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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 15, 2003 Decided February 13, 2004

No. 02-1262

CELLCO PARTNERSHIP, D/B/A VERIZON WIRELESS,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

No. 03–1080

VERIZON TELEPHONE COMPANIES, ET AL.,

PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.
2

AT&T CORPORATION AND

CINGULAR WIRELESS LLC,

INTERVENORS

On Petitions for Review of an Order of the

Federal Communications Commission

Andrew G. McBride argued the cause in No. 02–1262 for

petitioner. With him on the brief were Eve Klindera Reed

and John T. Scott III. Lewis A. Tollin entered an appearance.

Richard K. Welch, Counsel, Federal Communications Commission, argued the cause in No. 02–1262 for respondents.

On the brief were Robert H. Pate III, Assistant Attorney

General, Robert B. Nicholson and Robert J. Wiggers, Attorneys, John A. Rogovin, General Counsel, John E. Ingle,

Deputy Associate General Counsel, and Laurel R. Bergold,

Counsel.

Andrew G. McBride argued the cause in No. 03–1080 for

petitioners. With him on the briefs were Eve Klindera Reed,

William P. Barr, Michael E. Glover and Edward H. Shakin.

Richard K. Welch, Counsel, Federal Communications Commission, argued the cause in No. 03–1080 for respondents.

With him on the brief were Robert H. Pate III, Assistant

Attorney General, U.S. Department of Justice, Catherine G.

O’Sullivan and Nancy C. Garrison, Attorneys, John A. Rogovin, General Counsel, Federal Communications Commission,

John E. Ingle, Deputy Associate General Counsel, and Laurel

R. Bergold, Counsel. Laurence N. Bourne, Counsel, entered

an appearance.

Peter H. Jacoby, David W. Carpenter, David L. Lawson

and James P. Young were on the brief in No. 03–1080 for
3

intervenor AT&T Corporation. Mark C. Rosenblum entered

an appearance.

Before: RANDOLPH, ROGERS and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Section 11 of the Telecommunications Act of 1996 (‘‘1996 Act’’) requires the Federal Communications Commission, upon biennial review, to repeal or modify

any regulation that is ‘‘no longer necessary in the public

interest as the result of meaningful economic competition

between providers of such service.’’ 47 U.S.C. § 161 (2002).

Cellco Partnership d/b/a Verizon Wireless (‘‘Verizon Wireless’’) and Verizon Telephone Companies (‘‘Verizon’’) petition

for review of the Commission’s Biennial Regulatory Reviews

for 2000 and 2002, respectively, challenging the Commission’s

interpretation of § 11. Verizon Wireless also challenges the

Commission’s determination to retain two rules, 47 C.F.R.

§ 43.61(a) and § 63.21(i). Because of the chameleon-like

nature of the term ‘‘necessary,’’ whose meaning depends on

its statutory context, we defer to the Commission’s reasonable interpretation of § 11 as requiring it to apply the same

standard used to adopt regulations under 47 U.S.C. § 201(b)

to determinations of whether the regulations remain necessary in the public interest, and as imposing a time limit for

Commission action only in § 11(a). Absent direction by

Congress for a contrary interpretation, this interpretation

provides internal statutory consistency, avoids absurd results,

and is consistent with Congress’ deregulatory purpose.

We therefore hold, upon rejecting the Commission’s challenges to our jurisdiction and Verizon Wireless’ standing, that

because § 11 neither mandates the completion of the § 11(b)

proceedings within the biennial year itself nor requires the

Commission to repeal or modify every rule that the Commission does not determine to be absolutely essential, and thus

does not impose a special evidentiary burden, the Commission

provided an adequate explanation for retention of the two
4

rules challenged by Verizon Wireless. Accordingly, we deny

Verizon Wireless’ petition challenging the Commission’s interpretation of § 11 and its determination to retain the two

rules. In light of our disposition of Verizon Wireless’ petition, we dismiss Verizon’s petition for lack of jurisdiction.

I.

The Communications Act of 1934 vested broad discretion in

the Commission to regulate interstate and international wire

and radio communications services. See 47 U.S.C. § 151.

Among the responsibilities that Congress assigned to the

Commission is the duty to ‘‘prescribe such rules and regulations as may be necessary in the public interest.’’ Id.

§ 201(b). Its rulemaking authority thus extends to adopting

rules so long as they ‘‘are not an unreasonable means’’ to

achieve ‘‘permissible public-interest goals.’’ FCC v. Nat’l

Citizens Comm. for Broad., 436 U.S. 775, 796 (1978).

In 1993, Congress amended the Communications Act to

provide for the regulation of mobile communications services.

See Omnibus Budget Reconciliation Act of 1993, Pub. L. No.

103–66, Title VI, § 6002(c), 107 Stat. 312 (1993). Commercial

mobile radio services (‘‘CMRS’’) were to be treated as common carriers subject to Title II of the Communications Act,

which authorizes the Commission to ensure that carriers

comply with applicable statutes. See 47 U.S.C. §§ 201–234.

Congress, however, authorized the Commission to forbear

from applying the provisions of Title II to such carriers upon

determining, among other things, that forbearance ‘‘is consistent with the public interest.’’ 47 U.S.C. § 332(c)(1)(A)(iii).

In making that determination, the Commission must consider

‘‘whether the proposed [forbearance] regulation TTT will promote competitive market conditions, including the extent to

which such regulation TTT will enhance competition among

providers of commercial mobile services.’’ Id. § 332(c)(1)(C).

Congress further directed the Commission to review CMRS

competitive market conditions and to analyze these conditions

in its annual report. Id.
5

In 1996, by further amendment to the Communications Act,

Congress enacted the Telecommunications Act of 1996 to

ensure ‘‘a pro-competitive, de-regulatory national policy

framework designed to accelerate rapidly private sector development of advanced telecommunications and information

technologies and services to all Americans by opening all

telecommunications markets to competition.’’ S. Rep. No.

