TracFone Wireless v. Nebraska Pub. Serv. Comm.

of our decision in Hausmann24 and the principles articulated in
this opinion.
ConClusion
The Court of Appeals erred in concluding it lacked jurisdic-
tion over this appeal, because the appellants’ notice of appeal
was filed within 30 days of the final, appealable April 24,
2008, order from which they sought to appeal. And we con-
clude that the cause should be remanded to the district court for
further proceedings. Therefore, we reverse the judgment of the
Court of Appeals and remand the cause to the Court of Appeals
with directions to remand the cause to the district court for
further proceedings.
R eveRsed and Remanded with diRections.
24 Hausmann, supra note 4.
tRac Fone wiReless , inc., appellant, v. nebRaska public
seRvice commission, appellee .
778 n.W.2d 452
Filed February 12, 2010. 	no. s-08-1109.
1. Administrative Law: Judgments: Appeal and Error. A judgment or final order
rendered by a district court in a judicial review pursuant to the Administrative
Procedure Act, neb. Rev. stat. §§ 84-901 to 84-920 (Reissue 2008 & supp.
2009), may be reversed, vacated, or modified by an appellate court for errors
appearing on the record. When reviewing an order of a district court under the
Administrative Procedure Act for errors appearing on the record, the inquiry is
whether the decision conforms to the law, is supported by competent evidence,
and is neither arbitrary, capricious, nor unreasonable.
2. Administrative Law: Statutes: Appeal and Error. The meaning of a statute
is a question of law, and a reviewing court is obligated to reach its conclusion
independently of the court below and the administrative agency.
3. Statutes: Appeal and Error. When construing a statute, an appellate court
must look to the statute’s purpose and give to the statute a reasonable construc-
tion which best achieves that purpose, rather than a construction which would
defeat it.
4. Statutes: Intent: Appeal and Error. in construing a statute, an appellate court
looks to the statutory objective to be accomplished, the evils and mischiefs sought
to be remedied, and the purpose to be served.
426 	279 nebRAskA RePoRTs
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:47 AM CST

5. Statutes: Appeal and Error. An appellate court construes statutes relating to the
same subject matter together to maintain a sensible and consistent scheme, so that
effect is given to every provision.
6. Rules of Evidence: Words and Phrases. Adjudicative facts within the meaning
of neb. evid. R. 201, neb. Rev. stat. § 27-201 (Reissue 2008), are simply the
facts developed in a particular case, as distinguished from legislative facts, which
are established truths, facts, or pronouncements that do not change from case to
case but apply universally. The adjudicative facts are those to which the law is
applied in the process of adjudication.
7. Administrative Law: Judicial Notice: Legislature: Appeal and Error.
legislative history is judicially noticeable by an appellate court and by the dis-
trict court in an administrative proceeding.
Appeal from the District Court for lancaster County: steven
d. buRns, Judge. Affirmed.
stephen M. bruckner and Russell A. Westerhold, of Fraser
stryker, P.C., l.l.o., and Mitchell F. brecher, of Greenberg
Traurig, l.l.P., for appellant.
Jon 	bruning, Attorney 	General, 	and 	l. 	Jay 	bartel 	for
appellee.
heavican, 	c.J., 	wRight, 	connolly, 	geRRaRd, 	stephan,
mccoRmack, and milleR-leRman, JJ.
geRRaRd, J.
i. nATuRe oF CAse
The enhanced Wireless 911 services Act (911 Act)1 requires
wireless telecommunications carriers to collect a surcharge on
wireless service for the purpose of implementing enhanced 911
emergency dispatch service, which can be loosely described as
providing public safety agencies with identification and location
information for wireless 911 callers.2 The appellant, TracFone
Wireless, inc. (TracFone), is in the business of selling prepaid
wireless service. At issue in this appeal is the method by which
TracFone should be required to collect the 911 Act surcharge
from its prepaid wireless customers.
1 neb. Rev. stat. §§ 86-442 to 86-470 (Reissue 2008).
2 see §§ 86-448 and 86-463.
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	427
Cite as 279 neb. 426

