United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 15, 2001 Decided June 29, 2001

No. 00-1072

United States Cellular Corporation,

Petitioner

v\.

Federal Communications Commission and

United States of America,

Respondents

Association of Public-Safety Communications

Officials-International, Inc., et al.,

Intervenors

Consolidated with

00-1536, 00-1538, 01-1047

On Petitions for Review of Orders of the

Federal Communications Commission

Thomas P. Van Wazer argued the cause for petitioners. With him on the
briefs were James P. Young, Donald J.

Evans and Sylvia Lesse. Stephen G. Kraskin entered an appearance.

Roberta L. Cook, Counsel, Federal Communications Commission, argued the
cause for respondents. With her on the brief were Christopher J. Wright,
General Counsel, John E. Ingle, Deputy Associate General Counsel,
Catherine G. O\'Sullivan and Andrea Limmer, Attorneys, U.S. Department
of Justice. Daniel M. Armstrong, Associate General Counsel, Federal
Communications Commission, entered an appearance.

Robert M. Gurss and Tamara Y. Brown were on the brief for intervenor
Association of Public-Safety Communications Officials-International,
Inc.

Before: Henderson, Tatel and Garland, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: In an effort to speed implementation of enhanced
911 services for wireless phones, the Federal Communications Commission
removed a provision conditioning wireless carriers\' obligation to
purchase and install the necessary technology on guaranteed state or
local government funding. The carriers challenge this decision, arguing
that, among other things, it contravenes the cost causation principle
adopted by this court in Competitive Telecommunications Association v.
FCC, 87 F.3d 522, 529 (D.C. Cir. 1996) (\"Comptel\"), is arbitrary and
capricious, 5 U.S.C. § 706(2)(A), violates the Regulatory Flexibility
Act, 5 U.S.C. §§ 601-612, and amounts to an unconstitutional taking.
Finding petitioners\' arguments either without merit or not properly
before us, we deny the petition for review in its entirety.

I

Over the last thirty years, 911 service has \"spread across the nation
and become synonymous with emergency assistance.\" In re Revision of the
Comm\'n\'s Rules to Ensure Compatibility with Enhanced 911 Emergency
Calling Sys., 11 FCC Rcd 18676 p 3 (1996) (\"First Report & Order\"). At
its most basic, 911 service involves routing calls to state or local
governmental entities responsible for coordinating emergency response,
known as Public Safety Answering Points (\"PSAPs\"), which dispatch
emergency assistance to callers. Most PSAPs now provide E911\--enhanced
911\--services for calls placed from traditional landline phones, using
Automatic Numbering Identification (\"ANI\") to determine a caller\'s
phone number and Automatic Location Identification (\"ALI\") to pinpoint
a caller\'s location. For landline calls, ALI information is typically
determined by looking up the caller\'s phone number in an
address/telephone number database.

Although wireless callers place a large number of 911 calls,
implementing E911 services for wireless phones has proven more
difficult. In June 1994, a group of public safety organizations
(including the Association of Public-Safety Communications Officials
(\"APCO\"), intervenor here) issued an Emergency Access Position Paper
highlighting the need to make E911 services available to wireless
callers to \"facilitate rapid and effective contact with emergency
services, when and where needed.\" Shortly thereafter, the Commission
issued a notice of rulemaking to \"ensure that, over time, \[wireless
callers would\] have the same level of access to 911 emergency services
as \[landline\] callers,\" and proposed requiring wireless carriers to
make both ANI and ALI information available to PSAPs. In re Revision of
the Comm\'n\'s Rules to Ensure Compatibility With Enhanced 911 Emergency
Calling Sys., 9 FCC Rcd 6170 pp 37, 50-52 (1994).

