Court Opinion

ID: 185411
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:31:39+00
Date Added: 2024-06-11T17:26:15.666104
License: Public Domain

254 F.3d 78 (D.C. Cir. 2001)
United States Cellular Corporation, Petitionerv.Federal Communications Commission and United States of America, RespondentsAssociation of Public-Safety Communications Officials-International, Inc., et al., Intervenors
Nos. 00-1072, 00-1536, 00-1538, and 01-1047
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 15, 2001Decided June 29, 2001

On Petitions for Review of Orders of the Federal Communications Commission
Thomas P. Van Wazer argued the cause for petitioners. With him on the briefs were James P. Young, Donald J. Evans and Sylvia Lesse.  Stephen G. Kraskin entered an  appearance.
Roberta L. Cook, Counsel, Federal Communications Commission, argued the cause for respondents.  With her on the brief were Christopher J. Wright, General Counsel, John E. Ingle, Deputy Associate General Counsel, Catherine G. O'Sullivan and Andrea Limmer, Attorneys, U.S. Department of Justice.  Daniel M. Armstrong, Associate General Counsel, Federal Communications Commission, entered an  appearance.
Robert M. Gurss and Tamara Y. Brown were on the brief for intervenor Association of Public-Safety Communications Officials-International, Inc.
Before:  Henderson, Tatel and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Tatel.
Tatel, Circuit Judge:

1
In an effort to speed implementation  of enhanced 911 services for wireless phones, the Federal  Communications Commission removed a provision condition- ing wireless carriers' obligation to purchase and install the  necessary technology on guaranteed state or local government funding.  The carriers challenge this decision, arguing  that, among other things, it contravenes the cost causation  principle adopted by this court in Competitive Telecommunications Association v. FCC, 87 F.3d 522, 529 (D.C. Cir. 1996)  ("Comptel"), is arbitrary and capricious, 5 U.S.C. § 706(2)(A),  violates the Regulatory Flexibility Act, 5 U.S.C. §§ 601-612,  and amounts to an unconstitutional taking.  Finding petitioners' arguments either without merit or not properly before us,  we deny the petition for review in its entirety.

2
* Over the last thirty years, 911 service has "spread across  the nation and become synonymous with emergency assistance."  In re Revision of the Comm'n's Rules to Ensure  Compatibility with Enhanced 911 Emergency Calling Sys.,  11 FCC Rcd 18676 p 3 (1996) ("First Report & Order").  At  its most basic, 911 service involves routing calls to state or  local governmental entities responsible for coordinating emergency response, known as Public Safety Answering Points  ("PSAPs"), which dispatch emergency assistance to callers.   Most PSAPs now provide E911--enhanced 911--services for  calls placed from traditional landline phones, using Automatic  Numbering Identification ("ANI") to determine a caller's  phone number and Automatic Location Identification ("ALI")  to pinpoint a caller's location.  For landline calls, ALI information is typically determined by looking up the caller's  phone number in an address/telephone number database.

3
Although wireless callers place a large number of 911 calls,  implementing E911 services for wireless phones has proven  more difficult.  In June 1994, a group of public safety organizations (including the Association of Public-Safety Communications Officials ("APCO"), intervenor here) issued an Emergency Access Position Paper highlighting the need to make  E911 services available to wireless callers to "facilitate rapid  and effective contact with emergency services, when and  where needed."  Shortly thereafter, the Commission issued a  notice of rulemaking to "ensure that, over time, [wireless  callers would] have the same level of access to 911 emergency  services as [landline] callers," and proposed requiring wireless carriers to make both ANI and ALI information available  to PSAPs.  In re Revision of the Comm'n's Rules to Ensure  Compatibility With Enhanced 911 Emergency Calling Sys., 9  FCC Rcd 6170 pp 37, 50-52 (1994).

4
After the comment period ended, APCO and two other  public safety bodies, together with the Cellular Telecommunications Industry Association ("CTIA"), a trade association of  wireless industry participants, filed with the Commission a  Consensus Agreement addressing wireless E911 implementation.  Among other things, the Agreement proposed a cost  recovery mechanism to fund carrier and PSAP investment in  E911 technology, asking the Commission to condition the  obligation to make these investments on a guarantee of state  or local government funding.  The Commission also sought  public comment on this Consensus Agreement.