ii. bACkGRounD
The 911 Act expresses
the intent of the legislature that . . . all users of prepaid
wireless services pay an amount comparable to the amount
paid by users of wireless services that are not prepaid in
support of statewide wireless enhanced 911 service. it is
also the intent of the legislature that whenever possible
such amounts be collected from the users of such prepaid
wireless services.3
under the 911 Act, the nebraska Public service Commission
(Commission) is to establish surcharges for prepaid wireless
service comparable to the surcharge assessed on other users of
wireless services and develop methods for collection and remit-
tance of surcharges from wireless carriers offering prepaid
wireless services.4 The Commission did so in a June 19, 2007,
order, providing three preapproved methods that had been
established by a previous version of the 911 Act:
a) The wireless carrier shall divide the total earned pre-
paid wireless telephone revenue received by the wireless
carrier within the monthly reporting period by fifty dollars
and multiply the quotient by the surcharge amount;
b) The wireless carrier shall collect on a monthly
basis the surcharge from each customer’s active, prepaid
account. A customer with two or more active, prepaid
accounts shall be assessed a separate surcharge for each
active, prepaid account; or
c) A wireless carrier shall remit the surcharge upon the
activation of the active prepaid account and upon each
replenishment of additional minutes purchased by the
prepaid customer.5
The June 19 order also noted that “differences between various
prepaid wireless carriers may require additional methods be
made available,” so it provided that “any prepaid wireless car-
rier wishing to utilize a method different than the three adopted
3 § 86-457(4).
4 see § 86-457(5).
5 Compare, 2007 neb. laws, l.b. 661, § 23; 2006 neb. laws, l.b. 1222,
§ 8.
428 	279 nebRAskA RePoRTs

herein, shall file with the Commission for approval a detailed
description of the method it wishes to use.”
TracFone filed such a request. TracFone explained that its
services were entirely prepaid. Therefore, it proposed to col-
lect a surcharge from each customer to whom it directly sold
prepaid wireless service, in an amount equal to 1 percent
of the purchase price. TracFone estimated that the average
wireless customer spends approximately $50 per month on
wireless service and pays a 50-cent surcharge6; therefore, a
1-percent surcharge on TracFone customers was, according to
TracFone, comparable. TracFone explained that unlike other
wireless service providers, TracFone could not deduct a sur-
charge directly from the customer’s account balance, because
the customer’s prepaid account balance was stored in the cus-
tomer’s telephone, in the possession of the customer. TracFone
also noted that it would be unable to collect a surcharge from
customers who did not have a positive balance on the col-
lection date, and that customers would be able to evade the
surcharge by waiting until after the collection date to recharge
their balances.
The Commission rejected TracFone’s proposed alternative.
The Commission noted that only 10 to 15 percent of TracFone’s
revenues are attributable to direct sales. The remaining sales of
prepaid TracFone wireless service time are made by indepen-
dent retail stores, such as Wal-Mart and Radio shack. The
Commission concluded that TracFone’s proposal would not
result in the remittance of surcharges comparable to those
established for users of non-prepaid wireless service, because
the surcharge would fall only on those users who purchased
services directly from TracFone.
TracFone submitted a second proposal. This time, TracFone
proposed to collect a 1-percent surcharge on every retail sale of
TracFone service. TracFone would collect the surcharge on pur-
chases made directly from it, and when service was purchased
from an independent retail vendor, the vendor would collect
the surcharge and give it to TracFone, which would in turn
remit the surcharge to the 911 Act fund. but the Commission
6 see § 86-457(1)(b).
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	429
Cite as 279 neb. 426

rejected TracFone’s second proposal, reasoning that it did not
have jurisdiction over retail vendors who were not telecommu-
nications carriers. TracFone was ordered to use one of the three
methods approved in the June 19, 2007, order or, if it wished
to submit another alternative, use one of the three approved
methods in the interim.
TracFone filed a petition for judicial review under the
Administrative Procedure Act (APA).7 The district court agreed
with the Commission’s rejection of TracFone’s proposed meth-
ods of collection and found no merit to TracFone’s argument
that the Commission’s established methods of surcharge collec-
tion treated prepaid and postpaid wireless carriers differently
in violation of federal law. The court affirmed the decision of
the Commission.
iii. AssiGnMenTs oF eRRoR
TracFone assigns that the district court erred in
(1) determining that TracFone failed to demonstrate that it
was impossible for it to collect the surcharge from users of
its wireless service who purchase its service through indepen-
dent retailers;
(2) determining that the 911 Act requires TracFone to pay
the surcharge established by the act even though TracFone
has no means to collect the surcharge directly from users of
its wireless service who purchase its service through indepen-
dent retailers;
(3) determining that TracFone’s first alternative collection
method did not comply with the 911 Act;
(4) determining that TracFone’s second alternative collection
method did not comply with the 911 Act;
(5) relying upon material not found in the record of the
Commission to rule that TracFone’s second alternative collec-
tion method did not comply with the 911 Act;
(6) determining that TracFone should be required to adopt one
of the three established methods approved by the Commission
for the collection of the 911 Act surcharge; and
7 see neb. Rev. stat. §§ 84-901 to 84-920 (Reissue 2008 & supp. 2009).
see, also, neb. Rev. stat. § 75-136 (Reissue 2009).
430 	279 nebRAskA RePoRTs

