United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 96-3519

___________

The People of the State of California; *

The Public Utilities Commission of *

the State of California, *

*

Petitioners, *

*

Bell Atlantic Corporation; Bellsouth *

Corporation; Pacific Telesis Group; *

SBC Communications, Inc.; Maryland *

Public Service Commission; US West, *

Inc.; US Telephone Association; * On Petitions for Review of 

Arkansas Public Service Commission; * an Order of the Federal

ALLTEL Telephone Services * Communications Commission.

Corporation; Ameritech Corporation; *

Oregon Public Utility Commission; *

North State Telephone Company; *

Western Alliance; Independent *

Telephone and Telecommunications *

Alliance; Roseville Telephone *

Company; Concord Telephone *

Company; Rock Hill Telephone *

Company; Public Utilities *

Commission of the State of Hawaii; *

American Public Communications *

Council, Inc.; ICG Telecom Group, *

Inc.; Minnesota Public Utilities *

Commission; Southern New England *

Telephone Company; The Ad Hoc *

Coalition of Telecommunications *

Manufacturing Companies; Pacific *
-2-

Telecom, Inc.; Minnesota Independent *

Coalition; Kentucky Public Service *

Commission; Kansas Corporation *

Commission; Public Service *

Commission of the State of Wyoming; *

Rhode Island Public Utilities *

Commission; Public Service *

Commission of Wisconsin; *

State of Texas; Alabama Public *

Service Commission; Citizens *

Telephone Company of Kecksburg; *

New Mexico State Corporation *

Commission; Public Service *

Commission of the State of Montana; *

GTE Service Corporation; Utah *

Department of Commerce, Division of *

Public Utilities; Public Service *

Commission of Utah; Public Service *

Commission of the State of South *

Carolina; Tennessee Regulatory *

Authority; Aging Forum, Inc., doing *

business as National Silver Haired *

Congress; U.S. Coalition on Aging; *

College for Living; Council of Silver *

Haired Legislatures; Missouri *

Alliance of Area Agencies on Aging; *

Missouri Association for the Deaf; *

Missouri Council of the Blind; *

Presidents' Club for *

Telecommunications Justice; *

Paraquad, Rural Advocates for *

Independent Living; Services for *

Independent Living; Public Utilities *

Commission of the State of Colorado; *

Department of Public Utilities of the *

Commonwealth of Massachusetts; *

Oklahoma Corporation Commission; *
-3-

Public Service Commission of the *

State of Connecticut, Department of *

Public Utility Control; New York *

Telephone Company; New England *

Telephone and Telegraph Company, *

*

Intervenors on Appeal, *

*

v. *

*

Federal Communications *

Commission; United States of *

America, *

*

Respondents, *

*

AT&T Corp.; Competitive Tele- *

communications Association; MFS *

Communications Company, Inc.; *

Airtouch Communications, Inc.; *

Nextlink Communications, L.L.C.; *

Sprint Spectrum, L.P.; National Cable *

Television Association, Inc.; MCI *

Telecommunications Corporation; *

Sprint Corp.; Cox Communications, *

Inc.; Vanguard Cellular Systems, Inc.; *

Western Wireless Corporation; *

American Communications Services, *

Inc.; KMC Telecom, Inc.; The *

Competition Policy Institute; *

Association for Local *

Telecommunications Services; *

Cellular Telecommunications *

Industry Association; GST Telecom, *

Inc.; ACC Corp.; General *

Communication, Inc.; Telecom- *

munications Resellers Association; *
-4-

Consumer Federation of America; Ad *

Hoc Telecommunications Users *

Committee; Information Technology *

Industry Council; America's Carriers *

Telecommunication Association; *

Jones Intercable, Inc.; *

Telecommunications, Inc.; Teleport *

Communications Group, Inc.; Rural *

Telecommunications Group; Allied *

Associated Partners; Geld Information *

Systems; Pronet, Inc.; Winstar *

Communications, Inc.; U.S. One *

Communications Services; *

Comcast Corporation; Frontier *

Corporation; Anaheim, California *

Public Utilities Department; City of *

Long Beach, California; City of *

Manassas, Virginia; Cable & *

Wireless, Inc.; National Association of *

State Utility Consumer Advocates; *

Time Warner Communications *

Holdings, Inc.; Personal *