230, 104th Cong., 2d Sess. 1 (1996). Congress’ broad policy

was to be implemented through Commission rules, but the

1996 Act provided that it ‘‘shall not be construed to modify,

impair or supersede’’ the Communications Act ‘‘unless expressly so provided.’’ Pub. L. No. 104–104, § 601(c)(1), 110

Stat. 56 (1996), 47 U.S.C. § 152 note. See also AT&T Corp.

v. Iowa Utils. Bd., 525 U.S. 366, 378 n.5 (1999). The 1996 Act

directed the Commission to expedite rulemaking in a variety

of areas, for instance, local competition, universal service, and

portability, see 47 U.S.C. §§ 251(d), 254, 251(b), but also

vested the Commission with general forbearance authority,

id. § 160. As pertinent here, the 1996 Act, Pub. L. No. 104–

104, § 402, amended Title I of the Communications Act by

adding a new § 11, which directed the Commission to undertake biennial assessments of its rules to determine whether

they should be repealed or modified. 47 U.S.C. § 161. Section 11 provides:

(a) Biennial review of regulations. In every evennumbered year (beginning with 1998), the Commission

(1) shall review all regulations issued under this chapter

in effect at the time of the review that apply to the

operations or activities of any provider of telecommunications service; and (2) shall determine whether any such

regulation is no longer necessary in the public interest as

the result of meaningful economic competition between

providers of such service.

(b) Effect of determination. The Commission shall repeal or modify any regulation it determines to be no

longer necessary in the public interest.
6

Id. (emphasis added).

Consequently, the Commission has undertaken a wholesale

review of its regulations. Initially, the Commission’s approach was to examine all its rules, not merely those that

were specifically implicated in § 11, to determine whether

repeal or modification might be appropriate. As a result of

the 1998 Biennial Regulatory Review, the Commission initiated 32 proceedings to remove unnecessary regulatory burdens. See 2000 Biennial Regulatory Review Report, 16 FCC

Rcd 1207, 1209 (2001) (‘‘January 2001 Report’’).

The Commission also conducted a comprehensive review of

its regulations in the 2000 Biennial Regulatory Review. With

respect to each rule, staff reports considered the underlying

purposes, the advantages and disadvantages, the impact of

competitive developments, and whether modification or repeal

should be recommended. See Public Notice, Biennial Review

2000 Staff Report Released, 15 FCC Rcd 21084 (2000). As a

result of the 2000 Biennial Review, the Commission adopted

the staff recommendations for modification or repeal of rules

and released an updated staff report in light of comments on

the initial staff report. See January 2001 Report, 16 FCC

Rcd at 1207, 1210. The Commission also reported on the

status of the deregulatory initiatives begun in the 1998 Review, see, e.g., id. at 1207, 1218, 1224, construing § 11 not to

require completion of such initiatives within the biennial year,

id. at 1210, 1212–13. Following notice and comment, the

Commission modified or repealed numerous regulations.

In the international service market, for instance, the Commission removed tariff regulation from interexchange services

provided by non-dominant carriers, see Policy and Rules

Concerning the International, Interexchange Marketplace, 16

FCC Rcd 10647 (2001), adopted streamlined procedures for

processing applications for submarine cable landing licenses,

see Review of Commission Consideration of Applications under the Cable Landing License Act, 16 FCC Rcd 22167

(2001), reduced the notification period in the foreign carrier

affiliation notification rule, and exempted certain classes of
7

foreign carriers from the prior notification requirement, see

Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, 15 FCC Rcd 18158 (2000). The

Commission also determined to retain 47 C.F.R. § 43.61(a),

which requires common carriers to report annually on their

international telecommunications traffic, and 47 C.F.R.

§ 63.21(i) (as of August 8, 2002, § 63.21(h)), which requires

providers of telecommunications services to give notice of

their foreign affiliations in seeking Commission authorization

to operate. See 2000 Biennial Regulatory Review Report and

Order, Amendments of Parts 43 and 63 of the Commission’s

Rules, 17 FCC Rcd 11416, 11428–30, 11432–34 (2002) (‘‘June

2002 Order’’). The Commission invited comments on any

additional international telecommunications services that

should be modified or repealed as part of the 2002 Biennial

Regulatory Review. See Public Notice, Commission Seeks

Public Comment in 2002 Biennial Review of Telecommunications Regulations Within the Purview of the International

Bureau, 17 FCC Rcd 18929 (2002).

In the 2002 Biennial Regulatory Review, the Commission

formally addressed the meaning and scope of § 11, and the

Commission’s staff issued a series of reports reviewing and

determining, as to each rule covered by § 11, whether the

rule should be repealed or modified. The Commission, in a

report released March 14, 2003, adopted the staff reports and

its own Report, which incorporated its interpretation of § 11,

stated its intention to issue notices of proposed rulemaking on

the basis of the recommendations in the staff reports, and

solicited applications for review of those recommendations.

See 2002 Biennial Regulatory Review, 18 FCC Rcd 4726, 4740

(2003) (‘‘March 2003 Report’’), available at http://www.

fcc.gov/biennial/.

II.

The petitions for review represent another attempt by the

same parties and the same counsel to elicit from this court a
8

narrow interpretation of the word ‘‘necessary’’ in the deregulatory context of the 1996 Act. In Cellular Telecommunications & Internet Ass’n v. FCC, 330 F.3d 502, 509 (D.C. Cir.

2003) (‘‘CTIA’’), Verizon Wireless failed to persuade the court

in the related context of the Commission’s forbearance authority, 47 U.S.C. § 160(a), to adopt such an interpretation.

