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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 15, 2003 Decided February 13, 2004
No. 02-1262
CELLCO PARTNERSHIP, D/B/A VERIZON WIRELESS,
PETITIONER
v.
FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS
No. 03–1080
VERIZON TELEPHONE COMPANIES, ET AL.,
PETITIONERS
v.
FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
AT&T CORPORATION AND
CINGULAR WIRELESS LLC,
INTERVENORS
On Petitions for Review of an Order of the
Federal Communications Commission
Andrew G. McBride argued the cause in No. 02–1262 for
petitioner. With him on the brief were Eve Klindera Reed
and John T. Scott III. Lewis A. Tollin entered an appear-
ance.
Richard K. Welch, Counsel, Federal Communications Com-
mission, argued the cause in No. 02–1262 for respondents.
On the brief were Robert H. Pate III, Assistant Attorney
General, Robert B. Nicholson and Robert J. Wiggers, Attor-
neys, John A. Rogovin, General Counsel, John E. Ingle,
Deputy Associate General Counsel, and Laurel R. Bergold,
Counsel.
Andrew G. McBride argued the cause in No. 03–1080 for
petitioners. With him on the briefs were Eve Klindera Reed,
William P. Barr, Michael E. Glover and Edward H. Shakin.
Richard K. Welch, Counsel, Federal Communications Com-
mission, argued the cause in No. 03–1080 for respondents.
With him on the brief were Robert H. Pate III, Assistant
Attorney General, U.S. Department of Justice, Catherine G.
O’Sullivan and Nancy C. Garrison, Attorneys, John A. Rogo-
vin, General Counsel, Federal Communications Commission,
John E. Ingle, Deputy Associate General Counsel, and Laurel
R. Bergold, Counsel. Laurence N. Bourne, Counsel, entered
an appearance.
Peter H. Jacoby, David W. Carpenter, David L. Lawson
and James P. Young were on the brief in No. 03–1080 for
3
intervenor AT&T Corporation. Mark C. Rosenblum entered
an appearance.
Before: RANDOLPH, ROGERS and GARLAND, Circuit Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: Section 11 of the Telecommunica-
tions Act of 1996 (‘‘1996 Act’’) requires the Federal Communi-
cations Commission, upon biennial review, to repeal or modify
any regulation that is ‘‘no longer necessary in the public
interest as the result of meaningful economic competition
between providers of such service.’’ 47 U.S.C. § 161 (2002).
Cellco Partnership d/b/a Verizon Wireless (‘‘Verizon Wire-
less’’) and Verizon Telephone Companies (‘‘Verizon’’) petition
for review of the Commission’s Biennial Regulatory Reviews
for 2000 and 2002, respectively, challenging the Commission’s
interpretation of § 11. Verizon Wireless also challenges the
Commission’s determination to retain two rules, 47 C.F.R.
§ 43.61(a) and § 63.21(i). Because of the chameleon-like
nature of the term ‘‘necessary,’’ whose meaning depends on
its statutory context, we defer to the Commission’s reason-
able interpretation of § 11 as requiring it to apply the same
standard used to adopt regulations under 47 U.S.C. § 201(b)
to determinations of whether the regulations remain neces-
sary in the public interest, and as imposing a time limit for
Commission action only in § 11(a). Absent direction by
Congress for a contrary interpretation, this interpretation
provides internal statutory consistency, avoids absurd results,
and is consistent with Congress’ deregulatory purpose.
We therefore hold, upon rejecting the Commission’s chal-
lenges to our jurisdiction and Verizon Wireless’ standing, that
because § 11 neither mandates the completion of the § 11(b)
proceedings within the biennial year itself nor requires the
Commission to repeal or modify every rule that the Commis-
sion does not determine to be absolutely essential, and thus
does not impose a special evidentiary burden, the Commission
provided an adequate explanation for retention of the two
4
rules challenged by Verizon Wireless. Accordingly, we deny
Verizon Wireless’ petition challenging the Commission’s inter-
pretation of § 11 and its determination to retain the two
rules. In light of our disposition of Verizon Wireless’ peti-
tion, we dismiss Verizon’s petition for lack of jurisdiction.
I.
The Communications Act of 1934 vested broad discretion in
the Commission to regulate interstate and international wire
and radio communications services. See 47 U.S.C. § 151.
Among the responsibilities that Congress assigned to the
Commission is the duty to ‘‘prescribe such rules and regula-
tions as may be necessary in the public interest.’’ Id.
§ 201(b). Its rulemaking authority thus extends to adopting
rules so long as they ‘‘are not an unreasonable means’’ to
achieve ‘‘permissible public-interest goals.’’ FCC v. Nat’l
Citizens Comm. for Broad., 436 U.S. 775, 796 (1978).
In 1993, Congress amended the Communications Act to
provide for the regulation of mobile communications services.
See Omnibus Budget Reconciliation Act of 1993, Pub. L. No.
103–66, Title VI, § 6002(c), 107 Stat. 312 (1993). Commercial
mobile radio services (‘‘CMRS’’) were to be treated as com-
mon carriers subject to Title II of the Communications Act,
which authorizes the Commission to ensure that carriers
comply with applicable statutes. See 47 U.S.C. §§ 201–234.
Congress, however, authorized the Commission to forbear
from applying the provisions of Title II to such carriers upon
determining, among other things, that forbearance ‘‘is consis-
tent with the public interest.’’ 47 U.S.C. § 332(c)(1)(A)(iii).
In making that determination, the Commission must consider
‘‘whether the proposed [forbearance] regulation TTT will pro-
mote competitive market conditions, including the extent to
which such regulation TTT will enhance competition among
providers of commercial mobile services.’’ Id. § 332(c)(1)(C).
Congress further directed the Commission to review CMRS
competitive market conditions and to analyze these conditions
in its annual report. Id.