Communications Industry *

Association; Excel *

Telecommunications, Inc.; Worldcom, *

Inc., Paging Network, Inc.; Nextwave *

Telecom, Inc.; Small Cable Business *

Association; Metrocall, Inc.; Texas *

Office of Public Utility Counsel, *

*

Intervenors on Appeal, *

_______________ *

*

Consumers' Utility Counsel Division, *

Georgia Governor's Office of *

Consumer Affairs; Honorable John D. *

Dingell; Honorable W.J. (Billy) *
-5-

Tauzin; Honorable Rick Boucher; *

Honorable Dennis Hastert, *

*

Amici on Behalf of Petitioner, *

*

Honorable Thomas J. Bliley, Jr.; *

Honorable Ernest F. Hollings; *

Honorable Ted Stevens; Honorable *

Daniel K. Inouye; Honorable Trent *

Lott; Honorable Edward J. Markey, *

*

Amici on Behalf of Respondent. *

*

___________ *

*

No. 96-4080 *

___________ *

*

Bell Atlantic-Delaware, Inc.; Bell *

Atlantic-Maryland, Inc.; Bell *

Atlantic-New Jersey, Inc.; Bell *

Atlantic-Pennsylvania, Inc.; Bell *

Atlantic-Virginia, Inc.; Bell Atlantic- *

Washington, D.C., Inc.; Bell Atlantic- *

West Virginia, Inc., *

*

Petitioners, *

*

Maryland Public Service Commission; *

SBC Communications, Inc.; New York *

Telephone Company; New England *

Telephone and Telegraph Company; US *

Telephone Association; GTE Service *

Corporation; US West, Inc.; Bellsouth *

Corporation; Bellsouth *

Telecommunications, Inc.; Ameritech *

Corporation, *
-6-

Intervenors on Appeal, *

*

v. *

*

Federal Communications Commission; *

United States of America, *

*

Respondents, *

*

Sprint Corp.; Competitive *

Telecommunications Association; *

Telecommunications Resellers *

Association; AT&T Corp.; National *

Cable Television Association, Inc.; GST *

Telecom, Inc.; MFS Communications *

Company, Inc.; KMC Telecom, Inc.; *

ACC Corp.; Winstar Communications, *

Inc.; MCI Telecommunications *

Corporation; America's Carriers *

Telecommunication Association; Jones *

Communications, Inc.; Airtouch *

Communications, Inc.; Cox *

Communications, Inc., *

*

Intervenors on Appeal. *

*

___________ *

*

No. 96-4082 *

___________ *

*

Pacific Telesis Group, *

*

Petitioner, *

*

Maryland Public Service Commission; *

SBC Communications, Inc.; New York *
-7-

Telephone Company; New England *

Telephone and Telegraph Company; US *

Telephone Association; GTE Service *

Corporation; US West, Inc.; Bellsouth *

Corporation; Bellsouth *

Telecommunications, Inc.; Ameritech *

Corporation, *

*

Intervenors on Appeal, *

*

v. *

*

Federal Communications Commission; *

United States of America, *

*

Respondents, *

*

Sprint Corp.; Competitive *

Telecommunications Association; *

Telecommunications Resellers *

Association; AT&T Corp.; National *

Cable Television Association, Inc.; GST *

Telecom, Inc.; MFS Communications *

Company, Inc.; KMC Telecom, Inc.; *

ACC Corp.; Winstar Communications, *

Inc.; MCI Telecommunications *

Corporation; America's Carriers *

Telecommunication Association; Jones *

Communications, Inc.; Airtouch *

Communications, Inc.; Cox *

Communications, Inc., *

*

Intervenors on Appeal. *

___________ *

*

No. 96-4083 *

___________ *
-8-

SBC Communications, Inc., *

*

Petitioner, *

*

Maryland Public Service Commission; *

New York Telephone Company; New *

England Telephone and Telegraph *

Company; US Telephone Association; *

GTE Service Corporation; US West, Inc.;*

Bellsouth Corporation; Bellsouth *

Telecommunications, Inc.; Ameritech *

Corporation, *

*

Intervenors on Appeal, *

*

v. *

*

Federal Communications Commission; *

United States of America, *

*

Respondents, *

*

Sprint Corp.; Competitive *

Telecommunications Association; *

Telecommunications Resellers *

Association; AT&T Corp.; National *

Cable Television Association, Inc.; GST *

Telecom, Inc.; MFS Communications *

Company, Inc.; KMC Telecom, Inc.; *

ACC Corp.; Winstar Communications, *

Inc.; MCI Telecommunications *

Corporation; America's Carriers *

Telecommunication Association; Jones *

Communications, Inc.; Airtouch *

Communications, Inc.; Cox *

Communications, Inc., *

 *

Intervenors on Appeal. *
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (codified 1

as amended in scattered sections of Title 47, United States Code).