After the comment period ended, APCO and two other public safety bodies,
together with the Cellular Telecommunications Industry Association
(\"CTIA\"), a trade association of wireless industry participants, filed
with the Commission a Consensus Agreement addressing wireless E911
implementation. Among other things, the Agreement proposed a cost
recovery mechanism to fund carrier and PSAP investment in E911
technology, asking the Commission to condition the obligation to make
these investments on a guarantee of state or local government funding.
The Commission also sought public comment on this Consensus Agreement.

After receiving comments on its proposal and the Consensus Agreement,
the Commission adopted its First Report & Order, which established a
two-phase plan for wireless E911 implementation. Phase I, to have been
completed in eighteen months, required wireless carriers to enable PSAPs
to determine a caller\'s ANI and the location of the base station or
cell site receiving the 911 call. First Report & Order, 11 FCC Rcd 18676
at p 10. Wireless carriers had five years to complete Phase II, which
required them to enable PSAPs to identify a caller\'s ALI within a
specified range. Id. Wireless carriers can implement Phase II in at
least two ways. One is network-based, determining a caller\'s location
by triangulating signals from several different cell sites or base
stations. In re Revision of the Comm\'n\'s Rules to Ensure Compatibility
with Enhanced 911 Emergency Calling Sys., 14 FCC Rcd 17388 p 23 (1999)
(\"Third Report & Order\"). The other is handset-based; it incorporates
locating functionality (such as Global Positioning System technology)
into the telephone itself. Id. at p 18.

Under the Commission\'s Order, carriers\' Phase I and Phase II
obligations would not be triggered until two conditions were met: (1)
the carrier had to receive a request for these services from a PSAP
capable of receiving and utilizing the data; and, responding to the
Consensus Agreement\'s cost recovery provision, (2) \"a mechanism for
the recovery of costs relating to the provision of such services\" had
to be in place. First Report & Order, 11 FCC Rcd 18676 at p 11. The
Commission prescribed no particular cost recovery mechanism, however,
because \"\[n\]o party dispute\[d\] the fundamental notion that carriers
must be able to recover their costs of providing E911 services\" and
because \"an inflexible Federal prescription would deny carriers and
government officials the freedom to develop innovative cost recovery
solutions.\" Id. at WW 89-90.

The Commission also responded to comments by rural wireless carriers
that \"providing ALI in rural areas may not be technologically and
economically feasible,\" id. at p 84, and that carrier cost recovery
mechanisms might not fully reimburse these higher implementation costs.
According to the rural carriers, a network-based method of providing ALI
would be difficult because, given the configuration of many rural
providers\' towers as a \"string of pearls\" along a high-way,
triangulation would require a large number of additional towers and
equipment. Petitioners\' Opening Br. at 17; cf. Third Report & Order, 14
FCC Rcd 17388 at p 23. They also claimed they had no alternative,
because the handset-based solution was not yet technologically
available. The Commission concluded that these problems \"need not delay
adoption of the general rule\" because \"\[i\]n cases where the cost
recovery mechanism for E911 service uniquely disadvantages a particular
carrier, we will \... consider waiver requests.\" First Report & Order,
11 FCC Rcd 18676 at p 84.

Reconsidering the First Report & Order, the Commission reaffirmed its
decision not to prescribe a particular cost recovery mechanism. In re
Revision of the Comm\'n\'s Rules to Ensure Compatibility with Enhanced
911 Emergency Calling Sys., 12 FCC Rcd 22665 WW 143-146 (1997). CTIA
filed for a second reconsideration, asking the Commission to clarify
that state and local governments could not satisfy the carrier cost
recovery requirement by asking carriers to recover their own costs
directly through charges to wireless customers, and to mandate that the
cost recovery mechanisms states and localities adopt be \"competitively
neutral.\" In response, and after receiving a Joint Status Report filed
by the Consensus Agreement parties (joined by the Wireless Consumers
Alliance, Inc.) revealing that Phase I implementation was proceeding
more slowly than planned, the Commission issued a Public Notice seeking
information on whether the carrier cost recovery requirement was
responsible for the delay, and if so, how to address this problem.
Public Notice, Comm\'n Seeks to Facilitate Wireless E911 Implementation
and Requests a Report, 14 FCC Rcd 11138, 11138 (1999). Petitioners
United States Cellular Association (\"US Cellular\") and the Rural
Cellular Association (\"RCA\") submitted comments.

