## F I LED United States C ourt of Appeals Tenth Circuit 

### Ju n e5,2007 Elisab eth A. Shumaker C lerk of C ourt PU BL I SH UNI TED S TATES COURT OF APP EALS

TENTH C IR C U IT W W C H O L D IN G C O ., IN C ., Pl ai nt i ff- A ppel l ee, v. GR EGO RY E. SOPKI N, POLLY E. P A G E , C A R L M IL L E R , in th e ir offi ci al capa ci t i es as the C om m i s s i oner s of the Publ i c U t i l i t i es C om m i s s i on of the St at e of Col or ado, D efen dan t s- A pp el l ants . N o. 06- 1156

A ppeal from t he U ni t ed St at es D i s t ri ctC ourt

for t he D i s t r i c t of

C ol or ado ( D . C . N o . 0 4 - c v - 1 6 8 2 - R P M) P a u l C . G o m e z , F i r s tA s s i s t a n tA tt o rn e yG e n e r a l , D e n v e r , C o l o r a d o ( J o h n W. S uther s, C olor ado A tt orneyG eneral , w i th h i m on the b ri efs) , for D efen dan t sA p p e lla n ts . Phi l l i p R . Schenkenbe r g, B r i ggs and M or gan, P. A . , M i nneapol i s , M i nnes ot a, for Pl ai nt i ff- A ppel l ee. B efor e BRI S CO E, EBEL, and GORS UCH , C i rcui tJudg es. EBEL , C i r cui tJ udge.- 2 -

T hi s cas e i nvol ves the ques t i on of w hetherand how the fe der al T el ecomm uni cat i ons A ctr es tr i ct s a s t at e’ s author i tyt o i m pos e condi t i ons on w ire les s s e rv ice p ro v id e rs s e e k in g to b e d e sig n a ted a s a n “ e lig ib le t el ecomm uni cat i ons carr i er ” ( “ET C ”) underSect i on 214( e) ( 2) of the A ctw hen th o s e c o n d itio n s w o u ld a ffe c t th e in te rs ta te c o m p o n e n ts o f a c a rr ie r’ s s e rv ic e s . T he comm i s s i oner s of the Publ i c U t i l i t i es C om m i s s i on ( “PU C ”) of C ol or ado appea l a di s tr i ctcourtdeci s i on thatenj oi ned the PU C fr om i m pos i ng “cons um er p rotec ti o n ” c o n d it ion s o n W W C H o lding C o m p an y(“W estern W ir eless” ) as p art of W es t ern W i r el es s ’ s r eques tt o be des i gnat ed an ET C . T he di s tr i ctcourtfound thatthe PU C ’ s pr opos ed condi t i ons cons t i tut ed i nt er s t at e r egul at i on, and c o n c lu d e d th a t th e T e lec o m m u n ica tio n s A c t p ro h ib ited th e P U C f ro m e n g a g in g in s uch r egul at i on. W W C H ol di ng C o. v. Sopki n, 420 F. Supp. 2d 1186 ( D . C ol o. 2006) . T he di s tr i ctcourtal s o deci ded thatthe Tel ecomm uni cat i ons A ctr equi r es th e P U C to e n g a g e in a ru le- m a k in g fo r a n yc o n d iti o n s th a t th e P U C d e c id e s to im p o s e o n a c a rr ie r s e e k in g E T C d e s ig n a tio n . W e conc l ude thatthe di s tr i ctcourterr ed i n both r egar ds . W e hol d thatthe T el ecom m un i cat i on s A ctdo es not pr even tthe P U C from exerci si ng i t s express s t atut oryauthor i tyunderSect i on 214( e) of the A cti n a w aythataffect s the in ter sta te c o m p o n e n ts o f se rv ice s o ffe re d b yc a rrie rs w h o a re o th e rw ise su bjec t to th e PUC’ s j u r i s d i c t i o n . W e a l s o c o n c l u d e th a tSe c t i o n 2 1 4 ( e ) g o v e rn s ETC- 3 -

des i gnat i ons and does notr equi r e s t at e comm i s s i ons t o i s s ue rul es and r egul at i ons re g a rd in g th e c o n d itio n s th a t a re im p o s e d o n a c a rr ie r s e e k in g E T C d e s ig n a tio n . W e r ever s e thos e tw o hol di ngs bythe di s tr i ctcourt , and r emand forfurther c o n s id e ra tio n o f

th e o th e r i s s u e s ra is e d in th is c a s e .

I . BA CKGROUND T he Tel ecomm uni cat i ons A ctof 1996 s i gni fi cant l ychange d the fe der al appr oach t o ens ur i ng thatthe nat i on’ s popul at i on has acc es s t o “uni ver s al se rv ice .” “ U n iv e rsa l se rv ice ” in c lu d e s th e p rin c ip les o f: q u a lity t el ecomm uni cat i ons s ervi ce a t“j us t , r eas onabl e, and affor dabl e r at es ; ” s ervi ce avai l abi l i tyi n al l r egi ons of the country ; and s ervi ces and r at es i n rur al and hi ghc o s t a re a s th a t a re c o m p a ra b le to o th e r a re a s . 4 7 U .S .C . § 2 5 4 (b ). T o d evelop the servi ces and i nfrastructure t o m eetthese go al s, C on gress c r e a t e d a fe d e r a l f

u n d t o wh i c h t e l e c o mmu n i c a t i o n s c a rr i e r s c o n tr i b u t e , 4 7 U. S . C. § 254( d) , oft en thr ough fee s pas s ed on t o cus t om er s . T hi s fundi ng i s di s tr i but ed as publ i c s ubs i di es t o t el ecomm uni cat i ons carr i er s w ho appl yforand r ece i ve des i gnat i on as E T C s . 47 U . S. C . § 214( e) . E T C s ar e el i gi bl e t o r ece i ve the s ubs i dybycomm i tt i ng t o offe r i ng the “uni ver s al s ervi ces ” pr es cr i bed bythe F e d e ra l C o m m u n ic a tio n s C o m m is s io n (“ F C C ” ) i n th e s p e c ifie d s e rv ic e a re a . Id . T he FC C i s r es pons i bl e forpr oces s i ng r eques t s forE T C des i gnat i on w hen the tele c o m m u n ica tio n s c a rrie r is n o t su bjec t to th e ju risd ictio n o f a sta te p u b lic- 4 -

u til ityc o m m iss io n . 4 7 U .S .C . § 2 1 4 (e )(6 ). H o w e v e r, w h e n a c a rrie r w ish e s to o b tain E T C d e sig n a tio n fo r a n a re a w ith in a sta te, it is th e sta te p u b lic u til ity c o m m is s io n ra th e r th a n th e F C C th a t is c h a rg e d w ith m a k in g th o s e d e s ig n a tio n s . 47 U . S. C . § 214( e) ( 2) . T he A cti ns truct s that“[b] efor e des i gnat i ng an addi t i onal el i gi bl e t el ecomm uni cat i ons carr i erforan ar ea s erved bya rur al t el ephone c o m p a n y , the S tate c o m m iss io n sh a ll fin d th a t th e d e sig n a tio n is in th e p u b lic i nt er es t . ” I d. St at es al s o have the opt i on of cr eat i ng thei row n uni ver s al s ervi ce pr ogr am un der Sec t i on 25 4(f) of the T el ecom m un i cat i on s A ct . C olor ado has do ne so thr ough a s t at e fundi ng m echa ni s m , and di s tr i but es s t at e s ubs i di es foruni ver s al s ervi ce bydes i gnat i ng carr i er s as “el i gi bl e pr ovi der s . ” W estern W ir eless p rov ides m o b il e p h o n e serv ices. In 2 0 0 3 , W estern W i r e l e s s ap p l i e d t o th e PUC t o r e c e i v e fe d e r a l s u b s i d i e s th r o u g h a n ETC des i gnat i on fors peci fi ed ar eas i n C ol or ado thatw er e al r eadys erved bya rur al t el ephone c om pany . W es t ern W i r el es s di d nots eek s t at e s ubs i di es thr ough an el i gi bl e pr ovi derdes i gnat i on. A ft era hea r i ng, the PU C deci ded t o gr antthe appl i cat i on forE T C des i gnat i on underSect i on 214( e) of the Tel ecomm uni cat i ons A c t, bu t fo u n d th a t th e d e sig n a tio n w o u ldb e in th e “ p u b lic in ter e st” o n lyif W es t ern W i r el es s compl i ed w i th s t at e- s peci fi c cons um erpr ot ect i on andT h e P U C also co n d it ion ed the E T C d esig n ati o n o n W estern W ir eless’s 1 compl i ance w i th defi ned r at e caps . T he di s tr i ctcourtenj oi ned thi s condi t i on, fin d in g th a t itc o n stitu ted sta te- lev e l ra te r e g u latio n o f c o m m e rc ial m o b ile ra d io s ervi ces , w hi ch i s expr es s l ypr eempt ed bySect i on 332 of the Tel ecomm uni cat i ons A c t. W W C H o ld in g C o ., 4 2 0 F . S u p p . at 1 1 9 4 . T h e P U C h a s n o t ap p e a led th is p a rto f th e d is tr ic t c o u rt ’s ru lin g . Speci fi cal l y , W es t ern W i r el es s s ai d i tw oul d compl yw i th the s t andar ds 2 a rt i c u l a t e d i n th e FCC’ s Vi r g i n i a Ce l l u l a ro r d e r . Se e I n r e Vi r g i n i a Ce l l u l a r , LLC Pet i t i on forD es i gnat i on as an ET C i n the C om m onw eal th of V a. , 19 F. C . C . R cd. 1 5 6 3 (J a n . 2 2 , 2 0 0 4 ). Th e FCC i mpo s e s a n u mbe ro f r e q u i r e me n t s whe n i tma k e s a n ETC des i gnat i on fora ca rr i ernots ubj ectt o a s t at e comm i s s i on’ s j ur i s di ct i on. 47 C . F. R . Part54. Forexampl e, carr i er s m us t : comm i tt o pr ovi di ng s ervi ce t o any cus t om erm aki ng a r eas onabl e r eques tfors ervi ce; s ubm i ta fi ve- y earpl an for in f ra stru c tu re a n d se rv ice im p ro v e m e n ts; d e m o n stra te its a b ili tyto re m a in f u n c tio n a l in e m e rg e n c ysitu a tio n s; d e m o n stra te th a t itw ill sa tisf yap p lica b le cons um erpr ot ect i on and s ervi ce qua l i tys t andar ds , w hi ch ar e meti f the ca rr i er co m p li es w ith the C ell u lar T elec o m m u n icati o n s an d Intern et A sso ciati o n s’s ( “C T I A ”) cons um ercode; and demonstr at e thati toffe r s a l ocalus age pl an c o m p a ra b le to th e o n e o ffe re d b yth e in c u m b e n t c a rr ie r i n th e a re a . 4 7 C .F .R . § 54. 202. T he cont es t ed condi t i ons i nvol ved i n W es t ern W i r el es s ’ s E T C des i gnat i on 3 i nclude requir em ents that W est ern W i rel ess: • w i l l pr ovi de cus t om ercar e per s onnel w ho w i l l be ava i l abl e 24 hour s per day , 7 d ay s per w eek b yph on e, or byvis i t i ng ret ai l st ore outl et s; • w i l l pr ovi de anycus t om er , upon r eques t , w i th bas i c uni ver s al s ervi ces w i thi n 150 w orki ng day s of appl i cat i on; • w i l l ens ur e, fors w i t ches form or e than 10, 000 cus t om er s , thata perm anent (c o n tin u e d ...) - 5 - op erat i on al st and ards. In a pet i t i on for r econ si derat i on , W est ern W i rel ess 1 i nform ed the PU C thati tw as w i l l i ng t o adher e t o the s ame cons um erpr ot ect i on condi t i ons thatthe FC C i m pos ed on ET C des i gnat i ons w i thi n i t s purvi ew , but 2 ar gued thatthe PU C ’ s s t at e- l evelcondi t i ons w er e des i gned fortr adi t i onal w i r el i ne ca rri ers a n d w ere inap p rop ri ate fo r a m o b il e teleco m m u n icati o n s ca rri er. 3( . . . cont i nued) 3 auxi l i arypow erand pos s i bl yaddi t i onal batt eryr es erve i s i ns t al l ed; • w i l l ens ur e, fors w i t ches forfew erthan 10, 000 cus t om er s , pl us m i cr ow ave r adi o s i t es and otherfac i l i t i es , thata mobi l e pow ers our ce w i th fouror m or e hour s of batt eryr es erve i s i ns t al l ed; • w i l l tr a n s m i ta s i g n a l a ts tr e n g th l e v e l o f n e g a t i v e 1 0 4 d B M; • w ill e sta b lish “ lo c a l ca lli n g a re a s” th a t g e n e ra llya llo w f re e c a lls “ w ith in [cust om ers ’] com m un i tyof int eres t , ” i ncludi ng l ocal gov ernm ent offi ces, s chool di s tr i ct s , l i br ar i es , pr i m arycent er s of bus i nes s act i vi ty , pol i ce a nd fi re departm ents , and essent i al m edical and em ergencyservices ; • w i l l publ i s h an annua l di r ect oryl i s t i ng of cus t om er s w i th thei rnames a nd addr es s es ; and • w i l l documentcus t om ertr oubl e r eport s and r eportt o the s t at e dur i ng the m on ths exce eding ei gh treport s per 100 cust om ers . T h e se h a v e so m e sim ilaritie s to th e fe d e ra l sta n d a rd s. F o r e x a m p le, b o th th e fe d e ra l an d sta te p ro g ra m s re q u ire a c a rrie r to h a v e b a c ku p c ap a c ityso th a t it i s funct i onal i n emer genci es . H ow ever , the FC C does nots pel l outthe det ai l ed oper at i onal and pr ocedur al s t andar ds – s uch as a four - hourbatt erybackup w i nd ow or m i nim um si gn al strength – that the P U C seeks t o im po se as a condi t i on of W es t ern W i r el es s ’ s E T C des i gnat i on. - 6 - A ft er the P U C den i ed the peti t i on for r econ si derat i on , W est ern W i rel ess b r o u g h ts u i ti n fe d e r a l d i s tr i c tc o u rts e e k i n g t o e nj o i n th e s e c o n d i t i o n s o f i t s ETC des i gnat i on. T he courtgr ant ed W es t ern W i r el es s s um m aryj udgm ent , hol di ng thatthe PU C ’ s pr opos ed condi t i ons amount ed t o “unl aw ful r egul at i on” of a n

