PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NEW CINGULAR WIRELESS PCS, 

LLC, d/b/a AT&T Mobility, on

behalf of itself and its wireless

operating affiliates,

Plaintiff - Appellant,

and

ALLTEL COMMUNICATIONS, LLC,

d/b/a Verizon Wireless,

Plaintiff,

v.

EDWARD S. FINLEY, JR., Chairman

(in his official capacity as

Commissioner of the North 

Carolina Utilities Commission);

WILLIAM T. CULPEPPER, III,

Commissioner (in his official

capacity as Commissioner of the

North Carolina Utilities

Commission); BRYAN E. BEATTY,

Commissioner (in his official

capacity as Commissioner of the

North Carolina Utilities

Commission); SUSAN WARREN

RABON, Commissioner (in her

official capacity as Commissioner

of the North Carolina Utilities

Commission); 
LORINZO L. JOYNER, Commissioner 

(in his official capacity as

Commissioner of the North

Carolina Utilities Commission);

ELLERBE TELEPHONE COMPANY;

RANDOLPH TELEPHONE COMPANY;

MEBTEL, INCORPORATED; TONOLA D.

BROWN-BLAND, Commissioner;  No. 10-2221

LUCY T. ALLEN, Commissioner,

Defendants-Appellees.

FEDERAL COMMUNICATIONS

COMMISSION,

Amicus Curiae. 

ALLTEL COMMUNICATIONS, LLC, 

d/b/a Verizon Wireless,

Plaintiff-Appellant,

and

NEW CINGULAR WIRELESS PCS, 

LLC, d/b/a AT&T Mobility, on

behalf of itself and its wireless

operating Affiliates,

Plaintiff,

v. 

2 NEW CINGULAR WIRELESS v. FINLEY


EDWARD S. FINLEY, JR., Chairman

(in his official capacity as

Commissioner of the North

Carolina Utilities Commission);

WILLIAM T. CULPEPPER, III,

Commissioner (in his official

capacity as Commissioner of the

North Carolina Utilities

Commission); BRYAN E. BEATTY,

Commissioner (in his official

capacity as Commissioner of the

North Carolina Utilities

Commission); SUSAN WARREN

RABON, Commissioner (in her

official capacity as Commissioner

of the North Carolina Utilities  No. 10-2243

Commission); LORINZO L. JOYNER,

Commissioner (in his official

capacity as Commissioner of the

North Carolina Utilities

Commission); ELLERBE TELEPHONE

COMPANY; RANDOLPH TELEPHONE

COMPANY; MEBTEL, INCORPORATED;

TONOLA D. BROWN-BLAND,

Commissioner; LUCY T. ALLEN,

Commissioner,

Defendants-Appellees.

FEDERAL COMMUNICATIONS

COMMISSION,

Amicus Curiae. 

NEW CINGULAR WIRELESS v. FINLEY 3
Appeals from the United States District Court

for the Eastern District of North Carolina, at Raleigh.

W. Earl Britt, Senior District Judge.

(5:09-cv-00123-BR)

Argued: October 26, 2011

Decided: March 15, 2012

Before AGEE, DAVIS, and KEENAN, Circuit Judges.

Affirmed by published opinion. Judge Davis wrote the opinion, in which Judge Agee and Judge Keenan joined.

COUNSEL

ARGUED: Helgi C. Walker, WILEY REIN, LLP, Washington, D.C., for Appellants. Margaret Ann Force, NORTH

CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North

Carolina; Daniel C. Higgins, BURNS, DAY & PRESNELL,

PA, Raleigh, North Carolina, for Appellees. ON BRIEF:

Dennis Friedman, Jeffrey M. Strauss, MAYER BROWN

LLP, Chicago, Illinois, for Appellant New Cingular Wireless

PCS, LLC; Brett A. Shumate, WILEY REIN, LLP, Washington, D.C., for Appellant Alltel Communications, LLC. Roy

Cooper, North Carolina Attorney General, Raleigh, North

Carolina, for Appellees Commissioners of the North Carolina

Utilities Commission. James M. Mills, BURNS, DAY &

PRESNELL, P.A., Raleigh, North Carolina, for Appellees

Ellerbe Telephone Company, Mebtel, Inc., and Randolph

Telephone Company. Austin C. Schlick, General Counsel,

Peter Karanjia, Deputy General Counsel, Richard K. Welch,

Acting Associate General Counsel, James M. Carr, FEDERAL COMMUNICATIONS COMMISSION, Washington,

D.C., for Amicus Curiae. 

4 NEW CINGULAR WIRELESS v. FINLEY
OPINION

DAVIS, Circuit Judge:

This appeal arises from a dispute between Appellees

Ellerbe Telephone Company, Randolph Telephone Company,

and MebTel, Inc., incumbent local exchange carriers that provide telephone service in rural areas of North Carolina (collectively, "RLECs") and Appellants New Cingular Wireless

PCS, LLC, d/b/a AT&T Mobility ("AT&T Mobility") and

Alltel Communications, LLC, d/b/a Verizon Wireless

("Verizon"),1 which provide commercial mobile radio service

(collectively, "CMRS Providers") in North Carolina. In 2005,

the RLECs formally requested interconnection with the

CMRS Providers. When the parties were unable to reach

agreement on certain issues, the RLECs filed petitions for

arbitration with the North Carolina Utilities Commission

("NCUC"). The NCUC consolidated the petitions, held an

evidentiary hearing, and issued a Recommended Arbitration

Order ("RAO") on December 20, 2007. After the parties filed

objections, the NCUC issued a final Order Ruling on Objections and Requiring the Filing of Composite Agreements

("FAO") on December 31, 2008. The parties filed conforming

interconnection agreements ("ICAs") on February 20, 2009.

The NCUC approved the ICAs by order on February 24, 2009

("approval order"). 

On March 26, 2009, the CMRS Providers filed a complaint

in the U.S. District Court for the Eastern District of North

Carolina against the RLECs and the Commissioners of the

NCUC in their official capacities (referred to as "NCUC" or

"Commissioners"), seeking review of several determinations

made by the NCUC and, ultimately, the NCUC’s approval of

1Verizon is referred to as "Alltel" in the NCUC proceedings and in the

district court order. In 2009, Alltel Communications, LLC, became a

wholly-owned indirect subsidiary of Cellco Partnership d/b/a Verizon

Wireless. 

NEW CINGULAR WIRELESS v. FINLEY 5
portions of the ICAs. They sought declaratory and injunctive

relief and compensation. 

On November 16, 2009, the CMRS Providers, the RLECs,

and the NCUC filed cross motions for summary judgment.

The district court denied the CMRS Providers’ motion for

summary judgment and granted the RLECs’ and the NCUC’s

motions for summary judgment. See New Cingular Wireless

PCS, LLC v. Finley, No. 5:09-CV-123-BR, 2010 WL

3860384 (E.D.N.C. Sept. 30, 2010). The district court also

affirmed the NCUC’s December 31, 2008 FAO and February

24, 2009 approval order. Id. The CMRS Providers timely

appealed. We affirm. 

I.

A.

We begin with a description of the statutory and regulatory

framework in which the present dispute arises. In so doing,

we briefly describe recent revisions to the regulatory regime

administered by the FCC, but we further point out, see infra

n.5, that the effective date of some of those revisions, July 1,

2012, renders it unnecessary for us to accommodate those

changes.

The Telecommunications Act of 1996 aims "to transition

the [telecommunications] industry from regulated monopoly

to unregulated competition." 1 Peter W. Huber et al., Federal

Telecommunications Law § 1.9 (2d ed. Supp. 2011) (hereinafter "Huber"). To achieve this goal, the Act seeks to "clear[ ]

away the obstacles to new entry" for new competitors and

requires incumbent Local Exchange Carriers ("ILECs"), specifically, "to assist" new competitors entering the market. Id.

Congress recognized "that the provision of local service

required significant infrastructure and that the prohibitive cost

of duplicating an incumbent LEC’s infrastructure would be an

insuperable barrier to entry," and thus "imposed on incum6 NEW CINGULAR WIRELESS v. FINLEY
bents a number of affirmative duties intended to facilitate

market entry by potential competitors." MCImetro Access

Transmission Servs., Inc. v. BellSouth Telecomms., Inc., 352

F.3d 872, 874 (4th Cir. 2003).

One way ILECs assist new entrants, which is relevant here,

is through "interconnection." See 47 U.S.C. § 251(c)(2).

While the Act requires all "telecommunications carrier[s]"2

"to interconnect directly or indirectly," id. § 251(a)(1), the Act

requires ILECs, specifically, upon request, to interconnect "at

any technically feasible point within the [ILEC’s] network,"

id. § 251(c)(2)(B); see also MCImetro, 352 F.3d at 875; Atlas,

400 F.3d at 1265 ("[T]he obligation under § 251(c)(2) applies

only to the far more limited class of ILECs, as opposed to the

obligation imposed on all telecommunications carriers under

§ 251(a)."). Interconnection, as used in § 251(c)(2), is defined

as the "physical linking of two networks for the mutual

exchange of traffic." Local Competition Order, 11 F.C.C.

Rcd. at 15590 ¶ 176 (emphasis added); see also 47 C.F.R.

§ 51.5. "[T]ransport and termination" of one carrier’s traffic

by another carrier is not considered "providing interconnection under the Act." Huber § 5.6.4.1; see also 47 C.F.R.

§ 51.5 (expressly excluding "transport and termination of traffic" from the definition of interconnection). In 2005, the FCC

amended its rules to clarify that "[ILECs] may request interconnection from a CMRS provider and invoke the negotiation

and arbitration procedures set forth in section 252 of the Act."

See Developing a Unified Intercarrier Compensation Regime,

2

"The FCC has determined that CMRS providers qualify as ‘telecommunications carriers,’ and thus are subject to the provisions of § 251(a)."

Atlas Tel. Co. v. Okla. Corp. Comm’n, 400 F.3d 1256, 1262 n.3 (10th Cir.

2005) (citing Implementation of the Local Competition Provisions in the

Telecommunications Act of 1996, 11 F.C.C. Rcd. 15499, 15598-99 ¶ 1012

(1996) ("Local Competition Order")); see also Local Competition Order,

11 F.C.C. Rcd. at 15998-99 ¶ 1012 ("Incumbent LECs must accordingly

make interconnection available to these CMRS providers in conformity

with the terms of sections 251(c) and 252, including offering rates, terms,

and conditions that are just, reasonable and nondiscriminatory."). 

NEW CINGULAR WIRELESS v. FINLEY 7
20 F.C.C. Rcd. 4855, 4864-65 ¶¶ 15-16 (2005); see also 47

C.F.R. § 20.11(e). 

