The 9th U.S. Court of Appeals agreed with a lower court that denied preliminary injunction against the California Public Utilities Commission shifting to a per line surcharge for the state Universal Service Fund. T-Mobile’s Assurance Wireless had argued that the state must align with the FCC’s revenue-based method for federal USF. But on March 31 last year, the U.S. District Court for Northern California decided not to block the CPUC’s April 1 change. The 9th Circuit heard arguments on an appeal in October (see 2310170042). "The carriers have failed to show a likelihood of success on their claim that the access line rule is 'inconsistent with' the FCC rule,” Judge Ryan Nelson wrote in Friday’s opinion, which Judges Jacqueline Nguyen and Eugene Siler joined (case 23-15490). The court referred to the Communications Act's Section 254(f), which prohibits USF rules that are "inconsistent" with FCC rules. Inconsistent doesn’t mean different, Nelson wrote. "The access line rule differs from the FCC’s rule funding interstate universal service programs. But the carriers have not shown that it burdens those programs, and they have thus failed to show that they are likely to succeed on their claim that it is inconsistent with those rules." Also, the court rejected T-Mobile’s claim that the surcharge rule is preempted because it's inequitable and discriminatory. "The carriers argue that they are harmed more than local exchange carriers,” but the CPUC rule treats all telecom technologies “the same and, if anything, is more equitable than the prior rule, under which most of the surcharges came only from ever-dwindling landline services,” Nelson said. The CPUC’s "course correction" is "a fair response to a real problem,” he added. “In a world of ever-evolving telecommunications technologies, competitive neutrality must allow some play in the joints. To hold otherwise would hamstring California’s ability to satisfy its statutory mandate of providing universal service." T-Mobile also argued the change was discriminatory because the CPUC rule treats providers who get federal affordable connectivity program (ACP) support differently from those in the state LifeLine program. But the court found differences between the programs and noted that companies in ACP have the option of joining LifeLine. The decision "affirms that the CPUC's surcharge rule is consistent with federal law," said a commission spokesperson. "The CPUC will continue to utilize the surcharge to ensure consumers have safe, reliable, affordable, and universal access to telecommunications services." T-Mobile didn’t immediately comment.
Federal law doesn't preempt New York state’s Affordable Broadband Act (ABA), the 2nd U.S. Circuit Court of Appeals decided Friday. In a 2-1 opinion, the court reversed the U.S. District Court for Eastern New York, which had barred the state from enforcing the 2021 Affordable Broadband Act (ABA). The ABA required $15 monthly plans providing 25 Mbps download and 3 Mbps upload speeds for qualifying low-income households.
Here are Communications Litigation Today's top stories from last week, in case you missed them. Each can be found by searching on its title or by clicking on the hyperlinked reference number.
Kelly Pinn filed suit to enforce the consumer-privacy provisions of the Telephone Consumer Protection Act, alleging that IJ Wireless makes telemarketing calls to numbers listed on the national do not call registry as a representative of the FCC’s “affordable connectivity program,” said her class action Wednesday (docket 1:24-cv-02315) in U.S. District Court for Northern Illinois in Chicago. The Texas resident further alleges that IJ Wireless violated the TCPA by phoning consumers without their written consent and by contacting people who had previously asked to no longer receive the calls, it said. Pinn’s personal residential phone number has been listed for years on the national DNC registry, yet she received at least four automated calls from various spoofed caller IDs between Dec. 15 and Feb. 5, said her complaint. The plaintiff and members of her proposed classes have been harmed by the acts of IJ Wireless “because their privacy has been violated and they were annoyed and harassed,” it said.
The Washington Supreme Court agreed to hear Assurance Wireless' petition for review of a lower court ruling that rejected its argument that the carrier's Lifeline services didn't involve a retail sale. The case (101873-8) is to be heard during the court's fall term. Assurance said in an April petition the state's retail sales tax for telecom services isn't possible for its Lifeline service because that service is free to eligible consumers, and the carrier "cannot be held secondarily liable for failing to collect sales tax from an unidentified buyer."
T-Mobile would upend the 1996 Telecom Act principle of cooperative federalism if courts stopped California from moving to a connections-based USF contribution mechanism, argued the California Public Utilities Commission. In an answering brief Tuesday at the 9th U.S. Circuit Court of Appeals, the CPUC also disagreed that a flat-fee surcharge discriminates against federal affordable connectivity program (ACP) participants.
California’s shift to a state USF flat fee discriminates against people with less income, said minority advocates in a proposed amicus brief Monday at the 9th U.S. Circuit Court of Appeals. They supported T-Mobile and subsidiaries’ challenge to the CPUC order, which took effect last month, to set a $1.11 per-line surcharge to fund state USF (see 2305020038). “The low-income individuals who are the intended beneficiaries of the surcharge-funded program will be hardest hit,” wrote the Multicultural Media Telecom and Internet Council (MMTC), ALLvanza, NAACP's California Hawaii State Conference and LatinoJustice.
California’s connections-based method “is directly at odds” with the FCC’s revenue-based mechanism for USF contribution, T-Mobile and subsidiaries argued at the 9th U.S. Circuit Court of Appeals. In an opening brief Monday, they urged the court to reverse a U.S. District Court for Northern California decision and direct the lower court to issue a preliminary injunction against the California Public Utilities Commission decision that took effect April 1.
The 9th U.S. Circuit Court of Appeals, in a Tuesday decision (docket 21-15969), reversed and remanded the district court’s injunction that enjoined the California Public Utility Commission from enforcing its zero co-pay rule on two tiers of affordable wireless service for service providers participating in the California LifeLine program. The CPUC’s zero co-pay requirement for certain affordable plans isn't rate regulation as preempted by the Communications Act because participation in California LifeLine “is voluntary and service providers remain free to opt out and charge whatever rates they deem appropriate,” said the court.
Procedural concerns could complicate a case at the 2nd U.S. Circuit Court of Appeals on a New York law requiring affordable broadband. At oral argument Thursday in Manhattan, Judge Richard Sullivan grilled parties on a procedural maneuver they used to move the case to the 2nd Circuit from the trial court. Sullivan asked New York’s attorney tough questions on the state’s argument that its law isn’t preempted.