Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | WT Docket No. 99-263         |
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| **Wireless Consumers Alliance,   | ) |                              |
| Inc.**                           | * |                              |
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| 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        | * |                              |
| Thereunder, Serve to Preempt     |   |                              |
| State Courts from Awarding       | * |                              |
| Monetary Relief Against          | * |                              |
| Commercial Mobile Radio Service  | ) |                              |
| (CMRS) Providers (a) for         | * |                              |
| 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 Tort Laws.          |   |                              |
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+----------------------------------+---+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted:** August 3, 2000 **Released:** August 14, 2000

By the Commission:

# introduction

+-----------------------------------------------------------------------+
| 1.  In this Memorandum Opinion and Order, the Commission responds to  |
|     a Petition for Declaratory Ruling filed on July 16, 1999 by the   |
|     Wireless Consumers Alliance, Inc. ("WCA Petition"). The Petition  |
|     concerns whether the provisions of the Communications Act of      |
|     1934, as amended, serve to preempt state courts from awarding     |
|     monetary relief against Commercial Mobile Radio Service ("CMRS")  |
|     providers: (a) for violating state consumer protection laws       |
|     prohibiting false advertising and other fraudulent business       |
|     practices, or (b) in the context of contractual disputes and tort |
|     actions adjudicated under state contract and tort laws.[^1]       |
|                                                                       |
| 2.  In this order we address the issue of whether damage awards       |
|     against CMRS providers are preempted by Section 332(c)(3) of the  |
|     Communication Act. We hold that Section 332 does not generally    |
|     preempt the award of monetary damages by state courts based on    |
|     state consumer protection, tort, or contract claims. We note,     |
|     however, that whether a specific damage calculation is prohibited |
|     by Section 332 will depend on the specific details of the award   |
|     and the facts and circumstances of a particular case. As set      |
|     forth below, we therefore grant WCA's petition to the extent      |
|     indicated below and otherwise deny the petition.                  |
+-----------------------------------------------------------------------+

# Background

3.  WCA brought this petition to resolve the issue of awarding monetary
    damages in a class action suit involving a CMRS carrier. The
    California Court of Appeals has stayed the case, *Spielholz v. Los
    Angeles Cellular Telephone Co.*,[^2] pending any Commission action
    on this request for a declaratory ruling.[^3] WCA underscores the
    importance of resolving the issues raised in its petition, arguing
    that state courts throughout the country have reached inconsistent
    rulings based on their interpretations of Section 332(c)(3)(A)'s
    preemption of damage awards and that such inconsistent rulings are
    likely to continue without FCC guidance. Although WCA argues that
    the issue of the preemption of monetary damages can be decided as a
    matter of law without delving into the facts of the underlying
    case,[^4] the petition does include some information regarding the
    facts of *LA Cellular* and its procedural history.[^5]

4.  The *LA Cellular* case centers on an allegation of false advertising
    on the part of LA Cellular for its practice of claiming a "seamless
    calling area" throughout Southern California.[^6] Plaintiffs allege
    that LA Cellular's advertising was intentionally deceptive because
    it was aware that its system did not have the capacity to offer a
    seamless calling area even where there were no dead zones. The
    Second Class Action Amended Complaint in the *LA Cellular* action
    includes six counts alleging false advertising, fraud, and breach of
    contract, including three alleged violations of the California
    consumer protection and business and professions code.[^7] On
    February 11, 1999, the trial court granted the defendants' motion to
    strike the plaintiffs' prayer for monetary damages based on
    violation of state consumer protection, tort and contract laws on
    the grounds that CMRS providers are immune from state monetary
    claims due to the preemptive effect of Section 332.[^8] The court
    accepted the argument that awarding any form of monetary relief
    would require the state court to regulate rates.[^9] Plaintiffs
    filed a writ of mandate with the appellate court. On June 15, 1999,
    after being informed of the Petitioner's intent to seek a
    declaratory ruling from the FCC, the court issued a stay pending any
    Commission determination of "whether the Federal Communications Act
    preempts state courts from awarding monetary relief as a remedy for
    fraud and false advertising claims."[^10]

5.  The WCA petition focuses on the issue of whether, as a matter of
    law, the Communications Act preempts state courts from awarding
    monetary relief to consumers against CMRS providers for violating
    state consumer protection, tort, or contract laws.[^11] WCA states
    that ordinarily state courts have the power to award monetary relief
    against businesses in connection with such acts, whether in the form
    of restitution or compensatory, exemplary or punitive damages.[^12]
    WCA asks the Commission to declare that CMRS providers are not
    endowed with a special status in the marketplace that shields them
    from state laws that regulate normal commercial practice.[^13] WCA
    admits that Section 332 preempts states from regulating the rates
    charged for CMRS services.[^14] WCA contends, however, that Section
    332 also clearly says that states are not prohibited from regulating
    other terms and conditions of CMRS service.[^15] WCA finds support
    in the legislative history and policy underlying Section 332 for its
    contentions that "terms and conditions" was intended to include
    state consumer protection matters and that the award of monetary
    damages is not tantamount to regulating rates.[^16] WCA also cites
    the "Savings Clause" in Section 414, which generally preserves
    remedies created by common law or statute, as supporting its
    position.[^17] If the award of monetary damages is not equivalent to
    rate regulation, then claims for monetary damages based on state
    consumer protection laws are not preempted.[^18]

6.  WCA argues that monetary damage awards do not prescribe, set, or fix
    rates.[^19] WCA alleges that CMRS defendants have clouded this issue
    and caused much confusion in state courts by erroneously urging the
    misapplication of the filed rate doctrine in these cases.[^20] WCA
    asserts that, because prices for CMRS services are determined by
    CMRS carriers as a result of competitive market forces, there are no
    filed rates for CMRS services and the filed rate doctrine does not
    apply.[^21] WCA argues that monetary awards cannot impinge upon
    nonexistent regulated rates.[^22] Thus, monetary damages based on
    actions taken in a competitive market are permissible remedies to be
    awarded in state court.[^23]

7.  We received comments from a number of CMRS providers in opposition
    to the position of WCA regarding the award of monetary damages.[^24]
    They argue that: Section 332 prohibits state regulation of CMRS
    providers' rates;[^25] a state court's decision constitutes state
    action;[^26] and the calculation of monetary damages unavoidably
    requires the court to engage in rate-making.[^27] More specifically,
    these commenters assert that, in order to assess the dollar amount
    of liability, the court must determine the difference between a
    reasonable rate for the service promised (either by contract or in
    promotional material) and the service received.[^28] To support
    their position, many commenters cite cases premised on the filed
    rate doctrine, whereby monetary damages are considered to be
    modifications to the lawful tariff rate and thus equivalent to
    ratemaking.[^29] In addition, commenters argue that the savings
    clause, Section 414, cannot preserve common law or statutory
    remedies that vitiate the express provisions of the Act.[^30]
    Accordingly, wireless carrier commenters view the award of monetary
    damages as contradicting Section 332's preemption of state
    regulation of the entry or the rates charged by commercial or
    private mobile services.

8.  In November 1999, we issued a decision on Southwestern Bell Mobile
    Systems' Petition for Declaratory Ruling. In that decision, we
    determined, among other things that, although states may not
    prescribe how much is charged for CMRS services or rate structures
    for CMRS, the CMRS industry is not exempt from the neutral
    application of state contractual or consumer fraud laws.[^31] We
    also determined that, although under Section 332 states do not have
    authority to prohibit CMRS carriers from charging in whole minute
    increments or charging for incoming calls, state contract or
    consumer fraud laws relating to the disclosure of rates and rate
    practices are not generally preempted under Section 332.[^32] We,
    however, declined to address the issue of whether damage awards
    against CMRS providers are preempted by Section 332, indicating that
    we would address that issue in the context of this proceeding.[^33]

# discussion

9.  Section 332 does not generally preempt the award of monetary damages
    by state courts based on state tort or contract claims. We note,
    however, that whether a specific damage award is prohibited by
    Section 332 will depend on the specific details of the calculation
    methodology as applied in a particular case. In reaching this
    decision, we find that the filed rate doctrine is inapposite because
    there are no filed rates or tariffs for CMRS services. We also
    conclude that, because the purposes behind the filed rate doctrine
    do not apply to CMRS services, the analysis and logic of the filed
    rate cases regarding the issue of whether awarding monetary damages
    is tantamount to ratemaking are inapplicable in cases dealing with
    Section 332.

