Does Tennessee's lower 53-cent 911 fee for prepaid wireless apply to unlimited monthly plans, or does the full $1.00 charge apply?

Subject

Opinion No. 13-43, Emergency Telephone Charges on Wireless Phone Service, June 5, 2013

Plain-English summary

Tennessee imposes a 911 emergency telephone service charge on wireless phone subscribers. There are two charge tracks under the relevant statutes:

• General wireless charge. Tenn. Code Ann. § 7-86-108(a)(1)(B)(i)(a): a flat statewide rate set by the Tennessee Emergency Communications Board, currently (in 2013) $1.00 per month.
• Prepaid wireless charge. Tenn. Code Ann. § 7-86-128(b)(1)(A): a 53-cent charge "in lieu of" the § 7-86-108 charge, but only for "prepaid wireless telecommunications service."

The question Sen. Burks asked: does an unlimited prepaid plan (flat monthly fee, unlimited minutes, no declining-balance feature) qualify for the 53-cent prepaid rate, or does it have to pay the full $1.00 general charge?

The AG concluded the $1.00 charge applies, not the 53-cent prepaid charge. The reason is the statutory definition of "prepaid wireless telecommunications service" at § 7-86-128(a)(5):

a wireless telecommunications service that allows a caller to dial 911 to access the 911 system, which service must be paid for in advance and is sold in predetermined units or dollars of which the number declines with use in a known amount.

The "declines with use" requirement is the key. Traditional prepaid plans (buy a card with $20 or 60 minutes; balance drops as you use the phone) fit this definition. Unlimited monthly plans (pay $50/month flat, talk all you want, balance never declines based on use) don't. Use doesn't decrease the available balance.

When statutes are unambiguous, courts apply plain meaning. Rich v. Tennessee Bd. of Medical Examiners, 350 S.W.3d 919, 926 (Tenn. 2011); State v. Flemming, 19 S.W.3d 195, 197 (Tenn. 2000). The 53-cent rate is an exception to the general rule; it applies only when the statutory conditions are met. Reading the exception to cover unlimited plans would improperly substitute the exception for the default.

So the AG's bottom line: unlimited prepaid plans are subject to the full $1.00 statewide 911 charge under § 7-86-108, not the 53-cent prepaid charge under § 7-86-128.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Tennessee's 911 charge framework has been amended since 2013, and the specific dollar amounts have likely changed. Anyone advising on a current 911 surcharge question should pull the current §§ 7-86-108 and 7-86-128 and check with the Tennessee Emergency Communications Board for current rates.

Background and statutory framework

The general wireless charge. Tenn. Code Ann. § 7-86-108(a)(1)(B)(i):

Effective April 1, 1999, commercial mobile radio service (CMRS) subscribers and users shall be subject to the emergency telephone service charge, a flat statewide rate, not to exceed the business classification rate established in subdivision (a)(2)(A). The specific amount of such emergency telephone service charge, and any subsequent increase in such charge, shall be determined by the board, but must be ratified by a joint resolution of the general assembly prior to implementation.

In 2013, the Emergency Communications Board confirmed the rate was $1.00. This rate applies broadly to commercial mobile radio service subscribers and users.

The prepaid wireless exception: § 7-86-128. Lower charge of 53 cents (or adjusted amount per § 7-86-128(b)(6)) imposed on each retail transaction "in lieu of" the § 7-86-108 charge.

The defining condition: § 7-86-128(a)(5). "Prepaid wireless telecommunications service" requires service that is (1) paid in advance, AND (2) sold in predetermined units or dollars of which the number "declines with use in a known amount."

Application to unlimited plans. Unlimited prepaid plans:

• Are paid in advance (each month's fee paid before that month's service). Satisfies condition (1).
• But the units don't decline with use. Whether you make 1 call or 1,000 calls, your balance is the same: full access until the end of the month. Fails condition (2).

Because both conditions must be met for § 7-86-128 to apply, unlimited prepaid plans don't qualify. The default § 7-86-108 charge applies.