(7) determining that the Commission’s interpretation of the
911 Act was not preempted by federal law.
iv. sTAnDARD oF RevieW
[1] A judgment or final order rendered by a district court
in a judicial review pursuant to the APA may be reversed,
vacated, or modified by an appellate court for errors appear-
ing on the record. When reviewing an order of a district court
under the APA for errors appearing on the record, the inquiry
is whether the decision conforms to the law, is supported
by competent evidence, and is neither arbitrary, capricious,
nor unreasonable.8
[2] The meaning of a statute is a question of law, and a
reviewing court is obligated to reach its conclusion indepen-
dently of the court below and the administrative agency.9
v. AnAlysis
because it underlies many of the parties’ more specific argu-
ments, we begin with a more complete examination of § 86-457,
which establishes how wireless telecommunications carriers
are to collect surcharges and remit them to the Commission
to fund the implementation of enhanced 911 service. section
86-457 provides in part:
(1) each wireless carrier shall collect:
(a) A surcharge of up to seventy cents, except as
provided in subdivision (1)(b) of this subsection and as
otherwise provided in this section with respect to pre-
paid wireless service, on all active telephone numbers or
functional equivalents every month from users of wireless
service and shall remit the surcharge in accordance with
section 86-459; or
(b) A surcharge of up to fifty cents, except as otherwise
provided in this section with respect to prepaid wireless
service, on all active telephone numbers or functional
equivalents every month from users of wireless service
8 Children’s Hospital v. State, 278 neb. 187, 768 n.W.2d 442 (2009).
9 see Holmes v. State, 275 neb. 211, 745 n.W.2d 578 (2008).
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	431
Cite as 279 neb. 426

whose primary place of use is in a county containing a
city of the metropolitan class and shall remit the sur-
charge in accordance with section 86-459.
The wireless carrier is not liable for any surcharge not
paid by a customer.
(2) except as otherwise provided in this section, the
wireless carrier shall add the surcharge to each user’s bill-
ing statement. The surcharge shall appear as a separate
line-item charge on the user’s billing statement and shall
be labeled as “enhanced Wireless 911 surcharge” or a
reasonable abbreviation of such phrase.
(3) if a wireless carrier, except as otherwise provided
in this section, resells its service through other entities,
each reseller shall collect the surcharge from its custom-
ers and shall remit the surcharge in accordance with sec-
tion 86-459.
(4) it is the intent of the legislature that, effective
July 1, 2007, all users of prepaid wireless services pay
an amount comparable to the amount paid by users
of wireless services that are not prepaid in support of
statewide wireless enhanced 911 service. it is also the
intent of the legislature that whenever possible such
amounts be collected from the users of such prepaid
wireless services.
(5) The [C]ommission shall establish surcharges com-
parable to the surcharge assessed on other users of wire-
less services and shall develop methods for collection
and remittance of such surcharges from wireless carriers
offering prepaid wireless services.
(6) The duty to remit any surcharges established pursu-
ant to subsection (5) of this section is the responsibility of
the wireless carrier.
As will become evident, the interpretation of § 86-457 is one
of the fundamental disagreements between the parties. The
Commission argues that subsections (1) through (3) should be
read as exclusively applying to traditional “postpaid” wireless
services, while subsections (4) through (6) apply to prepaid
wireless services such as TracFone’s. TracFone disagrees. As
explained below, we agree with the Commission.
432 	279 nebRAskA RePoRTs