“ in ter sta te c a rrie r” b e c a u se W e ste rn W ire les s “ b u n d les in tra sta te a n d in ter sta te s ervi ces t ogetheri n s ervi ce pa ckage s w hi ch do notdi s t i ngui s h betw een or s e pa r a t e l ybi l l fo ri nt e r s t a t e a ndi ntr a s t a t e c a l l s . ” W W C H ol di ng Co. , 42 0 F. Supp. 2d at1190, 1196. T he courtal s o found thatbecaus e Sect i on 254( f) pr ovi des thata s t at e uni ver s al s ervi ce pr ogr am “m ayadoptr egul at i ons not i ncons i s t entw i th the [FC C ’ s ] rul es t o pr es erve and a dvance uni ver s al s ervi ce, ”W es t ern W i r el es s ar gued thatw e have no j ur i s di ct i on becaus e thi s appea l 4 i s m oot . W es t ern W i r el es s poi nt ed t o a PU C deci s i on i s s ued af t erthe ons etof thi s l i t i gat i on i n w hi ch the PU C acknow l edged thats t at e l aw pr event ed i tfr om r egul at i ng w i r el es s carr i er s , s o thatthe PU C w as notperm i tt ed t o “r egul at e” the serv ice q u ali tyo f w ir eless c arriers alr ea d yd esig n ated as E T C s w h o w ere cert i fy i ng thei rcont i nui ng el i gi bi l i tyforfede r al s ubs i di es . I n r e Pr opos ed R ul es R egar di ng A nnual R eport i ng R equi r ement s forE T C s t o be C ert i fi ed t o R ece i ve Fed. U ni ver s al Serv. Support , PU C D eci s i on N o. C 06- 1108 ( Sept . 19, 2006) (refe rri n g to C . R . S . § § 4 0 -15 -40 1 an d 4 0 -15 -40 2 ). “C o n sti tuti o n al m o o tnes s d o ctri n e is g rou n d ed in the A rt icl e III r equi r ementthatfede r al court s m ayonl ydeci de ac tual ongoi ng cas es or contr over s i es . ” Senec a- C ayuga Tri be v. N at ’ l I ndi an G ami ng C om m ’ n, 327 F. 3d (c o n tin u e d ...) - 7 - the condi t i ons i m pos ed bythe PU C on carr i er s s eeki ng uni ver s al s ervi ce s ubs i di es u n d er a n E T C d esig n ati o n m u st be p rom u lgated thro u g h reg u lat ion s. T h e c o u rt concl uded thatbecaus e the PU C had notadopt ed r egul at i ons thats etforth the qual i tyof s ervi ce s t andar ds ati s s ue, s uch s t andar ds coul d notbe i m pos ed on We s t e rn Wi r e l e s s a s a c o n d i t i o n o f E T C d e s i g n a t i o n . I d . a t1 1 9 5 - 9 6 . T h e P UC app eal ed those con cl usi on s. I I . DI S CU S S I ON A . Juri s di ct i on and St andard of R evi ew T h e d istric t co u rt h a s a u th o rityu n d e r 2 8 U .S .C . § 1 3 3 1 to re v iew a sta te publ i c ut i l i tycomm i s s i on’ s or der s underthe Tel ecomm uni cat i ons A ctfor c ompl i a nc e w i th fe de r a l l a w . V e r i z on M d. , I nc . v. Pub . Se rv. Com m’ n, 53 5 U. S. 6 3 5 , 6 4 2 (20 0 2 ). W e h av e jurisdicti o n to h ea r th is ap p ea l from the d istri ct co u rt ’s fi nal deci s i on. 28 U . S. C . § 1291. 4( . . . cont i nued) 4 1 0 1 9 , 1 0 2 8 (1 0 th C ir. 2 0 0 3 ) (c itatio n o m itt e d ). “[ T ]h e S u p re m e C o u rt h a s s a id that a c ase p rop erlyb rou g h t i n the fir st i n stan ce o n lyb ec o m es m o o t w h ere i nt er i m r el i ef orevent s have c om pl et el yand i rr evocabl yer adi cat ed the effec t s of the al l eged vi ol at i on. ” B l dg. & C ons tr . D ep’ tv. R ockw el l I nt ’ l C orp. , 7 F. 3d 1 4 8 7 , 1 4 9 1 (1 0 th C ir . 1 9 9 3 ) ( q u o ta tio n o m itte d ). T h e P U C , in its s u p p lem e n tal b rie f a n d a t o ra l ar g u m e n t, state d th a t it c o n tin u e s to a ss e rt ju risd ictio n o v e r in iti a l E T C d e sig n a tio n s a n d h a s th e a u th o rity t o i m pos e condi t i ons i n doi ng s o. T he PU C has noti nt erpr et ed D eci s i on C 06- 1 1 0 8 a s re m o v in g su c h ju risd ictio n . M o re o v e r, th e P U C e x p re ss lyd e c lin e d to e x te n d th e ru le s p ro m u lg a te d in th a t d e c is io n to in itia l E T C d e s ig n a tio n s . T h e re fo re , this ap p e a l is n o t m o o t. W es t ern W i r el es s cont ends thatw e s houl d notcons i derthi s ar gum ent 5 b e c a u se th e P U C d idn o t d e v e lo p it i n th e d istric t co u rt. G e n e ra lly“ a n ap p e llate courtw i l l notcons i deran i s s ue r ai s ed forthe fi r s tt i m e on appe al . ” H i cks v. G a tes R u b b e r C o ., 9 2 8 F .2 d 9 6 6 , 9 7 0 (1 0 th C ir. 1 9 9 1 ). H o w e v e r, th e P U C d id (c o n tin u e d ...) - 8 - W e app l ya de n ov o st and ard of revi ew w hen revi ew i ng st at e com m i ssi on s’ i nterpret at i on s of the T el ecom m un i cat i on s A ctand i t s r egu l at i on s, as tho se deci s i ons turn on det erm i nat i ons of fe der al l aw . Sw . B el l T el . C o. v. A ppl e, 309 F. 3d 713, 717 ( 10th C i r . 2002) ; Sw . B el l T el . C o. v. B r ooks Fi berC om m c’ ns of O kl a. , I nc. , 235 F. 3d 493, 498 ( 10th C i r . 2000) . “O nce feder al court s det erm i ne th a t sta te c o m m iss io n s p ro p e rlyin terp re ted th e A c t an dits re g u latio n s, c o u rts ap p lya n a rb itrarya n d c ap ric io u s s tan d a rd to re v iew th e re m a in in g sta te comm i s s i ons ’ det erm i nat i ons . ” A ppl e, 309 F. 3d at717. B ecaus e t oday ’ s deci s i on a d d r e s s e s o n l yth e i n t e rp r e t a t i o n o f th e T e l e c o mm u n i c a t i o n s Ac ta n d fe d e r a l l a w, o u r r e v ie w is d e n o v o . B. St at e A ut hor i t i e s and I nt e r s t at e C omm uni c at i ons 5( . . . cont i nued) 5 a rg u e to th e d istric t co u rt th a t v a rio u s s e c tio n s o f th e T e lec o m m u n ica tio n s A c t, in c lu d in g S e c tio n s 2 1 4 , 2 5 4 a n d 3 3 2 , g iv e th e P U C e x p re ss a u th o rities to re g u late t el ecomm uni cat i ons carr i er s w i thoutr egar d t o w hetherthe exe r ci s e of s uch a u th o r i tyc a n r e a c h th e i n t e r s t a t e c o m p o n e n t s o f s u c h c a rr i e r s ’ s e rv i c e s . We c o n c lu d e th e P U C a d e q u a telyra ise d th is a rg u m e n t to th e c o u rt b e lo w , p a rticu lar ly i n vi ew of the pur e ques t i on of l aw i tpr es ent s forourr evi ew . See R os s v. U ni t ed S ta te s M a rs h a l, 1 6 8 F .3 d 1 1 9 0 , 1 1 9 5 n .5 (1 0 th C ir . 1 9 9 9 ). - 9 - T he conc eptof a c l ean di vi de betw een i nt er s t at e and i ntr as t at e j ur i s di ct i on i n the w or l d of t el ecomm uni cat i ons r egul at i on has l ong been c ons i der ed anac hr oni s t i c, even be for e the adve ntof m obi l e t el ecomm uni cat i ons . A s the S u p re m e C o u rth a s o b s e rv e d , w h i l e th e [ Commu n i c a t i o n s ] Act wou l d s e e m t o d i v i d e th e worl d of dom es t i c t el ephone s ervi ce ne at l yi nt o tw o h emi s pher es - - one co m p ri sed o f in terst ate serv ice, o v er w h ich the F C C w o u ld h av e p lena ry author i ty , and the otherm ade up o f i ntr as t at e s ervi ce, overw hi ch the St at es w oul d r et ai n excl us i ve j ur i s di ct i on - - i n pr act i ce, the r eal i t i es of t echnol ogyand ec onom i cs bel ie s uch a c l ean pa r cel i ng of re sp o n sib ili ty . T h is is s o b e c a u se v irtu a llya ll t e lep h o n e p lan t th a t is u se d to p ro v id e in tr a s ta te s e rv ice is a lso u se d to p ro v id e in ter sta te s ervi ce, and i s thus conce i vabl yw i thi n the j ur i s di ct i on of both s t at e and fe d e ra l a u th o r itie s. M o re o v e r, b e c a u se th e sa m e c a rrie rs p ro v id e b o th in ter sta te a n d in tra sta te s e rv ice , ac tio n s ta k e n b yfe d e ra l an d sta te r egul at or s w i thi n thei r r es pect i ve dom ai ns nece s s ar i l y affectthe gene r al fi nanci al heal th of thos e ca rr i ers, a nd hence thei rabi l i tyt o pr ovi de s e rv ic e , in th e o th e r “ h e m is p h e re .” L a . P ub . S e rv . C o m m ’n v . F C C , 4 7 6 U .S . 3 5 5 , 3 6 0 (1 9 8 6 ). In L o u isia n a P u b lic Servi ce Com m i s s i on, the C ourtr ej ect ed the s ugges t i on thatthe FC C ’ s j ur i s di ct i on p re e m p ted sta te a c tio n w h e n e v e r th e sta te a c tio n im p a c ted a ss e ts u se d fo r b o th in te rs ta te a n d in tr a s ta te c o m m u n ic a tio n . Id . a t 3 7 4 -7 5 .- 10 -