Why the legislature distinguished. The opinion didn't explore policy, but the design makes sense. The 53-cent prepaid rate was set knowing that prepaid customers (who pay one-time fees for small amounts of service) generate fewer 911 calls on average than postpaid customers and so contribute less revenue. The legislature picked a discounted rate for these one-time, declining-balance transactions. Unlimited monthly plans look more like postpaid plans (regular recurring fees, ongoing service), so the legislature presumably wanted them to pay the standard rate.

Statutory construction. Rich v. Tennessee Bd. of Medical Examiners and State v. Flemming: read the statutory language in its natural, ordinary meaning within the context of the entire statute, without forced or subtle construction. The 53-cent rate is an exception to the general rule, and exceptions are construed narrowly.

Common questions

What's the difference between the $1.00 and 53-cent 911 charges?

The $1.00 charge under § 7-86-108 is the default for commercial mobile radio service. The 53-cent charge under § 7-86-128 is a discounted rate for true prepaid plans where the user pays a one-time amount that declines as they use the phone. The 53-cent rate "in lieu of" the $1.00 rate means the discounted rate replaces the default — but only for plans that meet the statutory definition.

Why are unlimited monthly plans treated differently?

The statutory definition of "prepaid wireless telecommunications service" requires "units or dollars of which the number declines with use." Unlimited plans don't have a declining balance. Whether the user makes one call or a thousand calls, the available service is the same. So unlimited plans don't fit the definition, even if they're billed in advance.

What about a monthly plan with a usage cap (say 1000 minutes per month)?

The opinion didn't address this directly. A capped plan has a unit count that declines with use within the month (1000 minutes used = 0 minutes available). It might qualify for the 53-cent rate, depending on how the plan is structured. The key question is whether the "predetermined units" decline as the user makes calls.

How does this affect what carriers must collect?

Carriers selling unlimited prepaid plans must collect the full $1.00 statewide charge from each subscriber, not the 53-cent prepaid charge. Carriers selling true prepaid (declining balance) plans collect the 53 cents per retail transaction.

What if a seller is unsure how to categorize a plan?

The AG noted that § 7-86-128(b)(1)(B) lets a seller elect not to apply the charge for minimal transactions (10 minutes or less, or $5 or less). For larger transactions, the seller would need to assess whether the plan is true prepaid (declining balance) or unlimited (flat fee).

Citations

Tenn. Code Ann. § 7-86-108 (general 911 charge); § 7-86-128 (prepaid wireless charge, especially subsections (a)(5) and (b)(1)). Cases: Rich v. Tennessee Bd. of Medical Examiners, 350 S.W.3d 919 (Tenn. 2011); State v. Flemming, 19 S.W.3d 195 (Tenn. 2000).

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2013/op13-043.pdf

Original opinion text

S T A T E O F T E N N E S S E E
OFFICE OF THE
ATTORNEY GENERAL
PO BOX 20207
NASHVILLE, TENNESSEE 37202

June 5, 2013

Opinion No. 13-43

Emergency Telephone Charges on Wireless Phone Service

QUESTIONS

1. Does a wireless cell phone service plan that has a flat fee due each month prior to use but does not have an associated amount of dollars or minutes which decline with use (also known as an unlimited prepaid plan) satisfy the requirements of Tenn. Code Ann. § 7-86-128(a)(5) for "prepaid wireless emergency telephone service"?

2. If such a wireless service plan does not qualify as "prepaid wireless emergency telephone service" pursuant to Tenn. Code Ann. § 7-86-128, should those plans carry the statewide 911 service charge set pursuant to Tenn. Code Ann. § 7-86-108(a)(1)(B)(i)(a)?

OPINIONS

1. No, a wireless cell phone service plan for which a flat fee is charged each month before use but which is not "sold in predetermined units or dollars of which the number declines with use in a known amount" does not satisfy the requirements of Tenn. Code Ann. § 7-86-128.

2. Yes, a plan of this type should carry the statewide 911 service charge of $1.00 set pursuant to Tenn. Code Ann. § 7-86-108(a)(1)(B)(i)(a).