1. tRac Fone is R equiRed to R emit suRchaRges
R egaRdless oF whetheR they aRe diRectly
collected FRom customeRs
TracFone’s first two assignments of error are related. First,
TracFone contends that it is impossible for it to collect sur-
charges directly from its customers. And second, TracFone
contends that if it cannot collect a surcharge directly from its
customers, it is not required to remit the surcharge. in that
regard, TracFone relies on § 86-457(1), which provides in rele-
vant part that a “wireless carrier is not liable for any surcharge
not paid by a customer.”
but § 86-457(1) imposes surcharges on wireless service cus-
tomers “except as otherwise provided . . . with respect to pre-
paid wireless service.” And TracFone’s argument is contrary to
§ 86-457(4), which expressly applies to prepaid wireless serv-
ices and states that comparable surcharges should “whenever
possible . . . be collected from the users of such prepaid wire-
less services.” in accordance with that, § 86-457(5) requires the
Commission to develop methods for “collection and remittance
of such surcharges from wireless carriers offering prepaid wire-
less services.”
[3-5] We have often said that when construing a statute, we
must look to the statute’s purpose and give to the statute a rea-
sonable construction which best achieves that purpose, rather
than a construction which would defeat it.10 We look to the
statutory objective to be accomplished, the evils and mischiefs
sought to be remedied, and the purpose to be served.11 And we
construe statutes relating to the same subject matter together
to maintain a sensible and consistent scheme, so that effect is
given to every provision.12
When this statute is read as a whole, it is apparent that
§ 86-457(1), upon which TracFone’s argument depends, applies
to postpaid wireless services, not prepaid wireless services.
10 see Gilbert & Martha Hitchcock Found. v. Kountze, 272 neb. 251, 720
n.W.2d 31 (2006).
11 see Premium Farms v. County of Holt, 263 neb. 415, 640 n.W.2d 633
(2002).
12 see Deuth v. Ratigan, 256 neb. 419, 590 n.W.2d 366 (1999).
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	433
Cite as 279 neb. 426

The evident purpose of providing that a wireless carrier “is not
liable for any surcharge not paid by a customer” of postpaid
wireless service is to relieve the wireless carrier of responsi-
bility for surcharges owed by wireless customers who do not
pay their bills. it was not intended to relieve a wireless carrier
of responsibility for remitting surcharges assessed for wireless
customers who pay their bills in advance.
instead, § 86-457(4) provides that surcharges should be col-
lected from prepaid wireless customers “whenever possible”—
language that clearly contemplates circumstances in which
such direct collection is not possible. nonetheless, the duty to
remit those surcharges remains, pursuant to § 86-457(6), the
responsibility of the wireless carrier.
TracFone counters with an attempt to distinguish a duty to
“pay” the surcharges with the duty to “remit” the surcharges.
TracFone cites no authority for its rather novel interpretation of
the word “remit,” nor are we aware of any. To “remit” money
is simply to transmit or send it as payment.13 The legislature’s
use of the word “remit” to describe a wireless carrier’s duty to
ensure that the Commission receive the surcharges provides no
basis for distinguishing between surcharges collected directly
from postpaid wireless customers and surcharges assessed for
prepaid wireless service.
TracFone also relies on § 86-459, which requires wireless
carriers to remit to the Commission “the amounts collected
pursuant to section 86-457.” TracFone asserts that § 86-459
reveals the legislature’s intent to require a wireless carrier to
remit only surcharges collected directly from customers. but
§ 86-459 is not limited to amounts collected from custom-
ers—it requires remittance of all “amounts collected pursuant
to section 86-457,” which includes surcharges assessed on pre-
paid wireless customers pursuant to § 86-457(5).
in sum, TracFone’s argument is that if a wireless carrier
is unable to collect a surcharge directly from a customer, the
legislature intended for neither the carrier nor the customer
to pay it. This is contrary to the stated intent of the 911 Act,
and to a commonsense reading of the statutory language.
13 see black’s law Dictionary 1409 (9th ed. 2009).
434 	279 nebRAskA RePoRTs