10. Several commenters allege that WCA is seeking an overbroad ruling
    that neither the Communications Act nor the FCC's rules can ever
    preempt a state court from awarding monetary relief against CMRS
    providers for violations of state consumer protection laws or in
    connection with state contract disputes or tort claims.[^34] Some
    opposing commenters argue that the Commission can only make a
    decision based on the facts of the particular case and since the
    facts were not properly pleaded we should deny the petition.[^35] We
    find, however, that in light of both the WCA Petition and the SBMS
    Petition, we can and should address the legal question of whether
    Section 332 of the Federal Communications Act generally preempts
    state courts from awarding monetary relief as a remedy for state
    consumer protection, tort or contract claims.

## Section 332(c)(3)(A)

11. CMRS providers assert that awarding monetary damages for violation
    of state consumer protection or breach of contract claims
    necessarily constitutes state regulation of rates, which is
    prohibited by Section 332(c)(3)(A) of the Act.[^36] This Section
    provides that:

> . . . no State or local government shall have any authority to
> regulate the entry of or the rates charged by any commercial mobile
> service, except that this paragraph shall not prohibit a State from
> regulating the other terms and conditions of commercial mobile
> service.

The parties raise a number of issues concerning the proper
interpretation of the statutory language as applied to damage awards
against CMRS carriers in state courts. We address these in turn below.

### The Award of Monetary Damages Constitutes State Action

12. In interpreting the preemptive scope of Section 332, as a first step
    we face the issue raised by Public Citizen of whether state court
    actions are regulatory actions subject to Section 332.[^37] We
    conclude that judicial action can constitute state regulatory action
    for purposes of Section 332.[^38] This conclusion comports with the
    Supreme Court's determination that a judicial decision can
    constitute state action,[^39] as well as with the determinations of
    the Supreme Court and other courts that, like legislative or
    administrative action, judicial action constitutes a form of state
    regulation.[^40] We agree with AT&T and others that the judicial
    branch of state government is included within the meaning of "State
    or local government" under Section 332(c)(3).[^41]

### The Award of Monetary Damages Does Not *Per Se* Constitute Impermissible Rate Regulation

13. At the outset of our analysis on the preemptive scope of Section
    332, we observe that Section 332(c)(3)(A) bars state regulation of,
    and thus lawsuits regulating, the entry of or the rates or rate
    structures of CMRS providers.[^42] Section 332(c)(3)(A) also
    expressly preserves the right of states to regulate the terms and
    conditions of CMRS providers. Therefore, our primary inquiry
    becomes: Is the award of monetary damages necessarily equivalent to
    rate regulation and thus preempted, or does awarding damages
    generally fall under allowable state action on terms and conditions?

14. We initially note that in the *SBMS Ruling*, we found that the
    language and the legislative history of Section 332 does not support
    the preemption of state contract or consumer fraud laws relating to
    the disclosure of rates and rate practices.[^43] We noted that the
    legislative history of Section 332 clarifies that billing
    information, practices, and disputes \-- all of which might be
    regulated by state contract or consumer fraud laws \-- fall within
    \"other terms and conditions\" which states are allowed to
    regulate.[^44] We thus ruled that state law claims stemming from
    state contract or consumer fraud laws governing disclosure of rates
    and rate practices are not generally preempted under Section
    332.[^45] For the same reasons, we hereby find that the language and
    legislative history of Section 332 do not support the view that
    state courts are, as a general matter, prevented by Section
    332(c)(3)(A) from awarding damages to customers of CMRS providers
    based on violations of state contract or consumer fraud laws.

#### The Filed Rate Doctrine Does Not Apply

15. We note that, in arguing that an award of monetary damages is
    equivalent to rate regulation and thus prohibited by Section
    332(c)(3)(A), many commenters rely on cases in which the courts have
    held that the award of damages was barred by the \"filed rate
    doctrine.\"[^46] We find, however, that these cases are not
    dispositive of the question of whether damages may be awarded
    resulting from state law claims against CMRS providers, whose rates
    are not subject to tariff and have not been prescribed by the
    Commission.[^47]

16. The filed rate doctrine forbids a regulated entity from charging
    rates \"for its services other than those properly filed with the
    appropriate federal regulatory authority.\"[^48] As commenters
    discuss in detail, the filed rate doctrine has been held to preempt
    a customer\'s state law claims relating to a tariffed communications
    service, for breach of contract, and for tortious interference with
    contract against a common carrier.[^49] Similarly, a claim by a
    customer against a communications common carrier for damages based
    on fraud has been dismissed, because \"\[a\]ny remedy that requires
    a refund of a portion of the filed rate . . . is barred\" by the
    filed rated doctrine.[^50]

17. The application of the filed rate doctrine sometimes has resulted in
    hardship to customers, as the Supreme Court acknowledged in *Central
    Office Telephone*, saying \"\[t\]hus, even if a carrier
    intentionally misrepresents its rates and a customer relies on the
    misrepresentation, the carrier cannot be held to the promised rate
    if it conflicts with the published tariff.\"[^51] The Commission,
    accordingly, has concluded that the application of the filed rate
    doctrine \"may undermine consumers\' legitimate business
    expectations\"[^52] and that its application with respect to
    competitive communications services is contrary to the public
    interest.[^53] In part for this reason, it has been this
    Commission's policy to eliminate the filing of tariffs for services
    it judges to be substantially competitive.[^54]

18. In the case of CMRS there are no longer any \"filed rates.\" In the
    1993 amendments to the Communications Act, Congress not only
    provided in Section 332(c)(3) for the preemption of state regulation
    of the \"entry of or the rates charged\" for CMRS service, but also
    granted the Commission forbearance authority to specify, by
    regulation, provisions in Title II of the Act as inapplicable to
    CMRS and CMRS providers.[^55] Pursuant to this authority, the
    Commission has exempted CMRS providers from the requirements of
    Section 203, which requires communications common carriers to file
    tariffs for interstate services with the Commission and prohibits
    carriers from charging, demanding, collecting, or receiving \"a
    greater or less or different compensation\" [^56] than that
    specified in their filed tariffs.[^57] CMRS carriers are not only
    exempt from filing tariffs, they are also prohibited from filing
    tariffs with the Commission.[^58] The intrastate services of CMRS
    providers, in accordance with Section 332(c)(3)(A), are also no
    longer subject to any comparable tariffing requirements or other
    rate regulation imposed by state agencies. We therefore find that,
    since there are no filed rates for CMRS services, the filed rate
    doctrine does not preclude a state court's ability to award monetary
    relief against wireless telephone companies.[^59] We have similarly
    held that our subsequent forbearance action, pursuant to Section 10
    of the Communications Act,[^60] not to require or allow nondominant
    interexchange carriers to file tariffs for their interstate wireline
    services also eliminated the ability of carriers to invoke the filed
    rate doctrine for those services.[^61]

#### Filed Rate Rationale Should Not Apply in CMRS Cases

19. Several commenters acknowledge that the filed rate doctrine is not
    controlling in the CMRS context because there are no filed CMRS
    rates.[^62] They argue, however, that the logic or analysis of the
    filed rate cases applies equally in the CMRS situation.[^63] Some
    commenters allege that under the filed rate doctrine a plaintiff is
    prevented from bringing a cause of action for damages under the
    principle of nonjusticiability.[^64] For example, AT&T argues that
    under the filed rate doctrine, nonjusticiability is aimed at
    preserving the role of federal agencies in approving rates for
    telecommunication services and keeping courts out of the rate making
    process.[^65] They argue that the purpose of Section 332 is
    identical to the nonjusticiability principle of the filed rate
    doctrine: that is, Section 332 grants exclusive jurisdiction over
    CMRS rates to the FCC and the federal courts.[^66] If CMRS providers
    had limited their argument to the principle that under both the
    filed rate doctrine and Section 332 rates are nonjusticiable by
    state courts we would be in agreement, as evidenced by the *SBMS
    Ruling*.[^67] CMRS providers, however, take their argument one step
    further and contend that, because under the analysis found in filed
    rate cases, courts have found that calculating and awarding damages
    in filed rate situations is tantamount to rate regulation, the same
    should hold true for cases involving Section 332.[^68] We reject the
    sweeping extension of this broad analysis to CMRS cases. Section 332
    is consistent with the policy of nonjusticiability underlying the
    filed rate doctrine to the extent that Section 332 prohibits states
    from regulating CMRS rates. However, the very structure of Section
    332 limits the scope of its preemption by distinguishing
    nonjusticiable rates from terms and conditions which are subject to
    state jurisdiction. The distinction between the two is not part of
    the logic or analysis of the filed rate doctrine. Moreover, we find
    no evidence in the legislative history of Section 332, that it was
    the intent of Congress to impose the broad scope of the filed rate
    doctrine judicial analysis in cases dealing with CMRS services.

