U.S. Chamber Comment Letter to FCC on SIM Card Arbitration

Marlene Dortch
Secretary
Federal Communications Commission
45 L Street, NE Washington, DC 20554

Re: In the Matter of Protecting Consumers from SIM Swap and Port-Out Fraud (WC Docket No. 21-341)

Dear Ms. Dortch:

This letter is submitted on behalf of the U.S. Chamber of Commerce by the Chamber Technology Engagement Center (“C_TEC”) and the U.S. Chamber Institute for Legal Reform (“ILR”). The Chamber created C_TEC to promote the role of technology in our economy and advocate for rational policy solutions that drive economic growth, spur innovation, and create jobs. ILR champions a fair legal system that promotes economic growth and opportunity.

We write regarding the recent further notice of proposed rulemaking in the abovecaptioned matter—in particular, the portion of the notice requesting comment on whether the Commission should “require wireless providers to explicitly exclude resolution of SIM change and port-out fraud disputes from arbitration clauses in providers’ agreements with customers or abrogate such clauses.”1

The Commission should not issue an anti-arbitration rule. Such a rule—suggested by the National Consumer Law Center and the Electronic Privacy Information Center2—would be unlawful because the Commission has no legal authority to regulate arbitration agreements. And it would deprive consumers and the public at large of the significant advantages that arbitration provides. Agreements to resolve consumer disputes through arbitration, including disputes involving wireless services, have been common for decades. These agreements reduce transaction costs and enable fair, speedy, and efficient dispute resolution for all parties.

Our comments focus on two important points.

First, the Commission lacks legal authority to promulgate a rule declaring certain claims off-limits from arbitration or forcing wireless service providers to rewrite their arbitration clauses. Numerous judicial decisions hold that Congress’s decision, embodied in the Federal Arbitration Act (“FAA”), to protect the enforceability of arbitration agreements, may be displaced only by an express contrary command from Congress. Neither the Communications Act of 1934 (as amended by the Telecommunications Act of 1996) nor any other statute relating to the Commission contains any such express command or delegation of such express authority to the Commission.

Second, even if the Commission had the authority to regulate arbitration agreements between wireless service providers and their customers—and it does not—a rule containing the restrictions on arbitration that NCLC and EPIC propose would be arbitrary, capricious, and irrational, and therefore invalid under the Administrative Procedure Act. NCLC and EPIC ignore basic empirical facts, and instead rest their argument entirely on the demonstrably false assertions that arbitration is “unfair” and “expensive” for consumers.3

Full comment letter can be found here.