TracFone’s choice of business model does not give it license
to throw up its hands and pay nothing. instead, the surcharge
should be collected from a wireless carrier’s prepaid customers
“whenever possible.”14 When that is not possible, a “compa-
rable” surcharge will be assessed by the Commission, and the
duty to remit that surcharge is the carrier’s responsibility.15
in this case, it is TracFone’s, and TracFone’s first and second
assignments of error are without merit.
2. commission did not eRR in R eJecting
tRac Fone’s pRoposed alteRnative
methods oF collection
TracFone’s next two assignments of error are directed at the
Commission’s rejection of its two proposed alternative methods
of collecting the surcharge. We address each proposed alterna-
tive in turn.
(a) TracFone’s First Proposed Alternative Collection
Method Was inconsistent With § 86-457
TracFone’s first proposed alternative collection method was
to collect a 1-percent surcharge on the purchase price of
each sale of prepaid wireless service purchased directly from
TracFone. The Commission rejected this alternative. in arguing
that the Commission erred, TracFone relies on § 86-457(4),
which, as discussed above, declares the legislature’s intent
that surcharges be collected from the users of prepaid wireless
services “whenever possible.” TracFone asserts that it is only
“possible” for it to collect surcharges from its sales directly
to customers.
but only 10 to 15 percent of TracFone’s sales are direct.
TracFone’s remaining sales are made through independent
retailers, and under TracFone’s first proposed alternative collec-
tion method, no surcharge would be collected from, or paid for,
those sales. This would be contrary to the expressed intent of
the legislature that “all users of prepaid wireless services pay
an amount comparable to the amount paid” by other wireless
14 see § 86-457(4).
15 see § 86-457(5) and (6).
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	435
Cite as 279 neb. 426

customers.16 As discussed above, TracFone is not relieved of
the responsibility for remitting the surcharge, regardless of
whether it is “possible” to collect the surcharge directly from
its customers. Therefore, the Commission did not err in reject-
ing this proposed alternative, and TracFone’s assignment of
error to the contrary is without merit.
(b) TracFone’s second Proposed Alternative Collection
Method Was outside Commission’s Jurisdiction
TracFone’s second proposed alternative collection method
was essentially a supplemented version of the first. TracFone
proposed to collect a 1-percent surcharge on the purchase price
of each sale of prepaid wireless service purchased directly
from TracFone and require its third-party vendors to collect a
1-percent surcharge from users at the point of sale, which would
be remitted to TracFone for remittance to the Commission. The
Commission rejected this alternative as being outside its regu-
latory authority.
The Commission’s jurisdiction extends to a wide variety
of commercial activities: common carriers; grain dealing and
storage; manufactured homes, modular housing units, and rec-
reational vehicles; motor carrier registration and safety; pipe-
line carriers and rights-of-way; railroad carrier safety; tele-
communications carriers; transmission lines and rights-of-way;
water service; and certain natural gas public utilities.17 nothing
in § 75-109.01 gives the Commission jurisdiction over third-
party vendors that do not fall within those categories. TracFone
does not argue otherwise.
instead, TracFone’s argument rests entirely upon § 86-457(3),
which provides that if a wireless carrier “resells its service
through other entities, each reseller shall collect the surcharge
from its customers and shall remit the surcharge” to the
Commission. The 911 Act does not define “reseller.” TracFone
argues that its third-party vendors are “resellers” within the
meaning of § 86-457(3).
16 see § 86-457(4).
17 see neb. Rev. stat. § 75-109.01 (Reissue 2009). see, also, neb. Rev. stat.
§ 66-1802(13) (Reissue 2009).
436 	279 nebRAskA RePoRTs

but as explained above, § 86-457(3) applies to postpaid wire-
less services, not prepaid wireless services such as TracFone’s.
And contrary to TracFone’s second proposal, § 86-457(3)
requires resellers, not the initial wireless carrier, to remit sur-
charges to the Commission—requiring the Commission to exer-
cise jurisdiction over the reseller. There is simply no indication
that § 86-457(3) was intended to extend the Commission’s
jurisdiction to every gas station or grocery store that sells a
prepaid calling card.
And the legislative history of the 911 Act buttresses this con-
clusion, indicating that the legislature intentionally “omit[ted]
any reference to collection of the surcharge by the retail
industry who resells this prepaid wireless service,” because
it “did not believe that the . . . Commission should have the
authority over the retail industry to collect a telecommunica-
tions surcharge.”18 The legislative history explains that under
§ 86-457(3), “[i]f a carrier resells its service, each reseller shall
collect the surcharge, except with respect to resellers of prepaid
service, which are addressed in a later subsection.”19 And in
that later subsection, § 86-457(6), the legislature struck pro-
posed language “authorizing the collection from an entity that
resells the prepaid wireless service, and insert[ed] a provision
that the duty to remit the surcharge is the responsibility of the
wireless carrier.”20
because TracFone’s second proposed alternative was beyond
the Commission’s authority to adopt or enforce, the Commission
did not err in rejecting it. We find no merit to TracFone’s fourth
assignment of error.
3. distRict couRt did not eRR in consideRing
legislative histoRy
The district court, like this court, found the legislative his-
tory of the 911 Act to support its construction of the statute.
18 Floor 	Debate, 	l.b. 	661, 	Transportation 	and 	Telecommunications
Committee, 100th leg., 1st sess. 12-13 (Mar. 8, 2007).
19 Committee statement, l.b. 661, Transportation and Telecommunications
Committee, 100th leg., 1st sess. 3 (Jan. 30, 2007) (emphasis supplied).
20 Id. at 4.
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	437
Cite as 279 neb. 426