Now Verizon Wireless and Verizon seek in tandem petitions

to elicit a narrow construction of ‘‘necessary’’ for § 11 purposes. Verizon does not challenge any particular regulation

addressed by the 2002 Biennial Regulatory Review, but Verizon Wireless challenges the Commission’s determinations in

the 2000 Review to retain § 43.61(a) and § 63.21(i), ultimately

maintaining that in view of the Commission’s ‘‘utter[ ] disregard[ ] [of] a statutory mandate,’’ the court should instruct

the Commission to repeal the regulations. Verizon Wireless

Br. at 14. We address the Commission’s threshold challenges

to Verizon’s petition, and turn thereafter to the merits of

Verizon Wireless’ petition.

The Commission challenges both Verizon’s standing to

petition for review of an order setting forth the Commission’s

interpretation of § 11’s requirements before it has been applied in a manner causing injury to Verizon, see AT&T v.

EEOC, 270 F.3d 973, 975 (D.C. Cir. 2001); Shell Oil Co. v.

FERC, 47 F.3d 1186, 1202–03 (D.C. Cir. 1995), and the court’s

jurisdiction to consider a non-final or non-ripe order, see DRG

Funding Corp. v. Sec’y of HUD, 76 F.3d 1212, 1214 (D.C. Cir.

1996); Franklin v. Massachusetts, 505 U.S. 788, 796–97

(1992); Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 891

(1990); Ohio Forestry Ass’n, Inc. v. Sierra Club, 523 U.S.

726, 735 (1998). We need not decide these questions. Verizon Wireless has standing to challenge the Commission’s § 11

actions regarding § 43.61(a) and § 63.21(i). See Friends of

the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167,

180–81 (2000); Vt. Agency of Natural Res. v. United States,

529 U.S. 765, 771 (2000). Because we decide the merits of

Verizon Wireless’ petition, Verizon’s petition, which presents

identical challenges to the Commission’s interpretation of

§ 11, no longer presents a substantial federal question, and

the court therefore lacks jurisdiction. See Steel Co. v. Citi-
9

zens for a Better Env’t, 523 U.S. 83, 98 (1998); World Wide

Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154,

1167 (D.C. Cir. 2002).

To succeed on appeal, Verizon Wireless must demonstrate

that the June 2002 Order is ‘‘arbitrary, capricious, an abuse of

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

§ 706(2)(A). Under this ‘‘highly deferential’’ standard of

review, the court presumes the validity of agency action, see,

e.g., Davis v. Latschar, 202 F.3d 359, 365 (D.C. Cir. 2000), and

must affirm unless the Commission failed to consider relevant

factors or made a clear error in judgment, see, e.g., Citizens

to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416

(1971). One of the relevant factors is the 1996 Act’s mandate

in § 11 for biennial reviews to identify Commission regulations ‘‘no longer necessary in the public interest as the result

of meaningful economic competition between providers of

such service,’’ followed by their repeal or modification. 47

U.S.C. § 161; cf. Sinclair Broad. Group, Inc. v. FCC, 284

F.3d 148, 159 (D.C. Cir. 2002); CTIA, 330 F.3d at 507–08.

The standards of Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837 (1984), apply to the

court’s review of the Commission’s interpretation of the Communications Act. See CTIA, 330 F.3d at 507. Thus, where

Congress has spoken directly to the issue, our inquiry is at an

end. Chevron, 467 U.S. at 842–43, 843 n.9. Where Congress’

intent is unclear because the statute is silent or the language

Congress has used is ambiguous, the question is whether the

agency’s interpretation is a permissible construction of the

statute, id. at 843, and if it is, the court will defer to the

implementing agency’s reasonable interpretation. See, e.g.,

AT&T Corp., 525 U.S. at 397.

The two regulations whose retention Verizon Wireless challenges involve reporting requirements. The first, 47 C.F.R.

§ 43.61, requires all common carriers providing international

service to file annual and quarterly reports with the Commission regarding such service, including a financial breakdown

and a compilation of total minutes of calls involving international destinations. In the 2000 Biennial Review, in response

to comments by Verizon Wireless, the Commission deter-
10

mined that quarterly reports by CMRS carriers affiliated

with certain foreign carriers were no longer ‘‘necessary in the

public interest.’’ June 2002 Order, 17 FCC Rec at 11429.

Because such carriers ‘‘have a de minimis amount of the

switched resale international traffic,’’ the Commission reasoned, they ‘‘are unlikely to be able to distort traffic on

affiliated routes.’’ Id. at 11429. However, the Commission

retained the annual reporting requirement, despite comments

from both Verizon Wireless and Cingular Wireless LLC

(‘‘Cingular’’) supporting its elimination because some of the

same data was provided in other regulatory filings. Noting

that both the ‘‘Commission and industry use the information

provided in the reports to monitor compliance with the Commission’s rules and policies,’’ the Commission concluded that

the proposed alternative would not provide information on

minutes of use, which the Commission found to be ‘‘important.’’ Id. at 11429–30. The Commission concluded: ‘‘Therefore, we find that these less burdensome [annual] reporting

requirements continue to be in the public interest.’’ Id. at

11430.