Without interconnection, "customers of different LECs in

the same local calling area would not be able to call each other."3

MCImetro, 352 F.3d at 875. When a customer of Carrier A

places a phone call to a customer of Carrier B, the call goes

through the network of Carrier A (the "originating" carrier)

and is completed on the network of Carrier B (the "terminating" carrier). In some instances, the originating carrier and the

terminating carrier are "directly" interconnected. In other

instances, such as the circumstances in this case,4 the originating and terminating carriers are "indirectly" interconnected.

When a customer of Carrier A calls a customer of Carrier B,

the call originates on Carrier A’s equipment but is delivered

to a third-party transit provider (here, typically AT&T Mobility’s affiliate, BellSouth Telecommunications, Inc., d/b/a

AT&T North Carolina ("AT&T North Carolina")). The thirdparty transit provider delivers the call to Carrier B. Carrier B

then delivers the call to its customer.

The Act also requires all LECs "to establish reciprocal

compensation arrangements for the transport and termination

of telecommunications."5 47 U.S.C. § 251(b)(5). "Under a

(Text continued on page 10)

3Traffic to or from CMRS Providers is treated as "local" if it "originates

and terminates within the same Major Trading Area" ("MTA"). 47 C.F.R.

§ 51.701(b)(2). An MTA "is the largest FCC-authorized wireless license

territory, and might encompass all or part of numerous state-defined local

calling areas." Atlas, 400 F.3d at 1261 (citing Local Competition Order,

11 F.C.C. Rcd. at 16014 ¶ 1036). Here, the calls originate and terminate

within the same MTA. New Cingular Wireless, 2010 WL 3860384, at *5

n.7. 

4One reason the CMRS Providers and the RLECs here "do not generally

establish direct interconnection is because the relatively small amounts of

traffic do not justify the costs." New Cingular Wireless, 2010 WL

3860384, at *2 n.3. 

5While the FCC declined to treat CMRS Providers as LECs in its Local

Competition Order, the FCC determined "that LECs are obligated under

8 NEW CINGULAR WIRELESS v. FINLEY
§ 251(b)(5) to enter into reciprocal compensation arrangements with

CMRS providers." Atlas, 400 F.3d at 1263 (citing Local Competition

Order, 11 F.C.C. Rcd. at 15996-97 ¶ 1006, 1008). 

Since we heard oral argument in this case, the FCC released its decision

in Connect America Fund, 2011 WL 5844975 (rel. Nov. 18, 2011)

("Reform Order"), and its sua sponte Order on Reconsideration, Connect

America Fund, 2011 WL 6778613 (rel. Dec. 23, 2011) ("Reconsideration

Order"). The Reform Order replaces reciprocal compensation with a "default" "bill-and-keep" system for the exchange of wireless telecommunications traffic. 2011 WL 5844975, at *186, *269 ¶¶ 736, 994-95. "Under

bill-and-keep arrangements, a carrier generally looks to its endusers—which are the entities and individuals making the choice to subscribe to that network—rather than looking to other carriers and their customers to pay for the costs of its network." Id. at *186 ¶ 737. The FCC

found that "the bill-and-keep default should apply immediately" "for traffic to or from a CMRS provider subject to reciprocal compensation under

either section 20.11 or the Part 51 rules." Id. at *269 ¶ 995. The FCC set

the effective date for the new rules and transition to bill-and-keep for

December 29, 2011. Id. at *373 ¶ 1412; 76 Fed. Reg. 73830 (Nov. 29,

2011). 

In the Reform Order, the FCC stated, "[W]e emphasize that our reforms

do not abrogate existing commercial contracts or interconnection agreements or otherwise require an automatic ‘fresh look’ at these agreements."

Id. at *209 ¶ 815; see also id. at *271 ¶ 1000 ("[W]e are not abrogating

existing commercial contracts or interconnection agreements or otherwise

allowing for a ‘fresh look’ in light of our reforms. Thus, incumbent LECs

may have an extended period of time under existing compensation

arrangements before needing to renegotiate subject to the new default billand-keep methodology.") (footnote omitted). The FCC "decline[d] to

require that these existing arrangements be reopened in connection with

the reforms in this Order, and leave such issues to any change-of-law provisions in these arrangements and commercial negotiations among the parties." Id. at *209 ¶ 815. 

In the Reconsideration Order, the FCC retained the December 29, 2011

effective date for the new rules but modified the bill-and-keep transition

period. See 2011 WL 6778613, at *2-3 ¶ 5, 6. The FCC ruled that "intercarrier compensation for non-access traffic exchanged between LECs and

CMRS providers pursuant to an interconnection agreement in effect as of

the adoption date of this Order, will be subject to a default bill-and-keep

methodology on July 1, 2012 rather than on December 29, 2011." Id. at

*3 ¶ 7. 

NEW CINGULAR WIRELESS v. FINLEY 9
typical reciprocal compensation agreement between two carriers, the carrier on whose network the call originates bears the

cost of transporting the telecommunications traffic to the

point of interconnection with the carrier on whose network

the call terminates." Atlas, 400 F.3d at 1260. "Having been

compensated by its customer, the originating network in turn

Because the existing ICAs will continue to govern the traffic exchanged

here until they default to bill-and-keep on July 1, 2012, we need not consider the effect of the new default bill-and-keep methodology. Given this

and to avoid confusion, all citations and quotations to the Code of Federal

Regulations do not reflect the most recent amendments, but reference the

rules prior to the most recent amendments. 

In its Reform Order, the FCC also adopted "an interim default rule allocating responsibility for transport costs applicable to non-access traffic

exchanged between CMRS providers and rural, rate-of-return regulated

LECs to provide a gradual transition for such carriers." 2011 WL

5844975, at *270 ¶ 998. The interim default rule provides: 

For Non–Access Telecommunications Traffic exchanged

between a rate-of-return regulated rural telephone company as

defined in § 51.5 and a CMRS provider, the rural rate-of-return

incumbent local exchange carrier will be responsible for transport

to the CMRS provider’s interconnection point when it is located

within the rural rate-of-return incumbent local exchange carrier’s

service area. When the CMRS provider’s interconnection point is

located outside the rural rate-of-return incumbent local exchange

carrier’s service area, the rural rate-of-return incumbent local

exchange carrier’s transport and provisioning obligation stops at

its meet point and the CMRS provider is responsible for the

remaining transport to its interconnection point. This paragraph

(c) is a default provision and applicable in the absence of an

existing agreement or arrangement otherwise. 

47 C.F.R. § 51.709(c). We need not decide whether, as the RLECs contend in supplemental briefing, this interim rule moots the appeal for

Ellerbe Telephone and Randolph Telephone. In the Reconsideration

Order, the FCC also extended the effective date of this rule to July 1,

2012. 2011 WL 6778613, at *3, *6 ¶ 7 n.24 ("We similarly adjust the timing of the rural transport rule because the basis for this rule was a gradual

transition for these carriers to the default bill-and-keep methodology and

therefore the timing for the two rules should be the same."). 

10 NEW CINGULAR WIRELESS v. FINLEY
compensates the terminating carrier for completing the call."

Id.; see also Local Competition Order, 11 F.C.C. Rcd. at

16013 ¶ 1034 ("[R]eciprocal compensation for transport and

termination of calls is intended for a situation in which two

carriers collaborate to complete a local call. In this case, the

local caller pays charges to the originating carrier, and the

originating carrier must compensate the terminating carrier

for completing the call."). The obligation for transport begins

at the "interconnection point between the two carriers." 47

C.F.R. § 51.701(c).

Reciprocal compensation arrangements must "provide for

the mutual and reciprocal recovery by each carrier of costs

associated with the transport and termination on each carrier’s

network facilities of calls that originate on the network facilities of the other carrier" with costs being determined "on the

basis of a reasonable approximation of the additional costs of

terminating such calls." 47 U.S.C. § 252(d)(2)(A)(i)-(ii). The

regulations implementing the reciprocal compensation

requirement provide that an ILEC’s "rates for transport and

termination of telecommunications traffic shall be established

. . . on the basis of [t]he forward-looking economic costs of

such offerings, using a cost study pursuant to [47 C.F.R.]

§§ 51.505 and 51.111." 47 C.F.R. § 51.705(a)(1). The cost

study measures the "total element long-run incremental cost"

("TELRIC") of transport and termination. Id. § 51.505(a)(1).

The TELRIC "should be measured based on the use of the

most efficient telecommunications technology currently available and the lowest cost network configuration, given the

existing location of the incumbent LEC’s wire centers." Id.

§ 51.505(b)(1). The reciprocal compensation rate may also

include "[a] reasonable allocation of forward-looking common costs." Id. § 51.505(a)(2).

"The default rule is that rates for transport and termination

are symmetrical," that is, an ILEC’s transport and termination

rates apply to the competitor. Huber § 5.11.2.5; see 47 C.F.R.

§ 51.711(a) ("[S]ymmetrical rates are rates that a carrier other

NEW CINGULAR WIRELESS v. FINLEY 11
than an incumbent LEC assesses upon an incumbent LEC for

transport and termination of telecommunications traffic equal

to those that the incumbent LEC assesses upon the other carrier for the same services."). "[I]f the carrier other than the

[ILEC]," 47 C.F.R. § 51.711(b), establishes on the basis of a

forward-looking cost study "that its cost will be greater than

that of the [ILEC] for transport and termination," an "asymmetrical" rate may be established for the transport and termination of telecommunications traffic, Local Competition

Order, 11 F.C.C. Rcd. at 16042-43 ¶¶ 1089, 1091.

Congress recognized that some ILECs, particularly those in

rural areas, were not prepared to assume new duties. Congress

thus exempted "certain rural telephone companies" from

§ 251(c)’s obligations until a state commission determines

that a "request for interconnection, services, or network elements" "is not unduly economically burdensome." 47 U.S.C.

§ 251(f)(1). Congress also provided that a LEC "with fewer

than 2 percent of the Nation’s subscriber lines installed in the

aggregate nationwide may petition a State commission for a

suspension or modification of the application of a requirement

or requirements of [§ 251] (b) or (c)." Id. § 251(f)(2).

The Act also establishes a "procedural framework" through

which ILECs and other telecommunications carriers must

negotiate and enter into ICAs. MCImetro, 352 F.3d at 875;

see 47 U.S.C. § 252(a)(1). To the extent they cannot reach an

agreement, either carrier "may petition a State commission to

arbitrate any open issues." 47 U.S.C. § 252(b)(1). "In resolving . . . any open issues and imposing conditions upon the parties to the agreement," the state commission is required,

among other duties, to "ensure that such resolution and conditions meet the requirements of [47 U.S.C. § 251], including

the regulations prescribed by the [FCC] pursuant to [47

U.S.C. § 251]." Id. § 252(c)(1). The state commission must

also "establish any rates for interconnection, services, or network elements according to [47 U.S.C. § 252(d)]." Id.