-9-

_____________

Submitted: April 16, 1997

Filed: August 22, 1997

_____________

Before BOWMAN, WOLLMAN, and HANSEN, Circuit Judges.

_____________

HANSEN, Circuit Judge.

Before us are the petitions of the California Public Utilities Commission and

various providers of local telecommunications services seeking review of certain rules

issued by the Federal Communications Commission (FCC or Commission) pursuant to

the Telecommunications Act of 1996. The petitioners and the intervenors supporting 1

them (collectively "petitioners") argue that the FCC exceeded its jurisdiction in part in

issuing dialing parity rules that encompass some purely intrastate telecommunications

services, and they assert that one of the Commission's rules on numbering

administration violates the terms of the Act. Consistent with our decision in the related

case, Iowa Utils. Bd. v. FCC, No. 96-3321 and consolidated cases, 1997 WL 403401

(8th Cir. July 18, 1997), we vacate the FCC's dialing parity rules in part, concluding

that the FCC exceeded the scope of its jurisdiction. We find that the petitioners'

challenge to the FCC's numbering administration rule, however, is not ripe for review.

I.
All references in this opinion to sections and subsections of the

2

Telecommunications Act of 1996 in West's United States Code Annotated (U.S.C.A.)

are to the 1997 supplement.

First Report and Order, Implementation of the Local Competition Provisions in 3

the Telecommunications Act of 1996, CC Docket No. 96-98 (Aug. 8, 1996).

Second Report and Order, Implementation of the Local Competition Provisions 4

of the Telecommunications Act of 1996, CC Docket No. 96-98 (Aug. 8, 1996)

[hereinafter Second Report and Order].

-10-

One of Congress's goals in passing the Telecommunications Act of 1996 was to

open the local telephone markets to competition. See Telecommunications Act of

1996, Pub. L. No. 104-104, purpose statement, 110 Stat. 56 (1996). To accomplish

this objective, the Act imposes several duties on the current providers of local

telecommunications service (known as "incumbent local exchange carriers" or

"incumbent LECs") including the duties to provide competing carriers with

interconnection and unbundled access to the incumbents LECs' networks and to allow

competing carriers to resell any telecommunications service that the incumbent LECs

provide to their subscribers on a retail basis. 47 U.S.C.A. § 251(c)(2)-(4) (West Supp.

1997). The FCC issued numerous rules in its First Report and Order purporting to

2 3

implement these as well as other provisions of the Act. In our earlier decision in Iowa

Utils. Bd., we reviewed many of the Commission's regulations contained in its First

Report and Order and held, in part, that the FCC exceeded its authority in promulgating

rules governing the prices that incumbent LECs may charge competing carriers for

interconnection, unbundled access, and resale of services. See Iowa Utils. Bd. 1997

WL 403401, at *9. 

In the present case, the petitioners challenge several portions of the

Commission's Second Report and Order, which contains additional FCC comments

4

and regulations regarding provisions of the Telecommunications Act of 1996 that were

not addressed in the First Report and Order. In particular, the petitioners challenge the
-11-

FCC's rules implementing the Act's requirement that all local exchange carriers provide

dialing parity to competing providers of local and long-distance service. See 47

U.S.C.A. § 251(b)(3) (statutory dialing parity requirement); 47 C.F.R. §§ 51.205-

51.215 (1996) (FCC dialing parity rules). Additionally, the petitioners challenge the

FCC's rule, 47 C.F.R. § 52.17, implementing the Act's mandate that the costs of

creating telecommunications numbering administration arrangements be shared by all

telecommunications carriers on a competitively neutral basis. See 47 U.S.C.A.

§ 251(e)(2) (statutory numbering administration requirement).

II.

We have jurisdiction to review final orders of the FCC pursuant to 28 U.S.C.

§ 2342(1) (1994) and 47 U.S.C. § 402(a) (1994). Courts of appeals may set aside

agency rules that (1) conflict with the plain meaning of a statute, (2) are unreasonable

interpretations of ambiguous statutes, or (3) are the product of arbitrary or capricious

action by the agency. See Chevron U.S.A. Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837, 842-45 (1984). 