The second regulation, 47 C.F.R. § 63.21, requires notification to the Commission of foreign affiliations. Under the

Communications Act, 47 U.S.C. § 214(a), the Commission is

required to determine whether ‘‘public convenience and necessity’’ would be served by a carrier’s acquisition, construction, or operation of telecommunications facilities, including

international ones. To make that determination, the Commission requires all international carriers, except those 100%

owned by another carrier with its own international § 214

authorization, see 47 C.F.R. § 63.21(i), to comply with the

application process in § 63.21. During the 2000 Biennial

Review, Cingular commented that the exemption in § 63.21(i),

which exempts only wholly-owned subsidiaries, should be

extended to international § 214-authorized carriers that hold

a controlling interest, but not a complete ownership stake, in

another carrier. The Commission declined to broaden the

exemption, reiterating its finding when it adopted the exemption: ‘‘ ‘[A] controlling interest that does not amount to 100–

percent ownership may raise additional issues, such as addi-
11

tional foreign affiliations or minority ownership or beneficial

interest by persons or entities who are barred from holding a

Commission authorization.’ ’’ June 2002 Order, 17 FCC Rcd

at 11433 (quoting 1998 Biennial Regulatory Review, Review of

International Common Carrier Regulations, 14 FCC Rcd

4909, 4932–33 (1999)). It noted that subsidiaries not wholly

owned by a § 214-authorized carrier might require more

information for ‘‘national security, law enforcement, trade or

foreign policy evaluation.’’ Id. The Commission is required

to notify the Secretaries of Defense and State when a carrier

requests a § 214 authorization. See 47 U.S.C. § 214(b).

Verizon Wireless contends that a strict reading of the term

‘‘necessary’’ is required by the plain language, the statutory

structure, and the purpose of § 11. The Commission, according to Verizon Wireless, failed to meet its burden under § 11

to demonstrate by specific record evidence that the retention

of these two regulations in their present form is ‘‘necessary,’’

for the Commission may not rely on its initial justification for

adoption of a rule, but instead must provide evidence to

demonstrate that its regulation remains essential in light of

present market conditions. As support for its interpretation

of § 11, Verizon Wireless relies on the dictionary definition of

‘‘necessary’’ as ‘‘essential’’ or ‘‘indispensable,’’ see Merriam

Webster’s Collegiate Dictionary 774 (10th ed. 2000), and this

court’s opinions in Fox Television Stations, Inc. v. FCC, 280

F.3d 1027, 1051 (D.C. Cir. 2002) (‘‘Fox I’’), and Sinclair, 284

F.3d at 152. In its view, such a strict reading is ‘‘the only

reading consonant with the statutory purpose, which modified

the previous regulatory model for telecommunications services to favor reliance upon competition and market forces.’’

Verizon Wireless Reply Br. at 6. It maintains that the

Commission’s interpretation fails to recognize that § 11 is

meant to cabin the Commission’s authority and reduce regulation and not simply to restate the general administrative law

obligation of the Commission to ‘‘carefully monitor the effects

of its regulations and make adjustments where circumstances

so require.’’ ACLU v. FCC, 823 F.2d 1554, 1565 (D.C. Cir.

1987); see Bechtel v. FCC, 957 F.2d 873, 881 (D.C. Cir. 1992).

Although the court rejected virtually all of the same argu-
12

ments in support of a narrow reading of ‘‘necessary’’ as

meaning ‘‘absolutely essential’’ in the context of the Commission’s forbearance authority under 47 U.S.C. § 161, see CTIA,

330 F.3d at 510–12, we reexamine them as applied to § 11.

When Congress enacted § 11, it did not specify what it

meant by the key phrase at issue, ‘‘necessary in the public

interest.’’ In the 2000 Biennial Regulatory Review, the Commission did not address the meaning of this key phrase, but

instead implicitly relied on the traditional meaning of the

phrase as it had been interpreted in other sections of the

Communications Act. See, e.g., June 2002 Order, 17 FCC

Rec at 11417. The Commission’s formal discussion of its

interpretation of § 11 appears in the 2002 Biennial Regulatory Review. Responding to comments on the appropriate

interpretation of § 11, submitted in response to the Commission’s public notice for suggestions for the 2002 Review, the

Commission adopted an interpretation rejecting assertions

that the plain meaning of § 11 requires the Commission to

repeal any rule that it does not find to be absolutely essential.

See March 2003 Report, 18 FCC Rcd at 4734. The court

takes judicial notice of the March 2003 Report. See Shuttlesworth v. Birmingham, 394 U.S. 147, 157 (1969); Nat’l Fire

Ins. Co. of Hartford v. Thompson, 281 U.S. 331, 336 (1930);

LeBoeuf, Lamb, Greene & MacRae, L.L.P. v. Abraham, 347

F.3d 315, 325 (D.C. Cir. 2003). An examination of the

Commission’s reasoning in construing its obligations under

§ 11 demonstrates that its interpretation is eminently reasonable.

The Commission has interpreted § 11 in light of the fact

that the phrase ‘‘necessary in the public interest’’ in § 11(a)

and (b) was the same phrase that Congress used in delegating

rulemaking authority to the Commission. This is consistent

with the general proposition that ‘‘identical words used in

different parts of the same act are intended to have the same

meaning.’’ Gustafson v. Alloyd Co., Inc., 513 U.S. 561, 570

(1995). Under 47 U.S.C. § 201(b), the Commission can adopt

rules upon finding that they advance a legitimate regulatory

objective; it need not find that they are indispensable. See

March 2003 Report, 18 FCC Rcd at 4733 n.31; Nat’l Citizens
13

Comm., 436 U.S. at 796. In light of what the Commission

correctly observed to be the ambiguous nature of the term

‘‘necessary,’’ with its meaning dependent on its statutory

context, the Commission concluded that Congress intended

the phrase in § 11 to have the same meaning as in § 201(b).

See March 2003 Report, 18 FCC Rcd at 4733–34. It rejected

the view that Congress’ use of a different verb (‘‘may be’’ in

§ 201(b) and ‘‘is’’ in § 11) preceding § 11’s clause ‘‘no longer

in the public interest’’ required two different standards, reasoning that because both provisions required the Commission

to make predictive judgments about the ‘‘necessity’’ of a rule,

Congress would not have used the same phrase it had used in

§ 201(b) if it had intended § 11 to require a more stringent

standard. Id. at 4733 n.32.

