CTIA - The Wireless Association v. Echols et al

Filing 40

ORDER granting Plaintiff's 14 Motion for Preliminary Injunction and granting Plaintiff-Intervenors' 35 Motion for Preliminary Injunction. Defendants are ENJOINED from giving effect to or enforcing Amended Utility Rule 515-12-1-.35(3)(f) against commercial mobile service providers until further Order by the Court. Signed by Judge Richard W. Story on 12/17/2013. (cem)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CTIA - THE WIRELESS
ASSOCIATION, TELTRITE
CORPORATION, and IWIRELESS LLC,
Plaintiffs,
v.
TIM G. ECHOLS, in his official
capacity as a commissioner of the
Georgia Public Service
Commission, et al.,
Defendants.

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CIVIL ACTION NO.
1:13-CV-399-RWS

ORDER
This case comes before the Court on Plaintiff CTIA’s Motion for
Preliminary Injunction [14] and Plaintiff-Intervenors Teltrite Corporation and iwireless LLC’s Motion for Preliminary Injunction [35]. After conducting a
hearing and considering the submissions of the parties, the Court enters the
following Order.
Background
This case arises out of the Georgia Public Service Commission’s
(“GPSC”) adoption of an amendment to Utility Rule 515-12-1-.35(3)(f)

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(“Amended Rule”) designed to discourage fraud in the Georgia Lifeline
program. Lifeline is a federal program that subsidizes Eligible
Telecommunications Carriers (“ETCs”) to provide low-income households with
access to discounted or free telephone services. (Am. Compl., Dkt. [13] ¶ 2.)
Eligible consumers are limited to one line per household under the Lifeline
program. 47 C.F.R. § 54.400(g). The GPSC has concluded that some
households, however, use multiple subsidized lines. In 2012, the subsidies to
Georgia ETCs “indicated that participation in the program substantially
exceeded 100 percent of the total households that met the eligibility
requirements.” (Defs.’ Resp., Dkt. [22] at 3-4.) To discourage such fraud, on
October 18, 2013, the GPSC adopted the following Amended Rule:
An Eligible Telecommunications Carrier shall either bill and
collect from its Lifeline customers a minimum service rate of $5.00
per month after application of the Federal Lifeline discount or
provide to its Lifeline customers a minimum of 500 minutes of use
per month.
(Order Adopting Rule, Dkt. [13-2] at 4.) According to the GPSC, “unlike with
free service, a minimum charge means that there is a consequence to a
consumer signing up for Lifeline service with multiple ETCs.” (Defs.’ Resp.,
Dkt. [22] at 4-5.)
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On February 5, 2013, Plaintiff CTIA – The Wireless Association filed
this action and now seeks a preliminary injunction to prevent the Amended Rule
from going into effect on January 31, 2014. Plaintiff argues that the Amended
Rule is a preempted rate regulation under the Federal Communications Act of
1934, but Defendants contend that neither of the Amended Rule’s alternative
requirements regulates rates. On November 25, 2013, the Court permitted
Teltrite Corporation and i-wireless LLC to intervene as Plaintiffs in this action.
(Dkt. [33].)
Discussion
To obtain a preliminary injunction, the moving party must demonstrate:
(1) a substantial likelihood of success on the merits; (2) a substantial threat of
irreparable injury if the injunction is not granted; (3) the threatened injury to the
movant outweighs the damage to the opposing party; and (4) granting the
injunction would not be adverse to the public interest. Four Seasons Hotels &
Resorts v. Consorcio Barr, 320 F.3d 1205, 1210 (11th Cir. 2003). “The
preliminary injunction is an extraordinary and drastic remedy not to be granted
unless the movant ‘clearly carries the burden of persuasion’ as to the four

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prerequisites.” United States v. Jefferson Cnty., 720 F.2d 1511, 1518 (11th Cir.
1983) (quoting Canal Auth. v. Callaway, 489 F.2d 567, 573 (5th Cir. 1974)).
The Court finds that Plaintiff has carried its burden on all four elements.
First, Plaintiff has a substantial likelihood of success on the merits. Section
332(c)(3)(A) of the Communications Act expressly preempts state rate
regulation:
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). Defendants argue that the Amended Rule falls in the
“other terms and conditions” category because it is a measure intended to
combat fraud. Nevertheless, the Court finds that the requirement to bill and
collect a minimum service rate of $5.00 per month is clearly a rate regulation.
The alternative minimum service requirement of 500 minutes per month also
regulates rates because the GPSC chose a level of service at which it believed
the ETCs would charge a rate high enough to deter households from signing up
for multiple lines. Accordingly, Plaintiff has shown that there is a substantial

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likelihood that it will succeed on the merits as to both of the Amended Rule’s
requirements.
Second, Plaintiff has shown that it faces a substantial threat of irreparable
injury because it is likely to lose customers and goodwill if it has to raise rates
to comply with the Amended Rule. Third, the threat of harm both to Plaintiff’s
business and its members’ ability to participate in the Lifeline program
outweighs the harm to Defendants of maintaining the status quo. Finally, while
the status quo may permit some level of fraud to continue, the public interest
tilts in favor of providing telephone services to low-income households that
otherwise would be unable to afford mobile phones. Moreover, the preliminary
injunction would not harm the public interest in light of Congress’s preemption
of state regulation in this area.
Because Plaintiff has carried its burden on all four elements to obtain a
preliminary injunction, Plaintiff’s Motion for Preliminary Injunction [14] is due
to be GRANTED. For these same reasons, consistent with PlaintiffIntervenors’ Brief [35-1] adopting Plaintiff’s arguments for the preliminary
injunction, the Court also GRANTS Plaintiff-Intervenors’ Motion for
Preliminary Injunction [35].
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Conclusion
In accordance with the foregoing, Plaintiff’s Motion for Preliminary
Injunction [14] and Plaintiff-Intervenors’ Motion for Preliminary Injunction
[35] are GRANTED. Defendants are ENJOINED from giving effect to or
enforcing Amended Utility Rule 515-12-1-.35(3)(f) against commercial mobile
service providers until further Order by the Court.
SO ORDERED, this 17th

day of December, 2013.

_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE

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