T he r evi s i ons t o the Tel ecomm uni cat i ons A ctenac t ed i n 1993 and 1996 cont i nued t o r efl ectthi s uneas yj ur i s di ct i onal al l ocat i on betw een s t at es and the fede r al governm ent . T he A ctpr ovi des thatthe FC C has no j ur i s di ct i on over in tra sta te comm uni cat i on s ervi ces , gener al l yl eavi ng the r egul at i on of s uch s ervi ces t o the s t at es . 47 U . S. C . § 152( b) . H ow ever , “C ongr es s , byext endi ng the C om m uni cat i ons A cti nt o l ocalcompet i t i on, has r emoved a s i gni fi cantar ea f r om the St at es ’ excl us i ve contr ol . ” A T & T C orp. v. I ow a U t i l s . B d. , 525 U . S. 366, 381 n .8 (1 9 9 9 ). T h e S u p re m e C o u rt v iew s th e 1 9 9 6 A c t as re se rv in g to sta tes th e ir author i tyt o r egul at e i ntr as t at e comm uni cat i ons “[i ] ns ofaras C ongr es s has r emai ned s i l ent ” aboutthe r egul at orym att erati s s ue. I d. T he C ourtnot ed that the FC C “coul d not , forexampl e, r egul at e anyas pectof i ntr as t at e comm uni cat i on notgoverned bythe 1996 A cton the theorythati thad an a nci l l aryeffecton m att ers w ith in the [F C C ’s] prim aryjuri sd ict ion . ” Id . S ee also P h il ip J. W eiser, C hevr on , Coo p e r a t i v e Fe d e r a l i s m, a n d Te l e c o mmun i c a t i o n s Re fo rm, 5 2 Van d . L. R ev. 1, 25 ( 1999) ( des cr i bi ng how C ongr es s “envi s i oned thatthe s t at e age nci es w o u ld h av e a n ind ep en d en t r o le i n im p lem en ti n g a n u m b er o f th e A ct’s p r o v i s i o n s ” ) . T h e r e fo r e , i n d i s c e rn i n g th e l i m i t s o f a s t a t e ’ s r e g u l a t o ry a u th o r i ty, w e l ook pas ta mer e rul e of thum b demar cat i ng j ur i s di ct i on overi nt er s t at e or i ntr as t at e comm uni cat i ons , and i ns t ead l ook t o the Tel ecomm uni cat i ons A cti t s el f. U nderthe A ct , the FC C i s char ged w i th cert ai n r egul at oryauthor i tyover m obi l e s ervi ces , even t o the ext enttheyhave i ntr as t at e component s . 47 U . S. C . §§- 11 -

152( b) , 332. T he FC C has exclus i ve j ur i s di ct i on t o r egul at e the r at es and c o n d itio n s o f

m a rk e t e n tryo f

m o b ile s e rv ic e s . 4 7 U .S .C . § 3 3 2 (c )( 3 )( A ). H ow ever , s t at es ar e expr es s l yperm i tt ed t o r egul at e the “othert erm s and c o n d itio n s ” o f

c o m m e rc ia l m o b ile s e rv ic e s . Id . L i kew i s e, the Tel ecomm uni cat i ons A ctpr eempt s a part i cul ar l yoner ous s t at e r egul at i on bypr ovi di ng that“[n] o St at e orl ocals t atut e orr egul at i on, or otherSt at e orl ocall egalr equi r ement , m aypr ohi bi torhave the effec tof p ro h ib iti n g th e a b ili tyo f a n ye n tityto p ro v id e a n yin ter sta te o r in tra sta te t el ecomm uni cat i ons s ervi ce. ” 47 U . S. C . § 253( a) . H ow ever , C ongr es s al s o s t at ed that“[n] othi ng i n thi s s ect i on s hal l affectthe abi l i tyof a St at e t o i m pos e, on a compet i t i vel yneutr al bas i s and cons i s t entw i th s ect i on 254 of thi s t i t l e, r equi r ement s nece s s aryt o pr es erve and a dvance uni ver s al s ervi ce, pr ot ectthe publ i c s afe tyand w el far e, ens ur e the cont i nued qual i tyof t el ecomm uni cat i ons s e rv ic e s , a n d s a fe g u a rd th e ri g h ts o f c o n s u m e rs .” 4 7 U .S .C . § 2 5 3 (b ). It is c lea r th a t sta tes h a v e a u th o rityu n d e r th e T e lec o m m u n ica tio n s A c t to a d o p tth e i ro wn u n i v e r s a l s e rv i c e s t a n d a r d s a n d c r e a t e f u n d i n g me c h a n i s ms s uffi ci entt o s upportthos e s t andar ds , as l ong as the s t andar ds ar e noti ncons i s t ent w i th the FC C ’ s rul es , and as l ong as the s t at e pr ogr am does notbur den the fe der al p rog ram . 4 7 U . S . C . § 2 5 4 (f). M o reo v er, st ates a re g iven the p ri m ary r es pons i bi l i tyfordeci di ng w hi ch ca rr i er s qual i fyas E T C s t o be el i gi bl e for s ubs i di es fr om the fe der al uni ver s al s ervi ce f und. A s not ed ea r l i er , w hen a rur alB ecaus e ouranal y s i s of the Tel ecomm uni cat i on A ct ’ s pr ovi s i ons for 6 as s i gni ng i nt er s t at e and i ntr as t at e j ur i s di ct i on bear s di r ect l yupon ourr evi ew of th e d istric t co u rt’s h o ld in g a n d p ro v id e s th e ra tio n a le fo r o u r h o ld in g , itis in te g ra l to o u r d e c is io n a n dth e re fo re n o t “ d ic ta .” - 12 - t e l e p h o n e c o mpa n ya l r e a d ys e rv e s a g i v e n a r e a a n d a n o th e rc a rr i e rs e e k s ETC des i gnat i on forthe s ame ar ea, the s t at e mustdeci de w hetherthatdes i gnat i on w o u ld b e in th e p u b lic in te re s t. 4 7 U .S .C . § 2 1 4 (e )( 2 ). T h e d istric t co u rt h e ldth a t b e c a u se W e ste rn W ire les s b u n d led its in tra sta te a n d in ter sta te s e rv ice s, th e P U C ’s c o n d iti o n s o f E T C d e sig n a tio n a m o u n ted to

“ in ter sta te r e g u latio n ” th a t w a s p re e m p ted b yth e T e lec o m m u n ica tio n s A c t. 6 H ow ever , nothi ng i n the A ctexpr es s l ypr eempt s a s t at e fr om exer ci s i ng the above author i tyt o r egul at e ca rr i er s pr ovi di ng i ntr as t at e s ervi ces ort o des i gnat e s uch carr i er s as E T C s s i m pl yon the bas i s thatthe r equi r ement s orE T C des i gnat i on condi t i ons bei ng i m pos ed w oul d affects om e phone c al l s thator i gi nat e and term inate in d iffe ren t st ates. N o r do es th e A ct l im ita state’s jurisdicti o n o v er a t el ecomm uni cat i ons carr i erm er el ybecaus e the ca rr i eroffe r s i nt er s t at e and i ntr ast at e services i n “b un dles ” t o indi vidual con sum ers . F o r e x a m p le, C o n g re ss w a s w e ll aw a re th a t m o b ile s e rv ice s, “ b yth e ir natur e, oper at e w i thoutr egar d t o s t at e l i nes as an i nt egr al partof the nat i onal tele c o m m u n ica tio n s in f ra stru c tu re ,” a n d th e re fo re c re a ted S e c tio n 3 3 2 (c )(3 )(A ) to

“ p r e e mp ts t a t e r a t e a n d e n tryr e g u l a t i o n o f a l l c o mm e r c i a l mo b i l e s e rv i c e s . ” H. R pt . N o. 103- 111, at260 ( 1993) , r epr i nt ed i n 1993 U . S. C . C . A . N . 378, 587- 13 -

(e m p h a sis a d d e d ). Y e t, at th e sa m e tim e , C o n g re ss d e c id e d to p e rm it a s tate to r egul at e the “othert erm s and condi t i ons ” of am obi l e s ervi ce pr ovi der , w i th no expl i ci tl i m i t at i on on w hethera s t at e’ s r egul at i ons affectthe pr ovi s i on of interst ate se rvice . T h ese p rov isi o n s d o n o t sug g est th at a c arrier m ayd ec lare i t s el f exe m ptfr om al l r el evantr egul at i ons of a s t at e uni ver s al s ervi ce pr ogr am sim p lyb e c a u se th e c a rrie r’s ra te s tru c tu re d o e s n o t d istin g u ish b e tw e e n in ter sta te an d intr astate c all s. Instea d , a c arrier w o u ld n ee d to d em o n str ate tha t a st ate’s r equi r ement s effect i vel yr egul at e r at es orar e s o oner ous as t o cons t i tut e a ba rr i er t o e n try. I n s um m ary , the j ur i s di ct i onal del i neat i on betw een s t at e and feder al author i tyfocus es on the types of r equi r ement s bei ng i m pos ed, notw hetherthe r egul at ed ent i tyoffe r s bundl ed i nt er s t at e s ervi ces w i th i t s i ntr as t at e s ervi ces . For m obi l e t el ecomm uni cat i ons s ervi ces , Sect i on 332( c) ( 3) ( A ) dr aw s the l i ne betw een r egul at i on of r at es orm arketentry , w hi ch i s the FC C ’ s excl us i ve purvi ew , and

“ o th e r t e rm s a n d c o n d itio n s ,” w h ic h a re p e rm is s iv e re g u la to ry su bje c ts fo r s ta te s . E ven though C ongr es s w as s ens i t i ve t o the nee d t o “fos t erthe gr ow th and devel opm entof m obi l e s ervi ces , ” C ongr es s envi s i oned thats t at e comm i s s i ons coul d r egul at e mobi l e s ervi ces for“s uch matt er s as cus t om erbi l l i ng i nform at i on and pract i ces and bil l i ng dis pu t es and o ther con sum er pr otect i on m att ers ; fac i l i t i es s i t i ng i s s ues ( e. g. , zoni ng) ; tr ans fer s of contr ol ; the bundl i ng of s ervi ces and equipm ent ; and the r equi r ementthatcarr i er s m ake c apac i tyavai l abl e on aForexampl e, the El eventh C i r cui tr ece nt l yhel d thata s t at e r equi r ement 7 reg ard ing the u se o f li n e it em s in c u stom er b il li n g w as p rop erlyw ith in a s tat e’s S e c tio n 3 3 2 a u th o ri ty o v e r th e “ o th e r t e rm s a n d c o n d itio n s ” o f m o b ile s e rv ic e s . N at ’ l A s s ’ n of St at e U t i l . C ons um erA dvocat es v. FC C , 457 F. 3d 1238, 1242 (11 th C ir . 2 0 0 6 ). - 14 - w h o les a le b a sis o r su c h o th e r m a tters a s fa ll w ith in a sta te's law f u l au th o rity . T h is li st i s inten d ed to b e il lustrat ive o n lyan d n o t m ea n t t o p rec lud e o ther m att ers gener al l yunder s t ood t o fal l under‘ t erm s and condi t i ons . ’ ” I d. at588. 7 T herefore, i n assi gn i ng the respon si bil i tyfor r egu l at i ng m ob i l e service pr ov i ders, th e “ w h a t” m a tte rs a s m u c h a s th e “ w h e re .” Forr egul at i on ai m ed atpr om ot i ng uni ver s al s ervi ce, Sect i on 254( f) pr ovi des a hi er ar chyi n w hi ch s t at es cannotconfl i ctw i th the fe der al uni ver s al s ervi ces pr ogr am, buts t at es ar e cl ear l yauthor i zed t o bui l d upon the fe der al pr ogr am t o s upportuni ver s al s ervi ce. See Q w es tC orp. v. FC C , 258 F. 3d 1191, 12 03 (10th C i r. 20 01 ) ( “T he T el ecom m un i cat i on s A ctplai nlycon t em plat es a partner s hi p betw een the fe der al and s t at e governm ent s t o s upportuni ver s al se rv ice . . . . T h u s, it is ap p ro p ria te – e v e n n e c e ss a ry–fo r th e F C C to re lyo n sta te ac ti o n in this area . ”). A tthe s ame t i m e, the FC C has deci ded thats t at e comm i s s i ons have “ the p rim a ryre sp o n sib ili tyfo r p e rfo rm in g E T C d e sig n a tio n s” th a t re su lt i n t el ecomm uni cat i ons pr ovi der s bei ng el i gi bl e forfede r al uni ver s al s ervi ce s ubs i di es . I n r e Fed. - St at e J oi ntB d. on U ni ver s al Serv. , 20 F. C . C . R cd. 6371, 6374 ( M ar . 17, 2005) ( “2005 U ni ver s al Servi ce O r der ”) . T he FC C has- 15 -