5
After receiving comments on its proposal and the Consensus Agreement, the Commission adopted its First Report &  Order, which established a two-phase plan for wireless E911  implementation.  Phase I, to have been completed in eighteen  months, required wireless carriers to enable PSAPs to determine a caller's ANI and the location of the base station or cell  site receiving the 911 call.  First Report & Order, 11 FCC  Rcd 18676 at p 10.  Wireless carriers had five years to  complete Phase II, which required them to enable PSAPs to  identify a caller's ALI within a specified range.  Id.  Wireless  carriers can implement Phase II in at least two ways.  One is  network-based, determining a caller's location by triangulating signals from several different cell sites or base stations.   In re Revision of the Comm'n's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Sys., 14 FCC Rcd  17388 p 23 (1999) ("Third Report & Order").  The other is  handset-based;  it incorporates locating functionality (such as  Global Positioning System technology) into the telephone  itself.  Id. at p 18.

6
Under the Commission's Order, carriers' Phase I and  Phase II obligations would not be triggered until two conditions were met:  (1) the carrier had to receive a request for  these services from a PSAP capable of receiving and utilizing  the data;  and, responding to the Consensus Agreement's cost  recovery provision, (2) "a mechanism for the recovery of costs  relating to the provision of such services" had to be in place.   First Report & Order, 11 FCC Rcd 18676 at p 11.  The  Commission prescribed no particular cost recovery mechanism, however, because "[n]o party dispute[d] the fundamental notion that carriers must be able to recover their costs of  providing E911 services" and because "an inflexible Federal  prescription would deny carriers and government officials the  freedom to develop innovative cost recovery solutions."  Id. at  WW 89-90.

7
The Commission also responded to comments by rural  wireless carriers that "providing ALI in rural areas may not  be technologically and economically feasible," id. at p 84, and  that carrier cost recovery mechanisms might not fully reimburse these higher implementation costs.  According to the  rural carriers, a network-based method of providing ALI  would be difficult because, given the configuration of many  rural providers' towers as a "string of pearls" along a highway, triangulation would require a large number of additional  towers and equipment.  Petitioners' Opening Br. at 17;  cf.  Third Report & Order, 14 FCC Rcd 17388 at p 23.  They also  claimed they had no alternative, because the handset-based  solution was not yet technologically available.  The Commission concluded that these problems "need not delay adoption  of the general rule" because "[i]n cases where the cost  recovery mechanism for E911 service uniquely disadvantages  a particular carrier, we will ... consider waiver requests."   First Report & Order, 11 FCC Rcd 18676 at p 84.

8
Reconsidering the First Report & Order, the Commission  reaffirmed its decision not to prescribe a particular cost  recovery mechanism.  In re Revision of the Comm'n's Rules  to Ensure Compatibility with Enhanced 911 Emergency Calling Sys., 12 FCC Rcd 22665 WW 143-146 (1997).  CTIA filed  for a second reconsideration, asking the Commission to clarify  that state and local governments could not satisfy the carrier  cost recovery requirement by asking carriers to recover their  own costs directly through charges to wireless customers, and  to mandate that the cost recovery mechanisms states and  localities adopt be "competitively neutral."  In response, and  after receiving a Joint Status Report filed by the Consensus  Agreement parties (joined by the Wireless Consumers Alliance, Inc.) revealing that Phase I implementation was proceeding more slowly than planned, the Commission issued a  Public Notice seeking information on whether the carrier cost  recovery requirement was responsible for the delay, and if so,  how to address this problem.  Public Notice, Comm'n Seeks  to Facilitate Wireless E911 Implementation and Requests a  Report, 14 FCC Rcd 11138, 11138 (1999).  Petitioners United  States Cellular Association ("US Cellular") and the Rural  Cellular Association ("RCA") submitted comments.