§ 252(c)(2). The results of the arbitration are then memorial12 NEW CINGULAR WIRELESS v. FINLEY
ized in an ICA between the carriers that is submitted to the

state commission for approval. See id. § 252(e)(1). "[A]ny

party aggrieved" may then "bring an action in an appropriate

Federal district court to determine whether the [ICA] meets

the requirements of [47 U.S.C. §§ 251 and 252]." Id.

§ 252(e)(6).

B.

1.

We now lay out the background to this appeal. In 2005, the

RLECs filed a petition with the NCUC asking to "be relieved

of any requirement that they provide [TELRIC] studies to any

requesting carrier with respect to reciprocal compensation."

J.A. 41. In its modification order, the NCUC determined that

the RLECs were not "required to perform TELRIC studies to

establish reciprocal compensation rates." J.A. 53. The NCUC

modified the TELRIC requirements and set out seven guidelines the RLECs were to follow when performing alternate

cost studies to set reciprocal compensation rates. The guidelines are as follows:

1. The cost data should be easily obtainable, verifiable, and reflect only the direct costs associated with

the transport and termination of traffic.

2. The cost data may be a surrogate of the company’s cost, but should be forward looking and reflect

an efficient network to the extent practicable.

3. The rates for transport and termination of traffic

should be usage based.

4. The capital costs and structure should reflect the

cost and structure approved by the Commission in

previous decisions in Docket No. P-100, Sub 133d.

NEW CINGULAR WIRELESS v. FINLEY 13
5. Depreciation should reflect the economic lives

and net salvage values within the ranges established

by the FCC.

6. The study should include a reasonable allocation

of common costs to be added to direct costs.

7. The study should not include retail costs, opportunity costs, or revenues to subsidize other services.

J.A. 46. The NCUC later affirmed this decision in the December 31, 2008 FAO. The CMRS Providers never appealed the

modification order.

Meanwhile, in September 2006, the RLECs separately filed

petitions for arbitration with the NCUC. The NCUC consolidated the petitions and held an evidentiary hearing in April

2007. On December 20, 2007, the NCUC issued a RAO. Most

relevant, the NCUC ruled that under § 252(c)(2) there was

one point of interconnection ("POI") between the CMRS Providers and the RLECs that was located on the RLECs’ networks. After receiving objections to the RAO, the NCUC

issued its FAO on December 31, 2008. 

The NCUC first reaffirmed its conclusion that there was

one POI between the CMRS Providers and the RLECs that

was located on the RLECs’ networks. However, the NCUC

abandoned reliance on § 251(c)(2), finding that specific statutory provision to be not "determinative of the location of the

POI." J.A. 207-08. The NCUC found that § 251(c)(2) could

be triggered only upon request, and is not applicable when, as

here, "an ILEC initiates arbitration." Id. at 208. The only basis

for interconnection in this case could be found in § 251(a)(1).

The NCUC explained, "Unlike the language of Section

251(c)(2), Section 251(a)(1) does not specify the number of

POIs or where the POI or POIs should be located." Id. Thus,

the NCUC determined that "the literal language of Section

251(a)(1), in an arbitration in which an RLEC seeks intercon14 NEW CINGULAR WIRELESS v. FINLEY
nection with a CMRS Provider, would seem to provide the

Commission with the discretion to determine how many POIs

there should be and where they should be located." Id. The

NCUC "proceed[ed] to determine, on the basis of its sound

discretion, the number and location of the POIs for purposes

of the parties’ [ICAs]." Id. at 208-09.

In reaffirming its initial conclusion in the RAO, the NCUC

based its decision on certain, in its terms, "equities." Id. at

209-10. These included,

First, there are the relative sizes of the CMRS Providers and the RLECs. The RLECs in these dockets

are small, rural telephone companies with limited

service areas, while the CMRS Providers are massive entities whose local calling areas, or MTAs,

sprawl across states. As such, the CMRS Providers’

network can, with only slight exaggeration, be called

ubiquitous, while those of the RLECs are small and

local. Under that set of circumstances, it is more

equitable for there to be a single POI that is located

on the RLECs’ networks.

Second, the use of a single POI places these

RLECs, practically speaking, in the same position as

they would have been had they been able to rely on

Section 251(c)(2). . . .

Third, the use of a single point in the circumstances of these dockets is conceptually less complicated than the use of multiple POIs. . . .

Id. at 210.6 The NCUC also found that the third-party transit

6

In its brief, the NCUC clarifies in regard to its second consideration

that, given the absence of further guidance when the FCC adopted its new

rule allowing ILECs to request interconnection, "it was not unreasonable

. . . to adopt the single-POI approach" used "when requests are made upon

[ILECs]" because "that is the only arrangement that is described in the Act

or regulations" and "is considered fair when large [ILECs] are requested

to interconnect." NCUC’s Br. 37. 

NEW CINGULAR WIRELESS v. FINLEY 15
network is considered to be "a virtual part of the CMRS Provider’s network." Id.

The NCUC then concluded that "[t]he RLECs are technically and financially responsible for transporting and delivering their originating traffic to the chosen POI and for paying

reciprocal compensation to cover the cost of terminating and

completing the call beyond the POI, but they are not responsible for transit charges, based on the CMRS Providers’ use of

a third party provider’s network facilities, beyond the POI."

Id. at 220 (internal quotation marks omitted). The NCUC

found that "payment of transit charges will be the CMRS Provider’s responsibility in the first instance in connection with

RLEC-originated calls," but that CMRS Providers could be

reimbursed "in the form of reciprocal compensation paid by

the RLEC." Id. at 211. Further, "[a]ny genuine financial disadvantage" is "curable by a proceeding to arrive at an asymmetric reciprocal compensation rate." Id.

Finally, the NCUC determined,

Because the Commission modified the reciprocal

compensation requirements of Section 251(b)(5) of

the Act in [the modification order], the RLECs are

not required to perform strict TELRIC studies to

establish reciprocal compensation rates, and the rates

proposed for reciprocal compensation do not have to

comply with all of the requirements set forth in Section 252(d) of the Act and related FCC rules.

Id. at 224.

The parties filed conforming ICAs, which the NCUC

approved by order on February 24, 2009. 

2.

On March 26, 2009, the CMRS Providers filed suit against

the RLECs and the Commissioners of the NCUC in their offi16 NEW CINGULAR WIRELESS v. FINLEY
cial capacities in the U.S. District Court for the Eastern District of North Carolina, seeking review of several

determinations made by the NCUC and of the NCUC’s

approval of portions of the ICAs. They sought declaratory and

injunctive relief and compensation. The CMRS Providers

alleged that (1) "the NCUC’s single-POI and transit-charge

rulings conflict with federal law"; and (2) "the NCUC lacks

authority under Section 251(f)(2) to relieve the RLECs of

their obligation to establish reciprocal compensation rates

consistent with federal pricing standards set forth in Section

252(d)(2)(A) and FCC regulations or to approve arbitrated

rates that do not comply with that provision." CMRS Providers’ Br. 7 (citing J.A. 23-30). 

On November 16, 2009, the parties filed cross motions for

summary judgment. On September 30, 2010, the district court

denied the CMRS Providers’ motion for summary judgment

and granted the NCUC’s and the RLECs’ motions for summary judgment. The district court affirmed the NCUC’s

December 31, 2008 FAO and the NCUC’s February 24, 2009

approval order. 

As an initial matter, the district court agreed with the

NCUC that § 251(a)(1) "provides the only basis for the indirect interconnections," and that § 251(a)(2) "is silent regarding the terms and conditions of indirect interconnections."

New Cingular Wireless, 2010 WL 3860384, at *5. Regarding

the location of the POIs and determination of financial

responsibility for transit costs, the district court held that "it

was not improper for the NCUC to conclude that there was

just one POI for the purposes of allocating financial responsibility for the transit costs in this case." Id. at *7. Moreover,

the district court concluded that imposition of financial

responsibility for paying the transit costs for RLEC-originated

traffic upon the CMRS Providers was not inconsistent with

federal regulations, id. at *8-9, the CMRS Providers’ argument regarding the NCUC’s findings about asymmetrical

compensation was "without merit," id. at *9-10, and "the

NEW CINGULAR WIRELESS v. FINLEY 17
equities found in this situation support the result reached," id.

at *10-11. 

The district court concluded that "the Act and its accompanying regulations provide very little guidance regarding the

terms of indirect interconnections," "nothing in the Act . . .

mandates the number or location of the POI(s)," and "the Act

does not address the issue of allocation of financial responsibility for interconnection costs." Id. at *11. 

On the CMRS Providers’ second claim for relief, the district court held that the NCUC possesses authority under

§ 251(f)(2) to modify TELRIC pricing standards for the

RLECs. Id. at *11-14.

II.

The legal issues before us, though complex as a matter of

statutory interpretation and application, are nonetheless easily

stated: whether the district court erred as a matter of law in

concluding that (1) the NCUC’s order adopting a single POI

approach to indirect interconnection and allocating the

responsibility for payment of transit charges for RLECoriginated traffic to the CMRS Providers is consistent with

the Act and regulations, and (2) the NCUC has authority

under § 251(f)(2) to modify TELRIC pricing standards for the

RLECs. 

Prior to oral argument, we solicited an amicus brief from

the FCC on the issues raised in this appeal.7See Amicus Br.

7The Supreme Court recently noted that an agency’s interpretation of its

regulations in an amicus brief is worthy of deference. See Chase Bank

USA, N.A. v. McCoy, 562 U.S. ___, ___, 131 S. Ct. 871, 880 (2011)

("[W]e defer to an agency’s interpretation of its own regulation, advanced

in a legal brief, unless that interpretation is ‘plainly erroneous or inconsistent with the regulation.’") (quoting Auer v. Robbins, 519 U.S. 452, 461

(1997)); Talk America, Inc. v. Mich. Bell Tel. Co., 564 U.S. ___, ___, 131

S. Ct. 2254, 2261 (2011) (same). 

We decline the FCC’s suggestion to hold this case in abeyance or dismiss the case without prejudice and direct the parties to file a pleading at

the FCC requesting an answer to these issues in a declaratory ruling. 

18 NEW CINGULAR WIRELESS v. FINLEY
for the FCC in Support of Neither Party ("FCC Br."). The

FCC indicated that it "has not directly ruled on the precise

issues raised by these cases." Id. at 1. Specifically, the FCC

explained that "[n]o prior FCC order has addressed whether

the originating carrier or the terminating carrier is responsible

for paying transit charges to an intermediate carrier under

[these] facts." Id. "Nor has the FCC clearly opined on whether

the Communications Act authorizes state commissions to suspend or modify the application of federal pricing requirements

to small rural telephone companies." Id. at 1-2. 

