United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 7, 2018 Decided July 24, 2018

No. 17-1198

SORENSON COMMUNICATIONS, LLC,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED 

STATES OF AMERICA,

RESPONDENTS

Consolidated with 17-1202

On Petitions for Review of an Order of

the Federal Communications Commission

Donald B. Verrilli Jr. argued the cause for petitioner

Sorenson Communications, LLC. With him on the briefs were 

Michael B. DeSanctis, Ginger D. Anders, Sarah G. Boyce, and 

Rachel G. Miller-Ziegler.

Anthony C. Kaye argued the cause for petitioner Video 

Relay Services Consumer Association. With him on the briefs 

was Daniel J. Tobin.
2

C. Grey Pash Jr., Counsel, Federal Communications 

Commission, argued the cause for respondents. With him on 

the brief were Robert B. Nicholson and Robert J. Wiggers,

Attorneys, U.S. Department of Justice, Thomas M. Johnson, 

Jr., General Counsel, Federal Communications Commission, 

David M. Gossett, Deputy General Counsel, and Jacob M. 

Lewis, Associate General Counsel. Richard K. Welch, Deputy 

Associate General Counsel, Federal Communications 

Commission, entered an appearance. 

Jeffrey T. Rosen, pro hac vice, argued the cause for amici 

curiae Convo Communications, LLC, et al. With him on the 

brief was George L. Lyon Jr.

Before: GRIFFITH, MILLETT, and PILLARD, Circuit Judges.

Opinion for the Court filed by Circuit Judge GRIFFITH.

GRIFFITH, Circuit Judge: Video Relay Service (VRS) 

enables people with hearing or speech impairments to 

communicate with people who use standard telephones. The 

VRS user communicates in sign language with an interpreter 

through a video connection, and the interpreter speaks with the 

hearing person using a standard phone. VRS is provided by 

several private companies who are reimbursed through rates set 

by the Federal Communications Commission (FCC). Two 

parties bring different challenges to the rates set by the FCC in 

2017: Sorenson Communications, LLC (“Sorenson”), the 

largest VRS provider, and the Video Relay Services Consumer 

Association (VRSCA), an unincorporated information forum 

for VRS users. We dismiss VRSCA’s petition for lack of 

standing and deny Sorenson’s petition on the merits.
3

I

A

The Americans with Disabilities Act directs the FCC to 

ensure that telecommunications services are available and 

accessible to people with hearing or speech impairments. See 

Pub. L. No. 101-336, tit. IV, § 401, 104 Stat. 327, 366 (1990) 

(codified as amended at 47 U.S.C. § 225). These services are 

broadly known as telecommunications relay services (TRS), 

which enable a person who is “deaf, hard of hearing, deafblind, or who has a speech disability to engage in 

communication by wire or radio . . . in a manner that is 

functionally equivalent to the ability of a hearing individual 

who does not have a speech disability to communicate using 

voice communication services by wire or radio.” 47 U.S.C. 

§ 225(a)(3) (emphasis added). The FCC must also ensure that 

TRS is “available, to the extent possible and in the most 

efficient manner,” to people with hearing and speech 

disabilities. Id. § 225(b)(1) (emphasis added). The dispute in 

this case ultimately turns on whether the FCC’s compensation 

rates for TRS comply with § 225’s mandate to provide

functionally equivalent communication services in the most 

efficient manner.

There are several types of TRS, but only one is relevant 

here. VRS “allows people with hearing or speech disabilities 

who use sign language to communicate with voice telephone 

users through video equipment.” 47 C.F.R. § 64.601(a)(43). 

VRS video equipment functions somewhat like Skype or 

Apple’s FaceTime by providing a visual connection between 

the caller and an American Sign Language (ASL) interpreter 

who is employed by the VRS provider. The interpreter then 

makes a standard voice call to the hearing recipient and 

translates between the two, signing with the caller and speaking 
4

with the recipient. See generally Sorenson Commc’ns, Inc. v. 

FCC (“Sorenson I”), 659 F.3d 1035, 1039 (10th Cir. 2011); 

Sorenson Commc’ns, Inc. v. FCC (“Sorenson II”), 765 F.3d 37, 

40 (D.C. Cir. 2014). Ultimately, there are three interacting 

components: VRS access technologies, such as a videophone;

the video communication “platform” that routes calls; and the 

relay service provided by ASL-fluent communications 

assistants. Order, Structure & Practices of the Video Relay 

Serv. Program, 28 FCC Rcd. 8618, 8621 (2013) (“2013 

Order”).

Today, the majority of VRS is provided by several private 

companies, all of which are involved in this case as either 

petitioner or amicus curiae. Sorenson is the dominant VRS 

provider, holding approximately 80% of the market since at 

least 2013. The four other VRS providers, two of which 

recently merged, share the remaining 20% of the market and 

are amici in this case.1

The VRS market is not a traditional competitive market.

Under § 225, VRS users do not pay any additional costs for 

VRS beyond what they would pay for standard telephone 

services. See 47 U.S.C. § 225(d)(1)(D). Instead of charging 

usersfor the additional cost of VRS, providers are compensated 

through the FCC’s Interstate TRS Fund (“TRS Fund”), which 

is supported by fees levied on telecommunications services. 

 1 ZVRS Holding Company owns two VRS subsidiaries: 

CSDVRS, LLC d/b/a ZVRS (“ZVRS”) and Purple Communications, 

Inc. (“Purple”), the latter of which it acquired in February 2017, 

though the integration is not yet complete. Collectively, ZVRS and 

Purple account for 17% of the VRS market. The two other VRS 

providers, ASL Services Holdings, LLC d/b/a GlobalVRS and 

Convo Communications, LLC, collectively make up about 3% of the 

market. 
5

See id. § 225(d)(3)(B); 47 C.F.R. § 64.604(c)(5)(iii)(A). The 

FCC sets a per-minute rate to reimburse VRS providers for 

their “reasonable costs” and then makes direct payments to the 

providers from the TRS Fund based on their total number of 

minutes. 47 C.F.R. § 64.604(c)(5)(iii)(E). Under the current 

rate structure, Sorenson is also the lowest-cost provider of 

VRS, meaning that the average VRS call with Sorenson is 

cheaper for the TRS Fund than the average call with other 

providers.