e s ta b lis h e d s ta n d a rd s fo r E T C d e s ig n a tio n s m a d e b yth e F C C . Id . a t 6 3 7 2 . Al th o u g h th e F CC h a s e n c o u r a g e d s t a t e c o mmi s s i o n s t o a d o p tth e s e s a me r e q u i r e me n t s , i th a s d e c l i n e d t o r e q u i r e s t a t e s t o d o s o . I d . I n s t e a d , th e F CC g e n e ra llya ffirm e d th a t sta tes h a v e th e d isc re tio n to im p o se a d d iti o n a l elig ib ili ty r equi r ement s on carr i er s s eeki ng E T C des i gnat i ons , w i thoutr efe r ence t o w hether th e re q u ir e m e n ts c a n o r c a n n o t b e ap p lie d to a c a rr ie r’ s in te rs ta te c o m p o n e n ts . W e bel i eve thats ect i on 214( e) ( 2) dem o n str at es C ongr es s ' s i nt entthat s t at e comm i s s i ons eval uate l ocalfac tual s i tuat i ons i n E T C cas es and e x e rc ise d isc re tio n in re a c h in g th e ir c o n c lu sio n s re g a r d in g th e p u b lic interest, co n v en ienc e a n d n ec essity , as lon g as su ch d eterm ination s are cons i s t entw i th fede r al an d o the rs t at e l aw . . . . C ons i s t entw i th our a d o p tio n o f

p e rm iss iv e fe d e ra l g u id e lin e s fo r E T C d e sig n a tio n , sta te c o m m iss i on s w i l l con t i nu e t o m ai ntai n the fl exibi l i tyt o im po se add i t i o n a l el i gibi l i tyrequi rem ents i n st at e E T C proceed i ng s, i f theyso choos e. Id . a t 6 3 9 7 -9 8 . T h e states’ au tho ri tyto m ak e E T C d esig n ati o n s ex tend s to w ir eless c arriers s eeki ng fede r al uni ver s al s ervi ce s ubs i di es . T he FC C s peci fi cal l yr ej ect ed su g g esti o n s tha t “co n su m er p rotec ti o n req u ir em en ts i m p o sed o n w ir eless c arriers as a condi t i on forE T C des i gnat i on ar e nec es s ar i l yi ncons i s t entw i th s ect i on 332 of the A ct . ” I d. at 6384- 85. I ns t ead, the FC C deci ded that“s t at es m ayext end gener al l yappl i cabl e, compet i t i vel yneutr al r equi r ement s [t o w i r el es s carr i er s ] that do notr egul at e r at es orentryand thatar e cons i s t entw i th s ect i ons 214 and 254 of the A ctt o al l E T C s i n or dert o pr es erve and a dvance uni ver s al s ervi ce. ” I d. at 6384- 85. O f r el evanc e her e, the FC C has nots ai d thata s t at e mustpar s e outtheT he A dm i ni s tr at i ve O r der s R evi ew A ct( “H obbs A ct ”) pr ecl udes col l at er al 8 a ttac k s o n F C C O rd e rs b yp re sc rib in g “ th e so le c o n d iti o n s u n d e r w h ich th e c o u rts of appe al s have j ur i s di ct i on t o r evi ew the mer i t s of FC C or der s . ” V onage H ol di ngs C orp. v. M i nn. Pub. U t i l s . C om m ’ n, 394 F. 3d 568, 569 ( 8th C i r . 2004) ( des cr i bi ng the pr oces s forpet i t i oni ng forr evi ew , w hi ch mustname the U ni t ed S ta te s a s a p a rty ) ( c itin g 2 8 U .S .C . § § 2 3 4 2 , 2 3 4 4 ; o th e r c ita tio n s o m itte d ). S p e c ifica lly , “[ e ]x c lu siv e ju risd ictio n fo r re v iew o f fin a l F C C o rd e rs . . . l ies in the C ourtof A ppeal s . L i t i gant s m aynotevade thes e pr ovi s i ons byr eques t i ng the (c o n tin u e d ...) - 16 - appl i cat i on of thes e r equi r ement s t o avoi d affect i ng the i nt er s t at e s ervi ces of carr i er s pr ovi di ng bundl ed s ervi ces . T he FC C ’ s i nt erpr et at i on of the T el ecomm uni cat i ons A ct ’ s pr ovi s i ons addr es s i ng s t at e ET C des i gnat i ons i s , of cour s e, s ubj ectt o defe r ence . See Q w es tC om m c’ ns I nt ’ l , I nc. v. FC C , 398 F. 3d 1222, 1229- 30 ( 10th C i r . 2005) ( ci t i ng C hevr on U . S. A . , I nc. v. N atur al R es . D ef. C o u n cil , Inc . , 4 6 7 U . S . 8 3 7 , 8 4 2 (19 8 4 )). Atl e a s to n e c i r c u i tc o u rth a s a g r e e d wi th th e F CC i n th i s r e g a r d , a n d we have found no ci r cui tauthor i tyt o the contr ary . T he Fi fth C i r cui t , i n T exas O ffi ce o f P u b lic U til ityC o u n se l v . F C C , 1 8 3 F .3 d 3 9 3 (5 th C ir. 1 9 9 9 ), ex p re ss lyh e ld thatthe Tel ecomm uni cat i ons A ctperm i t s s t at es t o i m pos e s om e addi t i onal el i gi bi l i tyr equi r ement s on carr i er s s eeki ng an ET C des i gnat i on. See i d. at418 (d is c u s s in g S e c tio n 2 1 4 (e )( 2 ) a n d c o n c lu d in g th a t “ n o th in g in th e s ta tu te . . . prohibi t s st at es fr om i m po si ng theirow n eli gibi l i tyrequi rem ents ”). A nd w e m ust as s um e thatthe FC C ’ s or derperm i tt i ng s t at e comm i s s i ons t o i m pos e cons um er pr ot ect i on r equi r ement s on E T C des i gnees i s val i d underthe Tel ecomm uni cat i ons A c t. 8( . . . cont i nued) 8 D i s tr i ctC ourtt o enj oi n act i on thati s the out come of the age ncy ’ s or der . ” FC C v. I T T W or l d C om m c’ ns , I nc. , 466 U . S. 463, 468 ( 1984) ( ci t i ng 28 U . S. C . § 2342( 1) an d 4 7 U . S . C . § 4 0 2 (a)). - 17 - W es t ern W i r el es s att empt s t o r el yon the FC C ’ s or der s r egar di ng i nt ernet voi ce s ervi ces t o s upporti t s ar gum entthats t at es have no j ur i s di ct i on overany type of c om m uni cat i ons thatbundl es i nt er s t at e and i ntr as t at e s ervi ces . I n 2004, the FC C i s s ued an or derpr eempt i ng a s t at e’ s att emptt o r egul at e voi ce ove r i nt ernetpr ot ocol ( “V oI P”) s ervi ces . I n r e V onage H ol di ngs C orp. Pet i t i on for D ecl ar at oryR ul i ng C oncerni ng an O r derof the M i nn. Pub. U t i l s . C om m ’ n, 19 F .C .C . R c d . 2 2 ,4 0 4 (N o v . 1 2 , 2 0 0 4 ) (“ V o n a g e O rd e r” ). T h e E ig h th C irc u it a ffirm e d th e F C C ’s o rd e r. M in n . P u b . U til s. C o m m ’n v . F C C , 4 8 3 F .3 d 5 7 0 (8 th C ir . 2 0 0 7 ). V oI P se rvi ces ar e pr ovi ded thr ough the i nt ernetbutr es embl e t el ephone c o m m u n ica tio n s a n d in ter a c t w ith b o th tra d iti o n a l w ire lin e se rv ice s a n d m o b ile s ervi ces . T he l ocat i ons of both the ca l l or i gi nat i on and t erm i nat i on ar e i rr el evant t o s uch s ervi ces . A s ubs cr i berneed onl ybe s om ew her e w i th br oadband i nt ernet acc es s . T he M i nnes ot a Publ i c U t i l i t i es C om m i s s i on had i s s ued an or der s ubj ect i ng V onage t o the s ame r equi r ement s i m pos ed on othert el ephone compani es i n the s t at e, s uch as the r equi r ementt o offe r911 emer gencys ervi ces c o m p a ra b le to o th e r w ir e lin e c a rr ie rs . V o n a g e O rd e r, 1 9 F .C .C . R c d . a t 2 2 ,4 0 8 .- 18 -

T he FC C found thatV onage’ s s ervi ces w er e j ur i s di ct i onal l y“mi xed” a nd ther efor e theor et i cal l ys ubj ectt o dual fede r al / s t at e j ur i s di ct i on, butconcl uded that the F C C p ree m p ted s tat e re g u lat ion o v er intern et serv ices w h en , as w ith V o IP se rv ice s, it w a s “ im p o ss ib le o r im p ra c tica l” to se p a ra te th e se rv ice s in to in tra sta te a n d in ter sta te c o m p o n e n ts. Id . at 2 2 ,4 1 3 . T h e E ig h th C irc u it su b se q u e n tlyh e ld that“[t ] he i m pos s i bi l i tyexce pt i on, i f appl i cabl e, i s di s pos i t i ve of the i s s ue w h e th e r th e F C C h a s a u th o ri ty to p re e m p t s ta te re g u la tio n o f V o IP s e rv ic e s .” M inn . P u b . U ti ls. C o m m ’n, 48 3 F . 3 d at 57 8 . W estern W ir eless li k en s V o IP s ervi ces t o m obi l e comm uni cat i ons , w hi ch al s o bundl e thei ri nt er s t at e and i ntr ast at e services and hav e no t echn i cal l i m i t at i on s i nh erentt o st at e bo un dari es, in arg u ing that the P U C ’s E T C co n d it ion s are p ree m p ted b ythe F C C ’s j ur i s di ct i on. T h e F C C ’s ru lin g in V o n a g e is s im p lyn o t ap p lica b le to th e iss u e s in th is c a s e , p a rt i c u l a r l yi n l i g h to f th e 2 0 0 5 Un i v e r s a l S e rv i c e Or d e r . F i r s t , th e F CC fo u n d th a t V o IP se rv ice s a re in tern e t se rv ice s, a n d th a t C o n g re ss sp e c ifica lly in ten d e d in tern e t se rv ice s to b e tre a ted d iffe re n tlyth a n e ith e r m o b ile comm uni cat i ons ortr adi t i onal w i r el i ne s ervi ces . T he Tel ecomm uni cat i ons A ct do es not pr ov i de a m i xed st at e-federal regul at oryschem e for i nternet s ervi ces, w ith th e e x c e p tio n o f

p ro v is io n s fo r b lo c k in g o ffe n s iv e m a te ri a l. 4 7 U .S .C . § 230. I n contr as t , the A ctes t abl i s hes a det ai l ed r egul at orys cheme forcomm er ci al m o b ile s e rv ice s, w ith p rim a ryju risd ictio n g iv e n to th e F C C , b u t ex p re ss lyp e rm its- 19 -