20. In addition, the argument of CMRS providers ignores the fact that
    the filed rate cases arose under a totally different regulatory
    regime, one in which carriers file tariffs with a regulatory agency
    that are subject to scrutiny by the agency and the public, and under
    which carriers are bound to charge only the filed rate for the
    services they provide.[^69] The FCC has a different regime, in which
    the CMRS-customer relationship is not governed by terms set out by
    carriers in regulatory tariff filings, but by the mechanisms of a
    competitive marketplace. There is a distinction between rates that
    are filed with an agency and are subject to public and regulatory
    review, and prices that are determined and published by the carrier
    in a competitive marketplace.

21. The purposes behind the filed rate doctrine do not have the same
    relevance in CMRS cases.[^70] The statutory scheme of Section 203
    directs the agency to assure reasonable rates, rate uniformity, and
    the absence of price discrimination by carriers through tariff
    filings and the filed rate doctrine. A mandatory detariffing regime,
    when applied to both CMRS and other nondominant carriers,
    constitutes a totally different framework for fulfilling our
    statutory responsibilities. We do not set CMRS rates or require that
    carriers only charge rates as filed. Rather than file tariffs to
    establish the legally effective rates (and other terms and
    conditions) for their offering, CMRS carriers enter into service
    contracts with their customers. We rely on the competitive
    marketplace to ensure that CMRS carriers do not charge rates that
    are unjust or unreasonable, or engage in unjust or unreasonable
    discrimination.[^71] We have found that this approach produces
    better results for CMRS consumers than assuring reasonable rates
    through tariffing and the application of the filed rate doctrine.
    Since the economic and regulatory regime is different and the
    purposes behind the filed rate doctrine do not apply to the
    unregulated CMRS market, we conclude that the analysis and logic
    found in the filed rate cases regarding the issue of whether the
    award of monetary damages are equivalent to rate regulation is not
    applicable.

22. As WCA points out, the decision we reach today is in accord with our
    views regarding other competitive services.[^72] In the *Detariffing
    Proceeding*, we considered the question of whether services which
    are not subject to tariffs should be immune from liability for
    damages. We determined that once detariffing has been implemented,

> carriers in the interstate, domestic interexchange marketplace will be
> subject to the same incentives and rewards that firms in other
> competitive markets confront. We seek ultimately to accomplish the
> same result in every telecommunications market, because we believe
> that effectively competitive markets produce maximum benefits for
> consumers, carriers and the nation's economy.[^73]

We further concluded that once these services were detariffed, consumers
would be "able to take advantage of remedies provided by state consumer
protection laws and contract laws against abusive practices."[^74] We
thus found that eliminating the filed rate doctrine "would serve the
public interest by preserving reasonable commercial expectations and
protecting consumers."[^75] Similarly, we find today that refusing to
apply a filed rate doctrine rationale in CMRS cases also serves the
public interest.

#### In CMRS Cases, the Award of Monetary Damages Is Not Necessarily Equivalent to Rate Regulation

23. We find there are several arguments which support our decision that
    awarding monetary damages is not necessarily equivalent to rate
    regulation. First, we agree with commenters that there is no
    necessary correspondence between the indirect effect that monetary
    liability may have on a company's behavior and the direct effect
    that a statute or regulatory rate requirement will have on that
    behavior.[^76] For example, if a company is found monetarily liable
    for false advertising, it will presumably alter its advertising. The
    impact on its prices and other behavior, however, is uncertain. The
    indirect and uncertain effects of monetary damage awards based on
    tort and contract law do not correspond to the mandatory corporate
    actions that are required as a result of legislative or
    administrative rate regulation activities.[^77]

24. In addition, as Public Citizen points out, tort and contract law
    have the additional and separate function of compensating victims,
    which sets them apart from direct forms of regulation.[^78] Nader
    argues that the tort system is the traditional prerogative of the
    states and is the means through which consumers are able to seek
    redress for injustices.[^79] We agree with those commenters who
    contend that Section 332 was designed to promote the CMRS industry's
    reliance on competitive markets in which private agreements and
    other contract principles can be enforced.[^80] It follows that, if
    CMRS providers are to conduct business in a competitive marketplace,
    and not in a regulated environment, then state contract and tort law
    claims should generally be enforceable in state courts. We also
    agree with commenters who assert that enforcement of such laws
    through a monetary remedy is compatible with a free market.[^81] As
    Public Citizen asserts, "these duties fall no more heavily on CMRS
    providers than on any other business."[^82]

25. We also specifically disagree with those commenters who claim that
    any determination of monetary liability is equivalent to a finding
    that the service was inadequate for the price charged and therefore
    necessarily constitutes a finding that the rates originally charged
    were unreasonable.[^83] If a plaintiff asks a state court to make an
    outright determination of whether a price charged for a CMRS service
    was unreasonable, the court would be preempted from doing so by
    Section 332. Likewise, if a state court were to set a prospective
    price for CMRS service, this action would also be preempted by
    Section 332.

26. On the other hand, a case may present a question of whether a CMRS
    service had indeed been provided in accordance with the terms and
    conditions of a contract or in accordance with the promises included
    in the CMRS carrier's advertising. Such a case could present breach
    of contract or false advertising claims appropriately reviewable by
    a state court. In such a situation, a court need not rule on the
    reasonableness of the CMRS carrier's charges in order to calculate
    compensation for the injury that was caused, even though it could be
    appropriate for it to take the price charged into consideration in
    calculating damages.[^84] In our view, the court would not be making
    a finding on the reasonableness of the price charged but would be
    examining whether under state law, there was a difference between
    promise and performance.

27. In short, we reject arguments by CMRS carriers that non-disclosure
    and consumer fraud claims are in fact disguised attacks on the
    reasonableness of the rate charged for the service.[^85] A carrier
    may charge whatever price it wishes and provide the level of service
    it wishes, as long as it does not misrepresent either the price or
    the quality of service. Conversely, a carrier that is charging a
    "reasonable rate" for its services may still be subject to damages
    for a non-disclosure or false advertising claim under applicable
    state law if it misrepresents what those rates are or how they will
    apply, or if it fails to inform consumers of other material terms,
    conditions, or limitations on the service it is providing. We thus
    do not agree with those commenters who allege that, for consumer
    protection claims, any damage award or damage calculation, including
    any refund or rebate, is necessarily a ruling on the reasonableness
    of the price or the functional equivalent of a retroactive rate
    adjustment.[^86]

28. A number of courts deciding CMRS cases have also found that the
    award of monetary damages is not equivalent to regulating rates and
    therefore, not preempted by Section 332.[^87] We find that *Tenore*
    and similar cases are more persuasive than those cases upholding
    preemption, in part because the cases that have held monetary awards
    to be preempted have tended to rely on the type of analysis founded
    on the filed rate doctrine.[^88] We also note that in an *ex parte*
    filing, AT&T argues that the *Bastien* case, in which the court
    determined that certain state law claims were preempted, is
    controlling in the present context.[^89] AT&T contends *Bastien* is
    further support for their position that Section 332 prohibits the
    award of damages in the *LA Cellular* case, and thus the WCA
    petition for declaratory ruling should be denied. We disagree. The
    Bastien court did not decide the question before us: whether the
    award of monetary damages is equivalent to impermissible ratemaking
    prohibited by Section 332. Instead, we read *Bastien* as standing
    for the more general proposition, with which we agree, that state
    law claims may, in specific cases, be preempted by Section 332.[^90]
    We also read *Bastien* as standing for the proposition that it is
    the substance, not merely the form of the state claim or remedy,
    that determines whether it is preempted under Section 332.[^91] We
    recognize the line between prohibited and permissible claims may not
    always be clear. While we provide legal guidance on this issue in
    this order, the determination of whether any particular claim or
    remedy is consistent with Section 332 must be determined in the
    first instance by a state trial court based on the specific claims
    before it.

