 F.
Supp. 113, 119 (S.D.N.Y. 1974) (emphasis in original) (citing
Abilene Cotton, 204 U.S. at 448); see also Fedor v. Cingular
Wireless Corp., No. 01-CV-6849, 2002 U.S. Dist. LEXIS
14786, at *5 (N.D. Ill. Aug. 12, 2002) (challenge to the
reasonableness of a wireless carrier’s rates is completely
preempted by section 332(c)); Gilmore v. Southwestern Bell

9

Mobile Sys., L.L.C., 210 F.R.D. 212, 221 (N.D. Ill. 2001)
(questions regarding the reasonableness of rates “are gen-
erally within the particular expertise of the FCC and the
regulation of such involves exercising agency discretion.”).

The PUCO’s determination that it was acting under its
“other terms and conditions” authority is not supported by the
statutory language or the case law interpreting section 332(c).
Although the statute’s legislative history lists “the require-
ment that carriers make capacity available on a wholesale
basis,” among the terms and conditions that states may
oversee (H.R. REP. No. 103-111, at 261) the FCC explicitly
rejected the PUCO’s attempt to interpret that legislative
statement as giving the agency permission “to ensure that
wholesale cellular rates [in Ohio] are not below cost through
its complaint authority.” Ohio CMRS Order, 10 F.C.C.R. at
7852 4 43. The FCC explained that “Ohio may not prescribe,
set, or fix rates in the future because it has lost authority
to regulate ‘the rates charged’ for CMRS rates ....” Ohio
CMRS Order, 10 F.C.C.R. at 7852 4 43.

Here, the complainant asked the PUCO “to make an out-
right determination of whether a price charged for a CMRS
service was unreasonable,” which is precisely what state
agencies are “preempted from doing . . . by [s]ection 332.”
Wireless Consumers Alliance, Inc. Petition for a Declaratory
Ruling Concerning Whether the Provisions of the Communi-
cations Act of 1934, As Amended, or the Jurisdiction of the
Federal Communications Commission Thereunder, Serve to
Preempt State Courts From Awarding Monetary Relief
Against Commercial Mobile Radio Service (CMRS) Providers
(a) from Violating State Consumer Protection Laws
Prohibiting False Advertising and other Fraudulent Business
Practices, and/or (b) in the Context of Contractual Disputes
and Tort Actions Adjudicated under State Contract and Torts
Laws, Memorandum Opinion and Order, 15 F.C.C.R. 17021,
17035 § 25 (2000). “[A] claim that directly challenges a rate

10

and seeks a remedy to limit or control the rate prospectively
or retrospectively is an attempt to regulate rates... .”
Spielholz v. Superior Court of Los Angeles County, 104 Cal.
Rptr. 2d 197, 204 (Cal. Ct. App. 2001): It therefore cannot
also be considered an effort to regulate “carrier practices,
separate and apart from their rates.” Ohio CMRS Order, 10
F.C.C.R. at 7852 ¥ 43. |

B. The Ohio Decision Regulates Wireless Entry in
Contravention of Section 332

Although states retain “traditional authority to monitor
commercial activities within [their] borders,” section 332(c)
bars states from imposing requirements on wireless providers
that must be satisfied before the provider may legally operate
in the state. Ohio CMRS Order, 10 F.C.C.R. at 7853 ¥ 44.
State law is preempted when it “tread[s] directly on the very
areas reserved to the FCC: the modes and conditions under
which [a wireless provider] may begin offering service.”
Bastien v. AT&T Wireless Servs., Inc. 205 F.3d 983, 989 (7th
Cir. 2000); see also TPS Utilicom Servs., Inc. v. AT&T Corp.,
223 F. Supp. 2d 1089, 1108 (C.D. Cal. 2002) (express
preemption in section 332(c) “prevents second guessing” of
FCC criteria for wireless licensing). As the FCC found in
rejecting the PUCO’s petition seeking to regulate CMRS
providers in Ohio, “the statutory language is not broad
enough to accommodate Ohio’s apparent interest in asserting
authority to regulate marketplace entry by CMRS providers.”
Ohio CMRS Order, 10 F.C.C.R. at 7853 4 45.

The FCC has determined that section 332 precludes not
only a regulation that directly prohibits entry but also one that
“effectively precludes CMRS entry.” Developing a Unified
Intercarrier Compensation Regime, Notice of Proposed
Rulemaking, 16 F.C.C.R. 9610, 9638 4 80 (2001) (citing
Interconnection Between Local Exchange Carriers and Com-
mercial Mobile Radio Service Providers, Notice of Proposed

11

Rulemaking, 11 F.C.C.R. 5020, 5072-73 4 lil (1996));
Aubrey v. Ameritech Mobile Communications, inc., No. 00-
CV-75080, 2002 U.S. Dist. LEXIS 15918 (E.D. Mich. June
17, 2002) (section 332(c) preempts states from determining
what technology wireless providers must use to serve a
particular market). The PUCO’s separate subsidiary require-
ment is impermissible under this standard because it prevents
wireless providers in Ohio from lawfully selling their services
both to resellers and directly to the public. Indeed, even the
PUCO acknowledged that this rule could unreasonably pre-
vent the sale of wireless services—in 1999 it eliminated the
separate subsidiary requirement in order “to ensure that no
company will be restricted from entering the Ohio market as
a result of a mandated structural organization.” Commis-
sion Investigation into the Alternative Regulatory Treatment
of Commercial Mobile Radio Service Providers, No. 97-
1700-TP-COI, 1999 Ohio PUC LEXIS 745, at *41 4 2
(Dec. 16, 1999). ;