s t at es t o r egul at e non- r at e and non- entryas pect s of m obi l e s ervi ces and r equi r es sta tes d e sig n a tin g E T C s in ru ra l m a rk e ts s e rv e d b ya n in c u m b e n t p ro v id e r to m a k e a p u b lic in te re s t d e te rm in a tio n . 4 7 U .S .C . § 3 3 2 (c )( 3 )( A ). Second, the FC C ’ s V onage or derr eac t ed t o a s t at e dec i s i on thatr equi r ed V onage t o compl yw i th “al l s t at e s t atut es and r egul at i ons r el at i ng t o the offer i ng o f t e l e p h o n e s e rv i c e , ” i . e . ma rk e te n tryr e q u i r e me n t s . Vo n a g e Or d e r , 1 9 F . C. C. R cd. at22, 409, 22, 430. I n ourcas e, the PU C has notext ended the gamutof t el ephone r egul at i ons t o m obi l e s ervi ces . I ns t ead, W es t ern W i r el es s appr oache d the PU C t o r ece i ve fe der al uni ver s al s ervi ce s ubs i di es , and the PU C det erm i ned thatpubl i c i nt er es tr equi r ed thatan ET C des i gnat i on forr ece i ptof thos e s ubs i di es be condi t i oned on compl i ance w i th cert ai n r equi r ement s thathave a l s o been i m pos ed on w i r el i ne compani es s eeki ng the s ame type of s ubs i di es . A s s uch, W es t ern W i r el es s actual l yr eques t ed the PU C ’ s j ur i s di ct i on t o the ext entof r ece i vi ng E T C des i gnat i on. A nd W es t ern W i r el es s cannotcl ai m thati ti s bei ng s u bj e c t e d t o th e f

u l l p a n o p l yo f

wi r e l i n e r e g u l a t i o n s , a s n o to n l ya r e th e ETC co n d it ion s at i ssu e m ere lya su b set o f th o se re g u lat ion s, b u t al so W estern W i r el es s r et ai ns the abi l i tyt o optoutof them ent i r el ybydecl i ni ng anyfede r al u n iv e rs a l s e rv ic e s u b s id ie s . T hi r d, the FC C ’ s V onage or derw as bas ed i n parton a fi ndi ng thatthe stat e’s d ec isi o n “d ir ec tl yco n fli cts” w ith the F C C ’s ap p roa ch fo r reg u lat ing V o IP serv ices. Id. at2 2 , 4 1 5 . Y et he re, th ere is no d ir ec t con fli ct be tw ee n the P U C ’s- 20 -

c o n d itio n s o f

E T C d e s ig n a tio n a n d th e F C C ’s re g u la to ry ap p ro a c h . In s te a d , a y e a r a f terth e V o n a g e d e c isio n , the F C C a ffirm e d th a t sta te c o m m iss io n s c o u ld i mpo s e c o n s u me rp r o t e c t i o n r e q u i r e me n t s o n wi r e l e s s c a rr i e r s s e e k i n g ETC des i gnat i on. 2005 U ni ver s al Servi ce O r der , 20 F. C . C . R cd. at6384- 85. A nd w h ile th e P U C ’s c o n d iti o n s m ig h t n o t b e e x a c tlyw h a t th e F C C w o u ldim p o se if it w er e the ent i tydes i gnat i ng W es t ern W i r el es s as an ET C , s ee s upr a not e 3, the F C C has i nterpret ed the T el ecom m un i cat i on s A ctas perm i tt i ng st at es t o est abli sh th e iro w n a d d itio n a l r e q u ir e m e n ts . L as t , the FC C i n V onage de ci ded thatthe s t at e’ s r egul at oryr eac h vi ol at ed th e U .S . C o n stitu tio n ’s C o m m e rc e C lau se , sin c e M in n e so ta’ s re q u ire m e n ts w o u ld have the “‘ pr act i caleffect ’ of r egul at i ng comm er ce oc curr i ng w hol l yout s i de that s t at e’ s bor der s . ” V onage O r der , 19 F. C . C . R cd. at22, 428 ( quot i ng H eal yv. B eer I ns t . , 491 U . S. 324, 332 ( 1989) ) . H ow ever , C ongr es s has the pow ert o m ake e x c e p tio n s to th e C o m m e rc e C lau se ’s r e stric tio n s o n sta te ju risd ictio n a n d to p erm itstat es to reg u lat e in a w aythat affe cts i n terst ate c o m m erc e. S ee N ew Y o rk v. U ni t ed St at es , 505 U . S. 144, 171 ( 1992) ( “W hi l e the C om m er ce Cl aus e has lo n g b e e n u n d e rsto o d to lim it th e S tate s’ a b ili tyto d isc rim in a te a g a in st in ter sta te comm er ce, thatl i m i tm aybe l i ft ed . . . byan expr es s i on of the ‘ unambi guous in ten t’ o f

C o n g re ss .” (c itatio n s o m itt e d )). W ith re sp e c t to m o b ile comm uni cat i ons C ongr es s has done j us tthat , pr eempt i ng s t at es fr om r egul at i ng the r at es and marketentrycondi t i ons of m obi l e ca rr i er s , butexpr es s l yal l ow i ngT he P U C argues that the T el ecom m un i cat i on s A ctactuall y“requi res ” 9 carr i er s t o be abl e t o s epar at e i t s i ntr as t at e and i nt er s t at e s ervi ces . H ow ever , the PU C bas es i t s ar gum enton an unr el at ed cos tal l ocat i on m ethodol ogyempl oy ed by th e F C C th a t d o e s n o t sp e a kto th e a b ili tyo f a m o b ile c a rrie r to se p a ra te its in te rs ta te a n d in tr a s ta te s e rv ic e s fo r p u rp o s e s o f re g u la to ry c o m p lia n c e . M or eover , the PU C neveror der ed W es t ern W i r el es s t o s epar at e i t s i nt er s t at e and in tra sta te s e rv ice s w h e n it co n d iti o n e d its E T C d e sig n a tio n . A s s u c h , this a rg u m e n t is b o th u n a v a ili n g a n d irre lev a n t, an d w e d o n o t, ac c o rd in g ly , ad d re ss it f u rth e r o n th is a p p e a l. - 21 - th e s ta te s to re g u la te th e “ o th e r t e rm s a n d c o n d itio n s .” 4 7 U .S .C . § 3 3 2 (c )( 3 )( A ). W e m u st re sp e c t C o n g re ss ’s d e c isio n in th is m a tter to a llo w sta te P U C s to e x e rc ise E T C d e sig n a tio n a u th o rity , w h ich h a s n o t b e e n lim ited b yC o n g re ss to in s ta n c e s w h e re o n ly in tr a s ta te c o m m e rc e is a ffe c te d . I n s um m ary , the Tel ecomm uni cat i ons A ctdoes notcat egor i cal l ybarthe P U C f ro m e x e rc isin g ju risd ictio n o v e r se rv ice s th a t m a yin c lu d e a n in ter sta te c o m p o n e n t w h e n th e P U C a c ts w ith in its e x p licit a u th o rities u n d e r th e A c t. 9 M or eover , the FC C , i n aff i rm i ng s t at es ’ author i t i es underSect i ons 214 and 254, h a s n o t atte m p ted to re stric t th e sw e e p o f th o se a u th o rities e x c lu siv e lyto in tra sta te s e rv ice s. T h e A c t ex p licitlyg ra n ts th e F C C th e a u th o rityto p re e m p t a sta te r e g u latio n th a t h a s “ th e e ffe c t o f p ro h ib iti n g th e a b ili tyo f a n ye n tityto p r o v i d e a n yi n t e r s t a t e o ri n tr a s t a t e t e l e c o mmu n i c a t i o n s s e rv i c e . ” 4 7 U. S . C. § 2 5 3 (a ), (d ). H o w e v e r, th e F C C h a s y e t to e x e rc ise th a t sta tu to rya u th o rityto pr eemptthe type of ET C condi t i ons ati s s ue i n thi s cas e. W es t ern W i r el es s ’ s ar gum enti n thi s r egar d poi nt s t o the pot ent i al t ens i on betw een s t at e and feder al j ur i s di ct i on thatperm eat es the Tel ecomm uni cat i ons- 22 -

A ct, an d the a b sen ce o f c lear fe d era l gu idan ce o n the e x tent to w h ich a stat e’s condi t i ons of ET C des i gnat i on i m pos ed on a w i r el es s pr ovi dercan e m br ace the type of r egul at i on tr adi t i onal l yes t abl i s hed forw i r el i ne ca rr i er s w i thout i m perm i s s i bl ybur deni ng the fe der al uni ver s al s ervi ces pr ogr am. U nt angl i ng th o se iss u e s is sim p lyb e y o n d th e sc o p e o f o u r c u rre n t re v iew . O u r d e c isio n is ai m ed s ol el yatthe ques t i on pr es ent ed: w hetherthe Tel ecomm uni cat i ons A ct perm i t s a s t at e t o i m pos e ET C condi t i ons notr el at ed t o r egul at i on of r at es or m arketentrythataffectthe i nt er s t at e component s of a mobi l e ca rr i erthatbundl es i t s i nter st at e and i ntr ast at e services . T odayw e do notpas s on the ques t i ons of w hetherthe natur e and e xt entof the condi t i ons ati s s ue her e ar e bey ond the bounds of a s t at e’ s Sect i on 214( e) author i ty , orw hethertheyi m perm i s s i bl ybur den the fe der al uni ver s al s ervi ce pr ogr am underSect i on 254( f) . W e r emand t o the di s tr i ctcourtforfurther co n side rati o n o f u n reso lved issue s tha t m ayinclu d e tho se q u esti o n s. H o w ev er, w e do hol d, contr aryt o the rul i ng of the di s tr i ctcourt , thatfede r al l aw does not aut om at i cal l ypr ecl ude the PU C fr om exer ci s i ng thos e author i t i es i n a w aythat affects the int ers t at e com po nen tof an E T C desi gn ee’s services . C . R ul e- M aki ng R equi rem ent s and the Tel ecom m uni cat i ons A ct Th e c o n d i t i o n s th a tth e PUC s e e k s t o i mpo s e o n W e s t e rn W i r e l e s s ’ s ETC des i gnat i on ar e notpartof the s t at e’ s E T C r egul at i on, s ee 4 C o lo . C o d e R e g s . §T h e P U C fa iled to o ffe r b e fo re th e d istric t co u rt its v iew o f h o w to 10 in terp re t S e c tio n 2 5 4 (f). H o w e v e r, th e c o u rt d idn o t b a se its ru lin g o n a n yd e fa u lt bythe PU C , buti ns t ead pr es ent ed a de t ai l ed ar gum enton w hyi tconcl uded that W es t ern W i r el es s ’ s pos i t i on w as corr ect . T her efor e, w e r evi ew the di s tr i ct c o u rt ’s c o n c lu s io n o n its m e ri ts . O urs t atut oryi nt erpr et at i on di ffe r s fr om the pos i t i ons of both part i es on ap p e a l. H o w e v e r, w e a re n o t li m ited to th e p a rties ’ p o sitio n s o n w h a t a s tatu te m eans , becaus e w e r evi ew a ques t i on of s t atut orycons truct i on de novo. See U ni t ed Tra ns p. U ni on v. D ol e, 797 F. 2d 823, 828 ( 10th C i r . 1986) ( i n cons i der i ng w hethera partyhad w ai ved the opportuni tyt o ar gue fori t s pos i t i on as t o w hatthe s t atut e means , “[t ] he i s s ue conc erns ques t i ons of s t atut oryi nt erpr et at i on ur ged by the age ncyand ac cept ed bythe di s tr i ctcourt . Q ues t i ons of l aw ar e ent i t l ed t o a d e n o v o re v iew ; d e v e lo p m e n t o f a re c o rd b e fo re th e a g e n c yo r b yth e a g e n c yis notpr es s i ng. . . . W e bel i eve thati ti s nece s s aryt o corr ectm i s conce pt i ons of st atutorym eaning at the earl i estop po rtun i tyfor the b enefi tof all w ho m ust o p era te un d er a statu te' s p u rview . ” (c it ati o n o m itted)). - 23 - 723- 2, R ul e 2187, norar e theycodi fi ed el s ew her e. I ns t ead, the PU C es t abl i s hed thes e c o n d it ion s in a n adjud icatoryh ea ri n g an d d ec isi o n sp ec ifi c to W estern W i r el es s . T he di s tr i ctcourt , l ooki ng t o the t extof Sect i on 254( f) , rul ed thatthe PU C can i m pos e ET C des i gnat i on condi t i ons upon an appl i cantonl ybyadopt i ng regul at i on s throug h a rul e-m aking proceed i ng . W e dis agree. B ecause the exp res s s our ce of

the PU C ’ s author i tyi n thi s m att ercame fr om Sect i on 214( e) r atherthan Sect i on 254( f) , and bec aus e Sect i on 214( e) ( 2) E T C des i gnat i ons do notr equi r e a form al rul e- m aki ng pr ocee di ng, w e r ever s e the di s tr i ctcourt ’ s det erm i nat i on on thi s ques t i on. 10 S e c tio n 2 5 4 (f) p ro v id e s th a t sta tes m a y“ a d o p t re g u latio n s” to c re a te a sta te uni ver s al s ervi ce pr ogr am, i ncl udi ng “r egul at i ons ” thatpr ovi de “a ddi t i onal d e fin iti o n s a n d sta n d a rd s to p re se rv e a n d a d v a n c e u n iv e rsa l se rv ice ,” b u t o n lyifT h e f u ll t e x t o f