A. Dialing Parity Rules

The petitioners argue that the FCC exceeded its jurisdiction in promulgating its

dialing parity rules, 47 C.F.R. §§ 51.205-51.215. Dialing parity is a technological

capability that enables a telephone customer to route a call over the network of the

customer's preselected carrier without having to dial an access code of extra digits. See

47 U.S.C.A. § 153 (15). The petitioners claim that the FCC did not have authority to

issue these dialing parity rules to the extent that the rules involve intraLATA

telecommunications. The petitioners rely heavily on section 2(b) of the

Communications Act of 1934, 47 U.S.C. § 152(b) (1994), to support their jurisdictional
-12-

attack on the FCC's dialing parity rules. Section 2(b) provides that "nothing in this

chapter shall be construed to apply or to give the [FCC] jurisdiction with respect to .

. . charges, classifications, practices, services, facilities, or regulations for or in

connection with intrastate communications service. Id. The petitioners assert that even

though the Commission's dialing parity rules are not phrased explicitly in terms of

"intrastate" or "interstate," but rather use the terms "intraLATA," "interLATA," "local,"

and "toll" to describe the telecommunications they regulate, 47 C.F.R. §§ 51.205-

51.215, the intraLATA aspects of the rules overwhelmingly pertain to intrastate

communications service and are thus beyond the scope of the FCC's authority. Given

the importance of the terminology in this case, we find it necessary initially to explain

our understanding of the "LATA" concept and the difference between "local" and "toll"

calls.

The acronym "LATA" stands for "local access and transport area," 47 U.S.C.A.

§ 153(25), and was initially adopted by the district court administering the 1982

consent decree that broke up AT&T. See United States v. Western Elec. Co., 569 F.

Supp. 990, 993-94 (D.D.C. 1983). The consent decree divided the former Bell territory

into geographic units known as "LATAs." Id. The 1982 consent decree limited LECs'

transportation of telecommunications to traffic between points within a LATA, i.e.,

"intraLATA" traffic, while traffic between telephones located in two different LATAs,

i.e. "interLATA" traffic, was allotted to long-distance carriers such as AT&T, MCI,

and Sprint. The boundaries of LATAs generally center around cities or other

identifiable communities of interest; in some instances, one LATA encompasses an

entire state. The United States is currently divided into 192 LATAs, and for the most

part, LATAs do not cross state lines. (See Joint Br. of Intervenors in Support of the

FCC at 9.) We are told that approximately 98% of all intraLATA calls are intrastate

in nature. (Bell Atlantic Br. at 14.) 

IntraLATA calls can be either "local" or "toll" calls, but interLATA calls are

exclusively "toll" calls. Calls that remain within a caller's immediate local calling area
-13-

(a smaller geographic area within a LATA) are intraLATA local calls and are currently

made without incurring any additional charge beyond the flat monthly rate that one pays

for local phone service. Calls that are completed outside of a caller's local calling area

are "toll" calls and a separate charge or "toll" is incurred for making these calls. See

47 U.S.C.A. § 153(48). A single LATA can and frequently does encompass more than

one immediate local calling area. Thus "intraLATA" is not synonymous with "local."

A call that is completed outside of the caller's immediate local calling area but within

the same LATA is an intraLATA toll call, while a call that is completed outside of both

the caller's immediate local calling area and his or her LATA is an interLATA toll call.

The FCC argues that because the rules refer to "LATAs" and because "LATAs"

do not necessarily correspond to state boundaries, section 2(b), which removes

intrastate communication services from the FCC's reach, is not relevant to the issue of

the Commission's authority over dialing parity. Contrary to the FCC's assertion,

however, the different nomenclature used in the FCC's dialing parity rules neither

renders section 2(b) irrelevant nor weakens its effect with respect to this jurisdictional

issue. The fact remains that approximately 98% of all intraLATA calls (local or toll)

are intrastate in nature. The FCC itself has acknowledged that the vast majority of

intraLATA calls are intrastate and not within its jurisdiction. See Notice of Proposed

Rulemaking, In the Matter of Administration of the North American Numbering Plan,

9 FCC Rcd 2068, 2077 n.93 (1994). More importantly, we believe that section 2(b)

preserves intrastate communications for state regulation regardless of what other labels

may be applied to these communications. Although section 2(b) does not apply to the

portion of intraLATA calls that are interstate in nature, it does apply to the portion of

intraLATA calls that are intrastate in nature. Consequently, section 2(b) remains an

obstacle that the FCC must overcome in order to save its intraLATA dialing parity rules

from the petitioners' jurisdictional attack. 

In Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 370, 377 (1986), the

Supreme Court explained that section 2(b) "fences off" intrastate telecommunications
-14-

matters from FCC regulation and indicated that the 2(b) fence could be hurdled only

by an unambiguous congressional grant of intrastate authority to the FCC or an express

amendment to section 2(b) itself. The Court further stated that section 2(b) also

operates as a rule of statutory construction requiring that nothing in the Act, which

includes the 1996 amendments, be construed to provide the FCC with jurisdiction over

intrastate telecommunications service. Id. at 376-77 n.5. The FCC and its supporting

intervenors initially contend that merely the federal Act's application to intrastate

telecommunications matters is sufficient to supply the Commission with the authority

to regulate such matters, even in light of section 2(b). The Commission argues that it

has plenary authority to implement all of the requirements of federal

telecommunications statutes and that section 2(b) restricts only the Commission's

ancillary authority. We previously rejected the same argument in Iowa Utils. Bd., 1997

WL 403401, at *7, and now, we do so again for the same reasons. Our reading of

Louisiana indicates that a federal act must expressly apply to intrastate

telecommunications matters and explicitly direct the FCC to implement the act's

intrastate requirements before the Commission will have jurisdiction over intrastate

telecommunications matters. While subsection 251(b)(3) does require dialing parity

at the intrastate level, it makes no reference whatsoever to the FCC. See 47 U.S.C.A.

§ 251(b)(3). Without a clear grant of intrastate authority to the FCC, section 2(b)

stands as a fortification against the Commission's intrusion into telecommunications

matters that are intrastate in character. 

Alternatively, the FCC argues that several statutory provisions supply the

Agency with sufficiently straightforward grants of broad intrastate authority to enable

the Agency to overcome section 2(b)'s limitation. The Commission claims that

subsection 251(d)(1) directly grants the Agency authority to implement all of the

requirements in section 251, including the dialing parity provision in subsection

251(b)(3). Subsection 251(d)(1) reads, "Within 6 months after February 8, 1996, the

Commission shall complete all actions necessary to establish regulations to implement

the requirements of this section." 47 U.S.C.A. § 251(d)(1). As we found in Iowa Utils.
-15-

Bd., 1997 WL 403401, at *4, this subsection is merely a time limit on the Commission,

directing it to complete expeditiously its rulemaking related to those portions of section

251 that expressly call for the Commission's involvement. This provision does not

authorize the FCC to issue intraLATA dialing parity rules, because the subsection

addressing dialing parity, § 251(b)(3), does not mention the FCC. We also reject the

FCC's argument that its general rulemaking authority contained in subsections 201(b),

154(i), and 303(r) of the Communications Act is a legitimate source of jurisdiction for

the Commission's intraLATA dialing parity rules. The FCC's jurisdiction under section

201 is specifically limited to interstate or foreign communications services. See 47

U.S.C. § 201(a). Meanwhile, subsections 154(i) and 303(r) merely provide the FCC

with ancillary authority to promulgate additional regulations that might be required in

order for the Commission to meet its principal obligations contained in other provisions

of the statute. See id. §§ 154(i), 303(r); California v. FCC, 905 F.2d 1217, 1241 n.35

(9th Cir. 1990). Neither 154(i) nor 303(r) supplies the FCC with additional substantive

authority sufficient to overcome section 2(b).

The group of intervenors supporting the FCC argues that section 160 of the Act,

47 U.S.C.A. § 160, implies that the Commission has authority to issue regulations

pursuant to the entire Act because this section allows the Commission to forbear from

applying regulations or provisions of the Act. They reason that the power to forbear

from regulating necessarily presumes the power to regulate in the first place. While this

section does provide the Commission with the power to forbear from applying

provisions of the Act, we believe that this power is limited to forbearing from applying

those provisions that pertain to interstate telecommunications or the portions of the Act

addressing intrastate telecommunications that also specifically call for the FCC's

involvement such as subsection 251(b)(2) (number portability) or subsection

251(c)(4)(B) (prevention of discriminatory conditions on resale). Section 160's general

authorization allowing the FCC to forbear from applying provisions of the Act is not

the type of straightforward and unambiguous grant of intrastate authority that lifts the

FCC over the section 2(b) fence. When Congress intends to vest the FCC with 
Dialing parity is considered to be a type of "equal access obligation." (See Joint 5

Br. of Intervenors in Support of the FCC at 23-24.)