C. Review by this Court Is Necessary To Prevent
the Destruction of Congress’ Carefully Bal-
anced Wireless Regulatory Regime

The PUCO has not been alone in its efforts to intrude in
areas placed off limits by section 332(c). A number of other
states, as well as courts adjudicating state-law causes of
action, also have taken actions in recent years that conflate
the line between “rate and entry” and. “other terms and
conditions.”

For example, both state and federal courts often permit the
“other terms and conditions” exception of section 332(c) to
swallow the provision’s express preemption directive by
refusing to bar lawsuits so long as plaintiffs cast their state-
law claims for restitution in terms of fraud, unfair practices,
or non-disclosure. See, e.g., Brown v. Washington/Baltimore
Cellular, Inc., 109 F. Supp. 2d 421, 423 (D. Md. 2000) (“late
fees are not included in ‘rates’ of service, but rather are part

12

of the ‘other terms and conditions’ of service” because late
fees are intended to act as a penalty for late payment);
DeCastro v. AWACS, Inc., 935 F. Supp. 541 (D.N.J. 1996)
(award of monetary damages based on state deceptive
advertising or non-disclosure claims is not rate regulation);
Lee v. Contel Cellular of the South, Ine., No. CV-95-1057-
JH, 1996 U.S. Dist. LEXIS 19636 (S.D. Ala. Nov. 25, 1996)
(assessment of “rounding” practice in calculating bills is
unlawful rate regulation under section 332(c), but state fraud
and deceptive practices claims asking for the same relief
implicate “other terms and conditions”); Bryceland v. AT&T
Corp., No. 05-01-00552-CV, 2002 Tex. App. LEXIS 8511
(Tex. App. Dec. 3, 2002) (fraud, deceptive practices and
breach of contract are not preempted); Ball v. GTE Mobilnet
of California, 96 Cal. Rptr. 2d 801 (Cal. Ct. App. 2000) (state
unfair business practice claims relating to inadequate
disclosure or misrepresentation not preempted). In declining
to preempt the state-law complaints, these decisions ignore
the guidance provided by this Court that the “rates charged
by” language of the Communications Act must be construed
broadly. American Tel. & Tel. Co. v. Central Office Tel.,
Inc., 524 U.S. 214, 223 (1998) (“[R]ates . . . do not exist in
isolation. They have meaning only when one knows the
services to which they are attached. Any claim for excessive
rates can be couched as a claim for inadequate services and
vice versa.”).

Some state regulators also have begun to assert their
authority over wireless rates and entry in the guise of “con-
sumer protection.” The California Public Utilities Commis-
sion, for instance, recently proposed sweeping regulations
that would, among other things, dictate the maximum level of
late payment charges, excuse customers from paying early
termination fees, mandate the payment of five percent interest
on the monthly unused balance of a customer deposit, and
require wireless carriers to seek the state commission’s
approval before introducing any new services with “privacy

13

implications.” See Rulemaking 00-02-004, Order Instituting
Rulemaking on the Commission’s Own Motion to Establish
Consumer Rights and Consumer Protection Rules Applicable
to All Telecommunications Utilities, Draft Decision of Com-
missioner Wood (Cal. PUC June 6, 2002) (“California Draft
Decision”). Other states are watching California’s actions
carefully and, absent a clear directive from this Court, there
exists the strong probability that wireless carriers will be
sucked into the traditional state-by-state regulatory regime
that Congress sought to “dramatically revise” a decade ago.

Congress preempted a patchwork of state regulatory
schemes because, as one court has explained, “‘the risk of
fifty different states articulating fifty different rules’...
conflicts with Congress’s objectives of achieving national
uniformity in wireless telecommunications services... .” In
re Wireless Telephone Radio Frequency Emissions Products
Liability Litigation, 248 F. Supp. 2d 452, 463 (D. Md. 2003)
(quoting /n re Wireless Telephone Radio Frequency Emis-
sions Products Liability Litigation, 216 F. Supp. 2d 474, 491
(D. Md. 2002)). In light of the conflict among the courts on
this issue and the potential for further over-stepping by a!
states, not just Ohio, review by this Court is necessary to
clarify the boundary beyond which states may not stray.