29. As indicated, *Tenore* is an example of a case in which a court
    could find that awarding damages based on state deceptive
    advertising or non-disclosure claims is not equivalent to prohibited
    ratemaking.[^92] In *Tenore* the court reversed the trial court's
    finding of preemption under Section 332 (c)(3)(A) and dismissal of
    state law false advertising claims brought against AT&T Wireless.
    The court viewed the central point at issue in *Tenore* as identical
    to the one that is before us in this proceeding: that is, whether a
    request for monetary damages requires a court to retroactively
    establish new rates in determining damages, thus constituting state
    ratemaking explicitly preempted by Section 332. The court cited
    other cases dealing with non-disclosure by CMRS providers. Those
    courts had found that awarding damages for such non-disclosure
    allegations does not enmesh the court in ruling on the
    reasonableness or lawfulness of the company's rates.[^93] The court
    in *Tenore* held that \"\[t\]he award of damages is not *per se*
    rate regulation, and as the United States Supreme Court has
    observed, does not require a court to \'substitute its judgment for
    the agency\'s on the reasonableness of a rate.\'\"[^94]

30. In reaching this decision, the Supreme Court of Washington relied on
    the United States Supreme Court\'s decision in *Nader v. Allegheny
    Airlines, Inc*.[^95] In *Nader*, the plaintiff was bumped from his
    reserved and confirmed seat because the airline had overbooked its
    flight. Nader claimed fraudulent misrepresentation because the
    defendant did not disclose its deliberate overbooking practices. The
    Court of Appeals ruled that the matter had to be transferred to the
    Civil Aeronautics Board to determine whether the alleged failure to
    disclose its deliberate overbooking practices was deceptive. The
    Court held that neither the filed rate doctrine nor the doctrine of
    primary jurisdiction precludes an action for damages on common law
    fraud grounds against an airline by one of its customers based on
    the alleged failure to disclose its undisclosed policy of
    deliberately overbooking its flights.

31. The *Nader* Court distinguished its prior decision in *Texas &
    Pacific R. Co. v. Abilene Cotton Oil Co.,*[^96] holding that
    state-court common-law actions challenging the tariffed rates of
    railroad carriers as \"unjust and unreasonable\" are precluded by
    the Interstate Commerce Act. The Court stated, "The court in the
    present case, in contrast \[to the circumstances in the *Abilene*
    line of cases\] is not called upon to substitute its judgment for
    the agency\'s on the reasonableness of a rate or, indeed, on the
    reasonableness of any carrier practice."[^97] In allowing the case
    to proceed at the state level, the Court held, "any impact on rates
    that may result from the imposition of tort liability or from
    practices adopted by a carrier to avoid such liability would be
    merely incidental. Under the circumstances, the common-law action
    and the statute are not 'absolutely inconsistent' and may coexist .
    . . .\"[^98]

32. This reasoning by the Supreme Court answers AT&T's syllogism that a
    monetary award is necessarily equivalent to both retroactive and
    prospective rate regulation.[^99] AT&T sets up its argument as
    follows: AT&T contends that, if a court awarded monetary relief in
    the *LA Cellular* case, the monetary award would be equivalent to a
    rebate or refund off a previous CMRS rate.[^100] By ordering a
    monetary award, the state court would be retroactively resetting the
    CMRS rates and thus determining a reasonable rate for an earlier
    time period.[^101] In addition, AT&T contends that the court would
    also be regulating future rates because it would be impossible for
    the CMRS carriers to charge more than the rate the state court
    "determined was reasonable" for the earlier time period.[^102]

33. The Supreme Court, however, has determined that imposition of a
    state damage award has merely an incidental effect upon the prices
    charged by a carrier.[^103] Given this reasoning, we disagree with
    AT&T that, on a prospective basis, if a court awarded damages for
    past conduct, the court would necessarily be regulating rates
    because it would be impossible for the carrier to charge more than
    that amount.[^104] AT&T makes the unsupported assumption that any
    damage award, which is a one-time payment, can be automatically
    transformed into a prospective monthly rate. Courts across this
    nation have for many years awarded damages based on breach of
    contract and consumer fraud claims for all types of products and
    services. Such litigation costs and awards are simply a cost of
    doing business.[^105]

34. As commenters have noted, in a case involving Section 332,
    appellants argued that Texas universal service contribution
    requirements are impermissible rate regulation because they increase
    the cost of doing business in a state and thus impact rates
    charged.[^106] The U.S. Court of Appeals for the D.C. Circuit found
    this to be analogous to state consumer protection laws, which also
    "increase the cost of doing business."[^107] The court stated that,
    "To equate state action that may increase the cost of doing business
    with rate regulation would, the Commission reasonably concluded,
    forbid nearly all forms of state regulation, a result at odds with
    the 'other terms and conditions' portion of the first
    sentence."[^108]

35. Finally, our conclusions regarding the scope of Section 332 are not
    affected by the availability, as some comments point out, of
    remedies under Sections 207 and 208 of the Communications Act.[^109]
    Under the statutory scheme, CMRS providers remain obligated to
    comply with Sections 201 and 202 of the Act.[^110] These alternate
    avenues of relief supplement rather than replace claims under state
    law, particularly those common law claims for fraudulent or tortious
    behavior.

36. For these reasons, we hold that the award of monetary damages based
    on state contract or tort causes of action is not necessarily
    equivalent to rate regulation and thus is not generally preempted by
    Section 332. We further conclude that the award of monetary damages
    in these types of causes of action would generally fall under the
    terms and conditions provisions of Section 332, which can be the
    subject of state action. Finally, we conclude that whether a
    specific damage award or damage calculation is prohibited by Section
    332 will depend on the specific details of the award and the facts
    and circumstances of a particular case.

## Savings Clause

37. Some commenters have argued that despite the possible effect of
    Section 332 to preempt ratemaking, the savings clause, Section
    414,[^111] would preserve the right to seek monetary damages.[^112]
    Under accepted principles of statutory construction, however, the
    savings clause cannot preserve state law causes of action or
    remedies that contravene express provisions of the
    Telecommunications Act. Because we conclude that Section 332 does
    not generally preempt state court award of monetary damages, there
    is no inherent conflict between state common law or statutory
    remedies and the Communications Act, and thus, no need for us to
    reach the issue of interpreting the savings clause.

# CONCLUSIONS

38. A state court, by awarding damages to customers damaged by a CMRS
    provider\'s breach of contract or fraud violation, would not *per
    se* be engaged in ratemaking prohibited by Section 332(c)(3) of the
    Communications Act. If liability is established, an award of
    monetary relief would not normally require a court to prescribe, set
    or fix wireless rates. As the Supreme Court stated in *Nader*, "any
    impact on rates that may result from the imposition of tort
    liability or from practices adopted by a carrier to avoid such
    liability would be merely incidental."[^113] Furthermore, a
    consideration of the price originally charged, for the purposes of
    determining the extent of the harm or injury involved, is not
    necessarily an inquiry into the reasonableness of the original price
    and therefore is permissible.

39. Of course, a court will overstep its authority under Section 332 if,
    in determining damages, it does enter into a regulatory type of
    analysis that purports to determine the reasonableness of a prior
    rate or it sets a prospective charge for services. Thus, while we
    conclude that Section 332 does not generally preempt damage awards
    based on state contract or consumer protection laws, this is not to
    say that such awards can never amount to rate or entry regulation.
    Nor do we here conclude that a damage award in the WCA litigation or
    any other specific case would or would not be consistent with
    Section 332(c)(3). We believe the question of whether a specific
    damage award or a specific grant of injunctive relief constitutes
    rate or entry regulation prohibited by Section 332(c)(3) would
    depend on all facts and circumstances of the case.