To receive compensation, VRS providers must comply 

with certain operational and customer-service requirements, 

called “mandatory minimum standards.” Id. § 64.604. These

requirements are wide-ranging, for instance specifying the 

technical types of calls that providers must handle; establishing 

the process for addressing customer complaints; and requiring

ASL interpreters to have “familiarity with hearing and speech 

disability cultures, languages, and etiquette.” Id. The FCC 

promotes compliance with these standards through various 

techniques, including competition among VRS providers. 

B

1

Before 2007, the FCC set a single per-minute 

compensation rate based on all VRS providers’ projections of 

their costs for the upcoming year. See Telecomms. Relay Servs. 

& Speech-to-Speech Servs. for Individuals with Hearing & 

Speech Disabilities, 22 FCC Rcd. 20,140, 20,144-45 (2007)

(“2007 Order”). That approach proved problematic, however, 

so the FCC established a three-tiered rate structure in 2007. Id. 

at 20,163, 20,168. This structure compensated VRS providers 

based on the total number of monthly minutes they projected 

they would provide. As a provider’s volume increased, the per-
6

minute rate decreased to account for the provider’s lower 

marginal costs as it benefited from economies of scale. Id. at 

20,163, 20,168.

2 Thus smaller providers largely received Tier 

I compensation, which compensates at the highest rate; more 

established providers mostly received compensation under 

Tiers I and II; and dominant providers (today, only Sorenson) 

received compensation under all three tiers, earning relatively 

less for the minutes provided in Tier III.

In 2010, the FCC established an interim three-tiered rate

structure for one year. See Order, Telecomms. Relay Servs. and 

Speech-to-Speech Servs. for Individuals with Hearing and 

Speech Disabilities, 25 FCC Rcd. 8689 (2010) (“2010 Interim 

Rate Order”). The rates were designed as a placeholder until 

the FCC completed a review of the VRS program, which was 

experiencing several challenges. Id. at 8693. In particular, the 

FCC determined that VRS providers were being “significantly 

overcompensated,” id. at 8698, because their “projections 

consistently overstate[d] their costs,” id. at 8694-95. To 

address this problem, the FCC based the interim rates on a 

blend of providers’ actual historical costs and the TRS Fund 

administrator’s analysis of providers’ projected costs. Id.

Sorenson sought judicial review of the 2010 Interim Rate 

Order in the Tenth Circuit, and that court affirmed the FCC’s 

order in its entirety. Sorenson I, 659 F.3d 1035. The court 

rejected Sorenson’s various challenges to the VRS rates, the 

FCC’s ratemaking methodology, and the three-tiered rate 

structure. Id. at 1050. As relevant here, the court also upheld 

 2 The compensation rates were set at: $6.77 per minute for a 

provider’s first 50,000 minutes of monthly VRS service (Tier I); 

$6.50 for minutes 50,001-500,000 (Tier II); and $6.30 for all minutes 

over 500,000 (Tier III). See 2007 Order, 22 FCC Rcd. at 20,164.
7

the FCC’s decision to exclude the cost of providing VRS video 

equipment from providers’ compensable expenses. Id. at 1045.

On the same day that the FCC adopted the 2010 Interim 

Rate Order, the agency also issued a notice that it would “take 

a fresh look” at VRS rates because of its concern that the VRS 

program was “fraught with inefficiencies (at best) and 

opportunities for fraud and abuse (at worst).” Notice of Inquiry, 

25 FCC Rcd. 8597, 8598, 8606 (2010). In 2011, the FCC issued 

an additional notice that discussed possible options for 

improving the VRS program and solicited comments and 

proposals from the public and VRS industry. See Further 

Notice of Proposed Rulemaking, 26 FCC Rcd. 17,367 (2011)

(“2011 FNPRM”). In particular, the FCC sought comments on 

whether the agency should replace the tiered-rate structure with 

a single rate. See id. at 17,418.

2

In 2013, the FCC issued an order that adopted a number of 

structural reforms for the VRS market. See 2013 Order, 28 FCC 

Rcd. 8618. These reforms were designed to remove barriers to 

effective competition among VRS market participants. One 

structural reform sought to improve VRS “interoperability.” 

Interoperability ensures that VRS users can make calls with 

other VRS users regardless of their respective VRS providers. 

See id. at 8639. Another structural reform sought to improve 

“equipment portability,” which refers to a VRS user’s ability 

to switch between default VRS providers without changing 

their videophones. See id. The agency further adopted a rule to 

establish a neutral video communications platform (“Neutral 

VRS Platform”), which would provide technical video 

capabilities for companies who might want to provide only 

ASL translation services instead of an entire VRS operation. 

See id. at 8656-63.
8

The 2013 Order also updated the tiered-rate structure with 

new rates. The FCC designed the new tiers in light of its finding 

that Sorenson’s average cost per minute still fell below the 

average per-minute cost of its smaller competitors. See id. at 

8700. The calls were cheaper on average because, for one 

thing, Sorenson was able to spread its overhead costs over

many more minutes of service. Due to this cost difference, the 

agency stated that it hoped to transition the VRS market away 

from the tiered-rate structure and toward a single, low rate in 

the future. Id. at 8698-706. The FCC expected that its new 

structural reforms would make such a transition possible 

without “unnecessarily constricting the service choices 

available to VRS consumers” by driving smaller providers out 

of the market. Id. at 8699; see also id. at 9698 (“We also believe 

that our structural reforms, once implemented, will eliminate 

any residual need for tiered rates.”).

To advance the transition to a single rate, the agency 

planned to narrow the gap between rate tiers over the course of 

four years. Id. at 8699. By using this “glide path,” the agency 

hoped to eliminate the inefficiencies of the tiers while still 

protecting the long-term competitiveness and efficiency of the 

market. See id. at 8704. Even though immediately adopting a 

single, low rate might have brought some immediate savings to 

the TRS Fund, the FCC found that it was “worth tolerating 

some degree of additional inefficiency in the short term, in 

order to maximize the opportunity for successful participation 

of multiple efficient providers in the future, in the more 

competition-friendly environment that [it] expect[ed] to result 

from [its] structural reforms.” Id. at 8699. And finally, the 2013 

Order rejected once again Sorenson’s request to include video 

equipment as an allowable cost in determining VRS rates. Id. 

at 8696-97.
9

Sorenson petitioned our court to review the 2013 Order. 