In the resulting Second Reconsideration Order, the Commission found that
the \"prerequisite that there be a carrier cost recovery mechanism has
not expedited the delivery of E911 service and, if anything, has become
and will continue to be an impediment of E911 service.\" In re Revision
of the Comm\'n\'s Rules to Ensure Compatibility with Enhanced 911
Emergency Calling Sys., 14 FCC Rcd 20850 p 42 (1999) (\"Second Recons.
Order\"). Although twenty-seven states had enacted some sort of Phase I
cost recovery legislation, id. at p 34, these services were \"scarce,
and, in most parts of the country, nonexistent,\" id. at p 33.
Twenty-three states had no Phase I cost recovery mechanism in place, and
even in the states that had enacted legislation, the Commission found
that disputes about the adequacy and administration of cost recovery
interfered with Phase I implementation. Id. at p 36. The Commission
further agreed with APCO that, because few state and local governments
had enacted Phase II legislation, and because the costs of doing so
would likely exceed Phase I costs, carrier cost recovery threatened to
become an even greater obstacle to Phase II implementation. Id. at p 42.

To alleviate these delays, the Commission dropped the carrier cost
recovery requirement, noting that \"\[wireless\] carriers are not
subject to rate regulation, and may adjust their rates to reflect the
cost of providing E911 services without \[Commission\] intervention.\"
Id. at p 49. According to the Commission, passing costs on to consumers
is \"the normal way that costs of doing business, including the costs of
complying with government-imposed requirements, are recovered in an
industry free of rate regulation.\" Id. at p 61.

Addressing comments that eliminating the carrier cost recovery
requirement would unfairly discriminate against rural carriers, the
Commission concluded that the record contained insufficient evidence to
support the claim that rural carriers\' implementation costs are higher,
and that, even if they are, \"it is not clear that such costs should be
pooled for recovery in this competitive, deregulated industry.\" Id. at
p 57.

Petitioners RCA and Corr Wireless Communications (\"Corr\") sought
further reconsideration of the Second Reconsideration Order, contending
that the Commission had improperly disregarded rural carriers\' concerns
about cost recovery. Corr, a rural carrier, submitted detailed
information on its Phase II implementation costs. The reconsideration
petitions also argued that the Commission\'s action violates universal
service requirements under 47 U.S.C. § 254 and amounts to an
unconstitutional taking in violation of the Fifth Amendment. Although
petitioners had not made these claims in the proceedings leading to the
Second Reconsideration Order (in fact, Corr had not even participated in
those proceedings), Corr argued that its failure was excusable because
the Commission had not given adequate notice of the possibility that it
would abandon the carrier cost recovery requirement. Disagreeing, and
finding that commenters had presented no \"new or persuasive evidence\"
to justify reopening the proceedings, the Commission denied
reconsideration. In re Revision of the Comm\'n\'s Rules to Ensure
Compatibility with Enhanced 911 Emergency Calling Sys., 15 FCC Rcd 22810
p 8 (2000) (\"Fifth Memorandum & Order\").

RCA and Corr have now filed a petition for review of the Commission\'s
decision to deny reconsideration of the Second Reconsideration Order.
All three petitioners also challenge the Second Reconsideration Order
itself, arguing that the Commission\'s decision to eliminate the carrier
cost recovery requirement violates this circuit\'s cost causation
principle. See Comptel, 87 F.3d at 529. They also argue that the
Commission acted arbitrarily and capriciously in violation of the
Administrative Procedure Act and violated both the Regulatory
Flexibility Act and the takings clause of the Fifth Amendment.