# ordering clause

40. Accordingly, pursuant to Sections 4(i) and 4(j) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 154 (i) and 154
    (j), Section 5 (d) of the Administrative Procedure Act, 5 U.S.C. §
    554(e), and Section 1.2 of the Commission's Rules, 47 C.F.R. § 1.2,
    IT IS ORDERED, that the Petition for Declaratory Ruling filed by
    Wireless Consumer Alliance, Inc. IS GRANTED to the extent indicated
    herein and otherwise IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

> Magalie Roman Salas
>
> Secretary

APPENDIX

PARTIES FILING COMMENTS IN RESPONSE TO WIRELESS CONSUMERS ALLIANCE
PETITION

AirTouch Communications, Inc. (AirTouch)

Attorneys General of the States of California,\
Connecticut, and Wisconsin (States' Attorneys General)

AT&T Corp., Bellsouth Cellular Corp.,\
and AB Cellular Holding, LLC (AT&T)

BellAtlantic Mobile, Inc. (BAM)

Centiennial Communications Corporation (Centennial)

Cellular Telecommunications Industry Assoc. (CTIA)

GTE Service Corporation (GTE)

Landin, Erika (Landin)

Nader, Ralph (Nader)

Public Citizen Litigation Group (Public Citizen)

SBC Wireless, Inc. (SBC)

Sprint PCS (Sprint)

Texas Office of Public Utility Counsel (Texas)

Tritel Communications, Inc. (Tritel)

United States Cellular Corporation (USCC)

Richard Panza and William Kolis, Wicken, Herzer\
& Panza; Robert Gary and Thomas Theado, Gary,\
Naegele & Theado; Ronald Futterman and\
Michael Behn, Futterman & Howard, Chtd. (Wickens)

PARTIES FILING REPLY COMMENTS IN RESPONSE TO WIRELESS CONSUMERS ALLIANCE
PETITION

AirTouch

AT&T Corp., Bellsouth Cellular Corp., and AB Cellular Holding, LLC

Cellular Telecommunications Industry Assoc.

GTE Service Corp.

Landin, Erica

SBC Wireless

Wireless Consumers Alliance

PARTIES FILING COMMENTS IN RESPONSE TO SOUTHWESTERN BELL MOBILE SYSTEMS
(SBMS) PETITION FOR DECLARATORY RULING

360 Communications Company (360 SBMS)

AirTouch Communications, Inc. (AirTouch SBMS)

Ameritech (Ameritech SBMS)

AT&T Wireless Services, Inc. (AT&T SBMS)

Bell Atlantic Mobile, Inc. (BAM SBMS)

BellSouth Corporation (BellSouth SBMS)

Carr, Korein, Tillery, Kunin, Montory,\
Cates & Glass (Carr SBMS)

Cellular Telecommunications Industry Association (CTIA SBMS)

Century Cellnet, Inc. (Century SBMS)

Comcast Cellular Communications, Inc. (Comcast SBMS)

GTE Service Corporation (GTE SBMS)

Liberty Cellular Inc. and North Carolina RSA 3\
Cellular Telephone Company (Liberty SBMS)

Omnipoint Communications, Inc. (Omnipoint SBMS)

Personal Communications Industry Association (PCIA SBMS)

Primacy Rural Telecommunications Group (Primacy SBMS)

Jill Ann Smilow (Smilow SBMS)

Sprint PCS (Sprint SBMS)

Vanguard Cellular Systems, Inc. (Vanguard SBMS)

PARTIES FILING REPLY COMMENTS IN RESPONSE TO SOUTHWESTERN BELL MOBILE
SYSTEMS PETITION FOR DECLARATORY RULING

Comcast Cellular Communications, Inc.

GTE Service Corporation

Southwestern Bell Mobile Systems, Inc.

Staack and Klemm, P.A. (Staack SBMS)

United State Cellular Corporation (USCC SBMS)

Vanguard Cellular Systems, Inc.

[^1]: In addition, in an order responding to a Petition for a
    Declaratory Ruling filed by Southwestern Bell Mobile Systems, we
    stated that we would decide whether the Communications Act preempts
    the award of damages by state courts against CMRS providers as part
    of our response to the WCA petition. Southwestern Bell Mobile
    Systems Inc. Petition for a Declaratory Ruling Regarding the Just
    and Reasonable Nature of, and State Challenges to, Rates Charged by
    CMRS Providers when Charging for Incoming Calls and Charging for
    Calls in Whole-Minute Increments, FCC 99-365, *Memorandum Opinion
    and Order*, 14 FCC Rcd 19898, 19908-09 (para 24) (1999) (*SBMS
    Ruling*).

[^2]: The litigation is currently titled *Spielholz v. Los Angeles
    Cellular Telephone Co.*, No. BC186787 (*LA Cellular*).

[^3]: *Spielholz v. The Superior Ct*., No. B131655, Order Staying
    Proceedings, slip op. at 1 (Cal. Ct. App. June 15, 1999).

[^4]: WCA Petition at ii, 2-3, 5-6, 27-28.

[^5]: *Id*. at 6-11. Many of the supporting materials including the
    lower court briefs and cited cases from other state courts can be
    found in the appendix to the petition.

[^6]: *Id*. at 7.

[^7]: *Id*. at 9 and n.10; WCA Petition Exhibit 1, (Second Amended Class
    Action Complaint at 2-3, *Spielholz v. LA Cellular,* BC186787
    (Super. Ct. of Cal., Cty of Los Angeles, action first filed
    02/27/98)).

[^8]: WCA Petition Exhibit 4, Minutes at 1, (*Spielholz v. LA Cellular*,
    No. BC186787 (Super. Ct. of Cal., Cty of Los Angeles, February 11,
    1999) (noting that defendant's motion to strike improper claims for
    relief in second amended complaint granted)).

[^9]: WCA Petition Exhibit 4, Minutes at 1, (*Spielholz v. LA Cellular*,
    No. BC186787 (Super. Ct. of Cal., Cty of Los Angeles, February 11,
    1999) (noting that defendant's motion to strike improper claims for
    relief in second amended complaint granted)). *See also*, WCA
    Petition at i, 10, 18.

[^10]: WCA Petition Exhibit 8, (*Spielholz v. The Superior Ct*., No.
    B131655, Order Staying Proceedings, slip op. at 1 (Cal. Ct. App.
    June 15, 1999)).

[^11]: WCA Petition at 2, 5-6, 27-28.

[^12]: *Id*. at 2. As the different types of monetary damage awards,
    *e.g.,* restitution, compensatory, exemplary and punitive damages,
    have not been specifically differentiated in the record, we will use
    the term "damages" to include all types of monetary damages.

[^13]: *Id*. at ii.

[^14]: *Id*. at 12.

[^15]: *Id*. at 13.

[^16]: *Id*. at 12-13, 16.

[^17]: *Id*. at 14-16, citing 47 U.S.C. § 414, which provides, "Nothing
    in this Act contained shall in any way abridge or alter the remedies
    now existing at common law or by statute, but the provisions of this
    Act are in addition to such remedies."

[^18]: WCA Petition at 13.

[^19]: *Id*. at 13-14, 26.

[^20]: *Id*. at 5, 18-19, 27.

[^21]: *Id*. at 5, 13

[^22]: *Id*. at 13, 26.

[^23]: *Id*. at 13, 16-18.

[^24]: Lists of comments and reply comments to the WCA petition, as well
    as lists of comments and reply comments to the SBMS petition are
    attached in the Appendix.

[^25]: AirTouch Comments at 12; AT&T Comments at 1; BAM Comments at 6;
    Centennial Comments at 4; CTIA Comments at 2, 8; GTE Comments at
    2-3; SBC Comments at 2; Sprint Comments at 3; Tritel Comments at 4;
    USCC Comments at 14-15; AirTouch Reply at 5; AT&T Reply at 1; CTIA
    Reply at 4; GTE Reply at 2; SBC Reply at 2. *See also* AirTouch SBMS
    Comments at 2; BAM SBMS Comments at 13; Century SBMS Comments at
    4-5; Comcast SBMS Comments at iii, 6, 7; PCIA SBMS Comments at 4;
    Vanguard SBMS Comments at 2, 4; Comcast SBMS Reply at 12-13.