5
In 1996, by further amendment to the Communications Act,
Congress enacted the Telecommunications Act of 1996 to
ensure ‘‘a pro-competitive, de-regulatory national policy
framework designed to accelerate rapidly private sector de-
velopment of advanced telecommunications and information
technologies and services to all Americans by opening all
telecommunications markets to competition.’’ S. Rep. No.
230, 104th Cong., 2d Sess. 1 (1996). Congress’ broad policy
was to be implemented through Commission rules, but the
1996 Act provided that it ‘‘shall not be construed to modify,
impair or supersede’’ the Communications Act ‘‘unless ex-
pressly so provided.’’ Pub. L. No. 104–104, § 601(c)(1), 110
Stat. 56 (1996), 47 U.S.C. § 152 note. See also AT&T Corp.
v. Iowa Utils. Bd., 525 U.S. 366, 378 n.5 (1999). The 1996 Act
directed the Commission to expedite rulemaking in a variety
of areas, for instance, local competition, universal service, and
portability, see 47 U.S.C. §§ 251(d), 254, 251(b), but also
vested the Commission with general forbearance authority,
id. § 160. As pertinent here, the 1996 Act, Pub. L. No. 104–
104, § 402, amended Title I of the Communications Act by
adding a new § 11, which directed the Commission to under-
take biennial assessments of its rules to determine whether
they should be repealed or modified. 47 U.S.C. § 161. Sec-
tion 11 provides:
(a) Biennial review of regulations. In every even-
numbered year (beginning with 1998), the Commission
(1) shall review all regulations issued under this chapter
in effect at the time of the review that apply to the
operations or activities of any provider of telecommunica-
tions service; and (2) shall determine whether any such
regulation is no longer necessary in the public interest as
the result of meaningful economic competition between
providers of such service.
(b) Effect of determination. The Commission shall re-
peal or modify any regulation it determines to be no
longer necessary in the public interest.
6
Id. (emphasis added).
Consequently, the Commission has undertaken a wholesale
review of its regulations. Initially, the Commission’s ap-
proach was to examine all its rules, not merely those that
were specifically implicated in § 11, to determine whether
repeal or modification might be appropriate. As a result of
the 1998 Biennial Regulatory Review, the Commission initi-
ated 32 proceedings to remove unnecessary regulatory bur-
dens. See 2000 Biennial Regulatory Review Report, 16 FCC
Rcd 1207, 1209 (2001) (‘‘January 2001 Report’’).
The Commission also conducted a comprehensive review of
its regulations in the 2000 Biennial Regulatory Review. With
respect to each rule, staff reports considered the underlying
purposes, the advantages and disadvantages, the impact of
competitive developments, and whether modification or repeal
should be recommended. See Public Notice, Biennial Review
2000 Staff Report Released, 15 FCC Rcd 21084 (2000). As a
result of the 2000 Biennial Review, the Commission adopted
the staff recommendations for modification or repeal of rules
and released an updated staff report in light of comments on
the initial staff report. See January 2001 Report, 16 FCC
Rcd at 1207, 1210. The Commission also reported on the
status of the deregulatory initiatives begun in the 1998 Re-
view, see, e.g., id. at 1207, 1218, 1224, construing § 11 not to
require completion of such initiatives within the biennial year,
id. at 1210, 1212–13. Following notice and comment, the
Commission modified or repealed numerous regulations.
In the international service market, for instance, the Com-
mission removed tariff regulation from interexchange services
provided by non-dominant carriers, see Policy and Rules
Concerning the International, Interexchange Marketplace, 16
FCC Rcd 10647 (2001), adopted streamlined procedures for
processing applications for submarine cable landing licenses,
see Review of Commission Consideration of Applications un-
der the Cable Landing License Act, 16 FCC Rcd 22167
(2001), reduced the notification period in the foreign carrier
affiliation notification rule, and exempted certain classes of
7
foreign carriers from the prior notification requirement, see
Rules and Policies on Foreign Participation in the U.S. Tele-
communications Market, 15 FCC Rcd 18158 (2000). The
Commission also determined to retain 47 C.F.R. § 43.61(a),
which requires common carriers to report annually on their
international telecommunications traffic, and 47 C.F.R.
§ 63.21(i) (as of August 8, 2002, § 63.21(h)), which requires
providers of telecommunications services to give notice of
their foreign affiliations in seeking Commission authorization
to operate. See 2000 Biennial Regulatory Review Report and
Order, Amendments of Parts 43 and 63 of the Commission’s
Rules, 17 FCC Rcd 11416, 11428–30, 11432–34 (2002) (‘‘June
2002 Order’’). The Commission invited comments on any
additional international telecommunications services that
should be modified or repealed as part of the 2002 Biennial
Regulatory Review. See Public Notice, Commission Seeks
Public Comment in 2002 Biennial Review of Telecommunica-
tions Regulations Within the Purview of the International
Bureau, 17 FCC Rcd 18929 (2002).
In the 2002 Biennial Regulatory Review, the Commission
formally addressed the meaning and scope of § 11, and the
Commission’s staff issued a series of reports reviewing and
determining, as to each rule covered by § 11, whether the
rule should be repealed or modified. The Commission, in a
report released March 14, 2003, adopted the staff reports and
its own Report, which incorporated its interpretation of § 11,
stated its intention to issue notices of proposed rulemaking on
the basis of the recommendations in the staff reports, and
solicited applications for review of those recommendations.
See 2002 Biennial Regulatory Review, 18 FCC Rcd 4726, 4740
(2003) (‘‘March 2003 Report’’), available at http://www.
fcc.gov/biennial/.
II.
The petitions for review represent another attempt by the
same parties and the same counsel to elicit from this court a
8
narrow interpretation of the word ‘‘necessary’’ in the deregu-
latory context of the 1996 Act. In Cellular Telecommunica-
tions & Internet Ass’n v. FCC, 330 F.3d 502, 509 (D.C. Cir.