Because we ultimately agree with the arguments advanced

by the RLECs and the NCUC, we affirm the judgment of the

district court.8

III.

We review de novo the district court’s grant of summary

judgment and the NCUC’s interpretation of the Act and its

accompanying federal regulations.9 MCImetro, 352 F.3d at

8Prior to oral argument, we requested supplemental briefing addressing

whether AT&T North Carolina, the third-party transit provider, is a necessary or indispensible party, as well as whether this matter is ripe for decision "given that the transit providers apparently have yet to incur any

transit charges." Because we find these issues to be not as close as we

once thought they might be given the benefit of supplemental briefing and

argument, we elect not to address them here. 

We also dispense here with the contention that Verizon may not seek

review of the NCUC’s determination of the first issue on appeal because

Verizon resolved the POI issue through negotiation and stipulation with

the RLECs prior to arbitration, not by determination in the NCUC’s order.

Because we affirm the judgment of the district court, we need not address

this issue here. Instead, we assume, without deciding, Verizon may seek

review. 

9Despite their labeling as "findings of fact," J.A. 198, to the extent the

NCUC’s conclusions regarding the POI issue, financial responsibility for

transit charges, and the need for TELRIC-based reciprocal compensation

rates are grounded in interpretations of the Act and its accompanying regulations, and the application of the statutory and regulatory provisions to

the facts presented in this case, we treat them as conclusions of law subject

to de novo review. 

NEW CINGULAR WIRELESS v. FINLEY 19
876; Bellsouth Telecomms., Inc. v. Sanford, 494 F.3d 439, 447

(4th Cir. 2007) ("Actions of state commissions taken under 47

U.S.C. §§ 251 and 252 are reviewed in federal court de novo

to determine whether they conform with the requirements of

those sections."). While the NCUC’s interpretations of federal

law are accorded no deference, "an order of a state commission may deserve a measure of respect in view of the commission’s experience, expertise, and the role that Congress has

given it in the Telecommunications Act." BellSouth Telecomms., 494 F.3d at 447; GTE S., Inc. v. Morrison, 199 F.3d

733, 745 (4th Cir. 1999). Certainly, state commission orders

construing the Act fall outside the reach of Chevron, U.S.A.

Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837

(1984), but "the views of state commissions may nevertheless

deserve respect under Skidmore[ v. Swift & Co., 323 U.S. 134

(1944)]." BellSouth Telecomms., 494 F.3d at 447-48. The

amount of respect varies according to "‘the degree of the

agency’s care, its consistency, formality, and relative expertness,’ as well as ‘the persuasiveness of the agency’s position.’" Id. at 448 (quoting United States v. Mead Corp., 533

U.S. 218, 228 (2001)); see also id. (considering how the state

commission’s orders "align with the decisions of other state

commissions"). According the NCUC’s views some measure

of respect does not trump our independent ability to resolve

this matter; rather, it reflects a realistic recognition of the

expertise of state regulatory bodies dealing daily in a technical area of the law.

Despite the CMRS Providers’ arguments to the contrary,

the NCUC’s decision is worthy of some deference. Although

we review legal issues of a federal nature, the NCUC has "expertise and experience in applying [tenets of] communications

law." Id. The NCUC proceedings involved evidence and argument, and the parties prefiled testimony, participated in an

evidentiary hearing, and briefed the arguments. The NCUC

issued a lengthy RAO and a lengthy FAO, attesting to the

comprehensiveness of the proceedings below. Moreover,

while the NCUC acknowledged that its decision was "incon20 NEW CINGULAR WIRELESS v. FINLEY
sistent" with persuasive federal court authority and decisions

by other state commissions, the NCUC analyzed those decisions "closely" and remained convinced of its own reasoning

and decision. J.A. 97.

The fact that the NCUC changed its basis for the single POI

conclusion between the RAO and FAO does not significantly

weigh against giving the NCUC’s decision a measure of

respect. Notably, the NCUC changed the basis of its conclusion on an issue that was affected by a change recently made

by the FCC—allowing ILECs to initiate arbitration with

CMRS Providers—without "mak[ing] other corresponding

changes to the rights and duties of the parties under the Act."

Id. at 208. The "inconsistency" appears to be a result of a lack

of guidance in a case of first impression, rather than, as in the

case relied upon by the CMRS Providers, an "undulation[ ] in

interpreting a statute" not entitled to deference. A.T. Massey

Coal Co. v. Holland, 472 F.3d 148, 170 (4th Cir. 2006) (finding that no Skidmore deference should be given to the Commissioner of Social Security’s determination because, among

other factors, the Commissioner’s positions were inconsistent

"over the years").10

The NCUC’s factual findings are reviewed under the substantial evidence standard. GTE S., 199 F.3d at 745 & n.5

("We are aware that in reviewing state commission arbitration

decisions under the Act, some other courts, including the dis10There is no danger that giving the NCUC’s decision a measure of deference is contrary to or undermines the "theoretical underpinning" of Skidmore "that certain agency rulings should be respected because they

‘constitute a body of experience and informed judgment to which courts

and litigants may properly resort for guidance.’" CMRS Providers’ Reply

Br. 14-15 (quoting Skidmore, 323 U.S. at 140). The NCUC only used its

discretion in reaching its conclusion after thoroughly examining federal

law and other legal authority and did not, as the CMRS Providers assert,

use a "case-by-case, equitable approach to interconnection, which admittedly will vary according to the facts of each case." Id. at 14. Giving deference in this instance thus does not frustrate the underpinnings of Skidmore.

NEW CINGULAR WIRELESS v. FINLEY 21
trict court in this case, have used the ‘arbitrary and capricious’

standard of review. With respect to review of factfindings,

there is no meaningful difference between this standard and

the substantial evidence standard we apply.") (citations omitted). "In applying the substantial evidence standard, a ‘court

is not free to substitute its judgment for the agency’s . . . ; it

must uphold a decision that has substantial support in the

record as a whole even if it might have decided differently as

an original matter." Id. at 746 (quoting AT & T Wireless PCS,

Inc. v. City Council of Virginia Beach, 155 F.3d 423, 430 (4th

Cir. 1998)) (internal quotation marks omitted). To the extent

the NCUC relied on findings of fact to determine, in its discretion, the first issue on appeal, these factual findings are

subject to substantial evidence review.11

IV.

The CMRS Providers challenge the district court’s affirmance of the NCUC’s determination that there should be one

POI and that the CMRS Providers should be required to pay

transit costs incurred for RLEC-originated traffic on four

grounds: (A) § 251 itself requires there to be two POIs when

telecommunications carriers are indirectly connected through

a transit provider; (B) the NCUC’s single POI approach violates FCC regulations by improperly shifting financial responsibility for the RLECs’ transit charges to the CMRS

Providers; (C) the district court erred by deferring to the

NCUC’s consideration of the "equities"; and (D) the district

court’s reliance on the CMRS Providers’ potential recovery of

transit charges through reciprocal compensation does not cure

the NCUC’s legally flawed decision. We address each argument in turn.

11As we explain infra in Part IV.C, the district court did not err in applying the applicable standards of review. The district court thoroughly

reviewed the Act and the FCC regulations de novo. The district court only

then extended some measure of deference to the NCUC’s decision. See

New Cingular Wireless, 2010 WL 3860384, at *10-11. 

22 NEW CINGULAR WIRELESS v. FINLEY
A.

Despite the CMRS Providers’ various attempts to challenge

the NCUC’s conclusion, § 251 and the broader statutory

scheme do not mandate two POIs when telecommunications

carriers are indirectly connected via a third-party transit provider. Moreover, even if we were to accept the CMRS Providers’ arguments that there must be two physical POIs, this does

not necessarily mean the RLECs are responsible for paying

the transit costs for RLEC-originated traffic.

Section 251(a)(1) itself does not compel a two POI

approach in the circumstances of this case. Section 251(a)(1)

obligates each telecommunications carrier "to interconnect

directly or indirectly with the facilities and equipment of other

telecommunications carriers." 47 U.S.C. § 251(a)(1). Contrary

to the CMRS Providers’ contention that Congress’s use of "or

indirectly" requires there to be two POIs in the case of indirect interconnection, § 251(a)(1) cannot be read so narrowly.

Section 251(a)(1) neither defines "indirect" nor indicates the

number or location of POIs. The lone mention of the "point"

where interconnection must occur is found in § 251(c)(2)(B),

which establishes a duty specific to ILECs to interconnect

with a "requesting telecommunications carrier" "at any technically feasible point within the [ILEC’s] network" and does not

apply here.12 Indeed, as the NCUC and the district court concluded, § 251(a)(1) "is silent regarding the terms and conditions of indirect interconnection." New Cingular Wireless,

2010 WL 3860384, at *5.

12The language "or indirect" does not become superfluous when we separate, below, the concept of a physical POI from an "operative POI" (as

the RLECs term the point where financial responsibility shifts). RLECs’

Br. 10. In other words, there may be two physical POIs in the case of indirect interconnection, but it does not follow that the physical POI is the POI

for financial purposes. For the same reason, the CMRS Providers’ argument that the district court’s factual findings compel a two POI approach

fails. 

NEW CINGULAR WIRELESS v. FINLEY 23
Nor is the single POI approach inconsistent with the statutory scheme. The CMRS Providers attack the NCUC’s conclusion as improperly subjecting them under § 251(a)(1) to

the additional obligations of § 251(c)(2)(B). This, they argue,

"impermissibly protects the RLECs from the economic consequences of their decision to send traffic to the CMRS providers via a third-party transit provider by shifting responsibility

for the transit provider’s charges to the CMRS providers."

CMRS Providers’ Br. 34. In making this argument, they rely

heavily on the Tenth Circuit’s opinion in Atlas Telephone Co.

v. Oklahoma Corp. Commission, 400 F.3d 1256 (10th Cir.

2005), and the Eighth Circuit’s opinion in WWC License,

L.L.C. v. Boyle, 459 F.3d 880 (8th Cir. 2006), to argue that

other circuits have rejected similar cost-shifting efforts by

RLECs as inconsistent with the Act, and that affirming the

district court would leave this Circuit with a decision "fundamentally at odds" with the decisions of the Tenth and Eighth

Circuits. CMRS Providers’ Br. 18-19. 