[^26]: *See, e.g.,* AT&T Reply at 3-6, and nn. 8-15 (citing Supreme
    Court precedent, *Shelley v. Kraemer*, 334 U.S. 1 (1948),
    establishing that judicial action constitutes state action.); BAM
    Comments at 16; Centennial Comments at 7; GTE Comments at 4; Sprint
    Comments at 5. *See also* SBMS Petition at 16 n.28; AirTouch SBMS
    Comments at 3; Century SBMS Comments at 5.

    Some commenters also cite cases which support the proposition that a
    judgment is a form of regulatory action. *See, e.g.,* AT&T Comments
    at 10 and n.21; CTIA Comments at 12; GTE Comments at 4-5; SBC
    Comments at 4; Sprint Comments at 3; Texas Comments at 7; USCC
    Comments at 15-16; AT&T Reply at 6 n.15. *See also* SBMS Petition at
    16 n.28; Comcast SBMS Comments at 14.

[^27]: *See, e.g.,* AT&T Comments at 4; BAM Comments at 10-11, 21; CTIA
    Comments at 2, 13-14; SBC Comments at 4-5; Sprint Comments at 3;
    Tritel Comments at 4-5; USCC Comments at 16-17; AT&T Reply at 6-8;
    CTIA Reply at 3; GTE Reply at 4; SBC Reply at 2. *See also* SBMS
    Petition at 16-18; 360 SBMS Comments at 6; AirTouch SBMS Comments at
    3; BAM SBMS Comments at 8, 13, 27; Century SBMS Comments at 5;
    Comcast SBMS Comments at 17, 21; PCIA SBMS Comments at 5; Comcast
    SBMS Reply at 12-13; USCC SBMS Reply at 3; Vanguard SBMS Reply at 8.

[^28]: *See, e.g.,* AT&T Comments at 7-8, 12-13; BAM Comments at 10;
    CTIA Comments at 13; SBC Comments at 4-5; Sprint Comments at 4. *See
    also* SBMS Petition at 20-22; BAM SBMS Comments at 14, 25; Century
    SBMS Comments at 6; Comcast SBMS Comments at 17; PCIA SBMS Comments
    at 5; Vanguard SBMS Comments at 9; Vanguard SBMS Reply at 7-8.

[^29]: AT&T Comments at 11-12; BAM Comments at 12-15; Centennial
    Comments at 8 n.16; CTIA Comments at 15 n.37, 15-19; Sprint Comments
    at 4, 6 and n.4; AirTouch Reply at 7; AT&T Reply at 5 n.10, 6 n.18;
    CTIA Reply at 6; SBC Reply at 2 n.6. *See also* SBMS Petition at
    19-22 and nn.38-39; BAM SBMS Comments at 17 and n.19; SBMS Reply at
    18-20; Comcast SBMS Reply at 13, 14.

[^30]: AirTouch Comments at 14; AT&T Comments at 20-21; CTIA Comments at
    23-24; Sprint Comments at 11-12. *See also* BAM SBMS Comments at
    24-25; GTE SBMS Comments at 9; SBMS Reply at 16-18; Sprint SBMS
    Comments at 9 n.17.

[^31]: *SBMS Ruling,* 14 FCC Rcd at 19902-03, 19906-07 (paras. 10, 20).

[^32]: *Id*. at 19908 (para. 23).

[^33]: *Id*. at 19908-09 (para. 24).

[^34]: *See e.g.,* AirTouch Comments at 5-6; AT&T Comments at 1; BAM
    Comments at 2, 5; CTIA Comments at 5-6.

[^35]: *See e.g.*, AirTouch Comments at 7-9; AT&T Comments at 3, 6-7;
    BAM Comments at 6-7.

[^36]: *See e.g.*, AirTouch Comments at 7; AT&T Comments at 4; BAM
    Comments at 10-11; CTIA Comments at 12, 16; BAM SBMS Comments at ii,
    13; Vanguard SBMS Comments at 5; 360 SBMS Comments at 6; AirTouch
    SBMS Comments at 3; Century SBMS Comments at 5; Comcast SBMS
    Comments at 17, 21; PCIA SBMS Comments at 5; Comcast SBMS Reply at
    12-13; USCC SBMS Reply at 3; Vanguard SBMS Reply at 8.

[^37]: *See* Public Citizen Comments at 5-7.

[^38]: *See, e.g.,* AT&T Comments at 10 and n.21; AT&T Reply at 2, 6
    n.15; CTIA Comments at 12; GTE Comments at 4-5; SBC Comments at 4;
    Sprint Comments at 3; Texas Comments at 7; USCC Comments at 15-16;
    SBMS Petition at 16 n.28; Comcast SBMS Comments at 14.

[^39]: *Shelley v. Kraemer*, 334 U.S. 1 (1948).

[^40]: *See* *BMW of North America, Inc. v. Gore*, 517 U.S. 559, 572
    n.17 (1996); *San Diego Building Trades Council v. Garmon*, 359 U.S.
    236, 247 (1959) (*San Diego*); *Comcast Cellular Telecommunications
    Litigation*, 949 F.Supp. 1193, 1201 n.2 (E.D. Pa. 1996) (*Comcast*).

[^41]: *See* GTE Comments at 4-5 (citing *San Diego*, 359 U.S. 236 and
    *Arkansas Louisiana Gas Co. v. Hall*, 453 U.S. 571 (1981)
    (*Arkansas*)); AT&T Reply at 4-6; SBMS Petition at 16 n.28.

[^42]: Section 332(c)(3)(A), however, does provide that a state may
    petition the Commission for authority to regulate CMRS rates
    where: 1) CMRS market conditions fail to protect subscribers from
    unjust, unreasonable, or discriminatory rates, or 2) CMRS has become
    a replacement for land line telephone exchange service for a
    substantial portion of such service within the state. 47 U.S.C. §
    332(c)(3)(A).

[^43]: *SBMS Ruling,* 14 FCC Rcd at 19908 (para. 23). In the *SBMS
    Ruling*, we found that it was clear from the language and purpose of
    Section 332(c)(3) that states do not have authority to prohibit CMRS
    providers from charging for incoming calls or charging in whole
    minute increments because this would regulate the rates charged by a
    commercial mobile service.

[^44]: The House Report on the Omnibus Budget Reconciliation Act of
    1993, in which the amended language in Section 332 was enacted,
    states that:

    > Section 332(c)(3) provides that state or local governments cannot
    > impose rate or entry regulation on private land mobile service or
    > commercial mobile services; this paragraph further stipulates that
    > nothing here shall preclude a state from regulating the other
    > terms and conditions of commercial mobile services. . . . By
    > "terms and conditions," the Committee intends to include such
    > matters as customer billing information and practices and billing
    > disputes and other consumer protection matters . . . or such other
    > matters as fall within a state\'s lawful authority. This list is
    > intended to be illustrative only and not meant to preclude other
    > matters generally understood to fall under "terms and conditions."
    > H.R. Rep. No. 103-111, 103^rd^ Congress, 1^st^ Sess. 1993 211, 261
    > (cited in part in *SBMS Ruling,* 14 FCC Rcd at 19901 (para. 7)).

    *See also Esquivel v. Southwestern Bell Mobile Services*, 920
    F.Supp. 713, 716 (S.D. Tex. 1996) (*Esquivel*) (interpreting the
    legislative history of Section 332).

[^45]: *SBMS Ruling,* 14 FCC Rcd at 19908 (para. 23). See *Tenore v.
    AT&T Wireless Services,* 136 Wash.2d 322, 962 P.2d 104 (1998),
    *cert. denied*, *AT&T Wireless Services v. Tenore*, 525 U.S. 1171
    (1999) (*Tenore*).

[^46]: *See, e.g.,* SBMS Petition at pp. 19-23; AT&T Comments at 11-12;
    BAM Comments at 12-15; Centennial Comments at 8 n.16; CTIA Comments
    at 15 n.37, 15-19; Sprint Comments at 4, 6 and n.4; AirTouch Reply
    at 7; AT&T Reply at 5 n.10; 6 n.18; CTIA Reply at 6, 8; SBC Reply at
    2 n.6; SBMS Reply at 18-20.

