MetroPCS California, LLC v. Picker, No. 18-17382 (9th Cir. 2020)Annotate this Case
Federal law does not facially preempt California law governing universal service contributions from prepaid wireless providers. Federal law requires telecommunications providers, including wireless providers such as MetroPCS, to contribute to the federal Universal Service Fund, which helps provide affordable telecommunications access. California requires its own universal service contributions, adopting the Prepaid Mobile Telephony Services Surcharge Collection Act in 2014, which (prior to its recent expiration) governed the collection of surcharges from prepaid wireless customers. The CPUC issued resolutions implementing the Prepaid Act that required providers of prepaid services to use a method other than the three FCC recognized methods to determine the revenues generated by intrastate traffic that were subject to surcharge. MetroPCS filed suit challenging the CPUC's resolutions.
The panel held that the expiration of the Prepaid Act did not cause this case to become moot and that the panel therefore has jurisdiction to reach the merits of MetroPCS's preemption claim. On the merits, the panel held that preemption is disfavored because there was a dual federal-state regulatory scheme and a history of state regulation in the area of intrastate telecommunications. In this case, the CPUC resolutions are not facially preempted by the Telecommunications Act and related FCC decisions. The panel rejected MetroPCS's argument that the resolutions conflict with the requirement of competitive neutrality by depriving prepaid providers (but not postpaid providers) of the "right" to calculate intrastate revenues in a way that avoids assessing the same revenues as federal contribution requirements. Furthermore, the panel rejected MetroPCS's argument that because prepaid providers are deprived of that "right," the resolutions are preempted regardless of the treatment of competing providers. Therefore, the panel reversed the district court's ruling in favor of MetroPCS and remanded for the district court to consider in the first instance MetroPCS's other challenges to the resolution.