TracFone argues that because under the APA, “the agency
record shall constitute the exclusive basis for agency action in
contested cases under the act and for judicial review thereof,”21
the district court could not consult materials outside the record.
And TracFone argues that the legislative history was an “adju-
dicative fact,”22 which we have said a district court cannot judi-
cially notice in reviewing an administrative order.23 TracFone
also contends that the district court erred in referring to Federal
Communications Commission reference materials for defini-
tions of words in the statute.
[6,7] but we have never construed the APA to preclude a dis-
trict court from researching the law, for obvious reasons. And
the legislative history of a statute is not an adjudicative fact
within the meaning of neb. evid. R. 201. “Adjudicative facts”
within the meaning of rule 201 are simply the facts developed
in a particular case, as distinguished from “legislative facts,”
which are established truths, facts, or pronouncements that
do not change from case to case but apply universally.24 The
adjudicative facts are those to which the law is applied in the
process of adjudication.25 legislative history is among the most
literally “legislative” of facts, and it is well established that it
is judicially noticeable by this court and by the district court in
an administrative proceeding.26
TracFone also argues that the court should not have consid-
ered legislative history, because § 86-457(3) is unambiguous.27
As we explained above, however, neither the plain language of
§ 86-457 nor the legislative history supports TracFone’s posi-
tion. Therefore, the distinction is not a meaningful one.
21 § 84-915.01(4).
22 see neb. evid. R. 201, neb. Rev. stat. § 27-201 (Reissue 2008).
23 see, e.g., Becton, Dickinson & Co. v. Nebraska Dept. of Rev., 276 neb.
640, 756 n.W.2d 280 (2008).
24 Hagelstein v. Swift-Eckrich, 257 neb. 312, 597 n.W.2d 394 (1999).
25 Id.
26 see Dairyland Power Co-op v. State Bd. of Equal., 238 neb. 696, 472
n.W.2d 363 (1991).
27 see, e.g., Scofield v. State, 276 neb. 215, 753 n.W.2d 345 (2008).
438 	279 nebRAskA RePoRTs

in short, the district court did not err in conducting legal
research or consulting legislative history. We find no merit to
TracFone’s fifth assignment of error.
4. commission did not eRR in R equiRing tRac Fone
to use collection method pRovided
in June 19, 2007, oRdeR
in its order rejecting TracFone’s second proposed alterna-
tive collection method, the Commission ordered TracFone to
“immediately adopt and utilize one of the three established
methods set forth in the June 19, 2007 order.” The Commission
ordered TracFone, if it wished to propose another alternative
method, to “continue to utilize one of the three previously
adopted methods . . . pending Commission approval of any
alternative method it may propose.”
TracFone asserts that the Commission’s order runs contrary
to the legislature’s purported intent to permit collection meth-
ods other than the three adopted by the Commission, which
three had previously been required by statute, then repealed
in favor of the Commission’s regulatory process.28 but, to
begin with, we see nothing in the statute that requires the
Commission to permit wireless carriers to suggest their own
methods of collecting surcharges. instead, the statute simply
requires the Commission to establish surcharges and develop
methods for collection and remittance.29 The plain language
of § 86-457(5) permits the Commission to require compliance
with the surcharges and methods for collection and remittance
that it establishes.
And more to the point, § 86-457(4) declared the legislature’s
intent that users of prepaid wireless services pay a comparable
surcharge effective July 1, 2007. by the time the Commission
rejected TracFone’s second proposed alternative, it was April
22, 2008, and the litigation was still ongoing. The Commission
was entitled to require TracFone to comply with § 86-457 in
some way, and was not required to wait until TracFone finally
(if at all) found a mutually acceptable alternative for doing so.
28 see l.b. 661.
29 see § 86-457(5).
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	439
Cite as 279 neb. 426