2003) (‘‘CTIA’’), Verizon Wireless failed to persuade the court
in the related context of the Commission’s forbearance au-
thority, 47 U.S.C. § 160(a), to adopt such an interpretation.
Now Verizon Wireless and Verizon seek in tandem petitions
to elicit a narrow construction of ‘‘necessary’’ for § 11 pur-
poses. Verizon does not challenge any particular regulation
addressed by the 2002 Biennial Regulatory Review, but Veri-
zon Wireless challenges the Commission’s determinations in
the 2000 Review to retain § 43.61(a) and § 63.21(i), ultimately
maintaining that in view of the Commission’s ‘‘utter[ ] disre-
gard[ ] [of] a statutory mandate,’’ the court should instruct
the Commission to repeal the regulations. Verizon Wireless
Br. at 14. We address the Commission’s threshold challenges
to Verizon’s petition, and turn thereafter to the merits of
Verizon Wireless’ petition.
The Commission challenges both Verizon’s standing to
petition for review of an order setting forth the Commission’s
interpretation of § 11’s requirements before it has been ap-
plied in a manner causing injury to Verizon, see AT&T v.
EEOC, 270 F.3d 973, 975 (D.C. Cir. 2001); Shell Oil Co. v.
FERC, 47 F.3d 1186, 1202–03 (D.C. Cir. 1995), and the court’s
jurisdiction to consider a non-final or non-ripe order, see DRG
Funding Corp. v. Sec’y of HUD, 76 F.3d 1212, 1214 (D.C. Cir.
1996); Franklin v. Massachusetts, 505 U.S. 788, 796–97
(1992); Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 891
(1990); Ohio Forestry Ass’n, Inc. v. Sierra Club, 523 U.S.
726, 735 (1998). We need not decide these questions. Veri-
zon Wireless has standing to challenge the Commission’s § 11
actions regarding § 43.61(a) and § 63.21(i). See Friends of
the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167,
180–81 (2000); Vt. Agency of Natural Res. v. United States,
529 U.S. 765, 771 (2000). Because we decide the merits of
Verizon Wireless’ petition, Verizon’s petition, which presents
identical challenges to the Commission’s interpretation of
§ 11, no longer presents a substantial federal question, and
the court therefore lacks jurisdiction. See Steel Co. v. Citi-
9
zens for a Better Env’t, 523 U.S. 83, 98 (1998); World Wide
Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154,
1167 (D.C. Cir. 2002).
To succeed on appeal, Verizon Wireless must demonstrate
that the June 2002 Order is ‘‘arbitrary, capricious, an abuse of
discretion or otherwise not in accordance with law.’’ 5 U.S.C.
§ 706(2)(A). Under this ‘‘highly deferential’’ standard of
review, the court presumes the validity of agency action, see,
e.g., Davis v. Latschar, 202 F.3d 359, 365 (D.C. Cir. 2000), and
must affirm unless the Commission failed to consider relevant
factors or made a clear error in judgment, see, e.g., Citizens
to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416
(1971). One of the relevant factors is the 1996 Act’s mandate
in § 11 for biennial reviews to identify Commission regula-
tions ‘‘no longer necessary in the public interest as the result
of meaningful economic competition between providers of
such service,’’ followed by their repeal or modification. 47
U.S.C. § 161; cf. Sinclair Broad. Group, Inc. v. FCC, 284
F.3d 148, 159 (D.C. Cir. 2002); CTIA, 330 F.3d at 507–08.
The standards of Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984), apply to the
court’s review of the Commission’s interpretation of the Com-
munications Act. See CTIA, 330 F.3d at 507. Thus, where
Congress has spoken directly to the issue, our inquiry is at an
end. Chevron, 467 U.S. at 842–43, 843 n.9. Where Congress’
intent is unclear because the statute is silent or the language
Congress has used is ambiguous, the question is whether the
agency’s interpretation is a permissible construction of the
statute, id. at 843, and if it is, the court will defer to the
implementing agency’s reasonable interpretation. See, e.g.,
AT&T Corp., 525 U.S. at 397.
The two regulations whose retention Verizon Wireless chal-
lenges involve reporting requirements. The first, 47 C.F.R.
§ 43.61, requires all common carriers providing international
service to file annual and quarterly reports with the Commis-
sion regarding such service, including a financial breakdown
and a compilation of total minutes of calls involving interna-
tional destinations. In the 2000 Biennial Review, in response
to comments by Verizon Wireless, the Commission deter-
10
mined that quarterly reports by CMRS carriers affiliated
with certain foreign carriers were no longer ‘‘necessary in the
public interest.’’ June 2002 Order, 17 FCC Rec at 11429.
Because such carriers ‘‘have a de minimis amount of the
switched resale international traffic,’’ the Commission rea-
soned, they ‘‘are unlikely to be able to distort traffic on
affiliated routes.’’ Id. at 11429. However, the Commission
retained the annual reporting requirement, despite comments
from both Verizon Wireless and Cingular Wireless LLC
(‘‘Cingular’’) supporting its elimination because some of the
same data was provided in other regulatory filings. Noting
that both the ‘‘Commission and industry use the information
provided in the reports to monitor compliance with the Com-
mission’s rules and policies,’’ the Commission concluded that
the proposed alternative would not provide information on
minutes of use, which the Commission found to be ‘‘impor-
tant.’’ Id. at 11429–30. The Commission concluded: ‘‘There-
fore, we find that these less burdensome [annual] reporting
requirements continue to be in the public interest.’’ Id. at
11430.