II

We begin with petitioners\' contention that eliminating the carrier cost
recovery requirement runs afoul of this circuit\'s cost causation
principle. In Comptel, we held that when the Commission sets rates, it
\"must \... specifically justify any rate differential that does not
reflect cost.\" 87 F.3d at 529. In that case, the Commission had
established a rate structure that essentially required large long
distance carriers to subsidize smaller ones. Concluding that \"the
attempt to recover costs from \[long distance carriers\] that did not
cause those costs to be incurred would impart the wrong incentives,\"
id. at 530-31, we vacated the Commission\'s order. Comptel based its
cost causation principle on both APA section 706(A)(2), which makes
unlawful arbitrary and capricious agency actions, 5 U.S.C. § 706(2)(A),
and then-existing versions of Communications Act sections 201 and 202,
which presently provide that \"charges \... for and in connection with
\[a\] communication service, shall be just and reasonable,\" 47 U.S.C. §
201(b), and that \"\[i\]t shall be unlawful for any common carrier to
make any unjust or unreasonable discrimination in charges \... for or in
connection with \[a\] communication service,\" id. § 202(a). See
Comptel, 89 F.3d at 529. Petitioners here argue that neither they nor
their customers caused the E911 costs, and therefore that Comptel
prohibits the Commission from requiring them to pay for the cost of
implementation.

The Commission argues that petitioners may not rely on the cost
causation principle because they failed to raise Communications Act
sections 201 and 202 in the proceedings before the agency. See 47 U.S.C.
§ 405(a)(2); Bartholdi Cable Co. v. FCC, 114 F.3d 274, 279 (D.C. Cir.
1997) (interpreting section 405(a)(2) as requiring that the Commission
\"be afforded an \'opportunity to pass\' on an issue as a condition of
judicial review.\"). Alternatively, the Commission argues, even if the
cost causation principle were properly raised, it applies only when the
Commission is setting rates. Petitioners concede their failure to cite
Communications Act sections 201 and 202 in the proceedings before the
Commission, but claim that they have not waived reliance on these
sections because the \"issue \[was\] necessarily implicated by the
argument made to the Commission.\" Time Warner Entm\'t Co. v. FCC, 144
F.3d 75, 80 (D.C. Cir. 1998). Additionally, they argue that because the
cost causation principle also rests on the APA\'s prohibition against
arbitrary and capricious agency action, it applies whether or not the
Commission is setting rates. We need not resolve these disputes,
however, because even if the cost causation principle applies outside
rate-regulated industries and is properly before us, petitioners\'
argument fails.

Petitioners claim that the \"cost causer\" for wireless E911 is
\"clearly\" the PSAP: \"E911 capabilities are not necessary to provide
wireless service. Rather, carriers are forced to install these E911
capabilities at the instigation of and for the use of the PSAPs in their
provision of emergency services.\" Petitioners\' Opening Br. at 28.
Compelling carriers rather than PSAPs to bear financial responsibility
for wireless E911 implementation by passing some or all of the costs on
to their customers, petitioners claim, violates the cost causation
principle. We disagree.

For one thing, PSAPs are not the cost causers for wireless E911
implementation. As the Commission points out:

Wireless E911 services are provided for the benefit of all subscribers,
to enable them to call and receive prompt attention from public safety
agencies\.... It is entirely rational for subscribers to wireless
services to pay through their charges for the costs the Commission has
required the carriers to incur to upgrade their systems to include E911
services. Subscribers, after all, are the ultimate beneficiaries when
E911 calls go through and public safety agencies respond.

Respondent\'s Br. at 34-35.