While the CMRS Providers’ argument may be appealing on

the surface, we are ultimately unpersuaded. Atlas similarly

involved a dispute between CMRS Providers and LECs, specifically, rural telephone companies, regarding the way to

handle compensation for third-party transferred calls occurring in the same MTA. However, the issue presented was very

different. The CMRS Providers argued that, regardless of the

presence of the interexchange carrier, the third-party carrier,

the exchange was subject to the Act’s reciprocal compensation obligations under § 251(b)(5). 400 F.3d at 1260. The

LECs argued that the traffic passing through the third-party

carrier was subject to the access charge, or long-distance calling, regime. Id. Under this regime, the originating caller

would pay the third-party carrier, which in turn would compensate the originating and terminating networks; the LECs

thus argued they had no duty to compensate the CMRS Providers for transport and termination of the traffic. Id.

In Atlas, the district court affirmed various aspects of the

state commission’s orders, including its determination "that

24 NEW CINGULAR WIRELESS v. FINLEY
reciprocal compensation obligations apply to all calls originated by an [LEC] and terminated by a wireless provider

within the same [MTA], without regard to whether those calls

are delivered via an intermediate carrier." Id. at 1261 (internal

quotation marks omitted). In reviewing this specific conclusion, the Tenth Circuit analyzed § 251(b)(5) and the FCC’s

regulations and held that LECs "have a mandatory duty to

establish reciprocal compensation agreements with the CMRS

providers for calls originating and terminating within the

same MTA." Id. at 1264 (citation omitted). The court concluded, "Nothing in the text of these provisions provides support for the [LECs’] contention that reciprocal compensation

requirements do not apply when traffic is transported on [the

intermediary] network." Id.

The court then rejected the LECs’ argument that this holding was inconsistent with § 251(c)(2), which "mandates that

the exchange of local traffic occur at specific, technically feasible points within an [LEC’s] network, and that this duty is

separate and distinct, though no less binding on interconnecting carriers, from the reciprocal compensation arrangements

mandated by § 251(b)(5)." Id. at 1265 (footnote omitted). The

court explained that § 251(c)(2) only imposes a duty on

ILECs, not all telecommunications carriers governed more

broadly by § 251(a). Id. Adopting the LECs’ interpretation

would "contravene[ ] the express terms of the statute." Id. In

the course of rejecting the argument and holding that

§ 251(c)(2) "does not govern interconnection for the purposes

of local exchange traffic," the court also noted that "the

[LECs’] argument that CMRS providers must bear the

expense of transporting [LEC]-originated traffic on the [intermediary] network must fail." Id. at 1266 n.11.

As the district court correctly found, the Atlas reasoning

and holding are not particularly persuasive here. The RLECs

are not arguing that the access regime applies or that reciprocal compensation does not apply to calls they originate.

(Indeed, the parties agree with the Atlas holding, i.e., the

NEW CINGULAR WIRELESS v. FINLEY 25
reciprocal compensation regime applies. See New Cingular

Wireless, 2010 WL 3860384, at *6.) Nor are certain findings

made by the Tenth Circuit directly relevant or persuasive here.13

The footnote relied upon by the CMRS Providers in which the

Tenth Circuit disposed of a seemingly additional argument is

dictum not integral to resolve the ultimate issue in the case.

Cf. Pittston Co. v. United States, 199 F.3d 694, 703 (4th Cir.

1999) ("Dictum is statement in a judicial opinion that could

have been deleted without seriously impairing the analytical

foundations of the holding—that, being peripheral, may not

have received the full and careful consideration of the court

that uttered it.") (internal quotation marks omitted); Export

Group v. Reef Indus., Inc., 54 F.3d 1466, 1471-72 (9th Cir.

1995) (adopting definition of dictum as "an observation or

remark . . . not necessarily involved in the case or essential

to its determination") (internal quotation marks omitted). The

question in Atlas was whether "reciprocal compensation obligations apply to all calls originated by an [LEC] and terminated by a wireless provider within the same major trading

area, without regard to whether those calls are delivered via

an intermediate carrier," Atlas, 400 F.3d at 1261 (internal

quotation marks omitted); the issues we confront here were

not before the Tenth Circuit. Thus, resolution of the additional

argument was not necessary to the "analytical foundations of

the holding."

Likewise, neither is WWC License controlling or persua13Nor do we find persuasive the language in the "background" section

merely describing the indirect interconnection as having two POIs or the

second part of the decision, in which the Tenth Circuit dealt with whether

"the Telecommunications Act requires competing carriers to establish a

physical connection within an ILEC’s network for the exchange of local

traffic." Atlas, 400 F.3d at 1260, 1268. The "background" description was

not integral to the holding. And, as the district court here explained, the

second part of the decision was disposed of in a two paragraph summary

analysis and "has no bearing on the issue of establishing the location of

the POI(s) or on the issue of financial responsibility for transit costs." New

Cingular Wireless, 2010 WL 3860384, at *7 n.8. 

26 NEW CINGULAR WIRELESS v. FINLEY
sive. The language relied upon throughout the CMRS Providers’ brief to buttress its cost-shifting argument addresses the

duty to provide local dialing parity. The Eighth Circuit discussed "interconnection" in the context of local dialing parity

and held that the Act does not permit the state commission "to

impose a direct connection requirement as a condition on the

receipt of local dialing parity." 459 F.3d at 893. Again, the

Eighth Circuit did not address the specific issues before us.

Thus, we are unable to find the NCUC’s conclusion inconsistent with § 251(c)(2)(B).

Nor is the single POI approach inconsistent with § 251’s

"specific statutory vehicles," CMRS Providers’ Br. 39, that

accommodate rural carriers or with § 252’s requirement of

"mutual and reciprocal" recovery. The single POI approach

does not "trump[ ]" or "expand[ ]" the provisions of § 251

enacted by Congress for certain RLECs, id., but is the practical result of congressional silence in § 251(a)(1) and a lack of

administrative guidance when deciding that RLECs may formally request interconnection with CMRS Providers but providing no additional instructions. 

Moreover, to whatever extent the CMRS Providers’ interpretation of § 252(d)(2)(A)(i) has merit, we do not find the

argument sufficiently persuasive to cast doubt on our analysis

up to this point. The CMRS Providers argue that by identifying a single POI and treating the transit network as a virtual

part of the CMRS Providers’ networks, the NCUC created a

situation where the CMRS Provider is always responsible for

transit costs (both for originating and terminating traffic);

thus, compensation will not be "mutual and reciprocal," as

required by 47 U.S.C. § 252(d)(2)(A)(i), or "for the same services," as required by 47 C.F.R. § 51.711(a)(1). CMRS Providers’ Br. 40. We disagree.

We first note that it appears no transit charges are currently

being assessed by AT&T North Carolina on RLEC-originated

traffic, and that AT&T North Carolina has never assessed

NEW CINGULAR WIRELESS v. FINLEY 27
transit charges in connection with RLEC-originated indirect

traffic.14 Thus, it is not clear that, as the CMRS Providers

appear ultimately to argue, the reciprocal compensation mechanism will not adequately address their concerns. Moreover,

we find it difficult to reconcile the CMRS Providers’ interpretation with, albeit in a different scenario, the FCC’s determination that a third-party transit provider "may charge a

terminating carrier for the portion of facilities used to deliver

transiting traffic to the terminating carrier," and the terminating carrier "may seek reimbursement of these costs from originating carriers through reciprocal compensation." Texcom,

Inc. v. BellAtlantic Corp., 17 F.C.C. Rcd. 6275, 6276-77 ¶ 4

(2002).

Even accepting the CMRS Providers’ arguments that § 251

mandates two physical POIs, it does not follow, as the district

court explained, that § 251(a)(1) mandates a two POI

approach in which the financial POI for reciprocal compensation purposes is located at the POI between the transit carrier

and the CMRS Provider. See New Cingular Wireless, 2010

WL 3860384, at *7. Nowhere in the Act or regulations is

"point of interconnection" defined. Certainly, the most obvious meaning is the physical point where two carriers’ networks meet. Indeed, interconnection, as used in § 251(c)(2),

is defined as "the physical linking of two networks for the

mutual exchange of traffic." Local Competition Order, 11

F.C.C. Rcd. at 15590 ¶ 176. But this definition specifically

does not include the transport and termination of traffic. Id.

Transport and termination are instead addressed in the reciprocal compensation arrangements of § 251(b)(5). Thus, while

"POI" has taken on "financial connotations," as here, a dis14The CMRS Providers admit "AT&T Mobility has not yet begun to

receive bills from [the third-party transit provider] (or any other transit

provider the RLECs might employ) for the RLECs’ use of those facilities

for RLEC-originated traffic" and that "Verizon Wireless has not received

bills for RLEC transit charges from [the third-party transit provider]

because Alltel agreed to direct interconnection with the RLECs." CMRS

Providers’ Supp. Br. (filed on Oct. 18, 2011) at 9 & n.3. 

28 NEW CINGULAR WIRELESS v. FINLEY
tinction does in fact exist between the POI as a physical location and the POI as the "billing point." See New Cingular

Wireless, 2010 WL 3860384, at *7.

Indeed, the FCC highlighted in its amicus brief that it "previously has observed that the point at which a carrier bears

financial responsibility for intercarrier compensation (in this

case, the payment of transit charges) may not necessarily be

the physical POI between networks." FCC Br. 5. In a 2001

order, the FCC concluded that Verizon did not violate the Act

or FCC rules by "distinguish[ing] between the physical POI

and the point at which Verizon and an interconnecting competitive LEC are responsible for the cost of interconnection

facilities" because the "issue of allocation of financial responsibility for interconnection facilities" was "an open issue" in

the agency’s intercarrier compensation rulemaking docket.

Application of Verizon Pennsylvania, Inc., 16 F.C.C. Rcd.

17419, 17474 ¶ 100 (2001), aff’d, Z-Tel Commc’ns, Inc. v.

FCC, 333 F.3d 262 (D.C. Cir. 2003); see also Application by

Verizon Maryland, Inc., 18 F.C.C. Rcd. 5212, 5273 ¶ 103

(2003) (finding that Verizon could designate an "interconnection point" that "is different" from "the physical point of interconnection" for the purpose of "determin[ing] financial

responsibility for inter-network calls").

Therefore, the NCUC did not err in determining that there

was a single POI for the purpose of allocating financial

responsibility for transit costs.

B.

The CMRS Providers next argue that the NCUC’s determination regarding their responsibility to pay transit costs for

RLEC-originated traffic is prohibited by 47 C.F.R.

§ 51.703(b). The CMRS Providers rely in particular on MCImetro Access Transmission Services, Inc. v. BellSouth Telecommunications, Inc., 352 F.3d 872 (4th Cir. 2003). The

CMRS Providers essentially argue that carriers must enter

NEW CINGULAR WIRELESS v. FINLEY 29
arrangements so that each carrier only pays for its originated

traffic. Contrary to this argument, however, we agree with the

district court that 47 C.F.R. § 51.703(b) is not applicable here,

where transit charges are not assessed by the RLECs, but by

a third-party carrier. New Cingular Wireless, 2010 WL

3860384, at *8. 