The second regulation, 47 C.F.R. § 63.21, requires notifica-
tion to the Commission of foreign affiliations. Under the
Communications Act, 47 U.S.C. § 214(a), the Commission is
required to determine whether ‘‘public convenience and ne-
cessity’’ would be served by a carrier’s acquisition, construc-
tion, or operation of telecommunications facilities, including
international ones. To make that determination, the Com-
mission requires all international carriers, except those 100%
owned by another carrier with its own international § 214
authorization, see 47 C.F.R. § 63.21(i), to comply with the
application process in § 63.21. During the 2000 Biennial
Review, Cingular commented that the exemption in § 63.21(i),
which exempts only wholly-owned subsidiaries, should be
extended to international § 214-authorized carriers that hold
a controlling interest, but not a complete ownership stake, in
another carrier. The Commission declined to broaden the
exemption, reiterating its finding when it adopted the exemp-
tion: ‘‘ ‘[A] controlling interest that does not amount to 100–
percent ownership may raise additional issues, such as addi-
11
tional foreign affiliations or minority ownership or beneficial
interest by persons or entities who are barred from holding a
Commission authorization.’ ’’ June 2002 Order, 17 FCC Rcd
at 11433 (quoting 1998 Biennial Regulatory Review, Review of
International Common Carrier Regulations, 14 FCC Rcd
4909, 4932–33 (1999)). It noted that subsidiaries not wholly
owned by a § 214-authorized carrier might require more
information for ‘‘national security, law enforcement, trade or
foreign policy evaluation.’’ Id. The Commission is required
to notify the Secretaries of Defense and State when a carrier
requests a § 214 authorization. See 47 U.S.C. § 214(b).
Verizon Wireless contends that a strict reading of the term
‘‘necessary’’ is required by the plain language, the statutory
structure, and the purpose of § 11. The Commission, accord-
ing to Verizon Wireless, failed to meet its burden under § 11
to demonstrate by specific record evidence that the retention
of these two regulations in their present form is ‘‘necessary,’’
for the Commission may not rely on its initial justification for
adoption of a rule, but instead must provide evidence to
demonstrate that its regulation remains essential in light of
present market conditions. As support for its interpretation
of § 11, Verizon Wireless relies on the dictionary definition of
‘‘necessary’’ as ‘‘essential’’ or ‘‘indispensable,’’ see Merriam
Webster’s Collegiate Dictionary 774 (10th ed. 2000), and this
court’s opinions in Fox Television Stations, Inc. v. FCC, 280
F.3d 1027, 1051 (D.C. Cir. 2002) (‘‘Fox I’’), and Sinclair, 284
F.3d at 152. In its view, such a strict reading is ‘‘the only
reading consonant with the statutory purpose, which modified
the previous regulatory model for telecommunications ser-
vices to favor reliance upon competition and market forces.’’
Verizon Wireless Reply Br. at 6. It maintains that the
Commission’s interpretation fails to recognize that § 11 is
meant to cabin the Commission’s authority and reduce regula-
tion and not simply to restate the general administrative law
obligation of the Commission to ‘‘carefully monitor the effects
of its regulations and make adjustments where circumstances
so require.’’ ACLU v. FCC, 823 F.2d 1554, 1565 (D.C. Cir.
1987); see Bechtel v. FCC, 957 F.2d 873, 881 (D.C. Cir. 1992).
Although the court rejected virtually all of the same argu-
12
ments in support of a narrow reading of ‘‘necessary’’ as
meaning ‘‘absolutely essential’’ in the context of the Commis-
sion’s forbearance authority under 47 U.S.C. § 161, see CTIA,
330 F.3d at 510–12, we reexamine them as applied to § 11.
When Congress enacted § 11, it did not specify what it
meant by the key phrase at issue, ‘‘necessary in the public
interest.’’ In the 2000 Biennial Regulatory Review, the Com-
mission did not address the meaning of this key phrase, but
instead implicitly relied on the traditional meaning of the
phrase as it had been interpreted in other sections of the
Communications Act. See, e.g., June 2002 Order, 17 FCC
Rec at 11417. The Commission’s formal discussion of its
interpretation of § 11 appears in the 2002 Biennial Regulato-
ry Review. Responding to comments on the appropriate
interpretation of § 11, submitted in response to the Commis-
sion’s public notice for suggestions for the 2002 Review, the
Commission adopted an interpretation rejecting assertions
that the plain meaning of § 11 requires the Commission to
repeal any rule that it does not find to be absolutely essential.
See March 2003 Report, 18 FCC Rcd at 4734. The court
takes judicial notice of the March 2003 Report. See Shuttles-
worth v. Birmingham, 394 U.S. 147, 157 (1969); Nat’l Fire
Ins. Co. of Hartford v. Thompson, 281 U.S. 331, 336 (1930);
LeBoeuf, Lamb, Greene & MacRae, L.L.P. v. Abraham, 347
F.3d 315, 325 (D.C. Cir. 2003). An examination of the
Commission’s reasoning in construing its obligations under
§ 11 demonstrates that its interpretation is eminently reason-
able.
The Commission has interpreted § 11 in light of the fact
that the phrase ‘‘necessary in the public interest’’ in § 11(a)
and (b) was the same phrase that Congress used in delegating
rulemaking authority to the Commission. This is consistent
with the general proposition that ‘‘identical words used in
different parts of the same act are intended to have the same
meaning.’’ Gustafson v. Alloyd Co., Inc., 513 U.S. 561, 570
(1995). Under 47 U.S.C. § 201(b), the Commission can adopt
rules upon finding that they advance a legitimate regulatory
objective; it need not find that they are indispensable. See
March 2003 Report, 18 FCC Rcd at 4733 n.31; Nat’l Citizens
13
Comm., 436 U.S. at 796. In light of what the Commission
correctly observed to be the ambiguous nature of the term
‘‘necessary,’’ with its meaning dependent on its statutory
context, the Commission concluded that Congress intended
the phrase in § 11 to have the same meaning as in § 201(b).
See March 2003 Report, 18 FCC Rcd at 4733–34. It rejected
the view that Congress’ use of a different verb (‘‘may be’’ in
§ 201(b) and ‘‘is’’ in § 11) preceding § 11’s clause ‘‘no longer
in the public interest’’ required two different standards, rea-
soning that because both provisions required the Commission
to make predictive judgments about the ‘‘necessity’’ of a rule,
Congress would not have used the same phrase it had used in
§ 201(b) if it had intended § 11 to require a more stringent
standard. Id. at 4733 n.32.