-16-

intrastate authority, it is well aware of how to draft a statute that overcomes section

2(b). In the Telecommunications Act itself, one provision explicitly directs the FCC

to "establish a per call compensation plan to ensure that all payphone service providers

are fairly compensated for each and every completed intrastate and interstate call using

their payphone. . . ." 47 U.S.C.A. § 276(b)(1)(A) (emphasis added). Neither section

160 nor any other provision in the Act supplies the FCC with such an explicit grant of

intrastate authority over dialing parity. As we have stated, subsection 251(b)(3), the

provision directly addressing dialing parity, makes no reference to the FCC, in stark

contrast to several other subsections of the very same section of the Act, such as

subsection 251(b)(2) (number portability) and subsection 251(e) (numbering

administration), that expressly call for the FCC's participation in implementing their

requirements. "`[W]here Congress includes particular language in one section of a

statute but omits it in another section of the same Act, it is generally presumed that

Congress acts intentionally and purposely in the disparate inclusion or exclusion.'"

Russello v. United States, 464 U.S. 16, 23 (1983) (quoting United States v. Wong Kim

Bo, 472 F.2d 720, 722 (5th Cir. 1972)). We believe the argument is even stronger

when different subsections of the same section demonstrate the difference. We

conclude that the Act's different treatment of dialing parity signifies Congress's intent

to leave regulation of this matter to the states. See Lindh v. Murphy, 117 S. Ct. 2059,

2064 (1997) (finding that "a different intent explains the different treatment" of two

provisions in the Antiterrorism and Effective Death Penalty Act of 1996). 

 

The FCC's last hope of justifying its intraLATA dialing parity rules rests with

subsection 251(g). Although not expressly addressing dialing parity, subsection 251(g)

preserves all of the equal access obligations and interconnection restrictions that

5

existed prior to February 8, 1996 "under any court order, consent decree, or regulation,
-17-

order, or policy of the Commission, until such restrictions and obligations are explicitly

superseded by regulations prescribed by the Commission after February 8, 1996." Id.

§ 251(g). This subsection also provides that such obligations and restrictions are

enforceable as regulations of the Commission. The FCC contends that the 1982

consent decree that broke up the former Bell monopoly contained intraLATA dialing

parity requirements, in addition to interLATA ones, that the FCC is now authorized to

supersede under subsection 251(g). While the court administering the consent decree

did discuss matters related to intraLATA dialing parity and attempted to provide LECs

with an incentive to allow intraLATA toll competition, see Western Elec. Co., 569 F.

Supp. at 1006; United States v. Western Elec. Co., 569 F. Supp. 1057, 1108-09

(D.D.C.), aff'd by California v. United States, 464 U.S. 1013 (1983), the consent

decree's provisions involving dialing parity pertained only to interLATA calls; the

decree did not provide any specific intraLATA dialing parity rules. See United States

v. Western Elec. Co., 552 F. Supp. 131, 233 (D.D.C. 1982). In fact, the district court

expressly stated that "intrastate as well as intra-LATA regulation is not preempted by

the decree and, hence, that state regulatory bodies will control traffic within the LATAs

themselves." 569 F. Supp. at 1005; see also, Western Elec. Co., 569 F. Supp. at 1109

(explaining that a proposed intraLATA dialing parity rule to be included in the consent

decree "would inappropriately override state regulators' authority to decide what

intrastate calling arrangements are best suited to the public interest within their

states."). Moreover, the FCC itself concedes that subsection 251(g) "contains no

reference or cross reference to dialing parity or to section 251(b)(3)" and merely

preserves the dialing parity requirements already imposed on incumbent LECs. Second

Report and Order, ¶ 29. Consequently, subsection 251(g) does not authorize the FCC

to issue dialing parity rules governing intraLATA telecommunications. 

Finally, the petitioners point out that subsection 271(e)(2)(B) indicates that state

commissions, not the FCC, have the authority to issue intraLATA dialing parity rules.