47 C.F.R. § 51.703(b) provides, "A LEC may not assess

charges on any other telecommunications carrier for telecommunications traffic that originates on the LEC’s network."

Our conclusion, consistent with the district court’s, is not

"empty formalism," CMRS Providers’ Br. 44, but follows

from the plain language of the rule. Indeed, the FCC has

explained "transiting" and the payment of transiting charges

in a way that supports our conclusion: 

Transiting occurs when two carriers that are not

directly interconnected exchange non-access traffic

by routing the traffic through an intermediary carrier’s network. Typically, the intermediary carrier is

an incumbent LEC and the transited traffic is routed

from the originating carrier through the incumbent

LEC’s tandem switch to the terminating carrier. The

intermediary (transiting) carrier then charges a fee

for use of its facilities. . . . The reciprocal compensation provisions of the Act address the exchange of

traffic between an originating carrier and a terminating carrier, but the Commission’s reciprocal compensation rules do not directly address the

intercarrier compensation to be paid to the transit

service provider.

Developing a Unified Intercarrier Compensation Regime, 20

F.C.C. Rcd. at 4737-38 ¶ 120 (emphasis added) (footnotes

omitted). 

Moreover, the CMRS Providers’ argument that this strict

reading "cannot be squared with the rule’s fundamental pur30 NEW CINGULAR WIRELESS v. FINLEY
pose of ensuring that each carrier bears responsibility for the

costs of traffic originating on its network," CMRS Providers’

Br. 44, fails to acknowledge that transit costs are ultimately

recoverable (if they are ever assessed) through reciprocal

compensation. Indeed, the CMRS Providers ignore the possibility of petitioning the NCUC for an asymmetrical compensation rate if they believe the reciprocal compensation

arrangement does not adequately reimburse them. 

Furthermore, it is hard to square the CMRS Providers’

position with the FCC’s acknowledgment of the use of the

reciprocal compensation mechanism in a slightly different

context. As we briefly explained above, in Texcom, Inc. v.

BellAtlantic Corp., 17 F.C.C. Rcd. 6275 (2002), the FCC

determined that a third-party transit provider "may charge a

terminating carrier for the portion of facilities used to deliver

transiting traffic to the terminating carrier," and the terminating carrier "may seek reimbursement of these costs from originating carriers through reciprocal compensation." 17 F.C.C.

Rcd. at 6276-77 ¶ 4 (citing TSR Wireless, LLC v. US West

Commc’ns, Inc., 15 F.C.C. Rcd. 11166, 11184 ¶ 19 n.70

(2000), petitions for review denied, Qwest Corp. v. FCC, 252

F.3d 462 (D.C. Cir. 2001)). While Texcom and other orders

relied upon by the RLECs are not directly on point (the disputes were between transit providers and terminating carriers

where the terminating carrier was a "paging carrier" that only

receives and does not originate telecommunications traffic),

they at least lend a sliver of interpretive assistance. See FCC

Br. 7 & n.3 (distinguishing TSR Wireless, 15 F.C.C. Rcd.

11166; Mountain Commc’ns, Inc. v. Qwest Commc’ns Int’l,

Inc., 17 F.C.C. Rcd. 15135 (2002), vacated in part, Mountain

Commc’ns, Inc. v. FCC, 355 F.3d 644 (D.C. Cir. 2004);

Metrocall, Inc. v. Concord Tel. Co., 17 F.C.C. Rcd. 2252,

2257 ¶ 11 (2002)).15

15In its amicus brief, the FCC acknowledged, "The FCC has yet to specifically address whether the terminating or originating carrier is responsible for paying transit charges when (as in this case) the terminating

carrier’s dispute is with the originating carrier (rather than the transit provider), and the terminating carrier is a provider of wireless voice and data

services (as opposed to a paging carrier)." FCC Br. 7. 

NEW CINGULAR WIRELESS v. FINLEY 31
Moreover, the FCC apparently has recognized that "transit"

between carriers is a type of "transport" addressed by reciprocal compensation, further suggesting that in a scenario such

as this terminating carriers may recover for transit charges

that are assessed by the third-party carrier from the originating carrier through reciprocal compensation: 

We conclude that transport and termination should

be treated as two distinct functions. We define

"transport," for purposes of section 251(b)(5), as the

transmission of terminating traffic that is subject to

section 251(b)(5) from the interconnection point

between the two carriers to the terminating carrier’s

end office switch that directly serves the called party

(or equivalent facility provided by a non-incumbent

carrier). Many alternative arrangements exist for the

provision of transport between the two networks.

These arrangements include: dedicated circuits provided either by the incumbent LEC, the other local

service provider, separately by each, or jointly by

both; facilities provided by alternative carriers;

unbundled network elements provided by incumbent

LECs; or similar network functions currently offered

by incumbent LECs on a tariffed basis. Charges for

transport subject to section 251(b)(5) should reflect

the forward-looking cost of the particular provisioning method.

Local Competition Order, 11 F.C.C. Rcd. at 16015 ¶ 1039

(emphasis added). The CMRS Providers, however, ignore this

potential route of recovery.

MCImetro, relied upon by the CMRS Providers, is distinguishable.16 In MCImetro, MCI, exercising its right under

16We find persuasive the district court’s explanation of T-Mobile USA,

Inc. v. Armstrong, No. 3:08-36-DCR, 2009 WL 1424044 (E.D. Ky. May

20, 2009), in which the RLECs argued that they were responsible for the

32 NEW CINGULAR WIRELESS v. FINLEY
§ 251(c)(2)(B), decided to interconnect with BellSouth’s network at one point in the North Carolina local access and

transport area through a single switch. 352 F.3d at 877. Due

to this arrangement, all traffic had to pass through that POI,

regardless of the location of the customers, and BellSouth

incurred greater costs for transporting routine local traffic. Id.

BellSouth agreed to pay for transporting calls from the customer to the edge of the local calling area without charge. Id.

at 877 n.2. BellSouth urged that MCI should pay the incremental cost of transporting the call from the edge of the local

calling area to the POI. Id. at 877. The NCUC adopted this

proposal. Id. BellSouth, as distinguished from the RLECs

here, was attempting to, in contravention of 47 C.F.R.

§ 51.703(b), directly assess charges on MCI. Thus, the court

held that "the charge that BellSouth seeks to impose" is prohibited because "Rule 703(b) is unequivocal in prohibiting

LECs from levying charges for traffic originating on their

own networks, and, by its own terms, admits of no exceptions." Id. at 881. It bears repeating that, in contrast, the

charges here are being assessed by the transit carrier. 

Thus, neither 47 C.F.R. § 51.703(b) nor our interpretation

of it requires reversal of the NCUC’s resolution of the first

issue on appeal.

C.

The CMRS Providers next argue that the district court erred

by deferring to the NCUC’s consideration of the "equities."

They first contend that the NCUC exceeded its statutory

authority under § 252(c)(1) by deciding the POI issue based

on the "equities." They also contend that the district court

cost of transporting their originating calls up to the POI they negotiated

and had no further responsibility, as distinguishable. The RLECs here will

compensate the CMRS Providers through reciprocal compensation. See

New Cingular Wireless, 2010 WL 3860384, at *9. 

NEW CINGULAR WIRELESS v. FINLEY 33
erred under § 252(e)(6) by failing to ensure that the NCUC’s

decision met the requirements of §§ 251 and 252. We disagree with both of these propositions.

Fulfilling its duty as arbitrator to resolve "open issues" and

"impos[e] conditions" in compliance with § 251 and regulations promulgated pursuant to § 251, the NCUC necessarily

undertook the course it did. Section 252(c)(1) provides that

"[i]n resolving by arbitration . . . any open issues and imposing conditions upon the parties to the agreement, a State commission shall ensure that such resolution and conditions meet

the requirements of [§ 251 and its accompanying regulations]." The NCUC did not substitute equitable considerations

for legal requirements. Rather, it is apparent from the RAO

and the FAO that the NCUC first thoroughly reviewed the Act

and persuasive federal authority. The NCUC next concluded

that the Act, particularly § 251(a)(1), did not "specify the

number of POIs or where the POI or POI(s) should be located."17

J.A. 208. Only then did the NCUC "proceed to determine, on

the basis of its sound discretion, the number and location of

the POIs for the purposes of the parties’ interconnection

agreements." Id. at 208-09. This is a far cry from a situation

in which a wayward state commission shirked its duty under

17The NCUC stated in the FAO: 

Unlike the language of Section 251(c)(2), Section 251(a)(1) does

not specify the number of POIs or where the POI or POIs should

be located. As a result, the literal language of Section 251(a)(1),

in an arbitration in which an RLEC seeks interconnection with a

CMRS Provider, would seem to provide the Commission with the

discretion to determine how many POIs there should be and

where they should be located. 

J.A. 208. Indeed, the NCUC seemed to recognize the predicament of having to resolve the instant dispute without clear legal instruction: "The

Telecommunications Act places the burden on state commissions to arbitrate such matters, subject to review by federal courts." Id. at 209. 

34 NEW CINGULAR WIRELESS v. FINLEY
the Act, using its discretion to elevate the "equities" in a particular case above the law.18

Moreover, what the NCUC termed the "equities," but what

were actually the particular facts and administrative considerations underlying the parties’ dispute, were relevant to the

inquiry. We cannot say the NCUC was incorrect in considering that the chosen approach was "conceptually less complicated," particularly when it noted that the set up "does not

necessarily work to deprive either party of its just compensation for transit."19 J.A. 210. While the NCUC might too heavily have considered that its conclusion placed the RLECs "in

the same position as they would have been had they been able

to rely on Section 251(c)(2)," id., it is clear this concern

merely expressed the lack of guidance and the NCUC’s belief

that "it was not unreasonable . . . to adopt the single-POI

approach that is established when requests are made upon

incumbent LECs," NCUC’s Br. 37. Given the failure of the

18We are unpersuaded that, as the CMRS Providers argue, the NCUC’s

use of the "equities," and the district court’s "ratification of that approach,

upset the careful balance that Congress and the FCC struck between competition and the protection of rural carriers," and that the NCUC’s "caseby-case equitable approach undermines" congressional intent that §§ 251

and 252 "‘facilitate consistent resolution of interconnection issues.’"

CMRS Providers’ Br. 49-50 (quoting Local Competition Order, 11 F.C.C.

