Telrite Corp. v. Nebraska Pub. Serv. Comm., 852 N.W.2d 910

Telrite Corp. (doing business as Life Wireless) received Nebraska ETC and NETC designations on May 29, 2013, permitting participation in federal and state Lifeline subsidy programs.
Six weeks later Telrite held a 1-day outdoor enrollment event in Omaha using the wrong, non-Nebraska enrollment form; turnout exceeded expectations and there were complaints about crowding, heat, and running out of phones.
Telrite admitted the error, stopped Nebraska enrollments voluntarily, proposed corrective measures (re-enrollment with correct forms, revised outreach, and operational changes), and acknowledged inadequate contractor training and oversight.
The Nebraska Public Service Commission (PSC) issued a show-cause order, then revoked Telrite’s ETC/NETC designation and ordered it to cease offering Lifeline in Nebraska. The PSC cited failure to comply with state requirements and concerns about fraud and oversight.
Telrite appealed; the Nebraska Supreme Court reviewed the PSC order de novo under amended Neb. Rev. Stat. § 75-136(2) and concluded revocation and a cease-and-desist were excessive given the facts and statutory purposes.

Issue	Plaintiff's Argument (Telrite)	Defendant's Argument (PSC)	Held
Whether PSC’s revocation and cease-and-desist constituted an excessive penalty	Penalty is excessive; violations were limited (wrong form, one-day event), Telrite accepted responsibility and proposed remediation	Revocation justified by failures to follow state-specific rules, risk of fraud, and short time after designation	Court held penalty excessive; reversed and remanded for further proceedings
Whether PSC had authority to revoke an ETC designation	(Assigned error) Telrite disputed PSC’s exercise of authority to revoke	PSC maintained statutory authority to regulate ETC/NETC conduct and impose sanctions	Court did not decide remaining assignments of error because remedy was excessive; did not reach authority question
Whether Telrite violated PSC rules/regulations	Telrite conceded using wrong form but argued mistakes were administrative and remediable	PSC asserted Telrite violated rules/orders and failed required procedures	Court found record showed error but not evidence of fraud or willful systemic noncompliance; sanction disproportionate
Whether PSC followed its own rules in imposing sanction	Telrite argued PSC failed to apply or identify specific rules and failed to consider lesser remedies	PSC argued deference to its policy judgment and concern about fund abuse	Court applied de novo review and held PSC must reappraise penalty; remand required (no further ruling on procedural compliance)

Sherman v. Neth, 19 Neb. App. 435, 808 N.W.2d 365 (2011) (Court of Appeals holding regarding public-road inference in sworn reports, later addressed by Nebraska Supreme Court)
Sherman v. Neth, 283 Neb. 895, 813 N.W.2d 501 (2012) (Nebraska Supreme Court decision vacating Court of Appeals’ holding on other grounds)
In re Margaret Mastny Revocable Trust, 281 Neb. 188, 794 N.W.2d 700 (2011) (discusses standards of appellate review)
In re Claims Against Atlanta Elev., Inc., 268 Neb. 598, 685 N.W.2d 477 (2004) (addresses deference to PSC under prior review standard)
In re Application of Jantzen, 245 Neb. 81, 511 N.W.2d 504 (1994) (discusses PSC expertise and appellate review)
Chase 3000, Inc. v. Nebraska Pub. Serv. Comm., 273 Neb. 133, 728 N.W.2d 560 (2007) (prior review framework under Administrative Procedure Act)