The Commission found further support for its interpretation in the phrase ‘‘no longer,’’ which precedes the phrase

‘‘necessary in the public interest,’’ as indicating that Congress

intended the same standard to apply in § 11 as applies in

§ 201(b). Id. at 4733. The legislative history also offered

support for the Commission’s interpretation. Id. at 4732

(citing H.R. Conf. Rep. No. 104–458, at 185 (1996)). The

Commission’s interpretation, moreover, avoided absurd results where the Commission would adopt a regulation under

§ 201(b) as ‘‘necessary’’ only to be required to revoke it in the

following year as ‘‘non-essential’’ under a more stringent

‘‘necessary’’ standard in § 11. See March 2003 Report, 18

FCC Rcd at 4734. Therefore, the Commission concluded that

Congress intended the Commission to carry out the deregulatory purpose of the 1996 Act through the reevaluation of its

rules ‘‘in light of current competitive market conditions to be

sure that the conclusion that [it] reached in adopting the

rule — that it was needed to further the public interest —

remains valid.’’ Id. at 4735.

The term ‘‘necessary’’ is a chameleon-like word whose

meaning, as Verizon Wireless acknowledges, may be influenced by its context. The Supreme Court and this court have

had occasion to construe the word ‘‘necessary’’ in the strict,

dictionary definition sense that Verizon Wireless maintains

applies to § 11. In AT&T Corp., the Court rejected the
14

Commission’s flexible construction of ‘‘necessary’’ in 47 U.S.C.

§ 251, which requires the Commission to consider whether

access to a proprietary network element is ‘‘necessary’’ before

requiring its unbundling; the Court held that the term ‘‘requires the [Commission] to apply some limiting standard,

rationally related to the goals of the Act.’’ 525 U.S. at 388.

Similarly, in GTE Service Corp. v. FCC, 205 F.3d 416, 424

(D.C. Cir. 2000), the court rejected an expansive Commission

interpretation of ‘‘necessary’’ in the context of requiring local

exchange carriers to provide for collocation of equipment

‘‘necessary’’ for access to unbundled network elements at a

carrier’s premises, which is another part of § 251 closely

related to that at issue in AT&T Corp. Both cases, however,

addressed only the word ‘‘necessary,’’ rather than the phrase

‘‘necessary in the public interest,’’ and, as the Supreme Court

observed in AT&T Corp., the 1996 Act ‘‘is not a model of

clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.’’ AT&T Corp., 525 U.S.

at 397. Similarly, this court noted in CTIA that ‘‘necessary’’

is not language of plain meaning. CTIA, 330 F.3d at 509.

Consequently, Verizon Wireless’ position that ‘‘necessary’’ in

§ 11 must be interpreted to have a strict dictionary definition

ignores both that Congress chose to leave the phrase unqualified except in ways that are supportive of the Commission’s

view that the same standard is to apply in § 11 as applies in

§ 201(b), cf. AT&T Corp., 525 U.S. at 397, and that courts

have long recognized that the term ‘‘necessary’’ does not

always mean ‘‘indispensable’’ or ‘‘essential.’’ See, e.g., Nat’l

Citizens Comm., 436 U.S. at 795–96; Armour & Co. v.

Wantock, 323 U.S. 126, 129–30 (1944); McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 413 (1819); Indep. Ins. Agents

of Am., Inc. v. Hawke, 211 F.3d 638, 640 (D.C. Cir. 2000);

CTIA, 330 F.3d at 510. Adoption of Verizon Wireless’ position, then, ‘‘would give an unwarranted rigidity to the application of the word ‘necessary,’ which has always been recognized as a word to be harmonized with its context.’’ Armour

& Co., 323 U.S. at 129–30.

To the extent Verizon Wireless contends that the Commission ignores the deregulatory purpose animating the 1996
15

Act, Verizon Wireless ignores both what the Commission has

said in interpreting § 11 and what the Commission has done

in implementing § 11 since initiating the biennial reviews in

1998. In the 2000 and 2002 Biennial Regulatory Reviews, the

Commission acknowledged the deregulatory goal of the 1996

Act and its obligation to determine whether its rules were

necessary in light of current market conditions. See Public

Notice, Biennial Review 2000 Staff Report Released, 15 FCC

Rcd 21084 (2000); March 2003 Report, 18 FCC Rcd at 4735.

While rejecting Verizon’s comment that § 11 imposed a special burden to support any finding that a rule remained

necessary and that absent such evidence the rule must immediately be repealed, the Commission agreed that where § 11’s

conditions are met, § 11 creates a presumption in favor of

repealing or modifying covered rules. See March 2003 Report, 18 FCC Rcd at 4735. In addition, the staff reports

adopted by the Commission in the 2000 and 2002 Biennial

Reviews incorporate the competitive market approach in examining whether a regulation ‘‘is no longer necessary.’’ Indeed, the Commission’s actions in response to the Biennial

Reviews indicate that § 11 is working as Congress intended.

See, e.g., id. at 4736–37; H.R. Conf. Rep. No. 104–458, at 185;

see also January 2001 Report, 16 FCC Rcd at 1209.