The Commission found further support for its interpreta-
tion in the phrase ‘‘no longer,’’ which precedes the phrase
‘‘necessary in the public interest,’’ as indicating that Congress
intended the same standard to apply in § 11 as applies in
§ 201(b). Id. at 4733. The legislative history also offered
support for the Commission’s interpretation. Id. at 4732
(citing H.R. Conf. Rep. No. 104–458, at 185 (1996)). The
Commission’s interpretation, moreover, avoided absurd re-
sults where the Commission would adopt a regulation under
§ 201(b) as ‘‘necessary’’ only to be required to revoke it in the
following year as ‘‘non-essential’’ under a more stringent
‘‘necessary’’ standard in § 11. See March 2003 Report, 18
FCC Rcd at 4734. Therefore, the Commission concluded that
Congress intended the Commission to carry out the deregula-
tory purpose of the 1996 Act through the reevaluation of its
rules ‘‘in light of current competitive market conditions to be
sure that the conclusion that [it] reached in adopting the
rule — that it was needed to further the public interest —
remains valid.’’ Id. at 4735.
The term ‘‘necessary’’ is a chameleon-like word whose
meaning, as Verizon Wireless acknowledges, may be influ-
enced by its context. The Supreme Court and this court have
had occasion to construe the word ‘‘necessary’’ in the strict,
dictionary definition sense that Verizon Wireless maintains
applies to § 11. In AT&T Corp., the Court rejected the
14
Commission’s flexible construction of ‘‘necessary’’ in 47 U.S.C.
§ 251, which requires the Commission to consider whether
access to a proprietary network element is ‘‘necessary’’ before
requiring its unbundling; the Court held that the term ‘‘re-
quires the [Commission] to apply some limiting standard,
rationally related to the goals of the Act.’’ 525 U.S. at 388.
Similarly, in GTE Service Corp. v. FCC, 205 F.3d 416, 424
(D.C. Cir. 2000), the court rejected an expansive Commission
interpretation of ‘‘necessary’’ in the context of requiring local
exchange carriers to provide for collocation of equipment
‘‘necessary’’ for access to unbundled network elements at a
carrier’s premises, which is another part of § 251 closely
related to that at issue in AT&T Corp. Both cases, however,
addressed only the word ‘‘necessary,’’ rather than the phrase
‘‘necessary in the public interest,’’ and, as the Supreme Court
observed in AT&T Corp., the 1996 Act ‘‘is not a model of
clarity. It is in many important respects a model of ambigui-
ty or indeed even self-contradiction.’’ AT&T Corp., 525 U.S.
at 397. Similarly, this court noted in CTIA that ‘‘necessary’’
is not language of plain meaning. CTIA, 330 F.3d at 509.
Consequently, Verizon Wireless’ position that ‘‘necessary’’ in
§ 11 must be interpreted to have a strict dictionary definition
ignores both that Congress chose to leave the phrase unquali-
fied except in ways that are supportive of the Commission’s
view that the same standard is to apply in § 11 as applies in
§ 201(b), cf. AT&T Corp., 525 U.S. at 397, and that courts
have long recognized that the term ‘‘necessary’’ does not
always mean ‘‘indispensable’’ or ‘‘essential.’’ See, e.g., Nat’l
Citizens Comm., 436 U.S. at 795–96; Armour & Co. v.
Wantock, 323 U.S. 126, 129–30 (1944); McCulloch v. Mary-
land, 17 U.S. (4 Wheat.) 316, 413 (1819); Indep. Ins. Agents
of Am., Inc. v. Hawke, 211 F.3d 638, 640 (D.C. Cir. 2000);
CTIA, 330 F.3d at 510. Adoption of Verizon Wireless’ posi-
tion, then, ‘‘would give an unwarranted rigidity to the applica-
tion of the word ‘necessary,’ which has always been recog-
nized as a word to be harmonized with its context.’’ Armour
& Co., 323 U.S. at 129–30.
To the extent Verizon Wireless contends that the Commis-
sion ignores the deregulatory purpose animating the 1996
15
Act, Verizon Wireless ignores both what the Commission has
said in interpreting § 11 and what the Commission has done
in implementing § 11 since initiating the biennial reviews in
1998. In the 2000 and 2002 Biennial Regulatory Reviews, the
Commission acknowledged the deregulatory goal of the 1996
Act and its obligation to determine whether its rules were
necessary in light of current market conditions. See Public
Notice, Biennial Review 2000 Staff Report Released, 15 FCC
Rcd 21084 (2000); March 2003 Report, 18 FCC Rcd at 4735.
While rejecting Verizon’s comment that § 11 imposed a spe-
cial burden to support any finding that a rule remained
necessary and that absent such evidence the rule must imme-
diately be repealed, the Commission agreed that where § 11’s
conditions are met, § 11 creates a presumption in favor of
repealing or modifying covered rules. See March 2003 Re-
port, 18 FCC Rcd at 4735. In addition, the staff reports
adopted by the Commission in the 2000 and 2002 Biennial
Reviews incorporate the competitive market approach in ex-
amining whether a regulation ‘‘is no longer necessary.’’ In-
deed, the Commission’s actions in response to the Biennial
Reviews indicate that § 11 is working as Congress intended.
See, e.g., id. at 4736–37; H.R. Conf. Rep. No. 104–458, at 185;
see also January 2001 Report, 16 FCC Rcd at 1209.