Iii. THE OHIO SUPREME COURT’S DECISION
CONFLICTS WITH CONGRESSIONAL GOALS

Even if the PUCO’s actions were not expressly preempted
under section 332(c), they are not permissible because they
directly conflict with “the careful regulatory scheme estab-
lished by federal law.” United States v. Locke, 529 U.S. 89,
106-07 (2000); Geier v. American Honda Motor Co., Inc.,
529 U.S. 861, 870 (2000); see also Central Office Tel., Inc.,
524 U.S. at 227-28. Federal regulations preempt state law to
the extent there is an “actual conflict” between the two
regimes. Geier, 529 U.S. at 871-72. The Supremacy Clause

14

invalidates not only conflicting state laws “that make it
‘impossible’ for private parties to comply with both state and
federal law,” it nullifies state laws “that prevent or frustrate
the accomplishment of a federal objective.” /d. at 873-74; see
also TPS Utilicom Servs., Inc., 223 F. Supp. 2d at 1109
(lawsuit involving FCC auction of spectrum licenses pre-
empted because it “would interfere with Congress’s full pur-
pose and objectives under the [Communications Act]”).

The FCC, in implementing the Communications Act, has
twice rejected the same kind of separate wholesale/retail
subsidiary requirement established by the PUCO and to
which Petitioner was found by the Ohio Supreme Court to
have violated. See Petitions for Rule Making Concerning
Proposed Changes to the Commission’s Cellular Resale Poli-
cies, Notice of Proposed Rulemaking and Order, 6 F.C.C.R.
1719, 1725 § 52 (1991) (“Resale NPRM and Order’); Inter-
connection and Resale Obligations Pertaining to Commercial
Mobile Radio Services, First Report and Order, 11 F.C.C.R.
18455, 18462-63 § 12 (1996) (“CMRS Interconnection
Order’). In declining to adopt a separate affiliate require-
ment, the FCC noted that it would not “be wise policy at this
time to consider the need for separate accounting for
wholesale/retail operations, regulate wholesale rates of return
or require that rate cards be filed with the Commission.”
Resale NPRM and Order, 6 F.C.C.R. at 1725 9 52. The FCC
found that imposing such requirements on wireless providers
“could lead to pricing distortion, including possible higher
prices” and undermine its goals of “encouraging entry and
promoting competition in the marketplace.” /d. at 1722, 1725
| 23, 53; CMRS Interconnection Order, 11 F.C.C.R. at
18462 4 12 (reaffirming its previous ruling that “the rule does
not require providers to structure their operations or offerings
in any particular way, such as to promote resale, or adopt
wholesale/retail business structures... .”).

15

In Geier, this Court, noting that the Department of Trans-
portation had previously “rejected” the very standard plaintiff
sought to apply in her lawsuit, concluded that “a rule of state
tort law imposing such a duty . . . would have presented an
obstacle to the variety and mix of devices that the federal
regulation sought.” Geier, 529 U.S. at 879, 881 (emphasis in
original). The FCC, likewise, made a deliberate decision to
leave wireless services free from traditional separation
requirements because such regulations would “be counter-
productive” to the FCC’s goals and had the potential to
“circumvent competition-driven investment” in the wireless
market. Resale Order and NPRM, 6 F.C.C.R. at 1725 4 53.
The PUCO’s separate subsidiary requirement, accordingly, is
preempted “as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.”
Geier, 529 U.S. at 873 (quoting Hines v. Davidowitz, 312
U.S. 52, 67 (1941)).

Ohio’s intrusion into wireless ratemaking also conflicts
with explicit congressional intent. As discussed above,
Congress created a “uniform national policy” to “promote
competition for wireless services” and to avoid “State regu-
lation [that may] be a barrier to the development of
competition in the market.” H.R. REP. No. 103-213, at 480-
81 (1993), reprinted in 1993 U.S.C.C.A.N. 378, 1169-70
(incorporating the findings of $.335, 103d CONG. (1993));
H.R. Rep. No. 103-111, at 260 (1993), reprinted in 1993
U.S.C.C.A.N. 378, 587. In implementing section 332(c), the
FCC similarly sought to ensure that its regulations would be
“perceived by the investment community as a positive factor
that creates incentives for investment in the development of
valuable communications services rather than as a burden
standing in the way of entrepreneurial opportunities.” CMRS
Second Report and Order, 9 F.C.C.R. at 1421 § 22. The
PUCO’s broad foray into wireless regulation, by contrast,
threatens to create a competition-inhibiting “policy that is
balkanized state-by-state.” Ohio CMRS Order, 10 F.C.C.R.

16

at 7852 9 14. As such, neither the PUCO’s order nor the
Ohio Supreme Court’s affirming decision can coexist with the
explicit congressional objectives expressed in section 332(c)

and the FCC’s wireless policies.

CONCLUSION

For the reasons set forth above, the petition for writ of

certiorari should be granted.

MICHAEL F. ALTSCHUL

CELLULAR
TELECOMMUNICATIONS &
INTERNET ASSOCIATION

1250 Connecticut Avenue, N.W.

Suite 800
Washington, D.C. 20036
(202) 785-0081

July 21, 2003

Respectfully submitted,

HOWARD J. SYMONS
Counsel of Record
SARA F. LEIBMAN
ANGELA F. COLLINS
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY AND POPEO, P.C.
701 Pennsylvania Avenue, N.W.
Suite 900
Washington, D.C. 20004
(202) 434-7300

Counsel for Amicus Curiae

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1615%3A6. Public record. Not legal advice.