Order Being Teed up by Martin Addressing Wireless ETFs
FCC Chairman Kevin Martin is considering an order that would declare wireless early termination fees to be under FCC rather than state jurisdiction. At the same time, Martin is likely to ask the commission to approve another rulemaking notice examining the rules that the FCC should impose. Martin has said repeatedly that he wants an en banc hearing on ETFs in FCC-regulated industries, but hasn’t scheduled one.
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Of the four major wireless carriers, only Verizon Wireless prorates ETFs. AT&T plans to start doing so May 25. T-Mobile is committed to prorating fees by the mid-2008, according to a spokesperson. Sprint Nextel will prorate by the year-end, a spokesman said.
A carrier source said wireless carriers would welcome the order. One question, the source said, is how the FCC would make a finding preempting state oversight of ETFs. The FCC could base preemption on the Communication Act.
Martin has he said he might embrace a different type of preemption called “conflict preemption,” the source said. “The commission itself would say that state regulation of ETFs conflicts with the overall purpose of the Communications Act and that wireless operates without regard to state boundaries.” But that type of preemption is considered more vulnerable to a court overturn, the source said.
“He’s been after that particular outcome for quite some time, but hasn’t moved forward, so I don’t know if he’s been waiting to do an en banc hearing first or if he’s now ready to just move it out,” said a wireless industry attorney.
Martin told reporters in April after remarks to the CTIA annual meeting that he still planned an en banc hearing on ETFs. At that point, he said, he favored a two-step approach. “The industry wants federal preemption over state regulation, but to have federal preemption means that we have to have rules on what’s reasonable and unreasonable,” Martin said then.