We largely upheld the order, remanding only one issue that is 

not relevant today. See Sorenson II, 765 F.3d at 52. We first 

found that several of Sorenson’s challenges essentially 

repeated arguments it had already made before the Tenth 

Circuit in Sorenson I and were thus barred by issue preclusion. 

These included its claim that the FCC was required to adopt 

rates that reimbursed VRS providers for equipment costs. See 

id. at 45. We otherwise concluded that the tiered-rate structure, 

the applicable rules, and the rates themselves were consistent 

with § 225 and were not arbitrary and capricious. See id. at 45-

52. Despite Sorenson’s protests that the FCC had already 

determined the tiered-rate structure to be inefficient, we 

concluded that “the decision to retain the tiers while 

transitioning to a competitive bidding scheme [was] not 

inconsistent with the [FCC’s] stated position” in the 2013 

Order. Id. at 51. And we said we would “defer to the agency’s 

judgment about how best to achieve a smooth transition to 

competitive bidding.” Id. at 52. 

C

In 2017, after issuing a further notice and accepting 

proposals from Sorenson and the other providers, see Further 

Notice of Proposed Rulemaking, 32 FCC Rcd. 2436 (2017)

(“2017 FNPRM”), the FCC decided to retain a tiered-rate 

structure for four more years, Order, Structure & Practices of 

the Video Relay Serv. Program, 32 FCC Rcd. 5891 (2017) 

(“2017 Order”). That order gave rise to the dispute before us 

today.

In the 2017 Order, the FCC observed that the VRS market 

had not changed much since its 2013 Order. Sorenson still 

controlled 80% of the market, and the smaller providers had 

not grown enough to achieve “the necessary scale to compete 
10

effectively.” 2017 Order, 32 FCC Rcd. at 5893. And although 

two of the smaller providers merged—potentially creating a 

stronger competitor against Sorenson—it was too soon to 

assess the success of the merger. The FCC had anticipated in 

its 2013 Order that its structural reforms would enable multiple 

VRS providers to remain in the market without a tiered-rate 

system; however, that prediction was undercut by the delayed 

implementation of some reforms and the failure of others. See

id. at 5905-06; see also 2017 FNPRM, 32 FCC Rcd. at 2474. 

The interoperability standards were not incorporated into the 

FCC’s rules until 2017, 2017 Order, 32 FCC Rcd. at 5905, the 

equipment portability mandate was similarly delayed, id. at 

5905-06, and the agency had received no acceptable bids to 

develop the Neutral VRS Platform, id. at 5930-31. In light of 

the market’s then-current state, the FCC concluded that the 

“best available alternative at present” for establishing rates for 

the next four years was to maintain a tiered-rate structure. Id.

at 5905-08; see also 2017 FNPRM, 32 FCC Rcd. at 2469-79.

The FCC ultimately provided two main statutory 

rationales for retaining the tiers. First, keeping that structure 

would help ensure that multiple VRS providers remained in the 

market, which in turn would advance the “functional 

equivalence” of VRS. 2017 Order, 32 FCC Rcd. at 5907-09. 

Maintaining multiple providers enhances functional 

equivalence by giving VRS users the choice to select among 

multiple providers, just as voice telephone users are able to do.

It also provides a competitive incentive for the dominant 

provider to “maintain higher standards of service quality than 

if it faced no competition.” Id. at 5907; see also id. at 5909 

(“Further attrition [of providers] . . . would further limit the 

ability of consumers to select providers based on service 

quality and features . . . eroding the [FCC’s] ability to ensure 

the availability of functionally equivalent service.”). In other 

words, competition is a technique that can help ensure 
11

compliance with some of the service-quality requirements 

outlined in the mandatory minimum standards. In addition, the 

agency noted that retaining multiple providers through the 

tiered-rate structure “provides a competitive incentive to 

improve VRS offerings.” Id. at 5907. For instance, some of the 

smaller providers have developed services to meet the “needs 

of niche populations, including people who are deaf-blind or 

speak Spanish.” Id. at 5909-10, 5916-17 & n.153. Given all 

these benefits, the FCC concluded that retaining the tiered-rate 

structure may be justifiable on functional equivalency 

considerations alone, even if it resulted in somewhat reduced 

efficiency. Id. at 5909. 

As a second rationale, the FCC concluded that retaining 

the tiers actually advanced the statute’s efficiency mandate as 

well. The agency reasoned that its efficiency mandate required 

it to look beyond “short-term savings in an accounting sense” 

and also consider the “long[-]run” efficiency of the VRS 

program. Id. at 5909-10. To promote the long-term health of 

the program, the FCC determined it should work to “prevent 

the VRS marketplace from devolving into a monopoly,” which 

would limit the agency’s ability to “improve efficiency.” Id. at 

5910; see also id. at 5907 & n.91, 5909. 

For these reasons, the FCC rejected Sorenson’s proposal 

of setting a single, uniform rate for all providers. Given the 

state of the market, the single-rate approach would require the 

agency to choose between two inefficient options: (1) setting a 

low uniform rate, which would force all of the smaller 

providers out of the market, or (2) adopting Sorenson’s 

proposal and setting a higher uniform rate, which might allow 

a competitor to stay in the market but would provide windfalls 

to Sorenson because of Sorenson’s low average cost for VRS 

calls. The first option would yield a Sorenson monopoly; the 

second option would result in “greatly increased TRS fund 
12

expenditures” because Sorenson’s average compensation per 

minute would increase. Id. at 5907.3 Retaining the tiered-rate 

structure, on the other hand, would help “ensure greater 

efficiency without sacrificing competition, by tailoring 

compensation rates more closely to the costs of those 

competitors falling within each tier.” Id. at 5908. In sum, 

retaining the tiered-rate structure not only promoted long-term 

efficiency by preventing a monopoly, but it was also the most 

efficient short-term proposal that was actually presented to the 

agency. 

After rejecting several alternative proposals, the FCC 

established the new tiered-rate structure. First, the agency 

added an “emergent rate” for fledgling VRS providers who 

deliver fewer than 500,001 minutes per month. Id. at 5916. 

Second, the FCC adjusted the rates and number of minutes that 

defined the three tiers. Id. at 5918-24.4 In reaching these rates, 

the FCC considered covering providers’ costs, preserving 

competition, and minimizing any incentive for providers to 

slow their growth as they approached the boundary between 

 3 The FCC also rejected Sorenson’s proposed rate because it was 

based on unreliable projected costs. 