Rcd. at 16005 ¶ 1024). The discretionary authority exercised here is only

appropriate given the NCUC’s careful review of the law and the specifics

of this case; notably, the FCC was only able to provide us with limited

guidance on the issues raised here. And the authority is only acceptable

because a careful review of the Act and persuasive federal authority left

the NCUC without guidance but required it to resolve the open issues. 

19We note that this is especially true considering, as we believe we may

for practical purposes, that AT&T Mobility’s affiliate, AT&T North Carolina, typically provides the third-party transit function. (We do note that

one CMRS Provider, Verizon, has no corporate relationship with AT&T

Mobility. CMRS Providers’ Reply Br. 36.) As counsel for the RLECs

stated at oral argument, the NCUC could have reasonably considered "the

potential risk for the RLEC of being exposed to a transit cost scenario

that’s negotiated between affiliates that it’s not party to." Fourth Circuit

Oral Argument, at 30:40 (Oct. 26, 2011). 

NEW CINGULAR WIRELESS v. FINLEY 35
Act to provide direction in a case such as this, the NCUC

properly recognized these facts and considerations in reaching

its conclusion. 

Finally, the district court did not violate its own statutory

obligation to ensure that the NCUC’s decision met the

requirements of §§ 251 and 252 by deferring to the NCUC’s

reliance on the "equities." Section 252(e)(6) provides that

"any party aggrieved by [a state commission’s] determination

may bring an action in an appropriate Federal district court to

determine whether the agreement or statement meets the

requirements of [§§ 251 and 252]." The district court first

conducted a thorough de novo review of the Act, the FCC’s

regulations, and other legal authorities, making its own conclusions about the single POI approach and allocation of

financial responsibility. Only then did the district court evaluate the NCUC’s consideration of the "equities," appropriately

extending some measure of deference under Skidmore. See

New Cingular Wireless, 2010 WL 3860384, at *10-11. 

D.

Finally, the CMRS Providers argue that the "purported

cure" to the NCUC’s legally flawed decision is deficient

because federal regulations do not permit recovery of these

transit charges through reciprocal recovery arrangements.

CMRS Providers’ Br. 51-52. They further argue that even if

the charges could be recovered, any scheme that compels

them to use asymmetrical rates and to perform TELRIC cost

studies to recover the RLECs’ transit costs is inconsistent

with federal law. 

We are unpersuaded by the CMRS Providers’ attempt to

use a strict interpretation of 47 C.F.R. § 51.701(e) to undermine the NCUC’s conclusion.20 Given the FCC’s discussion

2047 C.F.R. § 51.701(e) states, "[A] reciprocal compensation arrangement between two carriers is one in which each of the two carriers

receives compensation from the other carrier for the transport and termination on each carrier’s network facilities of telecommunications traffic that

originates on the network facilities of the other carrier." 

36 NEW CINGULAR WIRELESS v. FINLEY
in the Local Competition Order and its explanation in Texcom, it is difficult to find persuasive the CMRS Providers’

position, i.e., because transit services do not occur on either

the CMRS Providers’ or the RLECs’ "network facilities,"

transit charges are not recoverable through reciprocal compensation arrangements. In defining "transport" under

§ 251(b)(5) in its Local Competition Order, the FCC recognized that "[m]any alternative arrangements exist for the provision of transport between two networks," including

"facilities provided by alternative carriers," 11 F.C.C. Rcd. at

16015 ¶ 1039, thereby suggesting that reciprocal compensation covers these charges. In addition, as explained earlier, see

supra Part IV.B, in Texcom the FCC acknowledged the use of

the reciprocal compensation mechanism in a similar context,

recognizing that transit carriers "may charge a terminating

carrier for the portion of facilities used to deliver transiting

traffic to the terminating carrier," and that the terminating carrier "may seek reimbursement of these costs from originating

carriers through reciprocal compensation." Texcom, 17 F.C.C.

Rcd. at 6277 ¶ 4. 

We are unpersuaded that the NCUC’s findings compel the

CMRS Providers to seek reimbursement through asymmetrical compensation rates.21 Reciprocal compensation might ade21The CMRS Providers argue, "Even if these transit charges could be

recovered through reciprocal compensation, which they cannot be, any

scheme that compelled CMRS providers to use asymmetrical rates and

perform TELRIC cost studies in order to recover the RLECs’ transit

costs—as proposed by both the District Court and the NCUC—would

deprive CMRS providers of their legal right to choose between symmetrical and asymmetrical reciprocal compensation rates and the need to do

cost studies." CMRS Providers’ Br. 53 (citations omitted). They believe

that, "[u]nder the NCUC’s single-POI and ‘virtual’ network conclusions

and indeed the terms of the ICAs mandated by the NCUC, the ‘symmetrical’ reciprocal compensation received by a CMRS provider, without any

cost study, for transporting and terminating each RLEC-originated call

would not in fact be ‘symmetrical’ because it would be partially offset by

the charge assessed by the transit provider for delivering the call to the

CMRS Provider." Id. at 54. 

NEW CINGULAR WIRELESS v. FINLEY 37
quately address transit costs incurred by the CMRS Providers.

As the district court aptly explained, the CMRS Provider pays

an RLEC the same rate of reciprocal compensation for transport and termination of traffic originated by the CMRS Provider as the RLEC pays the CMRS Provider for transport and

termination of traffic originated by the RLEC. See New

Cingular Wireless, 2010 WL 3860384, at *10 ("Because the

compensation is ‘reciprocal,’ each carrier pays the other the

same amount for terminating a minute of traffic.") (citing 47

C.F.R. § 51.711(a)(1)). The rate is determined based upon the

RLEC’s cost of terminating a minute of CMRS-originated

traffic, and the CMRS Provider receives the same reciprocal

compensation rate. The differences in costs incurred by RLEC

and CMRS Providers is not considered in determining the

reciprocal compensation rate. 

Moreover, no transit charges are currently being assessed

by the transit provider on RLEC-originated traffic. It is not

clear that at the end of the day costs will actually be nonrecoverable. It might even be the case, as the district court

pointed out, that "the economies of scale and resultant lower

costs [CMRS Providers] . . . would enjoy, could reasonably

be expected to be considerably more favorable than the costs

incurred by the RLECs." Id. (internal quotation marks omitted). Therefore, we are convinced neither that the CMRS Providers may not adequately recover transit costs in the

reciprocal compensation rate nor that they are "deprive[d] . . .

of the right to choose symmetrical rates without a cost study."

CMRS Providers’ Br. 54. If at some point the CMRS Providers are invoiced for RLEC transit charges and believe they are

being unfairly compensated, then they may seek an asymmetrical compensation rate.22

22We need not address the NCUC’s claim that the compensation

approach advanced by the CMRS Providers would require the RLECs "to

pay twice for transport and termination of calls they originate: through

symmetrical compensation rates to [the CMRS Providers], and again

through transit charges to the transit provider," NCUC’s Br. 49-50, and the

38 NEW CINGULAR WIRELESS v. FINLEY
V.

We also conclude that the district court did not err in holding that the NCUC possesses statutory authority under 47

U.S.C. § 251(f)(2) to modify the TELRIC guidelines.23 The

CMRS Providers argue that § 251(f)(2) is plain and unambiguous in giving state commissions limited authority to suspend

or modify only the application of a requirement or requirements of § 251(b) and (c), not "the mandatory cost-based pricing requirement for reciprocal compensation rates" set forth in

§ 252(d)(2)(A). They contend that the district court failed to

adhere to the plain and unambiguous language and erred in

relying on § 252(d)(2)(A)’s reference to § 251(b)(5) and the

in pari materia doctrine to reach a conclusion that is inconsistent with the Act’s purpose.

We begin by setting out the applicable principles of statutory interpretation.24 In determining whether the NCUC has

the authority under § 251(f)(2) to modify25 the pricing stanCMRS Providers’ response that the RLECs would pay the transit provider

"for transit services provided on that carrier’s network between the two

POIs," and "the CMRS providers for their services in terminating the

RLECs’ originating traffic on their networks beyond the second POI,"

CMRS Providers’ Reply Br. 35. 

23Because we affirm the district court’s judgment, we assume, but need

not decide, the CMRS Providers may challenge this issue despite their

failure to appeal the NCUC’s modification order at the time it was entered.

Indeed, they do not challenge the NCUC’s modification order, but instead

challenge "whether the [NCUC] has the subject matter jurisdiction to

allow the reciprocal compensation rates of the RLECs to be established by

any methodology other than that established by the Act and the FCC." J.A.

28. 

24It is not clear whether the district court found the language of

§ 251(f)(2) plain and unambiguous upon a consideration of the language’s

meaning, placement, and context, or whether the district court found the

language ambiguous and then construed the statute in pari materia with

§ 252(d)(2)(A). See New Cingular Wireless, 2010 WL 3860384, at *13-

14. 

25We focus on "modification" as the RLECs’ petition sought "modification of certain aspects of requirements under 47 U.S.C. § 251(b)(5)." J.A.

41. 

NEW CINGULAR WIRELESS v. FINLEY 39
dards for reciprocal compensation arrangements in

§ 252(d)(2)(A) and the FCC’s implementing regulations, we

first look to the language of § 251(f)(2), the statutory provision at issue. United States v. Hatcher, 560 F.3d 222, 226 (4th

Cir. 2009). We "determine whether ‘the language at issue has

a plain and unambiguous meaning with regard to the particular dispute in the case.’" Universal Mar. Serv. Corp. v.

Wright, 155 F.3d 311, 318 (4th Cir. 1998) (quoting Robinson

v. Shell Oil Co., 519 U.S. 337, 340 (1997)). We look "‘to the

language itself, the specific context in which that language is

used, and the broader context of the statute as a whole.’"

McLean v. United States, 566 F.3d 391, 396 (4th Cir. 2009)

(quoting Robinson, 519 U.S. at 341); Universal Mar. Serv.

Corp., 155 F.3d at 319 ("[B]ecause the ‘meaning of statutory

language, plain or not, depends on context,’ we must consider

‘not only the bare meaning of the word but also its placement

and purpose in the statutory scheme.’") (quoting Bailey v.

United States, 516 U.S. 137, 145 (1995)) (internal quotation

marks omitted). This includes examining § 251(f)(2) within

the broader context of the statute. Cf. Universal Mar. Serv.

Corp., 155 F.3d at 320 & n.11 (looking to the entire Longshore and Harbor Workers’ Compensation Act to determine

whether "the specific context of [the immediate provision] is

. . . diminished by looking to the broader context of the statute

as a whole"); Household Credit Servs., Inc. v. Pfennig, 541

U.S. 232, 239-42 (2004) (examining related provisions of the

Truth in Lending Act to determine whether the statutory provision at issue is ambiguous); Robinson, 519 U.S. at 340-45

(considering, among other provisions, §§ 701(c), (e), (f),

706(g)(1), and 717(a), (b), (c) of Title VII of the Civil Rights

Act of 1964 to determine whether the meaning of "employees" in § 704(a) is plain and unambiguous).