Petitioners\' argument to the contrary rests on a profound
misunderstanding of PSAPs and their public safety function. Petitioners
seem to think that PSAPs are private businesses\--like commercial
ambulance makers, to use petitioners\' own example\--providing
for-profit services to the public. If this were true, petitioners might
have a point. But PSAPs are governmental entities playing a critical
role in the provision of public safety services: in larger urban areas,
they are stand-alone government-funded organizations; in smaller rural
areas, they may be local law enforcement offices. PSAPs themselves
derive no benefit from wireless E911 services; rather, they provide
safety services to benefit the public. Under the Commission\'s Order, it
is the beneficiaries of these services who ultimately pay most if not
all of the cost of wireless E911 implementation.

Petitioners argue that wireless customers have not directly requested
carriers to provide them with E911 services. This is certainly true, but
the Commission, as their governmental representative, has made this
request on their behalf. Thus, in a sense, the Commission itself is the
cost causer\--it is the Commission\'s Order that requires wireless
carriers to provide E911 services in the public interest. Whether the
Commission or the wireless customer is the cost causer, we need not
decide. What\'s important is that on no plausible theory are PSAPs the
cost causers: their only role is providing 911 service. True, a PSAP
request is a precondition of a wireless carrier\'s obligation to
implement E911 technology, First Report & Order, 11 FCC Rcd 18676 at p
11, but the obligation itself results from the Commission\'s Order, and
the beneficiary of that obligation is the public.

The public nature of wireless E911 services distinguishes this case from
Comptel. There, the Commission had required some private businesses
(large long-distance carriers) to subsidize others (smaller
long-distance carriers). This produced competitive distortion in the
private market, insulating some inefficient smaller firms from the
pressures of the marketplace. Comptel, 87 F.3d at 530. In this case, by
contrast, eliminating the carrier cost recovery requirement produces no
such inefficiencies; it merely imposes the cost of E911 service on its
beneficiaries.

Disagreeing, petitioners claim that eliminating the carrier cost
recovery requirement will lead to \"inefficient economic behavior,
because \[the government is\] not required to internalize the costs of
building \[E911 capabilities\].\" Petitioners\' Opening Br. at 29.
Petitioners apparently think that, if governmental entities are not
obliged to cover the costs of the public benefits they impart, they may
order safety services that wireless customers do not really want, or at
least do not want at the price they must pay. This potential
\"inefficiency,\" petitioners claim, violates the cost causation
principle.

This argument is breathtaking. If petitioners were correct, the Federal
Aviation Administration could not require airlines to install safety
equipment without reimbursing them for their costs, the Environmental
Protection Agency would have to pay factories for the cost of required
pollution-reducing technology, and the Department of Transportation
would have to pay automobile manufacturers to install safety belts and
air bags. Each of these agencies has \"caused\" the cost of its
regulatory safety requirements in the same way the Commission has caused
the cost of wireless E911 implementation. Yet it is ludicrous to suggest
that government cannot pass these costs along to regulated entities.

Attempting to distinguish these sorts of safety regulations from the
Commission\'s action in this case, petitioners\' counsel observed at
oral argument that the Commission has chosen to implement its wireless
E911 mandate not directly, but through PSAPs. But the manner in which
the Commission chooses to implement its regulations is irrelevant. The
fact remains that the Commission has imposed upon wireless carriers an
obligation to implement a service in the public interest. Whether it
does this directly or with the cooperation of other governmental safety
organizations, it has no obligation to compensate carriers for their
costs.

If, as petitioners fear, the government improperly assesses the public
interest\--for instance, if consumers would rather pay less for wireless
phones without E911 or cars without safety belts\--the remedy is
political, not judicial. Granting petitioners the relief they seek,
moreover, would not necessarily have any impact at all on this so-called
inefficiency. If the carrier cost recovery requirement were still in
place, a state or local government could decide to place a tariff on
wireless service exactly equal to the amount carriers would have to
raise rates to cover the costs of implementation. At oral argument,
petitioners\' counsel conceded that such a tariff would not violate the
cost causation principle (if the Commission could in some way be held
responsible for it), because government would bear the costs of wireless
E911 implementation. Yet any \"inefficiency\" caused by requiring
carriers to pass implementation costs along to their customers would
result equally from such a state or local tariff.