4 Under the new plan, the rate for emergent providers is $5.29 

per minute. Tier I compensates providers at $4.82 per minute for up 

to 1 million minutes per month; Tier II pays $3.97 for minutes 1 to 

2.5 million per month; and Tier III pays $3.21 for minutes over 2.5 

million per month. The Tier III rates will gradually decline from 

$3.21 in 2017 down to $2.63 in 2020. As of now, only Sorenson 

provides enough minutes to receive any compensation under Tier III. 

But Sorenson still fares well under this scheme. The FCC found that 

the lowest Tier III rate ($2.63 per minute in 2020) “is higher than the 

average allowable expenses per minute for [Sorenson].” Id. at 5923. 

The agency also found that, under its new tiered-rate structure, 

Sorenson “is likely to continue earning higher per-minute operating 

margins than any of its competitors.” Id. at 5919 n.167.
13

tiers. The new compensation rates are effective from 2017 

through 2021. See id. at 5916-24.

The FCC emphasized that it would “revisit the VRS 

compensation rate structure” in four years. Report and Order 

and Order FCC-17-86A1, J.A. 23. Moreover, the agency 

predicted that full implementation of its structural reforms, the 

collection and publication of service-quality metrics, and the 

agency’s new attention to idiosyncratic anticompetitive 

features in the VRS market could enable more effective 

competition among VRS providers in the future.

* * *

Two parties petition for review of the 2017 Order, 

Sorenson and the VRSCA. Sorenson, as already noted, is the 

dominant provider in the VRS market. VRSCA is not a 

provider and describes itself as an unincorporated association 

that creates “an information forum” for VRS users with a 

primary purpose of integrating VRS into daily life. VRSCA Br. 

iii. VRSCA notes, “All VRS users may participate in the 

organization at no cost and are encouraged to sign up for email 

updates,” and over 10,000 individuals have signed up. Id.

VRSCA also informed us that it “receives funding” from 

Sorenson. Id. at iv. We asked VRSCA to provide supplemental 

briefing to clarify its relationship with Sorenson, and VRSCA 

confirmed that Sorenson “provides 100% of VRSCA’s 

financial support.” VRSCA Suppl. Br. 2. 

II

Sorenson and VRSCA separately seek review of the FCC’s 

final rate order. Both parties filed timely petitions for review, 

and we have jurisdiction under 47 U.S.C. § 402(a) and 28 
14

U.S.C. §§ 2342(1), 2344. As discussed below, Sorenson has 

standing to seek review but VRSCA does not.

Under the Administrative Procedure Act (APA), we will set 

aside FCC actions that are “arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with law.” 5 U.S.C. 

§ 706(2)(A); see also Motor Vehicles Mfrs. Ass’n of the U.S. v. 

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). 

Because “agency ratemaking is far from an exact science and 

involves policy determinations in which the agency is 

acknowledged to have expertise, courts are particularly 

deferential when reviewing ratemaking orders.” Sw. Bell Tel. 

Co. v. FCC, 168 F.3d 1344, 1352 (D.C. Cir. 1999) (citations 

and internal quotation marks omitted). 

For questions of statutory interpretation, we use the 

familiar Chevron framework. We first ask whether Congress 

has “‘directly spoken to the precise question at issue,’ Chevron 

USA Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842 

(1984), and if so, whether it has unambiguously foreclosed the 

agency’s statutory interpretation.” Catawba County v. EPA, 

571 F.3d 20, 35 (D.C. Cir. 2009). If the agency’s interpretation 

is not unambiguously foreclosed by the statute, we defer to its 

interpretation “so long as it is reasonable.” Id.

III

VRSCA has failed to establish constitutional standing. The 

“irreducible constitutional minimum of standing contains three 

elements”: (1) the plaintiff must have suffered an injury-infact, (2) there must be a causal connection between the injury 

and the conduct challenged, and (3) it must be likely that the 

injury will be redressed by a favorable decision. Lujan v. Defs.

of Wildlife, 504 U.S. 555, 560 (1992).
15

VRSCA claims it has “associational standing” to challenge 

the FCC’s 2017 Order. An association has standing on behalf 

of its members when: “(1) ‘its members would otherwise have 

standing to sue in their own right;’ (2) ‘the interests it seeks to 

protect are germane to the organization’s purpose;’ and (3) 

‘neither the claim asserted nor the relief requested requires the 

participation of individual members in the lawsuit.’” Ctr. for 

Sustainable Econ. v. Jewell, 779 F.3d 588, 596 (D.C. Cir. 2015)

(quoting Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 

333, 343 (1977)). Thus, to meet the first requirement for 

associational standing, VRSCA must show that at least one of 

its members was injured in fact, the injury was caused by the 

2017 Order, and the court can redress the injury. Moreover, 

“[w]hen a petitioner claims associational standing, it is not 

enough to aver that unidentified members have been injured. 

Rather, the petitioner must specifically identify members who 

have suffered the requisite harm.” Chamber of Commerce of 

the U.S. v. EPA, 642 F.3d 192, 199-200 (D.C. Cir. 2011)

(citations and internal quotation marks omitted).

In its opening brief, VRSCA failed to identify a specific 

member who had been injured by the 2017 Order. Instead, 

VRSCA broadly asserted that “any individual member of 

VRSCA . . . would have standing to sue in his or her own right 

as a VRS user.” VRSCA Br. 8. After the FCC challenged 

VRSCA’s standing, VRSCA stated in its reply brief that its 

director, Sharon Hayes, is a member who is deaf and uses VRS. 

See VRSCA Reply Br. 2-6.

VRSCA’s argument for standing fails to comply with our 

procedural requirements set out in Sierra Club v. EPA, 292 

F.3d 895, 899-900 (D.C. Cir. 2002). Sierra Club distilled 

certain procedural ground rules for petitioners to establish 

standing to challenge an agency decision. Petitioners must 

substantiate their claim of standing “with the manner and 
16

degree of evidence required at the successive stages of the 

litigation.” Id. at 899 (quoting Lujan, 504 U.S. at 561). When 

a petitioner seeks direct judicial review of an agency decision, 

the court examines the petitioner’s standing as it would at 

summary judgment—in other words, “the petitioner must 

either identify in th[e] record evidence sufficient to support its 

standing to seek review or, if there is none because standing 

was not an issue before the agency, submit additional evidence 

to the court of appeals.” Id. Frequently, this requirement poses

no problem because in “many if not most cases the petitioner’s 

standing to seek review of administrative action is selfevident.” Id. However, when a petitioner’s standing is not 

“clear” or “self-evident” on the face of its petition, the 

petitioner is required to address its standing in its opening brief. 