[^47]: It appears that CMRS providers have engendered much confusion
    over the issue of the applicability of the filed rate doctrine in
    cases concerning the preemptive effect of Section 332. For example,
    CMRS providers regularly cite filed rate cases to support their
    position, often without any acknowledgement that Section 332 cases
    do not involve filed rates. While some may admit that the filed rate
    doctrine does not apply, they urge that the same analysis be used in
    Section 332 cases without clarifying that Section 332 cases arise
    under a totally different regulatory regime.

[^48]: *Arkansas*, 453 U.S. at 577, quoted in *Marcus v. AT&T Corp.,*
    938 F. Supp. 1158, 1169 (S.D.N.Y. 1996) *aff\'d* 138 F.3d. 46 (2nd
    Cir. 1998) (*Marcus*). In *Marcus,* the Court described the filed
    rate doctrine further:

    > The doctrine creates "strict filed rates requirements and . . .
    > forbid\[s\] equitable defenses to collection of the filed tariff."
    > *Maislin Indus., Inc. v. Primary Steel, Inc.,* 497 U.S. 116, 127,
    > 110 S.Ct. 2759, 2766, 111 L.Ed.2d 94 (1990) \[*Maislin*\]
    > (invalidating an ICC policy that relieved a shipper of the
    > obligation to pay the filed rate when the shipper and carrier has
    > privately negotiated a lower rate). That means that the filed rate
    > governs the legal relationship between carrier and subscriber, and
    > "\[t\]he rights as defined by the tariff cannot be varied or
    > enlarged by either contract or tort of the carrier." *Keogh v.
    > Chicago & N.W. Ry.,* 260 U.S. 156, 163, 43 S.Ct. 47, 49, 67
    > L.Ed.2d 413 (1922).

[^49]: *See American Telephone and Telegraph Co. v. Central Office
    Telephone, Inc*., 524 U.S. 214 (1998) (*Central Office Telephone*).

[^50]: *Marcus*, 938 F. Supp. at 1170.

[^51]: *Central Office Telephone*, 524 U.S. at 222.

[^52]: Policy and Rules Concerning the Interstate, Interexchange
    Marketplace, Implementation of Section 254(g) of the Communications
    Act, CC Docket No. 96-61, *Second Report and Order*, 11 FCC Rcd
    20730, 20762 (para. 55) (1996) (*Detariffing Second Order*) *aff'd
    sub nom. MCI WorldCom v. FCC*, 209 F.3d 760 (D.C. Cir. 2000) (*MCI
    WorldCom*) (holding that the 1996 Act granted the FCC authority to
    order mandatory detariffing and recognizing the anti-competitive
    effects of the filed rate doctrine.).

[^53]: Policy and Rules Concerning the Interstate, Interexchange
    Marketplace,Implementation of Section 254(g) of the Communications
    Act of 1934, CC Docket No. 96-61, *Second Order on Reconsideration*,
    14 FCC Rcd 6004, 6006 (para. 2) (1999).

[^54]: For example, the Commission initiated efforts to prohibit filing
    of tariffs by non-dominant interexchange carriers in the early
    1980's and revived these efforts in 1996 after receiving statutory
    forbearance authority. *See MCI Telecommunications Corp. v. FCC*,
    765 F.2d 1186 (D.C. Cir. 1985); *MCI Telecommunications Corp. v.
    American Tel. & Tel Co.,* 512 U.S. 218 (1994). *See also Detarrifing
    Second Report and Order*, 11 FCC Rcd at 20733 (para*.* 4).

[^55]: 47 U.S.C. § 332(c)(1)(A).

[^56]: 47 U.S.C. § 203.

[^57]: Implementation of Sections 3(n) and 332 of the Communications
    Act, Regulatory Treatment of Mobile Services, GN Docket No. 93-25*,
    Second Report and Order,* 9 FCC Rcd 1411, 1418, 1478 (paras. 14,
    174) (1994). *See also* Section 20.15(a) of the Commission\'s Rules,
    47 C.F.R. § 20.15(a).

[^58]: *See* Section 20.15(c) of the Commission\'s Rules, 47 C.F.R. §
    20.15(c).

[^59]: The court in *Tenore*, 962 P.2d at 108-110 held that, since there
    are no filed rates at the federal or state level, the filed rate
    doctrine does not apply with respect to CMRS services. *See also*
    Texas Comments at 6; States' Attorneys General at 2; WCA Reply at
    10; Smilow SBMS Comments at 13.

[^60]: 47 U.S.C. § 160.

[^61]: *Detariffing Second Order*, 11 FCC Rcd at 20762 (para. 55).

[^62]: *See* AT&T Comments at 21-22; BAM Comments at 15-16; CTIA
    Comments at 16-19; Sprint Comments at 6; USCC Comments at 5-6; SBMS
    Reply at 18-20; Comcast SBMS Reply at 13, 14.

[^63]: *See* AT&T Comments at 21-22; BAM Comments at 15-16; CTIA
    Comments at 16-19; Sprint Comments at 6; USCC Comments at 5-6; SBMS
    Reply at 18-20; Comcast SBMS Reply at 13, 14.

[^64]: AT&T Comments at 21-22; CTIA Comments at 16-17; Comcast SBMS
    Reply at 13-14.

[^65]: AT&T Comments at 22. *See also* CTIA Comments at 16-17; Comcast
    SBMS Reply at 13-14.

[^66]: AT&T Comments at 22. *See also* Comcast SBMS Reply at 14-15.

[^67]: The *SBMS Ruling* supports this position by upholding Section
    332's preemption of state courts from deciding claims which
    specifically address CMRS carriers' rates including such issues as
    billing in whole minute increments. *SBMS Ruling*, 14 FCC Rcd at
    19908 (para. 23).

[^68]: *See* AT&T Comments at 21-22; BAM Comments at 15-16; CTIA
    Comments at 16-19; Sprint Comments at 6; USCC Comments at 5-6; SBMS
    Reply at 18-20; Comcast SBMS Reply at 13, 14.

[^69]: We note that in some "filed rate" situations there may be an
    actual determination on the part of a regulatory body of the
    appropriate costs and rate of return which are factored into a rate
    fixed by the agency as a result of the regulatory process.

[^70]: *See* *Tenore*, 962 P.2d at 110, "\[N\]ot only are there no
    tariffs on file, but the two purposes behind the 'filed rate'
    doctrine \-- preserving the agency's primary jurisdiction to
    determine the reasonableness of rates and insuring that only those
    rates approved are charged \-- do not apply in this case." *See
    also,* *Wegoland, Ltd. v. Nynex Corp.*, 806 F.Supp, 1112, 1113-15
    (S.D.N.Y. 1992), *aff'd,* 27 F.3d 17 (2d Cir. 1994); *Maislin*, 497
    U.S. at 126-27.

[^71]: *But see* USCC Comments at 6-8; BAM SBMS Comments at 17; Comcast
    SBMS Comments at 19-20; GTE SBMS Comments at 7; Comcast SBMS Reply
    at 14.

[^72]: WCA Reply at 5-6. *See also* States' Attorneys General Comments
    at 5-6.

[^73]: *Detariffing Second Order*, 11 FCC Rcd at 20733 (para*.* 4),
    *aff'd sub nom. MCI WorldCom v. FCC*, (holding that not only did the
    1996 Act grant the FCC authority to order mandatory detariffing but
    that the probability of increased transaction costs for carriers
    would be insignificant compared to the competitive benefits of
    nonregulated market conditions. *See* *also W*CA Reply at 5.

[^74]: *Detariffing Second Order*, 11 FCC Rcd at 20733 (para. 5).

[^75]: *Id*. at 20762 (para. 55).

[^76]: *See* Public Citizen Comments at 11. *See also* Texas Comments at
    8.

[^77]: *See* Public Citizen Comments at 11.

[^78]: *Id*.

[^79]: Nader Comments at 1.

[^80]: Public Citizen Comments at 16-17 (referencing Farber, *Contract
    Law and Modern Economic Theory*, 78 NW. U. L. Rev. 303, 315 (1983)
    and R. Posner, [Economic Analysis of Law]{.smallcaps} 90-91 (4^th^
    ed. 1992)); WCA Reply at 3.