Nothing in our opinions in Fox I and Sinclair is to the
contrary. These cases arose in the regulatory context of
§ 202(h) and (g), governing broadcast ownership require-
ments. Pretermitting whether the different regulatory con-
text suffices to distinguish the statutory challenge in the
instant petitions, neither Fox I nor Sinclair adopted a con-
trolling definition of ‘‘necessary,’’ much less the position that
§ 11 embodies a presumption in favor of deregulation. Al-
though Sinclair states that only those regulations ‘‘necessary
in the public interest’’ may be retained, 284 F.3d at 159, it
cited the recently decided opinion in Fox I, 280 F.3d at 1048,
for that proposition and did not itself define ‘‘necessary.’’ In
Fox I, the court, in addressing remedies available for the
court to require, interpreted ‘‘necessary’’ to mean that ‘‘a
regulation should be retained only insofar as it is necessary
in, not merely consonant with, the public interest.’’ 280 F.3d
16
at 1050. But shortly after Sinclair was decided, the court in
Fox Television Stations, Inc. v. FCC, 293 F.3d 537 (D.C. Cir.
2002) (‘‘Fox II’’), retracted Fox I’s definition of ‘‘necessary,’’
due to lack of briefing on the subject and the fact that the
definition was unnecessary to the court’s opinion. Id. at 540.
Consequently, Sinclair, 284 F.3d at 165, and Fox II left
undecided the question of what ‘‘necessary’’ means in § 11.
The court’s statement in Fox I regarding the meaning of
‘‘necessary’’ as creating a presumption in favor of modification
or elimination of existing regulations was, as noted, made in
the context of discussing the available remedies for the court.
280 F.3d at 1048. Nothing in that opinion suggested that
under § 11’s biennial review mandate the Commission could
no longer rely on its predictive judgment or properly-
supported inferences in determining to retain a regulation.
Cf. id. at 1051. The court’s observation in Fox I about the
presumption created by the 1996 Act only came after the
court had concluded that the Commission’s explanation for its
action could not withstand arbitrary and capricious review,
and the question became the selection of the appropriate
remedy for the court to impose: vacate the regulation or
remand the case to afford the Commission another opportuni-
ty better to explain its action. Id. at 1044, 1048. While
Sinclair piggybacked on Fox I, the court in Sinclair did not
adopt a general presumption in favor of modification or
elimination of regulations when considering a substantive
challenge to the adequacy of the Commission’s determina-
tions. Sinclair, 284 F.3d at 159; see also id. at 171 (Sentelle,
J., concurring and dissenting in part). Rather, as in Fox I,
the court in Sinclair examined whether the Commission’s
explanation for its action was arbitrary and capricious without
providing a definition of the term ‘‘necessary’’ that differed
from that implicit from the long-standing meaning of the term
in the statutory provision granting the Commission regulato-
ry authority under 47 U.S.C. § 201(b). Id. at 160. Thus,
neither Fox I nor Sinclair provide support for Verizon Wire-
less’ position that § 11 must be interpreted to impose a
stricter standard of ‘‘necessary’’ than applies to § 201(b).
17
For these reasons, we hold that the Commission reasonably
interpreted § 11 to require it to ‘‘reevaluate regulations in
light of current competitive market conditions to see that the
conclusion [it] reached in adopting the rule — that [the rule]
was needed to further the public interest — remains valid.’’
March 2003 Report, 18 FCC Rcd at 4735. Interpreting the
term ‘‘necessary’’ in § 11 in this manner avoids the inconsis-
tent application in related contexts of identical terms used by
Congress. Applying the same ‘‘necessary in the public inter-
est’’ standard as in § 201(b) is consistent with both of the
qualifying terms (‘‘no longer necessary’’ and ‘‘as the result of
meaningful economic competition’’) that Congress added in
§ 11 and avoids absurd results where a rule is ‘‘necessary’’
when adopted but not when it is subjected shortly thereafter
to biennial review under § 11. The language of § 11 thus
indicates that the Commission’s first obligation is to deter-
mine, under § 11(a), whether the necessity for a regulation
continues in light of current market conditions; its second
obligation, under § 11(b), is to repeal or modify such regula-
tions it determines are no longer necessary in the public
interest as a result of current competitive conditions. The
Commission reasonably concluded that the deregulatory pre-
sumption arises only after it has determined under § 11(a)
that a regulation is no longer necessary in the public interest.
See id. The provisions of § 11(b) thus make clear that the
Commission is under a mandate that extends beyond its
normal monitoring responsibilities. Finally, the Commis-
sion’s interpretation of § 11 is not inconsistent with Fox I or
Sinclair, and the fact that Verizon Wireless can point to an
alternative, stricter definition of ‘‘necessary’’ is insufficient to
demonstrate that the Commission’s interpretation is not owed
deference by the court. See Chevron, 467 U.S. at 843; CTIA,
330 F.3d at 507, 509–10.
III.
Verizon Wireless also contends that the Commission’s fail-
ure to complete the 2000 Biennial Review during the year
2000 functions as a default, requiring the court to direct the
Commission to repeal § 43.61(a) as it applies to CMRS carri-
18
ers, and to modify § 63.21(i). Verizon Wireless maintains
that the Commission must complete within the biennial year
not only the § 11 necessariness review and determination for
all its regulations, but also any modification or repeal of
regulations that it has determined are no longer necessary.
Verizon Wireless asserts that the Commission has taken an
‘‘all in good time’’ approach, contrary to the 1996 Act’s
deregulatory purpose. Verizon Wireless Br. at 14.
A.