Id. at 900; see also Nat’l Ass’n of Regulatory Util. Comm’rs v. 

FCC, 851 F.3d 1324, 1327 (D.C. Cir. 2017) (per curiam).

VRSCA’s standing was far from self-evident in its initial 

filings; to the contrary, VRSCA’s standing presented multiple, 

interrelated difficulties that it entirely failed to address. For 

example, it is unclear if VRSCA is the sort of organization that 

would qualify as a “membership association” for purposes of 

our standing analysis. Am. Legal Found. v. FCC, 808 F.2d 84, 

89-90 (D.C. Cir. 1987). Even in light of its supplemental 

briefing after oral argument, VRSCA appears to lack many of 

the “indicia of a traditional membership” association, such as a 

membership that finances the association’s activities or plays a 

role in selecting its leadership. See id. Its reply brief and postargument submission instead invoke as “members” the passive 

subscribers to its e-mail list and individuals who “follow” the 

group’s Facebook page. But see Gettman v. Drug Enf’t Admin., 

290 F.3d 430, 435-36 (D.C. Cir. 2002) (holding that a 

magazine’s readers and subscribers were not its members for 

purposes of associational standing). And we now are told that 

Sorenson “provides 100% of VRSCA’s financial support,” 
17

VRSCA Suppl. Br. 2, which casts further doubt on VRSCA’s

status as a constitutionally viable representative of the interests 

of its “members.”5

VRSCA’s standing is further complicated by numerous 

unanswered questions about the nature of the injury to its 

director Sharon Hayes, the only individual “member” it now 

identifies as having standing in her own right. Various 

documents in the administrative record allowed us to discern 

that Hayes is personally deaf, a user of VRS, and the director 

of VRSCA. But the association made no argument that the rates 

set in the 2017 Order adversely affected her service, costs, or

access to needed equipment, or that the rates injured her in any 

other individualized way.

In sum, VRSCA’s opening brief fell too short of the mark. 

It failed to identify any of its members or the harm they 

suffered, failed to disclose that it is fully funded by Sorenson, 

and offered only conclusory and general assertions about the 

nature of the association, untethered from evidence. Given the 

multiple potential hurdles VRSCA faced, it was unreasonable 

to assume that its standing was “self-evident.” By failing to 

bring forward the facts necessary to address all of this, VRSCA 

did not satisfy the requirements set out in Sierra Club. We 

therefore conclude that VRSCA did not carry its burden to 

establish standing.

 5 VRSCA’s complete financial dependence on Sorenson raises 

several concerns, not least of which is that VRSCA today advances

the precise argument that Sorenson is collaterally estopped from 

making. See Sorenson II, 765 F.3d at 43-46 (holding that Sorenson 

is barred under issue preclusion from challenging the FCC’s 

determination on compensation for VRS equipment). 
18

IV

A

Turning to Sorenson’s petition, we must resolve two 

threshold questions pertaining to standing and claim 

preclusion.

First, amici claim Sorenson lacks standing to challenge the 

2017 Order because it was not injured by that order. That is so, 

amici argue, because it is undisputed that the 2017 Order’s rate

adequately compensates Sorenson for its statutorily allowable 

costs; i.e., Sorenson doesn’t claim it is getting shortchanged by 

the new rate. Nor does Sorenson specify how it was otherwise 

injured by the order. We consider these objections, mindful of 

“our independent obligation to be sure we have jurisdiction.”

High Plains Wireless, L.P. v. FCC, 276 F.3d 599, 605 (D.C. 

Cir. 2002).

We conclude Sorenson has standing under the competitor 

standing doctrine. That doctrine recognizes that economic 

actors “‘suffer [an] injury in fact when agencies lift regulatory 

restrictions on their competitors or otherwise allow increased 

competition’ against them.” Sherley v. Sebelius, 610 F.3d 69, 

72 (D.C. Cir. 2010) (quoting La. Energy & Power Auth. v. 

FERC, 141 F.3d 364, 367 (D.C. Cir. 1998)). Because increased 

competition almost surely injures economic actors, they “need 

not wait” until they are competitively hurt “before challenging 

the regulatory . . . governmental decision that increases 

competition.” Id. In short, “the basic requirement” is that “the 

complainant show an actual or imminent increase in 

competition [that] will almost certainly cause an injury in fact.” 

Id. at 73. 
19

Sorenson has competitor standing to challenge the FCC’s 

2017 Order based on anticipated harm to its dominant position 

in the VRS market. The entire purpose of the tiered-rate 

structure is to promote competition and enable smaller VRS 

providers to expand their shares of that market. At least some 

of that expansion would inevitably come at the expense of 

Sorenson, which controls 80% of the VRS market. This

intended effect of the 2017 Order provides sufficient evidence 

of an “actual or imminent” increase in competition. Sorenson’s 

competitor-based standing is “clear” and “self-evident” on the 

face of its petition, and for that reason Sorenson did not need 

to provide a lengthy explanation of its standing. See Sierra 

Club, 292 F.3d at 899-900.

Second, the FCC briefly argues that Sorenson’s challenge 

to the tiered-rate structure is barred by claim preclusion. Claim 

preclusion, also called res judicata, “bars a party from relitigating a claim that was or should have been asserted in a 

prior action.” Hurd v. District of Columbia, 864 F.3d 671, 679 

(D.C. Cir. 2017). Under this doctrine, “a judgment on the 

merits in a prior suit bars a second suit involving identical 

parties . . . based on the same cause of action.” Apotex, Inc. v. 

FDA, 393 F.3d 210, 217 (D.C. Cir. 2004). As we have noted, 

our claim-preclusion case law uses interchangeably the terms 

“claim” and “cause of action.” See Stanton v. D.C. Court of 

Appeals, 127 F.3d 72, 78 n.3 (D.C. Cir. 1997). For purposes of 

claim preclusion, “it is the facts surrounding the transaction or 

occurrence which operate to constitute the cause of action, not 

the legal theory upon which a litigant relies.” Page v. United 

States, 729 F.2d 818, 820 (D.C. Cir. 1984) (citation and 

internal quotation marks omitted).