S e c tio n 2 5 4 (f) p ro v id e s th a t: 11 A S t a t e m a y a d o p t r e g u l a t i o n s n o t i n c o n s i s t e n t w i th t h e C o m m i s s i o n 's rules to p rese rve an d ad v an ce u n iversa l s ervi ce. E very t el ecomm uni cat i ons carr i er thatpr ovi des i ntr as t at e t el ecomm uni cat i ons services shal l con tri b u te, on an eq uit able and n on dis cri m i natorybasi s, i n a ma n n e r d e t e rmi n e d b y th e St a t e t o th e p r e s e rv a t i o n and advanc ement of uni ver s al s ervi ce i n that St at e. A St at e m ayadopt re g u latio n s to p ro v id e fo r a d d iti o n a l d e fin iti o n s a n d sta n d a rd s to p r e s e rv e a n d a d v a n c e u n i v e r s a l s e rv i c e wi th i n th a tSt a t e o n l yt o the ext entthats uch r egul at i ons adoptaddi t i onal s peci fi c, pr edi ct abl e, and s ufficien t mechani s m s t o s upports uch def i ni t i ons ors t andar ds thatdo no trel yon or burden F ederal un i versal service s up po rtm echan i sm s. 4 7 U . S . C . § 2 5 4 (f). - 24 - “such regul at i on s” ado pt suffici ent m echan i sm s t o supp ort tho se st and ards. 11 W hi l e the t extof Sect i on 254( f) coul d l ead t o the conc l us i on thata rul e- m aki ng pr ocee di ng i s r equi r ed forr egul at i on of a s t at e- cr eat ed uni ver s al s ervi ces pr ogr am, w e nee d notr es ol ve thatques t i on her e, becaus e the PU C ’ s condi t i ons w e re n o t im p o s e d o n W e s te rn W ir e le s s u n d e r th e a e g is o f S e c tio n 2 5 4 (f). T he structure of S ect i on 25 4 o f the T el ecom m un i cat i on s A ctdeli neates a fe d e ra l u n iv e rsa l se rv ice p ro g ra m , se e 4 7 U .S .C . § 2 5 4 (e ), an d a sta te’ s a u th o rity t o cr eat e i t s ow n s uch pr ogr am, s ee 47 U . S. C . § 254( f) . T he pr ovi s i on es t abl i s hi ng the fe der alpr ogr am provi des thatonl yE T C s des i gnat ed under S e c tio n 2 1 4 (e ) o f

th e A c t a re e lig ib le to re c e iv e fe d e ra l s u p p o rt . 4 7 U .S .C . § 2 5 4 (e ). B e c a u se W e ste rn W ire les s s o u g h t E T C d e sig n a tio n fo r fe d e ra l su p p o rt, and di d nots eek s t at e uni ver s al s ervi ce f undi ng, Sect i on 254( e) i s appl i cabl e.- 25 -

O n th e o th e r h a n d , S e c tio n 2 5 4 (f) g iv e s s tate s th e a u th o rityto a d o p t th e ir ow n r egul at i ons , defi ni t i ons and s t andar ds “t o pr es erve and a dvance uni ver s al serv ice,” as lo n g as th e re g u lat ion s are “n o t i n co n sist en t” w ith the F C C ’s uni ver s al s ervi ce rul es , and ar e pai r ed w i th “s peci fi c, pr edi ct abl e, and s uffi ci ent m ec h an ism s” th at “d o n o t r elyo n o r bu rde n F ed era l un iversa l service su p p o rt m echa ni s m s . ” 47 U . S. C . § 254( f) . W e have r ead Sec t i on 254( f) as empow er i ng sta tes to re q u ire tele c o m m u n ica tio n s c a rrie rs th a t p ro v id e in tra sta te s e rv ice s to c o n tr i b u t e fi n a n c i a l l yt o s t a t e u n i v e r s a l s e rv i c e me c h a n i s ms . S p r i n tS p e c tru m, L. P . v . S t a t e Co rp . Co mm’ n , 1 4 9 F . 3 d 1 0 5 8 , 1 0 6 1 ( 1 0 th Ci r . 1 9 9 8 ) . Th e F CC al s o has cons i s t ent l yr efe rr ed t o s t at es ’ author i tyunderSect i on 254( f) i n the con t ext of fun ding st at e m echan i sm s bycarr i er contri bu t i on s and d i sbursi ng tho se f u n d s fo r sta te u n iv e rsa l se rv ice s g o a ls. F o r e x a m p le, th e F C C d e c id e d th a t it s fe d e ra l u n iv e rsa l se rv ice f u n d s c o u ldn o lo n g e r b e u se d to su p p o rt “ m u lti p le connec t i ons ” t o a s i ngl e s ubs cr i ber ’ s r es i dence orbus i nes s , buts ai d thatSect i on 2 5 4 (f) p erm itted s tat es to u se state su p p o rtfo r m u lt iple co n n ec ti o n s. S ee In re Fed. - St at e J oi ntB d. on U ni ver s al Serv. , 19 F. C . C . R cd. 10, 800, 10, 839 ( J une 8, 2004) . “A l though s uch s t at e s upportw oul d go bey ond the s cope of fede r al h ig h -c o st s u p p o rt, w e d o n o t b e liev e th a t su c h su p p lem e n tarysta te f u n d in g w o u ld ‘re lyo n o r b u rd e n F e d e ra l u n iv e rsa l se rv ice su p p o rt m e c h a n ism s’ in c o n tr a v e n tio n o f

s e c tio n 2 5 4 (f) o f

th e A c t.” Id . a t 1 0 ,8 4 0 . S e e a ls o In re F e d .- St at e J oi ntB d. on U ni ver s al Serv. , 18 F. C . C . R cd. 22, 559, 22, 572 n. 61 ( O ct . 27,- 26 -

2 0 0 3 ) (c o m m e n tin g th a t if a sta te w a n ted to su p p o rt in tra sta te to ll se rv ice s in its un i versal service pr og ram , i tm ustfun d itthroug h it s ow n sup po rtm echan i sm w ith o u t r e lyin g o n fe d e ra l s u p p o rt ). I tappea r s thatSect i on 254( f) author i zes a s t at e t o cr eat e i t s ow n uni ver s al s ervi ce s t andar ds onl yt o the ext entthata s t at e i s pr ovi di ng s t at e fundi ng t o m eet thos e s t andar ds . T o hol d otherw i s e w oul d i gnor e the l as tand l onges ts ent ence of S e c tio n 2 5 4 (f). H o w e v e r, in th is c a se , W e ste rn W ire les s d idn o t se e ksta te su b sid ies . T h e re fo re , S e c tio n 2 5 4 (f) c a n n o t b e th e so u rc e o f th e P U C ’s a u th o rity t o im po se operat i on al and con sum er pr otect i on requi rem ents on W est ern W i rel ess as a condi t i on of ET C des i gnat i on. In c o n tra st, S e c tio n 2 1 4 (e )(2 ) is th e o n -p o in t so u rc e o f th e P U C ’s a u th o rity t o i m pos e condi t i ons on W es t ern W i r el es s ’ s E T C des i gnat i on, y eti tcont ai ns no tex tu a l im p lica tio n th a t sta te c o m m iss io n s s h o u ldiss u e ru les o r re g u latio n s in d o in g so . In ste a d , the sta tu to rylan g u a g e se e m s to a ss u m e a fa c t-sp e c ific d e ter m in a tio n m o re ap p ro p ria telyd o n e in a n a dju d ica to ryc o n tex t. T h e sta tu te r eads that“[b] efor e des i gnat i ng an addi t i onal el i gi bl e t el ecomm uni cat i ons carr i er foran ar ea s erved bya rur al t el ephone c om pany , the St at e comm i s s i on s hal l fi nd th a t th e d e sig n a tio n is in th e p u b lic in ter e st.” 4 7 U .S .C . § 2 1 4 (e )(2 ). T h is

“ p u b lic in ter e st” d e ter m in a tio n su g g e sts th a t sta tes sh o u ldc o n sid e r th e fa c ts s peci fi c t o the l ocalar ea i nvol ved and the s peci fi c s ervi ces pr opos ed t o be offer ed- 27 -

b yth e E T C d e sig n e e . T h e F C C ’s v iew a lso is th a t th e E T C d e sig n a tio n p ro c e ss is i nher ent l yl ocaland fa ct - s peci fi c i n natur e: S e c tio n 2 1 4 (e )(2 ) o f

th e A c t g iv e s s tate s th e p rim a ryre sp o n sib ili tyto desi gn at e E T C s and prescr i bes that al l st at e desi gn at i on decis i on s m ust b e c o n s is te n t w ith th e p u b lic in te re s t, c o n v e n ie n c e , a n d n e c e s s ity. W e b e liev e th a t se c tio n 2 1 4 (e )(2 ) de m o n stra tes C o n g re ss ’s in ten t th a t sta te com m i ssi on s ev al uate l ocal factual si tuati on s in E T C cases and ex erci se d isc re tio n in re a c h in g th e ir c o n c lu sio n s re g a rd in g th e p u b lic in ter e st, co n v en ienc e a n d n ec essity , as lo n g as su c h d e term ination s are c o n sis ten t w ith fe d e ra l an d o th e r sta te la w . . . . F u rth e rm o re , sta te comm i s s i ons , as the ent i t i es m os tfam il iar w i th the s ervi ce a r ea for w h ich E T C d e sig n a tio n is s o u g h t, are p a rticu lar lyw e ll-e q u ip p e d to determ i ne thei r ow n E T C el i gibi l i tyrequi rem ents . 2005 U ni ver s al Serv. O r der , 20 F. C . C . R cd. at6397. Al l o wi n g th e PUC fl e x i b i l i tyi n d e c i d i n g h o w t o a n n o u n c e i t s ETC d e s ig n a tio n re q u ir e m e n ts is c o n s is te n t w ith g e n e ra l a d m in is tr a tiv e la w p ri n c ip le s . “The Supre m e C ourthas cons i s t ent l yhel d that‘ the choi ce made betw een pr ocee di ng bygener al rul e orbyi ndi vi dual , ad hoc l i t i gat i on i s one thatl i es pr i m ar i l yi n the i nform ed di s cr et i on of the admi ni s tr at i ve age ncy . ’ ” N unez- Pena v. I N S, 956 F. 2d 223, 225 ( 10th C i r . 1992) ( quot i ng SE C v. C heneryC orp. , 332 U . S. 194, 203 ( 1947) ) . B uts ee N L R B v. B el l A er os pace C o. , D i v. of Textr on, Inc . , 4 1 6 U . S . 2 6 7 , 2 9 4 (19 7 4 ) (cau ti o n ing that an ad m inistrati v e a g en cy ’s di s cr et i on t o choos e the means of announc i ng new pr i nci pl es i s s ubj ectt o any appl i cabl e s t atut orycons tr ai nt s , and ther efor e ther e maybe s i tuat i ons i n w hi ch re lia n c e o n a dju d ic a tio n w o u ld a m o u n t to a n a b u s e o f d is c re tio n ).- 28 -

G i ven the thrus tof the s t atut oryl anguage of Sect i on 214( e) ( 2) gi vi ng s t at es the author i tyt o eval uat e s peci fi c l ocalfac t s i n E T C deci s i ons , and the abs ence of anyauthor i tys ugges t i ng thats uch det erm i nat i ons m us tbe done thr ough pr om ul gat i on of rul es , w e hol d thatthe PU C i s notr equi r ed t o engage i n a rul ema k i n g p r o c e e d i n g whe n i mpo s i n g c o n d i t i o n s p u r s u a n tt o ma k i n g a n ETC d e s ig n a tio n . I I I . C oncl usi on F o r th e a fo rem en ti o n ed rea so n s, w e R E V E R S E in p art th e d istri ct co u rt ’s deci s i on. W e hol d thatthe PU C ’ s author i tyt o m ake a n E T C des i gnat i on under Sect i on 214( e) ( 2) underthe Tel ecomm uni cat i ons A cti s notcurt ai l ed mer el yon a s how i ng thatthe exe r ci s e of s uch author i tyaff ect s the i nt er s t at e component s of a carr i er ’ s s ervi ces . W e al s o hol d thatthe PU C need notengage i n a rul e- m aki ng pr ocee di ng t o i m pos e condi t i ons on E T C des i gnat i ons thatar e author i zed by Sect i on 214( e) ( 2) of the A ct . W e r ecogni ze thatW es t ern W i r el es s has r ai s ed a n u m b e ro f

o th e rq u e s t i o n s a b o u tth e c o n d i t i o n s th a tth e P U C s e e k s t o i m p o s e . We R E M A N D to th e d istric t co u rt fo r c o n sid e ra tio n o f th e re m a in in g iss u e s in th is m a tte r.0 6 -1 1 5 6 , W W C H o ld in g C o ., In c . v. S op k in