nor, even now, has TracFone proffered an alternative better
than the two methods that the Commission correctly rejected,
making it difficult to conclude that TracFone was prejudiced by
the Commission’s directive to comply with its June 19, 2007,
order in the meantime.
in short, nothing in § 86-457 required the Commission to
wait for TracFone to exhaust its ingenuity before compelling
it to comply with the 911 Act. We find no merit to TracFone’s
sixth assignment of error.
5. commission’s deteRmination is not pReempted
by F edeRal law
Finally, TracFone argues that the Commission’s determination
is preempted by federal law. The federal Telecommunications
Act of 1996 provides in part:
(a) In general
no state or local statute or regulation, or other state or
local legal requirement, may prohibit or have the effect of
prohibiting the ability of any entity to provide any inter-
state or intrastate telecommunications service.
(b) State regulatory authority
nothing in this section shall affect the ability of a state
to impose, on a competitively neutral basis and consistent
with section 254 of this title, requirements necessary to
preserve and advance universal service, protect the pub-
lic safety and welfare, ensure the continued quality of
telecommunications services, and safeguard the rights
of consumers.
(c) State and local government authority
nothing in this section affects the authority of a state
or local government to manage the public rights-of-way
or to require fair and reasonable compensation from tele-
communications providers, on a competitively neutral and
nondiscriminatory basis, for use of public rights-of-way
on a nondiscriminatory basis, if the compensation required
is publicly disclosed by such government.
(d) Preemption
if, after notice and an opportunity for public comment,
the [Federal Communications] Commission determines
440 	279 nebRAskA RePoRTs

that a state or local government has permitted or imposed
any statute, regulation, or legal requirement that vio-
lates subsection (a) or (b) of this section, the [Federal
Communications] Commission shall preempt the enforce-
ment of such statute, regulation, or legal requirement
to the extent necessary to correct such violation or
inconsistency.30
TracFone argues that the Commission’s order has the effect of
prohibiting its ability to provide telecommunications service,
and is not competitively neutral, so the order is expressly pre-
empted by Congress’ explicit declaration.31
We explained in In re Application of Lincoln Electric System
that § 253(a) imposes a substantive limitation on state and
local governments, while § 253(b) and (c) are “safe harbors” or
exceptions to the general prohibition stated in § 253(a).32 This
means that the “safe harbor” provisions of subsections (b) and
(c) are affirmative defenses to preemption of state and local
exercises of authority that would otherwise violate subsection
(a), and are not implicated unless a regulation is determined to
be prohibitive in the first place.33
And TracFone has not demonstrated that the 911 Act, or the
Commission’s implementation of it, is prohibitive. Although
TracFone claims that it is only required to demonstrate “a
possible prohibition on the provision of services,”34 more recent
federal authority recognizes that under the plain language of
30 47 u.s.C. § 253 (2006).
31 see In re Application of Lincoln Electric System, 265 neb. 70, 655 n.W.2d
363 (2003), overruled on other grounds, Nixon v. Missouri Municipal
League, 541 u.s. 125, 124 s. Ct. 1555, 158 l. ed. 2d 291 (2004).
32 Id.
33 see, Puerto Rico v. Municipality of Guayanilla, 450 F.3d 9 (1st Cir. 2006);
Qwest Corp. v. City of Santa Fe, New Mexico, 380 F.3d 1258 (10th Cir.
2004); BellSouth Telecommunications v. Town of Palm Beach, 252 F.3d
1169 (11th Cir. 2001); Qwest Communications v. City of Berkeley, 202 F.
supp. 2d 1085 (n.D. Cal. 2001).
34 brief for appellant at 39 (emphasis in original). see City of Auburn v.
Qwest Corp., 260 F.3d 1160 (9th Cir. 2001), overruled, Sprint Telephony
PCS, L.P. v. County of San Diego, 543 F.3d 571 (9th Cir. 2008) (en banc),
cert. denied 557 u.s. 935, 129 s. Ct. 2860, 174 l. ed. 2d 576 (2009).
TRACFone WiReless v. nebRAskA Pub. seRv. CoMM. 	441
Cite as 279 neb. 426