The FCC argues Sorenson’s claim is precluded because 

the company has challenged the FCC’s VRS rates twice before

while similar tier structures were in place, but Sorenson failed 
20

to contest those tiers either time. In neither Sorenson I

(challenging the 2010 Interim Rate Order) nor Sorenson II

(challenging the 2013 Order) did the company argue that § 225 

prohibits tiered rates. And since claim preclusion bars a party 

from re-litigating arguments it could have raised in a prior 

proceeding, the FCC argues that Sorenson may not challenge 

the tiered-rate structure for the first time now. 

Sorenson is not barred from challenging the tiered-rate 

structure because of its prior lawsuits in Sorenson I and 

Sorenson II. We have previously explained that “rate orders are 

generally not res judicata because ‘[e]very rate order made 

may be superseded by another.’” Norfolk & W. Ry. Co. v. 

United States, 768 F.2d 373, 378 (D.C. Cir. 1985) (emphasis 

omitted) (quoting Tagg Bros. & Moorhead v. United States, 

280 U.S. 420, 445 (1930)). Claim preclusion has a limited 

application in the ratemaking context because new rates and 

new rate orders are almost always based on new facts and 

circumstances that were not present at the time of the earlier 

judgment, and so cannot be precluded by that earlier claim. See 

Stanton, 127 F.3d at 78 (“[I]f the plaintiff alleges a combination 

in restraint of trade, a new cause of action accrues each time it 

operates against him, and previous judgments do not bar 

repeated challenges. . . . Similarly, each successive 

enforcement of a statute . . . creates a new cause of action.” 

(citations and internal quotation marks omitted)); see also

Tesoro Alaska Petroleum Co. v. FERC, 234 F.3d 1286, 1290 

(D.C. Cir. 2000); W. Coal Traffic League v. ICC, 735 F.2d 

1408, 1411 (D.C. Cir. 1984). Nor does claim preclusion bar a 

subsequent suit based on events and circumstances that postdate and materially differ from those previously at issue. See 

Stanton, 127 F.3d at 79. Today Sorenson challenges the FCC’s 

2017 Order, which modified the agency’s ratemaking 

methodology and its actual rates based on new information 

gleaned from the agency’s experience in the years since issuing 
21

the 2013 Order. This new order, based on a materially changed 

record, gave rise to a new claim, and therefore Sorenson’s 

petition is not barred by claim preclusion. 

B

1

On the merits, we first address Sorenson’s main argument 

that the 2017 Order’s retention of tiered rates is incompatible 

with § 225’s efficiency mandate. The parties agree that the 

tiered-rate structure is designed to promote competition by 

preserving multiple VRS providers in the market. They 

disagree over whether that is a permissible consideration under 

the statute. Sorenson argues that § 225 requires the VRS rate to 

be set in the “most efficient manner,” and that the FCC itself 

acknowledged in its orders from 2013 and 2017 that a tieredrate structure is inefficient. The FCC claims the tiered-rate 

structure is consistent with § 225’s efficiency mandate because 

the agency must consider the long-term efficiency of the VRS 

market—including achieving the best quality of service for the 

cost—not just short-term savings. And if the FCC failed to 

preserve more than one VRS provider in the market, the market 

would devolve into a monopoly and its efficiency would be 

undermined. 

We begin with Chevron’s first step and ask whether the 

FCC’s interpretation of the “precise question at issue” is 

“unambiguously foreclosed” by the statute. Catawba County, 

571 F.3d at 35 (internal quotation marks omitted). Here, that 

means we ask if § 225 unambiguously forecloses the FCC’s 

interpretation of the efficiency mandate, which seeks to 

promote the VRS market’s long-term efficiency by preventing 

a monopoly. 
22

In § 225, Congress chiefly tasked the FCC with ensuring 

the provision of communications services for people who are 

deaf or speech-impaired in a manner that is “functionally 

equivalent” to services available for hearing people. 47 U.S.C. 

§ 225(a)(3). In carrying out this primary objective, Congress 

instructed the FCC to balance several different factors: the FCC 

must regulate the recovery of “costs caused by” the services, 

id. § 225(d)(3)(B); it must implement the program in a way that 

encourages “the use of existing technology” and does not 

“discourage or impair the development of improved 

technology,” id. § 225(d)(2); and the FCC must ensure those 

services are “available, to the extent possible and in the most 

efficient manner,” id. § 225(b)(1). Section 225 does not instruct

the FCC how to prioritize these various factors, nor does it 

define them.

Because § 225 does not define “efficient,” we give the 

term its ordinary meaning. Taniguchi v. Kan Pac. Saipan, Ltd., 

566 U.S. 560, 566 (2012). Sorenson agrees, settling on the 

definition: “to produce the desired result without waste.”

Sorenson Br. 24 (citing The American Heritage Dictionary of 

English Language (5th ed. 2016)). This definition, however,

does not “unambiguously foreclose” the FCC’s interpretation. 

The ordinary meaning of “efficiency” does not indicate 

whether the FCC’s mandate to avoid waste must focus 

exclusively on achieving the lowest cost for a given set of 

services in the short term or whether, instead, the agency may

also consider projected longer-term costs and the effects of its 

compensation choices on the quality of services users receive. 

Maximizing cost savings today could diminish the market’s 

efficiency—cost relative to service quality—tomorrow, and 

nothing in the ordinary meaning of the word prohibits the FCC 

from considering those downstream implications. Nor does the 

word dictate how the agency may promote the long-term health 

of the VRS market, whether it be through preserving multiple 
23

market participants or using a tiered-rate structure to do so. 

Because the efficiency mandate does not unambiguously

foreclose the FCC from considering the VRS market’s longterm efficiency, nor dictate how the agency may pursue that 

end, the FCC’s interpretation passes the first step of Chevron. 

At Chevron’s second step, we ask whether the FCC’s 

interpretation is reasonable. Catawba County, 571 F.3d at 35. 