If the language is ambiguous, cf. Hatcher, 560 F.3d at 231

(Shedd, J., dissenting) ("A statute is ambiguous if its language, when read in context, is susceptible to more than one

reasonable interpretation.") (citing Newport News Shipbuilding & Dry Dock Co. v. Brown, 376 F.3d 245, 248 (4th Cir.

40 NEW CINGULAR WIRELESS v. FINLEY
2004)), we then turn to other evidence to interpret the meaning of the provision, such as the rule of in pari materia and

the legislative history, Universal Mar. Serv. Corp., 155 F.3d

at 318; United States v. Broncheau, 645 F.3d 676, 685 (4th

Cir. 2011) ("The principle of in pari materia is applicable . . .

only ‘where the meaning of a statute is ambiguous or doubtful.’") (quoting N. Pac. Ry. Co. v. United States, 156 F.2d

346, 350 (7th Cir. 1946)). The rule of in pari materia "is but

a logical extension of the principle that individual sections of

a single statute should be construed together," Erlenbaugh v.

United States, 409 U.S. 239, 244 (1972), to resolve ambiguities in the language of a statutory provision, United States v.

Morison, 844 F.2d 1057, 1064 (4th Cir. 1988) ("When a statute is a part of a larger Act . . . , the starting point for ascertaining legislative intent is to look to other sections of the Act

in pari materia with the statute under review."). We have

explicitly "interpreted the principle to mean that ‘adjacent

statutory subsections that refer to the same subject matter’

should be read harmoniously." Broncheau, 645 F.3d at 685

(quoting Va. Int’l Terminals, Inc. v. Edwards, 398 F.3d 313,

317 (4th Cir. 2005)). That is, "statutes addressing the same

subject matter generally should be read ‘as if they were one

law.’" Wachovia Bank v. Schmidt, 546 U.S. 303, 316 (2006)

(quoting Erlenbaugh, 409 U.S. at 243) (internal quotation

marks omitted); see, e.g., Morison, 844 F.2d at 1064-65 (construing §§ 793(d) and 794 of the Espionage Act in pari materia because they were "intended to and did cover separate and

distinct offenses, with separate and distinct punishment" and

"[i]t is important . . . to ascertain the essential element in each

section which made it separate and distinct from the other").

We find that the language of § 251(f)(2)26 is plain and

26Section 251(f)(2) provides: 

A local exchange carrier with fewer than 2 percent of the

Nation’s subscriber lines installed in the aggregate nationwide

may petition a State commission for a suspension or modification

NEW CINGULAR WIRELESS v. FINLEY 41
unambiguous in authorizing state commissions to modify the

TELRIC guidelines for the RLECs. To be sure, the pricing

standards of § 252(d)(2)(A) are not specifically mentioned in

the language of § 251(f)(2), which only allows "rural carriers"

to "petition a State commission for a suspension or modification of the application of a requirement or requirements of

subsection (b) or (c)."27 It is plain from the broader context of

the statute, however, that modification of § 251(b)(5), explicitly provided for in the statutory provision at issue, includes

the authority to modify the pricing standards elucidated in

§ 252(d)(2)(A) and the accompanying regulations. 

of the application of a requirement or requirements of subsection

(b) or (c) of this section to telephone exchange service facilities

specified in such petition. The State commission shall grant such

petition to the extent that, and for such duration as, the State commission determines that such suspension or modification— 

(A) is necessary— 

(i) to avoid a significant adverse economic impact on users

of telecommunications services generally; 

(ii) to avoid imposing a requirement that is unduly economically burdensome; or 

(iii) to avoid imposing a requirement that is technically

infeasible; and 

(B) is consistent with the public interest, convenience, and

necessity. 

27We reject the CMRS Providers’ argument that the absence of any reference to § 252(d)(2)(A) in § 251(f)(2) was intentional. Here, as opposed

to the case relied upon by the CMRS Providers, a phrase appearing elsewhere is not missing from the particular section under review. See Doe v.

Chao, 435 F.3d 492, 503 n.15 (4th Cir. 2006) ("[B]ecause other subsections—not at issue here—of § 552a(g) require a claimant to ‘substantially

prevail’ before a fee award is appropriate, it is implausible to assume that

Congress accidentally omitted the ‘substantially prevail’ language from

subsection 552a(g)(4)(B).") (citations omitted). We also find unpersuasive

the CMRS Providers’ reliance on In re Griffith, 206 F.3d 1389 (11th Cir.

2000), for the proposition that "[w]here Congress knows how to say something but chooses not to, its silence is controlling." 206 F.3d at 1394

(internal quotation marks omitted). 

42 NEW CINGULAR WIRELESS v. FINLEY
Section 251(f)(2) explicitly authorizes state commissions to

suspend or modify the requirement or requirements of

§ 251(b). Section 251(b)(5), in turn, imposes on all LECs

"[t]he duty to establish reciprocal compensation arrangements

for the transport and termination of telecommunications." In

order for a state commission to modify the requirement(s) of

this duty, the state commission must be authorized to modify

the requirements of § 252(d), which establishes the pricing

standards for reciprocal compensation arrangements. In other

words, § 252(d)(2)(A),28 which explicitly refers to

§ 251(b)(5), begins to fill in the more specific requirements of

the broad duty established in § 251(b)(5). Likewise, to effectively modify the requirements of § 251(b)(5), the state commission must be authorized to modify the requirements of the

regulations implementing § 252(d)(2). The specific requirements developed in § 252(d)(2)(A) and the FCC regulations

fill in what is otherwise a vague duty broadly established in

§ 251(b)(5). The ability to modify the application of the

requirement(s) of § 251(b)(5) must therefore include the ability to modify the TELRIC pricing requirements for the RLECs.29

28Section 252(d)(2)(A) provides: 

For the purposes of compliance by an incumbent local

exchange carrier with section 251(b)(5) of this title, a State commission shall not consider the terms and conditions for reciprocal

compensation to be just and reasonable unless— 

(i) such terms and conditions provide for the mutual and reciprocal recovery by each carrier of costs associated with the transport and termination on each carrier’s network facilities of calls

that originate on the network facilities of the other carrier; and 

(ii) such terms and conditions determine such costs on the

basis of a reasonable approximation of the additional costs of terminating such calls. 

29Indeed, this is plain from the language of § 251(f)(2) itself, which

includes both "suspend" and "modify." As the NCUC explained in the

modification order, "[t]he power to modify a reciprocal compensation obligation necessarily implies a power to suspend a TELRIC rate calculation

requirement for good cause shown, given that the relevant statute authorizes both suspension and modification." J.A. 53-54. 

NEW CINGULAR WIRELESS v. FINLEY 43
Although fatal neither to its ruling nor to our independent

analysis, the district court perhaps too quickly relied on the

FCC’s Local Competition Order in reaching its conclusion. In

the Local Competition Order, the FCC noted that "certain . . .

small incumbent LECs may seek relief from their state commissions from our rules under section 251(f)(2)." 11 F.C.C.

Rcd. at 16026 ¶ 1059. The district court read this as an "explicit[ ] recogni[tion]" by the FCC "that the general rule

requiring rates to be established based on TELRIC studies is

subject to an exception for small and rural LECs." New

Cingular Wireless, 2010 WL 3860384, at *14. Thus, the district court concluded that "the Local Competition Order

leaves no doubt that the FCC intended state commissions to

have the authority to modify the TELRIC pricing requirements for RLECs." Id.

We agree with the FCC that the Local Competition Order

does not so clearly support the specific proposition here. Cf.

FCC Br. 9 (explaining that it does not read the same text as

"clearly interpreting" § 251(f)(2) to allow the NCUC to suspend or modify the TELRIC pricing requirements). The paragraph from which the quoted text is drawn neither mentions

§ 252(d)(2) nor the TELRIC pricing requirements specifically. Moreover, because the FCC failed specifically to refer

to its pricing rules when describing § 251(f)(2), we might

conclude that the FCC’s reference to § 251(f)(2) was only "a

general description of the statutory remedies available to

The CMRS Providers’ construction, which would require the rates of

compensation to "comport" with § 252(d)(2)(A) whenever the duty to

establish reciprocal compensation under § 251(b)(5) is in effect is

unsustainable. CMRS Providers’ Br. 58. It would leave the RLECs "with

a draconian choice—they could either not enter into reciprocal compensation arrangements with the CMRS Providers, and thus receive no compensation for terminating cell phone traffic on their network, or they could

perform expensive and time consuming TELRIC cost studies despite the

Act’s plain language permitting modification of FCC regulations."

NCUC’s Br. 55. 

44 NEW CINGULAR WIRELESS v. FINLEY
small incumbent LECs, not a specific finding that state commissions may suspend or modify the Act’s pricing requirements." Id.; see also Local Competition Order, 11 F.C.C.

Rcd. at 16118 ¶ 1263 ("declin[ing] . . . to adopt national rules

or guidelines" as to the specific implementation of § 251(f) as

the FCC "may offer guidance on these matters at a later date,

if . . . necessary and appropriate").30 We believe, however,

that the Local Competition Order lends some guidance.

All that said, we are confident that our construction is consistent with the purpose of the Act. Indeed, we think it manifest that the NCUC’s conclusion is consistent with the Act’s

concerns for small ILECs. Furthermore, we are satisfied that

allowing the NCUC to modify the pricing standards of

§ 252(d)(2)(A) furthers, rather than thwarts, the overriding

goal of removing economic barriers to competition within the

telecommunications industry. Cf. Local Competition Order,

11 F.C.C. Rcd. at 15505-06 ¶¶ 1, 3. We reject the exaggerated

fears advanced by the CMRS Providers. 

Thus, we find that the NCUC has authority under

§ 251(f)(2) to modify the TELRIC guidelines for the RLECs.

VI.

For the reasons set forth above, the judgment of the district

court is

AFFIRMED.

30We are hesitant to rely on the cases cited by the Appellees. Iowa Utils.

Bd. v. FCC, 219 F.3d 744, 759-61 (8th Cir. 2000), rev’d in part on other

grounds sub nom. Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467 (2002),

and Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467, 528 n.39 (2002), did

not address the precise issue here. See also RLECs’ Br. 54 ("While [Iowa

Utils. Bd.] more directly concerned the Section 251(f)(1) rural exemption

rather than the Section 251(f)(2) modification and suspension authority for

two percent ILECs . . . ."). 

NEW CINGULAR WIRELESS v. FINLEY 45