In limiting a state's ability to require a Bell operating company to implement intraLATA

toll dialing parity until the Bell company has received the authority to provide 
Because section 2(b) prevents the FCC from having jurisdiction only over

6

intrastate telecommunications matters, our decision to vacate the FCC's dialing parity

rules does not apply to the extent that the Commission's rules govern the very small

percentage of intraLATA, toll, interstate telecommunications. Our vacation order does

include, however, the rules' application to the even smaller percentage of intraLATA,

local, interstate calls, despite their interstate nature. See 47 U.S.C. § 221(b); Public

Util. Comm'n of Texas v. FCC, 886 F.2d 1325, 1331 n.5 (D.C. Cir. 1989); North

Carolina Utils. Comm'n v. FCC, 552 F.2d 1036, 1045 (4th Cir.), cert. denied, 434 U.S.

874 (1977). Because the petitioners limited their challenges to the intraLATA aspects

of the FCC's dialing parity rules, we make no determination regarding the validity of

the FCC's dialing parity rules as they apply to interLATA telecommunications. 

-18-

interLATA services, this provision implies that jurisdiction to regulate intraLATA

dialing parity rests with the states. See 47 U.S.C.A. § 271(e)(2)(B). The FCC

maintains that this subsection merely reveals that the states and the Commission have

parallel jurisdiction over dialing parity. As we have demonstrated above, however,

section 2(b) fences off the intrastate aspects of intraLATA dialing parity from the FCC,

thus refuting the Commission's theory of parallel jurisdiction. Consequently, we

conclude that the FCC exceeded its jurisdiction in promulgating its dialing parity rules,

47 C.F.R. §§ 51.205-51.215 (inclusive), but we set aside such rules only to the extent

that they pertain to intraLATA telecommunications traffic.6

B. Numbering Administration Rule

The petitioners also challenge the FCC's method for recouping the costs of

establishing numbering administration arrangements. Numbering administration

involves the coordination and distribution of all telephone numbers in the United States.

In particular, the incumbent LECs target the Commission's provision that allows

carriers to deduct the amounts they pay to other carriers for telecommunications

services and facilities from their gross revenues in calculating a carrier's portion of the

costs involved in administering a numbering administration program. See 47 C.F.R.

§ 52.17(b). The petitioners contend that this rule violates the Act's requirement that 
We recently held that state commissions have the authority to establish the

7

prices that incumbent LECs may charge their competitors for interconnection,

unbundled access, resale of services, and transport and termination of

telecommunications traffic. Iowa Utils. Bd., 1997 WL 403401, at *9. Accordingly,

the question of whether or not incumbent LECs will be permitted to include numbering

administration costs in those prices will be decided by the state commissions. 

-19-

numbering administration costs "be borne by all telecommunications carriers on a

competitively neutral basis." 47 U.S.C.A. § 251(e)(2). The petitioners claim that if

state commissions do not allow incumbent LECs to include their numbering

7

administration costs in the prices they charge to their competitors for

telecommunications services and facilities, the deduction will afford the incoming

competitors a cost advantage and result in a noncompetitively neutral cost allocation

method. On the other hand, the parties appear to agree that if such costs are included

in the prices that incumbent LECs are permitted to charge to their competitors, then the

FCC's numbering administration rule would be valid.

Article III of the Constitution limits our jurisdiction to deciding actual cases or

controversies that are ripe for review. 

The basic rationale of the ripeness doctrine is to prevent the courts,

through avoidance of premature adjudication, from entangling themselves

in abstract disagreements over administrative policies, and also to protect

the agencies from judicial interference until an administrative decision has

been formalized and its effects felt in a concrete way by the challenging

parties.

State of Missouri v. Cuffley, 112 F.3d 1332, 1337 (8th Cir. 1997) (internal quotations

and citations omitted). Because the validity of this rule depends on the state

commissions' determinations of the rates that incumbent LECs will be able to charge

their competing carriers for interconnection, unbundled access, and other

telecommunications services and facilities, and none of those determinations is before
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us in this proceeding, we find that the alleged harm to the petitioners is speculative at

this juncture and conclude that this issue is not ripe for review.

III.

In sum, we vacate the FCC's dialing parity rules, 47 C.F.R. §§ 51.205-51.215,

but only to the extent that they apply to intraLATA telecommunications and subject to

the conditions noted above, see supra note 6 and accompanying text, and we find the

Commission's numbering administration rule, 47 C.F.R. § 52.17, not ripe for review.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.