G O R S U C H , J ., C i r cui t J udge, di s s ent i ng. T hough r el uct ant t o par t company w i t h m y col l eague s , I fee l cons t r ai ned t o do s o i n t hi s cas e bec aus e t he maj or i t y r ever s es t he di s t r i ct c o u rt e m p lo y in g a rg u m e n ts th a t th e a p p e llan t n e v e r m a d e b e fo re th a t co u rt, n e v e r p re ss e d o n a p p e a l, an d m a n y o fw h ich th e a p p e llan t h a s e x p re ss ly di s avow ed. T hey ar e ar gum ent s , as w el l , t o w hi ch t he appe l l ee ha s never had t he cha nce t o r es pond. Skept i cal of m y ow n capa ci t y t o ar r i ve pur el y by j udi ci al s el f- di r ect i on at t he opt i m al under s t andi ng of a c om pl ex cor ner of fede r al comm uni cat i ons l aw , and conc er ned about pr ocee di ng w i t hout at least affo rdin g the a ffec ted lit igan ts no ti ce an d an o p p o rt u n it y to b e h ea rd o n th e o ri e s p u rs u e d b y th e c o u rt , I r e s p e c tfu lly d is s e n t. T o begi n at t he begi nni ng, i n C ount I of i t s compl ai nt W W C H ol di ng C o m p a n y (“ W e ste rn W ire les s” ) c o n tes ted th e a u th o rity o fth e P u b lic U til iti e s C o m m iss io n o fth e S tate o fC o lo ra d o (“ P U C ” o r “ C o m m iss io n ” ) to r egul at e r at es under 47 U . S. C . § 332( c) ( 3) of t he Tel ecomm uni cat i ons A ct of 1 99 6 (t he “A ct ” or “19 96 A ct ”). In C ou nt I I, W est ern W i rel ess chall eng ed the C om m i ssi on ’s authori t y un der 47 U . S . C . § 1 51 t o im po se condi t i ons , r es pect i ng ei t her r at es or non- r at e t er m s of s er vi ce, on t he company ’ s bundl ed i nt er s t at e s er vi ce offer i ngs . A ft er a ca r eful anal y s i s , t he di s t r i ct cour t enj oi ned t he PU C ’ s r at e- s et t i ng for ay , expl ai ni ng t hat Sect i on 332( c) ( 3) ( A ) pr ohi bi t s s t at es fr om r egul at i ng t he ent r y of or t he r at es-2-

c h a rg e d b y a w ire les s c a rrie r. N o tab ly , the P U C h a s n o t ap p e a led th is cent r al det er m i nat i on of t he di s t r i ct cour t . T hus , t he fi r s t i s s ue r emai ni ng for our r es ol ut i on on appea l conce r ns t hat por t i on of C ount I I w hi ch su rviv ed – n am ely , W estern W ir eless’s c h all en g e to th e C o m m issi o n ’s aut hor i t y t o r egul at e non -r a te te rm s a n d c o n d itio n s o fits s e rv ic e s . In a s e c tio n title d “ S ta te A u th o ri tie s a n d In te rs ta te C o m m u n ic a tio n s ,” th e m ajo rity a p p ro a c h e s th is q u e stio n b y p u rsu in g th e b ro a d th e sis th a t sta te comm i s s i ons ar e fr ee t o r egul at e any non- r at e t er m s and condi t i ons of i nt er s t at e s er vi ce pr ovi ded by m obi l e s er vi ce e l i gi bl e t el ecomm uni cat i ons ca rri ers (“E T C s”). M aj. O p . at 9-2 2 . Y et, the C o m m issi o n it self n ev er – e ith e r b e fo re th e d is tr ic t c o u rt o r o n a p p e a l – a d v o c a te d s u c h a th e o ry. In d e e d , in its b rie fs a n d a g a in a t o ra l ar g u m e n t th e C o m m iss io n e x p re ss ly di s cl ai m edan y au tho ri ty to reg u lat e the term s an d co n d it ion s o f W estern W ir eless’s i nt er s t at e s e rv ic e s . See , e. g. , R e p ly B r. a t 9 ; A p lt. A p p . a t 2 2 7 . A ccor di ng t o t he C om m i s s i on, i t s or der m er el y s eeks t o i m pos e condi t i ons on W est ern W i rel ess’ s in tra sta te serv ices, an d it h ap p en s to a ffec t W estern W ir eless’s interstate offe ri n g s o n ly b y v ir tue o f W estern W ir eless’s in d e p e n d e n t (a n d p re su m a b ly lu c ra tiv e ) b u sin e ss d e c isio n to b u n d le in tr a s ta te a n d in te rs ta te s e rv ic e o ffe ri n g s . T o be s ur e, t he par t i es cannot s t i pul at e t o a fa l s e r eadi ng of a s t at ut e, and w e ar e not r i gi dl y pr ecl uded fr om deci di ng a ca s e on an una r gued but a p p a re n t p o in t o fla w . See Uni t ed St at es v. Int er nat i onal B us i nes s M achi nesT h e m aj o r i ty c i t e s a s c o n tr a ry a u th o r i ty Uni ted Tr ans por tat i on Uni on v. 1 D o le , 7 9 7 F . 2 d 8 2 3 (10 th C ir . 1 9 8 6 ). M aj. O p . at 23 n . 1 0 . B u t th ere the c o u rt emphasi zed that , qui t e unl i ke her e, the l egaltheoryi tpur s ued had be en “thor oughl yar gued i n the tr i al court . ” D o le , 7 9 7 F .2 d a t 8 2 8 . -3- C or p. , 517 U . S. 843, 866- 68 ( 1996) ( K ennedy , J . , di s s ent i ng) ( col l ect i ng aut hor i t y ) . B ut j us t beca us e w e have t he pow er t o r es ol ve a que s t i on of cour s e does not m ean w e must , or s houl d, al w ay s do s o. I ndeed, w hen a p a rty “ c h o [ o ]se [ s] n o t to ” p u rsu e a leg a l th e o ry p o ten tially a v a ilab le to it, w e g e n e ra lly ta k e th e p ru d e n tia l p o s itio n th a t it is “ in a p p ro p ri a te . . . w i t hout t he bene fi t of t he par t i es ’ br i efi ng” t o pur s ue t hat t heor y i n our o p in io n s . Id. at 85 5 (m ajorit y o p inion ) (i n terna l qu o tat ion o m it ted); s ee g e n e ra lly Sp ect or M otor Servs. , Inc. v. Wals h , 1 3 9 F . 2 d 8 0 9 , 8 2 3 (2d C ir . 1 9 4 3 ) (H a n d , J., d iss e n tin g ) (It is n o t “d e sira b le fo r a lo w e r c o u rt to embra ce t he exhi l ar at i ng oppor t uni t y of ant i ci pat i ng a doct r i ne w hi ch may b e in th e w o m b o ftim e , b u t w h o s e b ir th is d is ta n t.” ), vacat ed s u b n o m . , S p e c to r M o to r S e rv s., In c . v. M c L a u g h lin , 323 U . S. 101 ( 1944) . O ur 1 caut i on fl ow s i n par t fr om a r ecogni t i on of our depende nce on t he t r adi t i ons of t he adve r s ar i al pr oces s i n t es t i ng t he i s s ues for our deci s i on and t he er r or w e r i s k w hen w e s t r i ke out on our ow n; i t fl ow s , t oo, fr om conce r n for t he a ffe c ted p a rties to w h o m w e tra d iti o n a lly e x ten d n o tice a n d a n o p p o rtu n ity to b e h e a rd o n th e is s u e s th a t a ffe c t th e m . See Z am ora v. Eli t e L og i st i cs,T hes e s ame r at i onal es under gi r d ourgener alprudent i al pr act i ce of 2 d e c lin in g to e n ter tain e v e n th o se a rg u m e n ts a c tu a llyp u rsu e d b ya p a rtyb u t o n ly r ai s ed forthe fi r s tt i m e on appe al , as w el l as thos e ar gum ent s pr es erved befor e the d is tr ic t c o u rtb u t r a is e d o n ap p e a l o n ly in a re p ly b ri e f. See Hi l lv . Ke mp , 478 F .3 d 1 2 3 6 , 1 2 5 0 -5 1 (1 0 th C ir. 2 0 0 7 ); Tele- C om m uni cat i ons , Inc. v. C om m ’ rof InternalR eve nue , 104 F. 3d 1229, 1233 ( 10th C i r . 1997) ( “I n or dert o pr es erve the in teg rityo f

th e ap p e llate stru c tu re , w e sh o u ldn o t b e c o n sid e re d a ‘se c o n d -sh o t’ forum , a forum w here second ary , back -up theo ri es m aybe m ou nted for the fir st ti m e.”). See J im C h e n , Su b sidizedR u ra l Te leph o ny a n dthe P u b li c In terest: A

3 C a se S tu d

y in C o op e ra tive Fe de ra lism a n dIts P itf a lls , 2 J . T el ecomm . & H i gh T ech. L. 30 7, 31 4 (200 3) ( herei nafter“C hen ”) ( descri bing § 2 14 (e) as a “se em ing lyo b scu re p rov isi o n ” o f th e A ct). -4- Inc. , 4 7 8 F .3 d 1 1 6 0 , 1 1 8 3 -8 4 (1 0 th C ir . 2 0 0 7 ) ( e n b a n c ) ( G o rs u c h , J ., co n cu rri n g ). 2 M y conce r n w i t h s t r i ki ng out on a new cour s e t he par t i es have not advoca t ed or been pe r m i t t ed t o addr es s , even t hr ough s uppl ement al br i efi ng, i s hei gh t ened by t he set t i ng of thi s part i cular dis pu t e. T his case i nv olves a co m p lex a n d relati v ely u n stud ied c o rne r ofthe c o n tr o ll ing stat u tory re g im e . N o is s u e o fc o n s titu tio n a l g ra v ity o r p e rs o n a l lib e rt y is a t s ta k e .