Nothing in our opinions in Fox I and Sinclair is to the

contrary. These cases arose in the regulatory context of

§ 202(h) and (g), governing broadcast ownership requirements. Pretermitting whether the different regulatory context suffices to distinguish the statutory challenge in the

instant petitions, neither Fox I nor Sinclair adopted a controlling definition of ‘‘necessary,’’ much less the position that

§ 11 embodies a presumption in favor of deregulation. Although Sinclair states that only those regulations ‘‘necessary

in the public interest’’ may be retained, 284 F.3d at 159, it

cited the recently decided opinion in Fox I, 280 F.3d at 1048,

for that proposition and did not itself define ‘‘necessary.’’ In

Fox I, the court, in addressing remedies available for the

court to require, interpreted ‘‘necessary’’ to mean that ‘‘a

regulation should be retained only insofar as it is necessary

in, not merely consonant with, the public interest.’’ 280 F.3d
16

at 1050. But shortly after Sinclair was decided, the court in

Fox Television Stations, Inc. v. FCC, 293 F.3d 537 (D.C. Cir.

2002) (‘‘Fox II’’), retracted Fox I’s definition of ‘‘necessary,’’

due to lack of briefing on the subject and the fact that the

definition was unnecessary to the court’s opinion. Id. at 540.

Consequently, Sinclair, 284 F.3d at 165, and Fox II left

undecided the question of what ‘‘necessary’’ means in § 11.

The court’s statement in Fox I regarding the meaning of

‘‘necessary’’ as creating a presumption in favor of modification

or elimination of existing regulations was, as noted, made in

the context of discussing the available remedies for the court.

280 F.3d at 1048. Nothing in that opinion suggested that

under § 11’s biennial review mandate the Commission could

no longer rely on its predictive judgment or properlysupported inferences in determining to retain a regulation.

Cf. id. at 1051. The court’s observation in Fox I about the

presumption created by the 1996 Act only came after the

court had concluded that the Commission’s explanation for its

action could not withstand arbitrary and capricious review,

and the question became the selection of the appropriate

remedy for the court to impose: vacate the regulation or

remand the case to afford the Commission another opportunity better to explain its action. Id. at 1044, 1048. While

Sinclair piggybacked on Fox I, the court in Sinclair did not

adopt a general presumption in favor of modification or

elimination of regulations when considering a substantive

challenge to the adequacy of the Commission’s determinations. Sinclair, 284 F.3d at 159; see also id. at 171 (Sentelle,

J., concurring and dissenting in part). Rather, as in Fox I,

the court in Sinclair examined whether the Commission’s

explanation for its action was arbitrary and capricious without

providing a definition of the term ‘‘necessary’’ that differed

from that implicit from the long-standing meaning of the term

in the statutory provision granting the Commission regulatory authority under 47 U.S.C. § 201(b). Id. at 160. Thus,

neither Fox I nor Sinclair provide support for Verizon Wireless’ position that § 11 must be interpreted to impose a

stricter standard of ‘‘necessary’’ than applies to § 201(b).
17

For these reasons, we hold that the Commission reasonably

interpreted § 11 to require it to ‘‘reevaluate regulations in

light of current competitive market conditions to see that the

conclusion [it] reached in adopting the rule — that [the rule]

was needed to further the public interest — remains valid.’’

March 2003 Report, 18 FCC Rcd at 4735. Interpreting the

term ‘‘necessary’’ in § 11 in this manner avoids the inconsistent application in related contexts of identical terms used by

Congress. Applying the same ‘‘necessary in the public interest’’ standard as in § 201(b) is consistent with both of the

qualifying terms (‘‘no longer necessary’’ and ‘‘as the result of

meaningful economic competition’’) that Congress added in

§ 11 and avoids absurd results where a rule is ‘‘necessary’’

when adopted but not when it is subjected shortly thereafter

to biennial review under § 11. The language of § 11 thus

indicates that the Commission’s first obligation is to determine, under § 11(a), whether the necessity for a regulation

continues in light of current market conditions; its second

obligation, under § 11(b), is to repeal or modify such regulations it determines are no longer necessary in the public

interest as a result of current competitive conditions. The

Commission reasonably concluded that the deregulatory presumption arises only after it has determined under § 11(a)

that a regulation is no longer necessary in the public interest.

See id. The provisions of § 11(b) thus make clear that the

Commission is under a mandate that extends beyond its

normal monitoring responsibilities. Finally, the Commission’s interpretation of § 11 is not inconsistent with Fox I or

Sinclair, and the fact that Verizon Wireless can point to an

alternative, stricter definition of ‘‘necessary’’ is insufficient to

demonstrate that the Commission’s interpretation is not owed

deference by the court. See Chevron, 467 U.S. at 843; CTIA,

330 F.3d at 507, 509–10.

III.

Verizon Wireless also contends that the Commission’s failure to complete the 2000 Biennial Review during the year

2000 functions as a default, requiring the court to direct the

Commission to repeal § 43.61(a) as it applies to CMRS carri-
18

ers, and to modify § 63.21(i). Verizon Wireless maintains

that the Commission must complete within the biennial year

not only the § 11 necessariness review and determination for

all its regulations, but also any modification or repeal of

regulations that it has determined are no longer necessary.

Verizon Wireless asserts that the Commission has taken an

‘‘all in good time’’ approach, contrary to the 1996 Act’s

deregulatory purpose. Verizon Wireless Br. at 14.

A.