Petitioners claim that eliminating the carrier cost recovery requirement
produces another competitive distortion: \"because rural carriers\'
costs of implementing E911 capabilities are higher per customer than
those of predominantly urban carriers, the \[Commission\'s\] rule
introduces artificial, \[Commission\]-created competitive inequalities
between rural and urban carriers.\" Petitioners\' Opening Br. at 30. We
are skeptical, however, that this claim has anything at all to do with
Comptel\'s cost causation principle. Petitioners do not argue (nor could
they) that the Commission has required rural carriers to subsidize costs
caused by urban ones. Instead, petitioners seem to be arguing that, like
the rate structure invalidated in Comptel, the Commission\'s elimination
of the carrier cost recovery requirement is arbitrary and capricious
because it distorts the competitive marketplace. But the Commission
found insufficient evidence to conclude that rural carriers\'
implementation costs are higher. Second Recons. Order, 14 FCC Rcd 20850
at p 57. Even assuming that they are, however, it is because (as
petitioners recognize) rural carriers do business in areas with lower
population density. And again, because a cost recovery requirement could
result in tariffs equal in amount to carriers\' increased rates,
granting petitioners the relief they seek would not necessarily
alleviate any inequality.

Petitioners presumably hope that a government cost recovery mechanism
would pool wireless E911 costs, distributing them equally among rural
and urban carriers. But such pooling, the Commission found, may itself
distort the competitive marketplace: to preserve competition, carriers
ought to be responsible for the potentially greater costs of doing
business in rural areas. Id. Petitioners\' solution may thus create
exactly the distortion they seek to avoid.

III

This brings us to petitioners\' other APA challenges. They first argue
that the Commission failed to consider alternative causes of the delay
in wireless E911 implementation. In particular, petitioners point to
three alternatives suggested by commenters: lack of liability protection
for wireless carriers and PSAPs; Local Exchange Carriers\' failure to
fulfil their obligations; and disputes between carriers and PSAPs over
which technology to use in implementing wireless E911. The Commission
responds that it found the carrier cost recovery requirement to be a
significant cause of delay, Second Recons. Order, 14 FCC Rcd 20850 at p
38, and that even if other causes exist, it need not address all
wireless E911 implementation problems at the same time. We agree. As we
said in National Association of Broadcasters v. FCC, agencies need not
address all problems \"in one fell swoop.\" 740 F.2d 1190, 1207 (D.C.
Cir. 1984) (citing Williamson v. Lee Optical Co., 348 U.S. 483, 489
(1955) (\"\[R\]eform may take place one step at a time, addressing
itself to the phase of the problem which seems most acute to the
\[regulatory\] mind.\")). In any event, and contrary to petitioners\'
claim, the Commission did address these alternative explanations,
finding that problems caused by lack of liability protection were mooted
by legislation granting such protection, Second Recons. Order, 14 FCC
Rcd 20850 at p 9; that the Telecommunications Act of 1998 and existing
regulations already require Local Exchange Carriers to fulfill their
obligations, id. at p 8; and that the Commission is available to mediate
technology disputes between PSAPs and carriers, id. at p 7.

Petitioners next argue that the Commission failed to consider
alternative solutions to the problems posed by the carrier cost recovery
requirement, including drafting more specific instructions and
guidelines on the most disputed cost recovery issues and permitting
carriers to file federal tariffs to recover their costs. As the
Commission points out in its brief, however, it gave reasons for
rejecting both alternatives. Respondent\'s Br. at 25-27 (citing Second
Recons. Order, 14

FCC Rcd 20850 at WW 49-52). In reply, petitioners, apparently missing
this section of the Commission\'s brief, not only reassert that the
Commission \"simply ignored these proposals,\" Petitioners\' Reply Br.
at 14, but also make no effort to argue what they must: that the
Commission\'s reasons for rejecting these alternatives were inadequate
or unsupported by record evidence. See Comm. for Cmty. Access v. FCC,
737 F.2d 74, 83 (D.C. Cir. 1984).