ANALYSIS

All "commercial mobile radio service" subscribers and users in Tennessee are required to pay an emergency telephone service charge at a flat statewide rate, which is set by the Tennessee Emergency Communications Board. Tenn. Code Ann. § 7-86-108(a)(1)(B)(i). This statute specifically provides as follows:

Effective April 1, 1999, commercial mobile radio service (CMRS) subscribers and users shall be subject to the emergency telephone service charge, a flat statewide rate, not to exceed the business classification rate established in subdivision (a)(2)(A). The specific amount of such emergency telephone service charge, and any subsequent increase in such charge, shall be determined by the board, but must be ratified by a joint resolution of the general assembly prior to implementation.

Tenn. Code Ann. § 7-86-108(a)(1)(B)(i)(a). The Emergency Communications Board has advised this Office that the statewide rate is currently set at $1.00.

A separate "prepaid wireless emergency telephone service charge" for the purchase of "prepaid wireless telecommunications service" is established by Tenn. Code Ann. § 7-86-128. The term "prepaid wireless telecommunications service" means

a wireless telecommunications service that allows a caller to dial 911 to access the 911 system, which service must be paid for in advance and is sold in predetermined units or dollars of which the number declines with use in a known amount.

Tenn. Code Ann. § 7-86-128(a)(5) (emphasis added). A statewide prepaid wireless emergency telephone service charge is imposed in place of the emergency telephone service charge contained in Tenn. Code Ann. § 7-86-108(a)(1)(B)(i) as follows:

A statewide prepaid wireless emergency telephone charge of fifty-three cents (53¢), or an adjusted amount as provided in subdivision (b)(6), shall be imposed on each retail transaction in lieu of the charge imposed pursuant to § 7-86-108.

Tenn. Code Ann. § 7-86-128(b)(1)(A). The seller may elect not to apply this charge if a minimal amount of prepaid wireless telecommunications service is sold, minimal meaning ten minutes or less or five dollars or less. Tenn. Code Ann. § 7-86-128(b)(1)(B).

A prepaid wireless telecommunications service plan that requires a monthly payment before use but provides an unlimited number of minutes does not qualify for the charge of fifty-three cents established by Tenn. Code Ann. § 7-86-128(b)(1)(A), since the service available does not decline with use and the fee must be paid every month in full even if the phone is not used at all. In contrast, some wireless phone service is offered for a one-time payment in a specific dollar amount, with such payment entitling the user to a fixed amount of phone time. The usage available then declines, measured either in terms of the dollar amount or the number of minutes remaining, as a result of the user's using the phone; thus, the remaining available units "decline with use." This is the only type of service that fits the definition of "[p]repaid wireless emergency telephone service" in Tenn. Code Ann. § 7-86-128(a)(5), and thus it is the only type of service to which the telephone service charge in § 7-86-128(b)(1)(A) applies. See Rich v. Tennessee Bd. of Medical Examiners, 350 S.W.3d 919, 926 (Tenn. 2011); State v. Flemming, 19 S.W.3d 195, 197 (Tenn. 2000).

In summary, the lower charge established in Tenn. Code Ann. § 7-86-128(b)(1)(A), which imposes a fifty-three cent charge "in lieu of the charge imposed pursuant to § 7-86-108," applies only if the conditions stated in § 7-86-128(a)(5) are met. This structure thus requires that the charge for emergency telephone service imposed under Tenn. Code Ann. § 7-86-108 continues to apply to other types of service plans. Those plans would presumably be ones that do not have an associated dollar or minute amount that "declines with use." Applying the lower charge to plans in which a flat fee is required and in which no gradual reduction in available use occurs would improperly substitute the exception established under Tenn. Code Ann. § 7-86-128(b)(1)(A) for the default charge set under Tenn. Code Ann. § 7-86-108(a)(1)(B)(i)(a).

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

JONATHAN N. WIKE
Senior Counsel

Requested by:
The Honorable Charlotte Burks
State Senator
304 War Memorial Building
Nashville, Tennessee 37243