3 A nd t he par t i es w er e affor ded t he ful l benefi t of hi ghl y compet ent couns el and t hus pr es um abl y m ade de l i ber at e and i nfor m ed t act i cal deci s i ons re g a rd in g w h ic h le g a l th e o ri e s to p u rs u e (a n d n o t p u rs u e ). M eanw hi l e, t he maj or i t y i m pl i ci t l y r ej ect s t he PU C ’ s under s t andi ng of its o w n o rd e r w ith o u t p a u sin g to c o n sid e r w h e th e r th e a g e n c y is e n tit led toSe e , e . g . , Co lo . In te rs ta te Ga s Co . v . Na t ’ lGa s P i p e l i n e Co . o

f A m. , 885 4 F. 2d 683, 688 ( 10th C i r . 1989) ( not i ng the “de fer ence w e ow e t o [an ad m inistrati v e a g en cy ’s] i n terpretati o n o f it s o w n o rde rs”). See , e. g. , K y le D . D ix o n & P h ilip J . W e is e r, A D igi talA ge 5 C om m uni cat i ons A ctP ar adigm f orFederal

- State Relat i ons , 4 J . T e le c o m m . & H igh T ec h . L . 3 2 1 , 3 4 2 -43 (20 0 6 ); C h en at 30 8 -31 7 , 3 6 2 -69 ; Pe ter W . H u b er, M ic h a e l K . K e llo g g & J o h n T h o rn e , FederalTelecom m uni cat i ons Law §§ 3. 3. 3- 3 .9 a t 2 2 3 -2 7 0 (2 d e d . 1 9 9 9 ). See C hen at309- 13 ( des cr i bi ng compet i ng camps of thos e w ho have 6 pus hed forder egul at i on of the t el ecomm uni cat i ons i ndus tryand thos e w ho have pus hed fordevol ut i on of r egul at orypow erfr om the fe der al governm entt o the s t at es , and l abel i ng pr oponent s of the l att erper s pect i ve mem ber s of the “Col or ado sc h o o l” in re c o g n iti o n o f th e h o m e o f

c e rta in p e rc e iv e d a d v o c a tes o f th is p o sit ion ). B yw ayo f e x am p le, the c o u rtap p ea rs t o inv ert th e S u p rem e C o u rt ’s 7 re q u ire m e n t o f

a n e x p re ss c o n g re ss io n a l in ten tio n p rio r to p e rm itt in g sta tes to re g u la te in te rs ta te c o m m e rc e . See M aj . O p. 20- 21 ( quot i ng New York v. Uni ted States , 5 0 5 U .S . 1 4 4 , 1 7 1 (1 9 9 2 )). T h e m ajo rityp o sits th a t b y“ e x p re ss ly a llo w in g th e sta tes to re g u late th e ‘o th e r te rm s a n d c o n d iti o n s’” o f m o b ile se rv ice s, a n d b yC o n g re ss ’s fa ilu re to lim it th is a u th o rity“ to in sta n c e s w h e re o n ly i ntr as t at e comm er ce i s affect ed, ” C ongr es s has expr es s ed an una m bi guous i nt ent to p e rm it state s to re g u late in ter sta te c o m m e rc e . M aj. O p . at 2 1 . B u t, w h ile C ongr es s m aybe fa i thful l ychar act er i zed a s havi ng unambi guous l ygi ven s t at es author i tyt o r egul at e “othert erm s and condi t i ons ” of mobi l e s ervi ces , thi s i s notat (c o n tin u e d ...) -5- s om e degr ee ofdefe r ence r egar di ng t he meani ng of i t s ow n decr ee. T he 4 m aj or i t y ’ s novel t heor y al s o t r eads i nt o a l ongs t andi ng nat i onal di s cus s i on about t he pr oper r ol e of c om pet i ng fede r al and s t at e aut hor i t i es i n t he r e g u l a t i o n o ft h e t e l e c o m m u n i c a t i o n s i n d u s t r y , a n d i t a p p e a r s t o c o m e d o w n 5 ra th e r stro n g ly in fa v o r o fo n e c o m p e tin g sc h o o l o fth o u g h t. N e ith e r is its 6 a n a ly sis a b o u t th e ro le o fsta tes in th e re g u latio n o fin ter sta te t el ecomm uni cat i ons al t oget her s el f- evi dent or fr ee fr om ques t i on. Per haps 7( . . . cont i nued) 7 a ll o b v io u slyth e sa m e th in g a s e x p re ss lyb e sto w in g sta tes w ith a u th o rityto r egul at e i nt er s t at e comm er ce i n thi s endea vor . I ndeed, the maj or i tys eems t o r ead C on gress ’s s i lence re g a rd in g th e e ffe c t o f a n ysu c h sta te r e g u latio n o n in ter sta te c o m m e rc e in to a n u n a m b ig u o u s e x p re ss io n o f in ten t. C ongr es s expr es s l yal l ow ed s t at e comm i s s i ons t o r egul at e in tra sta te 8 s e rv ic e s , s ee 47 U . S. C . § 152( b) , and, m or e s peci fi cal l y , t o i m pos e “t erm s and c o n d itio n s ” o n in tr a s ta te s e rv ic e s p ro v id e d b yw ir e le s s c a rr ie rs . 4 7 U .S .C . § 3 3 2 (c )(3 )(A ); see also Fed.

- State Joi ntB d. on Uni vers alServ. , 20 F. C . C . R . 6371, 6 3 8 4 -85 (20 0 5 ) (“ 2005 Uni vers alServi ce O rder ” ); accord Tex. O f f i ce of P ub. Ut i l . Co u n s e lv . FCC , 18 3 F . 3d 39 3, 41 8 (5th C i r. 19 99 ). W est ern W i rel ess poi nt s t o nothi ng i n the A ctthatpr econdi t i ons thi s undi s put ed s t at e author i tyon a further i nq uiryi nto w hetheran E T C app l i cant has m ade an i nd epen den tbu si ness d e c isio n to b u n d le ( re g u late d ) in tra sta te s e rv ice s w ith (n o n re g u late d ) in ter sta te se rv ice s. T o b e su re , C o n g re ss sp e c ified th a t th e F C C m a yp re e m p t an ysta te re g u latio n th a t itfin d s to b e so o n e ro u s a s to e re c t a b a rrie r to e n try , am o u n t to r at e r egul at i on, orotherw i s e i nt er fer e w i th the abi l i tyof an e nt i tyt o pr ovi de te le c o m m u n ic a tio n s s e rv ic e . See 4 7 U .S .C . § 2 5 3 (a ), (d ); i d. § 332( c) ( 3) ( A ) . B ut W es t ern W i r el es s has notbegun t o as s ertbefor e us ( or , appar ent l y , the FC C ) that th e c o n d iti o n s s p e c ified b yC o n g re ss fo r re lief ap p lyh e re . In ste a d , ita sk s u s to fas hi on outof w hol e cl oth a new rul e abs ol vi ng carr i er s fr om s t at e r egul at i on any tim e a w ire les s c a rrie r m a k e s th e in d e p e n d e n t b u sin e ss d e c isio n to b u n d le its se rv ice s. W e a re n o t f re e to su b stitu te o u r ju d g m e n t fo r C o n g re ss ’s a n d w rite in to a c o m p reh en sive statu toryreg im e a n ew , low er b ar fo r reli ef than the L eg isl ature it self c h o se to en ac t. M o re tha n that w e n ee d n o t sayto reso lve C o u n t I I. -6- m os t s i gni fi cant l y of al l , none of t hi s i s r eal l y nece s s ar y . W hat r emai ns of C o u n t II c a n b e re so lv e d re a d ily , w ith o u t an y o fth e se d ifficu lti e s a n d w ith fai t hful nes s t o t he s t at ut or y s cheme befor e us , on a bas i s ful l y vet t ed by t he p a rties a n d d istric t co u rt. 8 T he r eas ons t hat gi ve me paus e about t he cour t ’ s di s pos i t i on of C ount II r ec u r w it h resp ec t t o C o u n t I V . B efo re the d ist ri ct co u rt , W estern W i r el es s ar gued t hat , even i f t he C om m i s s i on had t he aut hor i t y t o over s ee-7-

t he non- r at e t er m s and condi t i ons of i t s E T C s er vi ce, Sect i on 254( f) r equi r ed t he C om m i s s i on t o pr ocee d t hr ough for m al r ul emaki ng pr oces s es rathe r t h an , as it d id h ere , b y im p o sing info rm al co n d it ion s o n W estern W i r el es s ’ s E T C des i gnat i on. A pl t . A pp. at 88- 91. T he C om m i s s i on r es ponded by s ugges t i ng onl y t hat t he val i di t y of t he condi t i ons i t i m pos ed o n W e ste rn W ire les s h in g e o n w h e th e r it en g a g e d in th e u n law fu l ra te re g u la tio n c h a lle n g e d in C o u n t I . See A p lt . A p p . at 22 7 -28 . A t sum m ary ju d g m e n t, t h e d istric t co u rt a g re e d w ith W e ste rn W ire les s’s a ss e rtio n in C ount I V t hat t he PU C m ay onl y es t abl i s h qual i t y of s er vi ce s t andar ds thro u g h fo rm al reg u lat ion s ad o p ted p u rsua n t t o S ec ti o n 2 5 4 (f). T h e m ajo rity re v e rse s o n th e b a sis th a t S e c tio n 2 5 4 (f) sp e a k s o n ly to s t at e uni ver s al s er vi ce fund s ubs i dy i s s ues and, t hus , t hat not hi ng i n t hat p ro v isio n c a n b e a so u rc e o f, o r a lim itatio n o n , a s tate ’s a u th o rity in i mpo s i n g “ o p e r a t i o n a l a n d c o n s u m e r p r o t e c t i o n r e q u i r e m e n t s ” o n a n ETC d e sig n e e . M aj. O p . at 2 6 ; s e e g e n e r a lly id . at 24 -28 . O n ce ag ain, ho w ev er, t he PU C never pur s ued s uch a t heor y for r ever s al ; t he di s t r i ct cour t never had t he cha nce t o pas s upon i t ; and W es t er n W i r el es s has never had t he oppor t uni t y t o r es pond t o i t . I n fac t , w hen as ked at or al ar gum ent w het her S e c tio n 2 5 4 (f) a p p lie d o n ly to s ta te u n iv e rs a l s e rv ic e fu n d s , b o th par t i es a n s w e re d in th e n e g a tiv e .W hi l e the l att ertw o s ent ence s of Sect i on 254( f) do conce rn uni ver s al 9 s ervi ce s ubs i di es , the fi r s ts ent ence i s notobvi ous l ys o l i m i t ed, i ndi cat i ng that “ [ a ] S tate m a ya d o p t re g u latio n s n o t in c o n sis ten t w ith th e C o m m iss io n ’s ru les to p rese rve an d ad v an ce u n iversa l service . ” M o reo v er, co n tr aryto the m ajority ’s s ugges t i on thatthe FC C has s poken of Sec t i on 254( f) onl yi n the cont extof a stat e u n iversa l service fu n d , in at least on e d ec isi o n the F ed era l- S tat e Jo int B o ard on U ni ver s al Servi ce i ndi cat ed thatSect i on 254( f) m ayl i m i ta s t at e’ s rul e- m aki ng pow eri n anotherar ea, a s t at e comm i s s i on’ s des i gnat i on of the s ervi ce a r ea for E T C d e s ig n a tio n . See Fed.

- State Joi ntB d. on Uni vers alServ. , 12 F. C . C . R . 87, 1 8 1 (1 9 9 6 ) ( R e c o m m e n d e d D e c is io n ). B e fo re th e d istric t co u rt, th e P U C a rg u e d o n lyth a t C o u n t IV sh o u ld 10 s ta n d o r fa ll w ith th e c o u rt ’s re s o lu tio n o f C o u n t I c o n c e rn in g ra te re g u la tio n s . W ith C o u n t I in d isp u tab lyh a v in g fa llen , so in fa irn e ss o u g h t C o u n t IV . W h ile p e rh ap s s e e m in g lya ll t o o fa c ile o r stra ig h tfo rw a rd , res o lv in g th e c a se in th is m annerw oul d have the vi rtue of a dj udi cat i ng the ca s e both m odes t l yand on the bas i s of the part i es ’ chos en ar gum ent s , w hi l e l eavi ng the maj or i ty ’ s theoryof the s t atut e open a nd avai l abl e forl i t i gant s w i s hi ng t o pur s ue i tanotherday . T o be s u r e , o n ap p e a l th e P UC s o u g h tt o r a i s e a d d i t i o n a l a r g u me n t s fo rr e v e r s a l . Bu twe g e n e ra lly w ill n o t c o n s id e r s u c h la te -b lo s s o m in g a rg u m e n ts , see supra not e 2, and th e ma j o r i tyt o d a yi t s e l f

d o e s n o ta d d r e s s th e m.

-8- M eanw hi l e, and once agai n, t he maj or i t y ’ s s el f- char t ed cour s e does n o t o b v i o u s l y fl o w fr o m o u r p r e c e d e n t a n d i s n o t i m m u n e t o q u e s t i o n . A t 9 t he s ame t i m e, t hi s cas e coul d have be en r eadi l y r es ol ved on t he bas i s of t he par t i es ’ act ual ar gum ent s w hi l e ful l y pr es er vi ng t he vi abi l i t y of t he m ajo rity ’s th e o ry . E v e n ifin th e fu lln e ss o ftim e th e m ajo rity p ro v e s to 1 0 have be t t er ed bot h par t i es r egar di ng t he s cope a nd m eani ng of Sect i on 2 5 4 (f), fo r re a so n s a lre a d y e x p lo re d I a m re lu c tan t to p ro c e e d d o w n th is pat h w i t hout fi r s t at l eas t affor di ng t he par t i es affect ed by our deci s i on not i ce a nd an oppor t uni t y t o be hea r d. See supra p p . 2 -4 . I r e s p e c tfu lly d is s e n t.