Petitioners argue that the Commission\'s decision to eliminate the
carrier cost recovery requirement finds no support in the record because
\"none of the parties \... (with the exception of APCO \... )
recommended the elimination of carrier cost recovery.\" Petitioners\'
Opening Br. at 37. But the Commission has no obligation to take the
approach advocated by the largest number of commenters, Natural Res.
Def. Council v. EPA, 822 F.2d 104, 122 n.17 (D.C. Cir. 1987); indeed,
the Commission may adopt a course endorsed by no commenter. The
Commission\'s only responsibilities are to respond to comments, 5 U.S.C.
§ 553, and to choose a reasonable approach backed up by record evidence,
Comm. for Cmty. Access, 737 F.2d at 83.

Next, petitioners argue that, in eliminating the cost recovery
requirement, the Commission \"dramatically\" departed from precedent
without explanation. Petitioners\' Opening Br. at 38. In particular,
they argue, the Commission gave no reason for abandoning its goal of
achieving parity in wireless and landline services, so these services
can \"truly be viewed as substitute\[s\] by American consumers.\" In re
Revision of the Comm\'n\'s Rules to Ensure Compatibility with Enhanced
911 Emergency Calling Sys., 14 FCC Rcd 10954 p 4 (\"Second Report &
Order\"). Because landline carriers typically recover E911 costs by
obtaining state authorization to add a surcharge to customers\' bills,
petitioners claim that to achieve parity between landline and wireless
phone service, wireless E911 should be funded through a similar state
tariff. But the Commission\'s apparent focus in achieving wireless and
landline parity is not on making funding methods identical, but on
equalizing services available to consumers: one of the Commission\'s
parity goals is to ensure that consumers have access to E911 services
whether they use landline or wireless phones. Second Report & Order, 14
FCC 10954 at p 4 (\"We expect to continue to explore ways to improve
wireless 911 service because the improvement of wireless 911 is an
essential element in applying wireless communications to improving
public safety and hastening the day when wireless and \[landline\] can
truly be viewed as substitute services by American consumers.\").
Because the Commission found that carrier cost recovery was impeding
wireless E911, its action furthers, not frustrates, the goal of
wireless/landline parity. And as the Commission points out, the
difference in funding mechanisms reflects an important difference in the
way each service is regulated: landline carriers are rate-regulated;
wireless carriers are not. Because landline carriers are unable to pass
E911 implementation costs along to customers, as wireless carriers can,
the Commission had more than sufficient reason to choose a different
E911 implementation scheme for wireless carriers.

Finally, petitioners argue that the Commission\'s analysis of the impact
of its Order on rural carriers was arbitrary and capricious. In response
to comments that eliminating the carrier cost recovery requirement would
unduly burden rural carriers, the Commission found insufficient record
evidence to support commenters\' claims that the costs of wireless E911
implementation in rural areas would, in fact, be higher. Second Recons.
Order, 14 FCC Rcd 20850 at p 57. \"While some costs will likely be
higher in such areas,\" the Commission stated, \"other costs may
actually be lower, such as construction costs or other infrastructure
needs.\" Id. In its brief in this court, the Commission notes that
neither RCA nor US Cellular submitted any specific financial data to
support their claims of higher costs. Without specific evidence, the
Commission was entitled to conclude that petitioners failed to
demonstrate that rural carriers would disproportionately suffer from
eliminating the carrier cost recovery requirement.