The Commission challenges both the court’s jurisdiction to

consider, as well as Verizon Wireless’ standing to challenge,

the Commission’s timing of the 2000 Biennial Review. The

Commission maintains that because Verizon Wireless failed to

petition for review of the January 2001 Report setting forth

the Commission’s interpretation of § 11’s timing mandate,

that Report has become final and is not subject to judicial

review. Yet the Commission made clear in that Report that

it did ‘‘not set forth final Commission decisions, nor [did] it

represent rulemaking action.’’ January 2001 Report, 16 FCC

Rcd at 1210. Verizon Wireless thus reasonably delayed

seeking rehearing until the timing issue became ripe for

review when the June 2002 Order set forth the Commission’s

§ 11 determination to retain § 43.61(a) and § 63.21. See 17

FCC Rcd at 11429, 11433. At that point, in Verizon Wireless’

view, the Commission acted seventeen months late, and its

determination to retain the two regulations was therefore

based on unlawful agency action. See Nat’l Labor Relations

Bd. Union v. Federal Labor Relations Auth., 834 F.2d 191,

196 (D.C. Cir. 1987) (‘‘FLRA’’) (citing Functional Music, Inc.

v. FCC, 274 F.2d 543, 546 (D.C. Cir. 1958)). Because Verizon

Wireless contends that the June 2002 Order exceeded the

Commission’s authority, see FLRA, 834 F.2d at 195; accord

CTIA, 330 F.3d at 509, the court has jurisdiction to address

the challenge. See 5 U.S.C. § 706(2)(A). Review of the June

2002 Order encompasses its timing, which implicitly is based

on the interpretation in the January 2001 Report. The

Commission’s reliance on ICC v. Brotherhood of Locomotive

Engineers, 482 U.S. 270, 279–81 (1987), is misplaced; that
19

case involved a claimed material error in a single adjudication, not an agency regulation capable of continuing application. See Functional Music, 274 F.2d at 546.

The Commission further contends that Verizon Wireless

lacks standing to challenge the timing of the Commission’s

2000 Biennial Review because any injury it suffered resulted

not from the June 2002 Order but from the January 2001

Report construing § 11’s timing requirement. We hold that

Verizon Wireless has standing to challenge the timing of the

Commission’s determination in the June 2002 Order to retain

§ 43.61(a) and § 63.21(i). As an entity continuously burdened by the costs of complying after the biennial review

year with what it contends are ‘‘unnecessary’’ regulations

under § 11, Verizon Wireless’ injuries are concrete and actual, traceable to the Commission’s alleged failure to meet the

statutory deadline, and redressable by a ruling adopting

Verizon Wireless’ interpretation of § 11’s temporal mandate.

See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc.,

528 U.S. 167, 180–81 (2000); Vt. Agency of Natural Res. v.

United States, 529 U.S. 765, 771 (2000); cf. Ass’n of Am.

R.Rs. v. Dep’t of Transp., 38 F.3d 582, 585–86 (D.C. Cir.

1994).

B.

The Commission concluded that Congress created a timing

mandate only for § 11(a), entitled ‘‘Biennial review of regulations,’’ which requires the Commission ‘‘[i]n every evennumbered year’’ to review its rules to determine whether they

are no longer necessary in the public interest as a result of

meaningful economic competition. See January 2001 Report,

16 FCC Rcd at 1210; see also 47 U.S.C. § 161(a). By

contrast, § 11(b), entitled ‘‘Effect of determination,’’ requires

only that the Commission ‘‘shall repeal or modify any regulation it determines to be no longer necessary in the public

interest.’’ See 47 U.S.C. § 161(b). The Commission reasoned that ‘‘Congress thus distinguished between making

determinations (that certain rules are no longer in the public

interest), which must occur within a specified time period i.e.,
20

every even numbered year, and taking action (to repeal or

modify rules that are no longer in the public interest) which is

not required to be completed within that specific time period.’’

January 2001 Report, 16 FCC Rcd at 1210 (italics in original).

We hold that the Commission’s interpretation of § 11’s timing

requirement is reasonable.

Section 11 is ambiguous regarding what the Commission is

required to do within the biennial year, and the Commission

properly looked to the different phrasing in § 11(a) and (b) as

well as to the section headings for guidance. See Murphy

Exploration and Production Co. v. United States Dept. of the

Interior, 252 F.3d 473, 481 (D.C. Cir. 2001) (quoting Almendarez-Torres v. United States, 523 U.S. 224, 234 (1998)). If

Congress had intended that within each biennial year the

Commission must not only review its rules and determine

which were no longer necessary, but also, where applicable,

modify or repeal them, it could have included a temporal

restriction in § 11(b). It did not, presumably in recognition

of the period of time required for notice and comment required by the Administrative Procedure Act (‘‘APA’’), see 5

U.S.C. § 553, before a Commission rule may be changed.

The 1996 Act provided that it ‘‘shall not be construed to

modify, impair, or supersede Federal TTT law unless expressly so provided in such Act.’’ Pub. L. No. 104–104, § 601(c)(1),

110 Stat. 56 (1996), 47 U.S.C. § 152 note. Section 11 did not

authorize the Commission to bypass the APA. Under the

circumstances, the Commission reasonably concluded that a

timing requirement applied only to § 11(a) and not to § 11(b).

The Commission appreciated that it would take time to

complete rulemaking proceedings under § 11(b) so as to be in

a position to determine whether, and in what manner, to

modify or repeal the numerous regulations it had determined

were no longer necessary.

Verizon Wireless’ contention — that the Commission may

delay indefinitely the repeal or modification of regulations it

has determined are no longer necessary in the public interest — rings hollow. The Commission completed the § 11(a)

review within the biennial year, adopting the Biennial Review

Report on December 29, 2000. See January 2001 Report, 16
21

FCC Rcd at 1207. In noting, where it had not found that

regulations were no longer necessary, that it remained open

to petitions for rulemaking from interested parties, the Commission is referring to its ongoing efforts to repeal or modify

unnecessary regulations, not calling into question whether it

had timely completed the § 11(a) review. The Commission

stated that the ‘‘Report fulfills the Commission’s year 2000

biennial regulatory review obligations under § 11(a).’’ Id. at

1207. In the § 11(b) proceedings, the Commission invited

and responded to public comments contesting its § 11(a)

determinations. When the Commission adopted the § 11(b)

report on the regulations challenged by Verizon Wireless,

seventeen months had passed. See June 2002 Order, 17 FCC

Rcd at 11416. This was not an unreasonable period of time

for completion of the Commission’s § 11(b) duties, see 5

U.S.C. § 551(b), given the numerous rulemaking proceedings

that the Commission was contemporaneously pursuing as a

result of the § 11(a) determinations. In any event, were the

Commission not to act within a reasonable time, the remedy

would be to seek issuance of a writ of mandamus to compel

Commission action, see Telecommunications Research & Action Center v. FCC, 750 F.2d 70, 79–80 (D.C. Cir. 1984), and

Verizon Wireless made no such filing.