We conclude that it is. Indeed, it would be hard to argue 

otherwise. How could it be unreasonable for the FCC to 

interpret its efficiency mandate to include consideration of the 

VRS market’s long-term efficiency? Not even Sorenson argues

that. Instead, Sorenson claims that the FCC’s chosen technique

for promoting long-term efficiency—preserving multiple 

market participants—is an unreasonable method of pursuing 

efficiency. Embedded within this argument, Sorenson also 

challenges as unreasonable the FCC’s method for preserving 

multiple market participants: a tiered-rate structure. We find 

these challenges unpersuasive, and we defer to the FCC’s 

“reasoned explanation for why it chose [its] interpretation.” 

Village of Barrington v. Surface Transp. Bd., 636 F.3d 650, 660 

(D.C. Cir. 2011).

First, Sorenson argues that any effort at preserving 

multiple VRS providers in the market is an impermissible 

“extra-statutory consideration.” Sorenson Br. 28. According to 

Sorenson, competition cannot advance § 225’s efficiency 

mandate because “the VRS market is not a true competitive 

market in which competition among providers can drive prices 

down and encourage providers to seek greater efficiencies.” Id.

In other words, because VRS providers don’t set the VRS rates, 

competition is irrelevant. Although Sorenson never quite says 

so, it effectively argues that a monopoly—with itself as the 

monopolist—will be the “most efficient manner” of regulating 

the VRS market. 
24

Even given the unique features of the VRS market, 

preventing a monopoly is a reasonable way to promote the 

efficiency of VRS. As the FCC noted, efficient service is not 

just about cost but also quality. See 2017 Order, 32 FCC Rcd. 

at 5909 (measuring efficiency requires “comparing the overall

expenditures from the TRS Fund . . . with the overall results 

achieved by such expenditures” (emphasis omitted)). So even 

though competition in the VRS market may not necessarily 

“drive prices down,” Sorenson Br. 28, it may still promote 

efficiency by “encourag[ing] the lowest-cost provider to 

maintain higher standards of service quality,” 2017 Order, 32 

FCC Rcd. at 5907. In other words, competition promotes 

efficiency by preventing subpar service from a monopolist who 

has no fear of losing customers; i.e., it promotes compliance 

with the service quality required by the mandatory minimum 

standards. 

Preventing a monopoly promotes efficiency in other ways 

as well. As the FCC explained, the VRS market has gone 

through many changes over the past several decades, and the 

agency needs to retain “flexibility to consider other approaches 

that may improve efficiency.” Id. at 5910. For instance, “one 

option the Commission may want to consider in the future is a 

reverse auction, in which multiple providers bid for offering 

service at the most efficient levels.” Id. But as the FCC noted, 

that option won’t be possible “if all providers except one have 

been driven out of the market.” Id. Because the FCC plans to 

experiment with more efficient rate structures, and because 

those experiments will require multiple providers, the agency 

reasonably concluded that preserving market participants 

promotes long-term efficiency. 

Second, Sorenson argues that the FCC cannot retain a 

tiered-rate structure because the 2013 Order conclusively 
25

established that such a rate structure is inefficient. But 

Sorenson overlooks that two propositions can be true at once: 

(1) a tiered-rate structure may not be maximally efficient in 

terms of minimizing spending in the short term and (2) the 

tiered-rate structure may be necessary for the long-term 

efficiency of the market because it preserves multiple market 

participants. And that is precisely what the FCC’s orders say.

In the 2013 Order, the FCC explained that the tiered-rate 

structure was not optimally efficient, and the agency hoped to 

move to a single rate. 28 FCC Rcd. 8618. The agency predicted

that after implementation of its structural reforms, this 

transition would be feasible without “unnecessarily 

constricting the service choices available to VRS consumers” 

by driving smaller providers out of the market. Id. at 8699. The 

FCC concluded it was “worth tolerating some degree of 

additional inefficiency in the short term, in order to maximize 

the opportunity for successful participation of multiple 

efficient providers in the future, in the more competition 

friendly environment that we expect to result from our 

structural reforms.” Id. When these structural reforms failed or 

were delayed, however, the agency concluded in its 2017 Order

that long-term efficiency considerations justified retention of 

the admittedly inefficient tiered-rate structure. 32 FCC Rcd. at 

5910. Whatever inefficiencies it may introduce in the short 

term, the tiered-rate structure is essential to prevent the greater 

long-term inefficiency that would result from a monopoly.

None of this amounts to an unreasonable interpretation of 

§ 225’s efficiency mandate. 

Third, it is undisputed that no party proposed a more 

efficient rate structure than the one adopted by the FCC. 

Sorenson proposed a single rate set at “no lower than $3.73 per 

minute,” id. at 5923, but that would have been more costly to 

the TRS Fund than the tiered-rate structure adopted by the 
26

FCC, id. at 5909. Sorenson now argues that the FCC could have 

adopted a lower single rate, but no party made such a proposal

to the agency, nor does it seem likely that any of Sorenson’s 

competitors could have survived under a lower rate. Therefore, 

even if such a rate had been proposed, the FCC could still have 

reasonably rejected it for threatening the preservation of 

multiple competitors.

In sum, the FCC interprets its efficiency mandate to permit 

consideration of both short- and long-term efficiency, 

including efficiency-promoting objectives other than the 

lowest possible price, such as service competition. To promote 

the efficiency of the VRS market, the agency retained its tieredrate system to prevent the market from devolving into a 

monopoly. We conclude that this interpretation was 

reasonable.

2

Sorenson also attacks the 2017 Order with several 

arguments that it styles as arbitrary-and-capricious challenges 

under the APA. Sorenson claims the agency’s retention of the 

tiered-rate structure was arbitrary and capricious because (1) 

the FCC reversed without explanation its prior position that the 

tiered-rate system was inefficient; (2) there is no record 

evidence that smaller providers will become efficient in the 

future; (3) the design of the tiers will entrench the inefficiencies 

of smaller providers and harm Sorenson; and (4) the agency 

permitted two VRS providers that merged to be compensated 

as separate entities under the tiers.

If our review in this section seems similar to the Chevron

analysis in Part IV.B.1, that’s because it is. Our “inquiry at the 

second step of Chevron, i.e., whether an ambiguous statute has 

been interpreted reasonably, overlaps with the [APA’s] 
27

arbitrary and capricious standard.” Chamber of Commerce of 

the U.S. v. FEC, 76 F.3d 1234, 1235 (D.C. Cir. 1996) (citing 

Nat’l Ass’n of Regulatory Util. Comm’rs v. ICC, 41 F.3d 721, 

726-27 (D.C. Cir. 1994)); see also Gen. Instrument Corp. v. 