According to petitioners, Corr, a rural carrier, did supply specific
financial data. But Corr submitted this evidence for the first time in
its petition for reconsideration of the Second Reconsideration Order.
Refusing to reopen the proceeding, Fifth Memorandum & Order, 155 FCC Rcd
22810 at p 30, the Commission found that Corr had adequate notice of the
possibility that the Commission would drop the carrier cost recovery
requirement, and that Corr had not submitted \"new or persuasive
evidence that \[the Commission\'s\] conclusions were in error,\" id. at
p 8. \"Where \... the Commission refuses to reopen a proceeding, what is
reviewable is merely the lawfulness of the refusal,\" ICC v. Bhd. of
Locomotive Eng\'rs, 482 U.S. 270, 278 (1986) (emphasis omitted)\--in
this case, the Commission\'s determination that adequate notice had been
given and its finding that Corr\'s data did not qualify as new evidence
requiring reconsideration, see Bowman Transp., Inc. v. Arkansas-Best
Freight Sys., Inc., 419 U.S. 281, 295 (1974) (listing cases discussing
agency error in failing to reopen proceedings to consider new evidence).
Because petitioners offer no challenge to this part of the Commission\'s
decision, we lack jurisdiction to consider the implications of Corr\'s
cost data on the Second Reconsideration Order, as well as other
challenges to that order contained in the rejected reconsideration
petitions. Bhd. of Locomotive Eng\'rs, 482 U.S. at 282.

IV

The Regulatory Flexibility Act obliges federal agencies to assess the
impact of their regulations on small businesses. See 5 U.S.C. §§
601-612. Petitioners claim that the Commission failed to fulfill the
RFA\'s requirement to file a final regulatory flexibility analysis
(\"FRFA\") containing

a description of the steps the agency has taken to minimize the
significant economic impact on small entities consistent with the stated
objectives of applicable statutes, including a statement of the factual,
policy, and legal reasons for selecting the alternative adopted in the
final rule and why each one of the other significant alternatives to the
rule considered by the agency which affect the impact on small entities
was rejected.

5 U.S.C. § 604(a)(5). Purely procedural, however, RFA section 604
requires nothing more than that the agency file a FRFA demonstrating a
\"reasonable, good-faith effort to carry out \[RFA\'s\] mandate.\"
Alenco Communications, Inc. v. FCC, 201 F.3d 608, 625 (5th Cir. 2000).
Petitioners dispute neither that the Commission included a FRFA in its
Second Reconsideration Order, 14 FCC Rcd 20850, 20901 app. C, nor that
this statement addresses all subjects required by the RFA. Instead,
petitioners argue that the Commission\'s analysis of the impact its
action would have on small carriers and its dismissal of alternatives
was arbitrary. But as we have already seen, the Commission\'s analysis
of the impact on small rural carriers, supra at 15-16, and its reasons
for dismissing alternatives to eliminating the carrier cost recovery
requirement, supra at 13-14, were entirely reasonable.

Petitioners also argue that the Commission failed to issue an initial
regulatory flexibility analysis as required by RFA section 603. 5 U.S.C.
§ 603. Not only did petitioners fail to raise this argument until their
reply brief, see Corson & Gruman Co. v. NLRB, 899 F.2d 47, 50 n.4 (D.C.
Cir. 1990) (\"We require petitioners and appellants to raise all of
their arguments in the opening brief to prevent \'sandbagging\' of
appellees and respondents and to provide opposing counsel the chance to
respond.\"), but the RFA expressly prohibits courts from considering
claims of non-compliance with section 603, Allied Local & Reg\'l Mfrs.
Caucus v. EPA, 215 F.3d 61, 79 (D.C. Cir. 2000).

V

Because petitioners\' remaining claims\--that the Commission\'s action
violates the universal service requirements of the Communications Act,
47 U.S.C. § 254, and the takings clause of the Fifth Amendment, U.S.
Const. amend. V\--were raised only in petitions for reconsideration of
the Second Reconsideration Order, thus suffering the same defects as
Corr\'s submission of cost data, see supra at 15-16, we lack
jurisdiction to consider them. We therefore deny the petition for review
in its entirety.

So ordered.