concurring:
I concur with Judge Edwards’ opinion in all respects. I especially agree that Chevron deference would be inappropriate in these unusual circumstances. I write separately to point out,' as to the PCC’s claimed jurisdiction to set intrastate rate caps,’ that I think our result would be the same if the Chevron framework was in play, i.e., if the FCC had elected to defend this part of its regulation.
There is no question that the relevant statutory language, “fairly compensated," is ambiguous. 47 U.S.C. 276(b)(1)(A). Even the FCC agrees. But Judge Edwards’ careful explanation of the statute’s structure and context demonstrates that the agency’s interpretation would fail at Chevron’s second step; it is an unreasonable (impermissible) interpretation of section 276.
Much of the recent expressed concern about Chevron ignores that Chevron’s second step can and should be a meanihgful limitation on the ability of administrative agencies to exploit statutory ambiguities, assert farfetched interpretations, and usurp undelegated policymaking discretion.1 This case presents just one example of those kinds of agency tactics. There are others. Accord Michigan v. EPA, — U.S. —, 135 S.Ct. 2699, 2713, 192 L.Ed.2d 674 (2015) (Thomas, J., concurring) (“Although wé hold today that [the agency] exceeded even the extremely permissive limits on agency power set by our precedents, we should be alarmed that it felt sufficiently emboldened by those, precedents to make the bid for deference that it did here.”)
To be sure, some have lamented that as a practical matter, under Chevron, either the case is decided at the first step or the agency prevails once it receives deference under step two. But that is not what the Chevron case called for.
Chevron itself involved a phrase “stationary source” that was not at all defined and clearly could equally refer to (a) a factory complex, or (b) a specific emitter of pollution. 467 U.S. 837, 860-64, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). But it would have been unreasonable to refer to (c) a whole city. Yet too many times agencies have taken advantage of an ambiguity to pursue a (c), (d), or (f) interpretation that accorded with policy objectives. See, e.g., Verizon v. FCC, 740 F.3d 623, 660 (D.C. Cir. 2014) (Silberman, J., concurring in part and dissenting in part).
Unfortunately, the Supreme Court for some time after Chevron^ contributed to the step- one winner-take-all narrative by neglecting to rely on step two even when it was really called for. Take for example MCI Telecommunications Corp. v. AT&T Co., 512 U.S. 218, 114 S.Ct. 2223, 129 L.Ed.2d 182 (1994), in which Justice Sca-lia—perhaps tjje foremost expositor of Chevron—used statutory structure and context, much like Judge Edwards does in our case, to demonstrate that the FCC’s reliance on the word “modify” was unacceptable, see, e.g., id. at 228-29, 114 S.Ct. 2223. But he never conceded that the word “modify” was ambiguous, which it was. Id. at 228, 114 S.Ct. 2223 (“We have not the *419slightest doubt that [single definition] is the meaning the statute intended.”).
Subsequently, however, in AT&T Corp. v. Iowa Utilities Board, 525 U.S. 366, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999), Justice Scalia implicitly relied on step two. He. concluded that because the agency failed to interpret the terms of the statute “in a reasonable fashion,” the rule must be vacated. Id. at 392, 119 S.Ct. 721. Then, in City of Arlington v. FCC, 569 U.S. 290,133 S.Ct. 1863, 185 L.Ed.2d 941 (2013), he admonished that “where Congress has established an ambiguous line, the agency can go no further than the ambiguity will fairly allow,” id. at 1874. And most recently in Michigan v. EPA, — U.S. —, 135 S.Ct. 2699, 192 L.Ed.2d 674 (2015), when invalidating agency action under step two, he was more explicit still: “Chevron allows agencies to choose among competing reasonable interpretations of a statute; it does not hcense interpretive gerrymanders under which an agency keeps parts of statutory context it likes while throwing away parts it does not,” id. at 2708.
We have at times been careful to apply step two review vigorously. See, e.g., Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006). This is just such a case where the agency’s original claim for Chevron deference—before the agency’s control switched—would have been rejected at Chevron step two; a muscular use of that analysis is a barrier to inappropriate administrative adventure.
. See, e.g., City of Arlington v. FCC, 569 U.S. 290, 133 S.Ct. 1863, 185 L.Ed.2d 941 (2013) (Roberts, C.J., dissenting). Of course, some also question "step two” itself. For example, an essay in the Virginia Law Review contended that "Chevron Has Only One Step.” Matthew C. Stephenson & Adrian Vermeule, 95 Va. L. Rev. 597 (2009). But that position ignores.the practical effect on future agency discretion of a court opinion either affirming or reversing an agency interpretation at step one versus step two. Cf. Nat’l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005).