FCC, 213 F.3d 724, 732 (D.C. Cir. 2000). Arbitrary-andcapricious review is generally deferential, but it is “particularly 

deferential” in cases such as this, which “implicate competing 

policy choices, technical expertise, and predictive market 

judgments.” Ad Hoc Telecomm. Users Comm. v. FCC, 572 

F.3d 903, 908 (D.C. Cir. 2009) (citations omitted). When 

reviewing an agency’s predictive judgment under these 

circumstances, we “require only that the agency acknowledge 

factual uncertainties and identify the considerations it found 

persuasive.” Rural Cellular Ass’n v. FCC, 588 F.3d 1095, 1105 

(D.C. Cir. 2009). With this especially deferential standard in 

mind, we address Sorenson’s three arguments in turn. 

First, Sorenson argues that it was arbitrary and capricious

for the FCC to retain the tiered-rate structure because its 2013 

Order took the position that tiered rates were inefficient and 

planned to eliminate them; however, its 2017 Order changed 

course without explanation. This mischaracterizes both orders. 

As explained above, the 2013 Order used tentative language 

when discussing its plan to eliminate the tiered-rate structure. 

The FCC said that it hoped its structural reforms, once 

implemented, would eliminate the need for a tiered-rate 

system. See, e.g., 2013 Order, 28 FCC Rcd. at 8698-99 (“[W]e 

anticipate that the complete elimination of rate tiers . . . will be 

able to coincide with the implementation of VRS structural 

reforms.”). The agency’s decision to eliminate tiers was 

contingent upon realizing certain hoped-for outcomes, namely 

growth by the smaller VRS providers. Because those 

predictions went unrealized, the 2017 Order explained that the 

tiers remained necessary.
28

Under the APA, an agency is free to change its position if 

it sets forth reasonable grounds for doing so. FCC v. Fox 

Television Stations, Inc., 556 U.S. 502, 515 (2009). Here, the 

FCC did not change its position because its plan to eliminate 

the tiers was conditioned on the successful implementation of 

its structural reforms. But even if the FCC did “change its 

position” by choosing to retain the tiers, it provided reasonable 

grounds for doing so. See, e.g., 2017 Order, 32 FCC Rcd. at 

5905-07 (detailing why the tiers remained necessary to 

preserve competition due to the unsuccessful or delayed 

implementation of the structural reforms); 2017 FNPRM, 32 

FCC Rcd. at 2469-74 (same).

Second, Sorenson argues that there is no evidence in the 

record that smaller providers will be able to grow over the 

course of the next four years. To the contrary, the FCC has 

explained that the continued implementation of VRS 

interoperability, portability, and service quality reforms “may 

offer greater opportunities for providers to compete more 

effectively with one another.” 2017 Order, 32 FCC Rcd. at 

5913. The agency predicted that the full implementation of the 

structural reforms (particularly, interoperability and equipment 

portability), the collection and publication of service-quality 

metrics, and the agency’s new attention to idiosyncratic 

anticompetitive features in the VRS market may enable more 

effective competition between multiple VRS providers. We 

afford “substantial deference” to that type of predictive 

judgment by an agency acting in its area of expertise. Nat’l 

Ass’n of Broadcasters v. FCC, 789 F.3d 165, 182 (2015).

6

 6 Sorenson argues that interoperability barriers to competition 

have already been resolved; however, even Sorenson’s own expert 

acknowledges that certain interoperability issues persist. See 2017 

Order, 32 FCC Rcd. at 5905 n.83.
29

Third, Sorenson argues that the design of the tiered-rate 

structure will “entrench smaller providers’ existing 

inefficiencies” by diminishing their incentive to grow, and it 

also irrationally penalizes Sorenson by retaining a glide path 

only for the Tier III rates—a rate tier that applies only to 

Sorenson. See supra note 4. Neither claim prevails under our 

deferential review. As the 2017 Order explained, because there 

is a set rate within each tier, VRS providers have an incentive 

to decrease costs so they can maximize profits. See 32 FCC 

Rcd. at 5911. Moreover, contrary to Sorenson’s claim, the 

agency found no evidence that smaller providers intentionally 

slowed their growth as they approached a tier boundary at 

which they would start receiving a lower per-minute rate. Id. at 

5910. And despite Sorenson’s complaint, there’s little to 

suggest the 2017 Order irrationally penalizes Sorenson by 

retaining the glide path for Tier III. The FCC found that 

“Sorenson is likely to continue earning higher per-minute 

operating margins than any of its competitors,” id. at 5919 

n.167, and Sorenson’s actual costs fall below the Tier III rate, 

even after the glide path reaches its lowest level, see supra note 

4. Sorenson does not contest these facts, and there is no basis 

to conclude that the FCC acted out-of-bounds in giving 

Sorenson extra time to adjust to a rate that reflects its actual 

cost-of-service.

Fourth, Sorenson argues that the FCC acted arbitrarily by

allowing two recently merged VRS providers to count their 

VRS service minutes separately until the companies fully 

merge their operations. But far from arbitrary, the agency’s 

decision to give these two companies three years before 

counting their minutes jointly was based on a consent decree 

that affords the two companies three years to merge their 

operations. Waiting until the companies actually integrate

before combining their service minutes is reasonable.
30

The tiered-rate structure in the 2017 Order “represents the 

agency’s expert assessment, and we examine ‘not whether the 

FCC’s economic conclusions are correct or are the ones that we 

would reach on our own, but only whether they are 

reasonable.’” EarthLink, Inc. v. FCC, 462 F.3d 1, 12 (D.C. Cir. 

2006) (quoting In re Core Commc’ns, Inc., 455 F.3d 267, 279

(D.C. Cir. 2006)). We conclude that they are. Though the FCC 

acted reasonably in this case, we note that the agency has an 

ongoing, independent obligation to satisfy its statutory 

mandate. Given the agency’s longstanding concern with the 

subsidization of high-cost providers, a failure to consider all 

possible solutions to this problem could well become arbitrary 

at some point.

V

For the foregoing reasons, we dismiss VRSCA’s petition 

for lack of standing and deny Sorenson’s petition for review.

So ordered.