§ 253(a), to demonstrate preemption, a party must show actual
or effective prohibition, rather than the mere possibility of pro-
hibition.35 no such showing was made here. section 253(a) has
been held to be violated by circumstances such as outright pro-
hibition of telecommunications service,36 a significantly bur-
densome application process,37 an extensively delayed applica-
tion process,38 or the imposition of costs and fees that would
reduce the carrier’s profit by 86 percent.39 This case presents
nothing comparable.
TracFone argues that it suffers from an “inequitable competi-
tive marketplace” because it is required “to pay the surcharge
‘out of pocket’ when its competitors collect the surcharge from
their customers through billed line items which are clearly
identified as being government-imposed charges, thereby suf-
fering no adverse economic consequence.”40 but nothing pre-
vents TracFone from recouping the surcharge from its custom-
ers or retailers, or explaining its prices to them. We are not
entirely convinced that consumers are persuaded by such line
items to overlook the bottom-line price that they have to pay
for wireless service. A potential customer’s choice to purchase
from TracFone’s competition is not a prohibition of TracFone’s
ability to provide telecommunications service.41
We find nothing in the record to suggest that TracFone was
prohibited from providing telecommunications service within
the meaning of § 253(a). Having reached that conclusion, we
need not consider other complicated questions implicated by
TracFone’s argument, such as whether the 911 Act is competi-
tively neutral within the meaning of § 253(c), whether private
35 see, Sprint Telephony PCS, L.P., supra note 34; Level 3 v. City of St.
Louis, Mo., 477 F.3d 528 (8th Cir. 2007).
36 see In re Application of Lincoln Electric System, supra note 31.
37 see City of Santa Fe, New Mexico, supra note 33.
38 see TCG New York, Inc. v. City of White Plains, 305 F.3d 67 (2d Cir.
2002).
39 see Puerto Rico, supra note 33.
40 brief for appellant at 40.
41 see Time Warner Telecom of Oregon v. City of Portland, 452 F. supp. 2d
1103 (D. or. 2006).
442 	279 nebRAskA RePoRTs

parties have a right to enforce § 253, and whether the doctrine
of primary jurisdiction should apply.42 We find no merit to
TracFone’s final assignment of error.
vi. ConClusion
The Commission did not err in its construction of the 911
Act, in its rejection of TracFone’s proposed alternative col-
lection methods, or in requiring TracFone to comply with its
approved collection methods pending approval of any other
proposal. The district court did not err in affirming those con-
clusions, nor did the court err in relying on legal research and
legislative history in doing so. And neither the 911 Act nor the
Commission’s application of it is preempted by federal law.
Therefore, we affirm the judgment of the district court.
aFFiRmed.
42 see, e.g., Puerto Rico, supra note 33; City of Santa Fe, New Mexico, supra
note 33; TCG New York, Inc., supra note 38; BellSouth Telecommunications,
supra note 33; City of Berkeley, supra note 33.
McCully, inC. v. bACCARo RAnCH 	443
Cite as 279 neb. 443
mccully, inc., doing business as mccully R anch
company, a nebRaska coRpoRation, appellant, v.
baccaRo R anch , a nebRaska limited
liability company, appellee .
778 n.W.2d 115
Filed February 12, 2010. 	no. s-09-372.
1. Motions to Dismiss: Pleadings: Appeal and Error. An appellate court reviews a
district court’s grant of a motion to dismiss de novo, accepting all the allegations
in the complaint as true and drawing all reasonable inferences in favor of the
nonmoving party.
2. Pleadings: Proof. Complaints should be liberally construed in the plaintiff’s
favor and should not be dismissed for failure to state a claim unless it appears
beyond doubt that the plaintiff can prove no set of facts in support of his or her
claim which would entitle the plaintiff to relief.
3. Trial: Attorneys at Law: Appeal and Error. A motion to disqualify an attorney
is addressed to the discretion of the trial court, whose findings will not be dis-
turbed absent evidence of abuse.
4. Actions: Attorneys at Law: Appeal and Error. An attorney disqualification
matter is ancillary to the main case, whether the main case is at law, in equity, or