Wireless carriers were handed a legal defeat on Tuesday, as the U.S. Supreme Court turned down an industry appeal of a decision, handed down by the Eleventh Circuit Court of Appeals, which overturned an FCC order extending “truth-in-billing” rules to cell phone operators. At issue are state regulations that prohibit wireless firms from breaking out state and local government taxes as separate line items on customer bills. In 2005, the FCC ruled that states cannot prohibit wireless companies from listing taxes as line items because such taxes qualify as “rates charged” and do not constitute “other terms and conditions” that state governments may regulate under federal law. Arguing that they should be able to create a visible boundary between their service rates and taxes and other fees imposed by the state, Sprint Nextel, T-Mobile and other mobile phone carriers maintain that the passage of state laws against line items represents an attempt to “hide” unpopular taxes and other fees from wireless consumers. States, on the other hand, assert that carriers should raise their rates to offset the taxes as such taxes are not intended to be passed on to the consumer as line item fees. In 2006, the Eleventh Circuit remanded the FCC’s order, concluding that line items breaking out taxes and other fees constitute “other terms and conditions” that fall under state jurisdiction. Without comment, the high court refused to consider an appeal of the Eleventh Circuit decision filed by Sprint Nextel and T-Mobile. The FCC is reportedly considering other grounds on which to preempt such state regulation of the wireless industry.