IV.

Having rejected Verizon Wireless’ contentions that the

Commission’s determination to retain § 43.61(a) and

§ 63.21(i) was contrary to the requirements of § 11, we turn

to its contention that the Commission’s decision was arbitrary

or capricious. As regards § 43.61(a), Verizon Wireless contends that the Commission failed both to act consistently with

its prior findings that the CMRS and international markets

are highly competitive, and to explain its rationale for eliminating quarterly reports but not annual reports. Verizon

Wireless focuses on the Commission’s findings that the wireless market is among the most competitive markets in the

industry, that CMRS carriers act only as resellers of international services, and that they occupy a de minimis portion of

the international resale market. See June 2002 Order, 17
22

FCC Rcd at 11429. Yet in contending that the Commission

failed to link the monitoring function to any possible regulatory problem, Verizon Wireless would have the court ignore the

Commission’s statutory responsibilities, including the need to

determine whether forbearance is appropriate. Similarly,

Verizon Wireless focuses on the Commission’s prior finding

that the resale of unaffiliated U.S. facilities-based carriers’

switched services presents no substantial possibility of anticompetitive effects in the United States international services

market, see GTE Telecom, Inc., 13 FCC Rcd 4378, 4389

(1998), in maintaining that the Commission failed to explain

why monitoring of CMRS international resale traffic (by

minutes) is necessary to any legitimate regulatory goal.

Contrary to Verizon Wireless’ contention, the Commission

considered the continuing need for § 43.61(a) in light of

present competitive realities. While the Commission’s explanation was not lengthy, it sufficed to provide a rational basis

for the Commission’s decision. Cf. Sinclair, 284 F.3d at 160.

Although the Commission acknowledged in the § 43.61(a)

context that CMRS carriers have only a de minimis role in

international traffic, it was the Commission’s judgment that

the small role did not warrant completely abandoning the

requirement for any reports, annual or quarterly, from such

providers. The Commission identified the usefulness of the

information provided by the reports to it and the industry,

and given the Commission’s statutory obligations, Verizon

Wireless fails to show that the Commission did not reasonably conclude annual reporting remained necessary. See

June 2002 Order, 17 FCC Rcd at 11430.

The Communications Act requires the Commission to ‘‘review competitive market conditions with respect to commercial mobile services.’’ 47 U.S.C. § 332(c)(1)(C). The statute

makes no exceptions to account for CMRS services’ currently

small share of switched resale international traffic. An exemption for CMRS carriers from § 43.61(a) reporting would

impede the Commission’s ability to obtain information on an

important segment of the marketplace. The Commission

stated that it needs such reports in order to ‘‘monitor[ ]

trends in the [CMRS] industry.’’ June 2002 Order, 17 FCC
23

Rcd at 11430. Given that the Commission’s regulatory role

involves predictive judgments, cf. Fox I, 280 F.3d at 1051, the

Commission may reasonably anticipate that, as the use of cell

telephones increases, CMRS carriers will cease to hold a de

minimis share of the international telecommunications traffic

market, thus highlighting the Commission’s ongoing need for

data by which to monitor industry trends. Nothing suggests

that in enacting § 11 Congress intended to bar the Commission from exercising its predictive judgment in assessing

regulatory necessity in light of current competitive market

conditions; to the contrary, Congress’ use of the same phrase

it used in authorizing the Commission to adopt regulations

indicates the opposite. Verizon Wireless’ assertion that the

information collected is duplicative and redundant of other

information reported by the underlying facilities-based carriers ignores that other data sources do not include information

on CMRS carriers’ minutes of use, but rather are limited to

revenues. See June 2002 Order, 17 FCC Rcd at 11430.

Moreover, Verizon Wireless never argued to the Commission

that its decision to retain annual reporting was inconsistent

with its decision to exempt CMRS carriers from quarterly

reporting under § 43.61(c), and hence it cannot now argue

that the Commission erred by failing to reconcile these two

decisions. See 47 U.S.C. § 405.

Similarly, the Commission was not arbitrary and capricious

in continuing to require reporting of foreign affiliations of

common carriers solely controlled, but not wholly owned, by

another § 214 authorized carrier. Verizon Wireless contends

that the Commission failed both to confront comments suggesting that § 63.21 does not accomplish its stated purpose,

and to respond to less burdensome and potentially more

effective alternatives proposed by commenters. Although its

response was once again not lengthy, the Commission adequately responded to the comments in light of both the

statutory mandate to issue § 214 authorizations only where

they serve the ‘‘public convenience and necessity,’’ as well as

the statutory requirement that the Secretaries of Defense and

State be notified of such applications so that potential risks

associated with foreign affiliations, such as national security
24

concerns, may be addressed. See June 2002 Order, 17 FCC

Rcd at 11433. There are, as the Commission wrote, ‘‘persons

or entities who are barred from holding a Commission authorization.’’ Id.

Accordingly, we deny Verizon Wireless’ petition contending

that the Commission’s interpretation of § 11 is contrary to

the deregulatory purpose of the 1996 Act and that the Commission’s determination to retain two rules was arbitrary and

capricious, and we dismiss Verizon’s petition for lack of

jurisdiction.