[^81]: *See* Public Citizen Comments at 17; WCA Reply at 3.

[^82]: Public Citizen Comments at 17.

[^83]: *See* CTIA Comments at 13; AT&T Reply at 6.

[^84]: For instance, if a CMRS carrier promised to charge \$.20 per
    minute for certain calls and, in fact, charged its customers \$.30
    per minute for these calls, the difference between the promised rate
    and the one actually assessed would presumably be the basis for one
    potential measure of damages. While this involves the court in
    examining a carrier's prices, it would not be doing so to determine
    whether they were set at a "reasonable" or "just" level.

[^85]: *See Tenore,* 962 P.2d at 112. *See also* AT&T Comments at 16-17;
    Centennial Comments at 5; SBC Comments at 5; Sprint Comments at 3-4,
    8; Tritel Comments at 4-5; CTIA Reply at 3; GTE Reply at 4;
    Memorandum of Points and Authorities of Defendants L.A. Cellular and
    AT&T Wireless Services in Support of Motion to Strike Improper
    Claims for Relief in Second Amended Complaint, WCA Petition Exhibit
    1 at 6-7.

[^86]: *See, e.g.,* BAM Comments at 12-15; CTIA Comments at 13-14; AT&T
    Reply at 6; SBMS Petition at 20-23; Bell Atlantic SBMS Comments at
    13-15, 28; GTE SBMS Comments at 2; BellSouth SBMS Comments at 7-8;
    Comcast SBMS Comments at 5, 17; Comcast SBMS Reply at 12-13; USCC
    SBMS Comments at 3.

[^87]: *See, e.g., Tenore, Esquivel, DeCastro v. AWACS, Inc.*, 935 F.
    Supp. 541 (D.N.J. 1996) (*DeCastro);* *Bennett v. Alltel Mobile
    Communications of Alabama*, 1996 WL 1054301 (M.D.Ala. 1996);
    *Sanderson v. AWACS, Inc.*, 958 F.Supp. 947 (D. Del. 1997)
    (*Sanderson)* allow state causes of action to go forward in state
    courts. *But see, Comcast* which found two state causes of action
    went to the reasonableness of rates and were therefore preempted by
    Section 332. Commenters such as AT&T Comments at 13 n.31, and
    Centennial Comments at 4-5, also cite several unreported lower court
    state cases which they assert involved dismissals of state law
    claims for monetary damages due to preemption by Section 332.

[^88]: *See, e.g*., *Comcast*, 949 F.Supp at 1202.

[^89]: Letter from Howard J. Symons to Kris Monteith, Chief, Policy
    Division, WTB (March 13, 2000), (discussing *Bastien v. AT&T
    Wireless*, 205 F.3d 983 (7^th^ Cir. 2000) (*Bastien*)).

[^90]: In the *Bastien* case, the plaintiff alleged that AT&T "signed up
    subscribers without first building the cellular towers and other
    infrastructure necessary to provide reliable cellular connections."
    *Bastien,* 205 F.3d at 989. The court found that the plaintiff's
    claims bore directly on the areas reserved to the FCC -- "the modes
    and conditions under which AT&T Wireless may begin offering service
    in the Chicago market" -- because they were are "all founded on the
    fact that AT&T Wireless \[had\] not built more towers and more fully
    developed its network at the time Bastien tried to use the system."
    *Id*. Because the court found that AT&T Wireless was in compliance
    with the FCC requirements for building towers and establishing
    service in the Chicago market, it held that the particular claims at
    issue in that case were preempted. *Id*. at 989-90.

[^91]: In *Bastien*, the plaintiff did not explicitly challenge AT&T's
    "entry" into the Chicago market or style his complaint as one
    seeking regulation of AT&T's entry strategy. Nevertheless, the court
    found that this was the substance of the complaint and that allowing
    it to be litigated would inevitably entangle the court in
    effectively regulating the means and manner of entry by a CMRS
    carrier. Similarly, actions under state law could in substance and
    effect amount to regulation of CMRS rates even though not formally
    styled as such. In a number of cases, however, courts have examined
    complaints dealing with state law claims against CMRS carriers and
    determined that the substance of the complaint in essence challenged
    only the non-disclosure of billing practices and not the rates
    charged. *See DeCastro, Sanderson, Tenore, Bennett.*

[^92]: The claims in *Tenore* arose from AT&T's alleged failure to
    disclose the billing practice of rounding up charges to the next
    minute. Appellants did not attack the reasonableness of the practice
    of rounding up; they challenged only the nondisclosure of the
    practice. *Tenore*, 962 P.2d at 112. AT&T contended that Section 332
    preempted the state law claims because the monetary relief sought
    would necessarily require a court to engage in rate regulation in
    determining the refund award for partial minutes of telephone
    service. *Id*. at 107. Appellants argued that they were challenging
    only the allegedly misleading advertising practices and not the
    underlying rates. *Id*.

[^93]: *Id*. at 113 (citing *Kellerman* *v. MCI Telecommunications
    Corp.*, 493 N.E.2d 1045 (S.Ct. Ill. 1986), *cert. denied*, *MCI
    Telecommunications Corp.* *v. Kellerman*, 497 U.S. 949 (1986) and
    *DeCastro*).

[^94]: *Id*. at 115 (citing *Nader v. Allegheny Airlines, Inc.*, 426
    U.S. 290, 299 (1976) (*Nader*))*.*

[^95]: *Nader*, 426 U.S.at 299.

[^96]: *Texas & Pacific R. Co. v. Abilene Cotton Oil Co*., 204 U.S. 426
    (1907) (*Abilene*).

[^97]: *Nader*, 426 U.S. at 299*.*

[^98]: *Id*. at 300.

[^99]: It should be noted that AT&T urges that this syllogism be applied
    as a matter of law before a court even reaches a decision on
    liability rather than after a court has made what AT&T feels is an
    inappropriate damage award. *See* AT&T pleadings in *LA Cellular* in
    Appendix to WCA Petition.

[^100]: AT&T Reply at 7.

[^101]: *Id*.

[^102]: *Id*.

[^103]: *Nader*, 426 U.S. at 300.

[^104]: AT&T Reply at 7.

[^105]: *See* Landin Reply at 2; Texas Comments at 8. *See also* Public
    Citizen Comments at 16-17.

[^106]: WCA Reply at 9. *See also* Texas Comments at 6-7; *CTIA v. FCC*,
    168 F.3d 1332, 1336 (D.C. Cir. 1999) (*CTIA*).

[^107]: *CTIA*, 168 F.3d at 1336.

[^108]: *Id*.

[^109]: 47 U.S.C. §§ 207-208.

[^110]: *See* Personal Communications Industry Association\'s Broadband
    Personal Communications Services Alliance\'s Petition for
    Forbearance for Broadband Personal Communications Services, Biennial
    Regulatory Review -- Elimination or Streamlining of Unnecessary and
    Obsolete CMRS Regulations, Forbearance from Applying Provisions of
    the Communications Act to Wireless Telecommunications Carriers,
    Further Forbearance from Title II Regulation for Certain Types of
    Commercial Mobile Radio Service Providers, GTE Petition for
    Reconsideration or Waiver of a Declaratory Ruling, WT Docket No.
    98-100, GN Docket No. 94-33, MSD-92-14, *Memorandum Opinion and
    Order and Notice of Proposed Rulemaking*, 13 FCC Rcd 16857, 16872
    (para. 31) (1998) (declining to forbear from applying Sections 201
    and 202 of the Communications Act with respect to broadband personal
    communication services).

[^111]: 47 U.S.C. § 414, which provides, "Nothing in this Act contained
    shall in any way abridge or alter the remedies now existing at
    common law or by statute, but the provisions of this Act are in
    addition to such remedies."

[^112]: Public Citizen Comments at 17-18; Texas Comments at 5, 10;
    Smilow SBMS Comments at 12. *But see* AirTouch Comments at 14; AT&T
    Comments at 20-21; GTE Comments at 7-8; BAM SBMS Comments at 24-25;
    GTE SBMS Comments at 9; SBMS Reply at 16-18; Sprint SBMS Comments at
    9 n.17.

[^113]: *Nader*, 426 U.S. at 300*.*