The Commission challenges both the court’s jurisdiction to
consider, as well as Verizon Wireless’ standing to challenge,
the Commission’s timing of the 2000 Biennial Review. The
Commission maintains that because Verizon Wireless failed to
petition for review of the January 2001 Report setting forth
the Commission’s interpretation of § 11’s timing mandate,
that Report has become final and is not subject to judicial
review. Yet the Commission made clear in that Report that
it did ‘‘not set forth final Commission decisions, nor [did] it
represent rulemaking action.’’ January 2001 Report, 16 FCC
Rcd at 1210. Verizon Wireless thus reasonably delayed
seeking rehearing until the timing issue became ripe for
review when the June 2002 Order set forth the Commission’s
§ 11 determination to retain § 43.61(a) and § 63.21. See 17
FCC Rcd at 11429, 11433. At that point, in Verizon Wireless’
view, the Commission acted seventeen months late, and its
determination to retain the two regulations was therefore
based on unlawful agency action. See Nat’l Labor Relations
Bd. Union v. Federal Labor Relations Auth., 834 F.2d 191,
196 (D.C. Cir. 1987) (‘‘FLRA’’) (citing Functional Music, Inc.
v. FCC, 274 F.2d 543, 546 (D.C. Cir. 1958)). Because Verizon
Wireless contends that the June 2002 Order exceeded the
Commission’s authority, see FLRA, 834 F.2d at 195; accord
CTIA, 330 F.3d at 509, the court has jurisdiction to address
the challenge. See 5 U.S.C. § 706(2)(A). Review of the June
2002 Order encompasses its timing, which implicitly is based
on the interpretation in the January 2001 Report. The
Commission’s reliance on ICC v. Brotherhood of Locomotive
Engineers, 482 U.S. 270, 279–81 (1987), is misplaced; that
19
case involved a claimed material error in a single adjudica-
tion, not an agency regulation capable of continuing applica-
tion. See Functional Music, 274 F.2d at 546.
The Commission further contends that Verizon Wireless
lacks standing to challenge the timing of the Commission’s
2000 Biennial Review because any injury it suffered resulted
not from the June 2002 Order but from the January 2001
Report construing § 11’s timing requirement. We hold that
Verizon Wireless has standing to challenge the timing of the
Commission’s determination in the June 2002 Order to retain
§ 43.61(a) and § 63.21(i). As an entity continuously bur-
dened by the costs of complying after the biennial review
year with what it contends are ‘‘unnecessary’’ regulations
under § 11, Verizon Wireless’ injuries are concrete and actu-
al, traceable to the Commission’s alleged failure to meet the
statutory deadline, and redressable by a ruling adopting
Verizon Wireless’ interpretation of § 11’s temporal mandate.
See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc.,
528 U.S. 167, 180–81 (2000); Vt. Agency of Natural Res. v.
United States, 529 U.S. 765, 771 (2000); cf. Ass’n of Am.
R.Rs. v. Dep’t of Transp., 38 F.3d 582, 585–86 (D.C. Cir.
1994).
B.
The Commission concluded that Congress created a timing
mandate only for § 11(a), entitled ‘‘Biennial review of regula-
tions,’’ which requires the Commission ‘‘[i]n every even-
numbered year’’ to review its rules to determine whether they
are no longer necessary in the public interest as a result of
meaningful economic competition. See January 2001 Report,
16 FCC Rcd at 1210; see also 47 U.S.C. § 161(a). By
contrast, § 11(b), entitled ‘‘Effect of determination,’’ requires
only that the Commission ‘‘shall repeal or modify any regula-
tion it determines to be no longer necessary in the public
interest.’’ See 47 U.S.C. § 161(b). The Commission rea-
soned that ‘‘Congress thus distinguished between making
determinations (that certain rules are no longer in the public
interest), which must occur within a specified time period i.e.,
20
every even numbered year, and taking action (to repeal or
modify rules that are no longer in the public interest) which is
not required to be completed within that specific time period.’’
January 2001 Report, 16 FCC Rcd at 1210 (italics in original).
We hold that the Commission’s interpretation of § 11’s timing
requirement is reasonable.
Section 11 is ambiguous regarding what the Commission is
required to do within the biennial year, and the Commission
properly looked to the different phrasing in § 11(a) and (b) as
well as to the section headings for guidance. See Murphy
Exploration and Production Co. v. United States Dept. of the
Interior, 252 F.3d 473, 481 (D.C. Cir. 2001) (quoting Almen-
darez-Torres v. United States, 523 U.S. 224, 234 (1998)). If
Congress had intended that within each biennial year the
Commission must not only review its rules and determine
which were no longer necessary, but also, where applicable,
modify or repeal them, it could have included a temporal
restriction in § 11(b). It did not, presumably in recognition
of the period of time required for notice and comment re-
quired by the Administrative Procedure Act (‘‘APA’’), see 5
U.S.C. § 553, before a Commission rule may be changed.
The 1996 Act provided that it ‘‘shall not be construed to
modify, impair, or supersede Federal TTT law unless express-
ly so provided in such Act.’’ Pub. L. No. 104–104, § 601(c)(1),
110 Stat. 56 (1996), 47 U.S.C. § 152 note. Section 11 did not
authorize the Commission to bypass the APA. Under the
circumstances, the Commission reasonably concluded that a
timing requirement applied only to § 11(a) and not to § 11(b).
The Commission appreciated that it would take time to
complete rulemaking proceedings under § 11(b) so as to be in
a position to determine whether, and in what manner, to
modify or repeal the numerous regulations it had determined
were no longer necessary.
Verizon Wireless’ contention — that the Commission may
delay indefinitely the repeal or modification of regulations it
has determined are no longer necessary in the public inter-
est — rings hollow. The Commission completed the § 11(a)
review within the biennial year, adopting the Biennial Review
Report on December 29, 2000. See January 2001 Report, 16
21
FCC Rcd at 1207. In noting, where it had not found that
regulations were no longer necessary, that it remained open
to petitions for rulemaking from interested parties, the Com-
mission is referring to its ongoing efforts to repeal or modify
unnecessary regulations, not calling into question whether it
had timely completed the § 11(a) review. The Commission
stated that the ‘‘Report fulfills the Commission’s year 2000
biennial regulatory review obligations under § 11(a).’’ Id. at
1207. In the § 11(b) proceedings, the Commission invited
and responded to public comments contesting its § 11(a)
determinations. When the Commission adopted the § 11(b)
report on the regulations challenged by Verizon Wireless,
seventeen months had passed. See June 2002 Order, 17 FCC
Rcd at 11416. This was not an unreasonable period of time
for completion of the Commission’s § 11(b) duties, see 5
U.S.C. § 551(b), given the numerous rulemaking proceedings
that the Commission was contemporaneously pursuing as a
result of the § 11(a) determinations. In any event, were the
Commission not to act within a reasonable time, the remedy
would be to seek issuance of a writ of mandamus to compel
Commission action, see Telecommunications Research & Ac-
tion Center v. FCC, 750 F.2d 70, 79–80 (D.C. Cir. 1984), and
Verizon Wireless made no such filing.
IV.
Having rejected Verizon Wireless’ contentions that the
Commission’s determination to retain § 43.61(a) and
§ 63.21(i) was contrary to the requirements of § 11, we turn
to its contention that the Commission’s decision was arbitrary
or capricious. As regards § 43.61(a), Verizon Wireless con-
tends that the Commission failed both to act consistently with
its prior findings that the CMRS and international markets
are highly competitive, and to explain its rationale for elimi-
nating quarterly reports but not annual reports. Verizon
Wireless focuses on the Commission’s findings that the wire-
less market is among the most competitive markets in the
industry, that CMRS carriers act only as resellers of interna-
tional services, and that they occupy a de minimis portion of
the international resale market. See June 2002 Order, 17
22
FCC Rcd at 11429. Yet in contending that the Commission
failed to link the monitoring function to any possible regulato-
ry problem, Verizon Wireless would have the court ignore the
Commission’s statutory responsibilities, including the need to
determine whether forbearance is appropriate. Similarly,
Verizon Wireless focuses on the Commission’s prior finding
that the resale of unaffiliated U.S. facilities-based carriers’
switched services presents no substantial possibility of anti-
competitive effects in the United States international services
market, see GTE Telecom, Inc., 13 FCC Rcd 4378, 4389
(1998), in maintaining that the Commission failed to explain
why monitoring of CMRS international resale traffic (by
minutes) is necessary to any legitimate regulatory goal.
Contrary to Verizon Wireless’ contention, the Commission
considered the continuing need for § 43.61(a) in light of
present competitive realities. While the Commission’s expla-
nation was not lengthy, it sufficed to provide a rational basis
for the Commission’s decision. Cf. Sinclair, 284 F.3d at 160.
Although the Commission acknowledged in the § 43.61(a)
context that CMRS carriers have only a de minimis role in
international traffic, it was the Commission’s judgment that
the small role did not warrant completely abandoning the
requirement for any reports, annual or quarterly, from such
providers. The Commission identified the usefulness of the
information provided by the reports to it and the industry,
and given the Commission’s statutory obligations, Verizon
Wireless fails to show that the Commission did not reason-
ably conclude annual reporting remained necessary. See
June 2002 Order, 17 FCC Rcd at 11430.
The Communications Act requires the Commission to ‘‘re-
view competitive market conditions with respect to commer-
cial mobile services.’’ 47 U.S.C. § 332(c)(1)(C). The statute
makes no exceptions to account for CMRS services’ currently
small share of switched resale international traffic. An ex-
emption for CMRS carriers from § 43.61(a) reporting would
impede the Commission’s ability to obtain information on an
important segment of the marketplace. The Commission
stated that it needs such reports in order to ‘‘monitor[ ]
trends in the [CMRS] industry.’’ June 2002 Order, 17 FCC
23
Rcd at 11430. Given that the Commission’s regulatory role
involves predictive judgments, cf. Fox I, 280 F.3d at 1051, the
Commission may reasonably anticipate that, as the use of cell
telephones increases, CMRS carriers will cease to hold a de
minimis share of the international telecommunications traffic
market, thus highlighting the Commission’s ongoing need for
data by which to monitor industry trends. Nothing suggests
that in enacting § 11 Congress intended to bar the Commis-
sion from exercising its predictive judgment in assessing
regulatory necessity in light of current competitive market
conditions; to the contrary, Congress’ use of the same phrase
it used in authorizing the Commission to adopt regulations
indicates the opposite. Verizon Wireless’ assertion that the
information collected is duplicative and redundant of other
information reported by the underlying facilities-based carri-
ers ignores that other data sources do not include information
on CMRS carriers’ minutes of use, but rather are limited to
revenues. See June 2002 Order, 17 FCC Rcd at 11430.
Moreover, Verizon Wireless never argued to the Commission
that its decision to retain annual reporting was inconsistent
with its decision to exempt CMRS carriers from quarterly
reporting under § 43.61(c), and hence it cannot now argue
that the Commission erred by failing to reconcile these two
decisions. See 47 U.S.C. § 405.
Similarly, the Commission was not arbitrary and capricious
in continuing to require reporting of foreign affiliations of
common carriers solely controlled, but not wholly owned, by
another § 214 authorized carrier. Verizon Wireless contends
that the Commission failed both to confront comments sug-
gesting that § 63.21 does not accomplish its stated purpose,
and to respond to less burdensome and potentially more
effective alternatives proposed by commenters. Although its
response was once again not lengthy, the Commission ade-
quately responded to the comments in light of both the
statutory mandate to issue § 214 authorizations only where
they serve the ‘‘public convenience and necessity,’’ as well as
the statutory requirement that the Secretaries of Defense and
State be notified of such applications so that potential risks
associated with foreign affiliations, such as national security
24
concerns, may be addressed. See June 2002 Order, 17 FCC
Rcd at 11433. There are, as the Commission wrote, ‘‘persons
or entities who are barred from holding a Commission author-
ization.’’ Id.
Accordingly, we deny Verizon Wireless’ petition contending
that the Commission’s interpretation of § 11 is contrary to
the deregulatory purpose of the 1996 Act and that the Com-
mission’s determination to retain two rules was arbitrary and
capricious, and we dismiss Verizon’s petition for lack of
jurisdiction.