9
In the resulting Second Reconsideration Order, the Commission found that the "prerequisite that there be a carrier  cost recovery mechanism has not expedited the delivery of  E911 service and, if anything, has become and will continue to  be an impediment of E911 service."  In re Revision of the  Comm'n's Rules to Ensure Compatibility with Enhanced 911  Emergency Calling Sys., 14 FCC Rcd 20850 p 42 (1999)  ("Second Recons. Order").  Although twenty-seven states had  enacted some sort of Phase I cost recovery legislation, id. at  p 34, these services were "scarce, and, in most parts of the  country, nonexistent," id. at p 33.  Twenty-three states had  no Phase I cost recovery mechanism in place, and even in the  states that had enacted legislation, the Commission found  that disputes about the adequacy and administration of cost  recovery interfered with Phase I implementation.  Id. at p 36.   The Commission further agreed with APCO that, because few  state and local governments had enacted Phase II legislation,  and because the costs of doing so would likely exceed Phase I  costs, carrier cost recovery threatened to become an even  greater obstacle to Phase II implementation.  Id. at p 42.

10
To alleviate these delays, the Commission dropped the  carrier cost recovery requirement, noting that "[wireless]  carriers are not subject to rate regulation, and may adjust  their rates to reflect the cost of providing E911 services  without [Commission] intervention."  Id. at p 49.  According  to the Commission, passing costs on to consumers is "the  normal way that costs of doing business, including the costs of  complying with government-imposed requirements, are recovered in an industry free of rate regulation."  Id. at p 61.

11
Addressing comments that eliminating the carrier cost  recovery requirement would unfairly discriminate against rural carriers, the Commission concluded that the record contained insufficient evidence to support the claim that rural  carriers' implementation costs are higher, and that, even if  they are, "it is not clear that such costs should be pooled for  recovery in this competitive, deregulated industry."  Id. at  p 57.

12
Petitioners RCA and Corr Wireless Communications  ("Corr") sought further reconsideration of the Second Reconsideration Order, contending that the Commission had improperly disregarded rural carriers' concerns about cost recovery.  Corr, a rural carrier, submitted detailed information  on its Phase II implementation costs.  The reconsideration  petitions also argued that the Commission's action violates  universal service requirements under 47 U.S.C. § 254 and  amounts to an unconstitutional taking in violation of the Fifth  Amendment.  Although petitioners had not made these  claims in the proceedings leading to the Second Reconsideration Order (in fact, Corr had not even participated in those  proceedings), Corr argued that its failure was excusable  because the Commission had not given adequate notice of the  possibility that it would abandon the carrier cost recovery  requirement.  Disagreeing, and finding that commenters had  presented no "new or persuasive evidence" to justify reopening the proceedings, the Commission denied reconsideration.   In re Revision of the Comm'n's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Sys., 15 FCC Rcd  22810 p 8 (2000) ("Fifth Memorandum & Order").

13
RCA and Corr have now filed a petition for review of the  Commission's decision to deny reconsideration of the Second  Reconsideration Order.  All three petitioners also challenge  the Second Reconsideration Order itself, arguing that the  Commission's decision to eliminate the carrier cost recovery  requirement violates this circuit's cost causation principle.   See Comptel, 87 F.3d at 529.  They also argue that the  Commission acted arbitrarily and capriciously in violation of  the Administrative Procedure Act and violated both the Regulatory Flexibility Act and the takings clause of the Fifth  Amendment.

II

14
We begin with petitioners' contention that eliminating the  carrier cost recovery requirement runs afoul of this circuit's  cost causation principle.  In Comptel, we held that when the  Commission sets rates, it "must ... specifically justify any  rate differential that does not reflect cost." 87 F.3d at 529.   In that case, the Commission had established a rate structure  that essentially required large long distance carriers to subsidize smaller ones.  Concluding that "the attempt to recover  costs from [long distance carriers] that did not cause those  costs to be incurred would impart the wrong incentives," id.  at 530-31, we vacated the Commission's order.  Comptel  based its cost causation principle on both APA section  706(A)(2), which makes unlawful arbitrary and capricious  agency actions, 5 U.S.C. § 706(2)(A), and then-existing versions of Communications Act sections 201 and 202, which  presently provide that "charges ... for and in connection  with [a] communication service, shall be just and reasonable,"  47 U.S.C. § 201(b), and that "[i]t shall be unlawful for any  common carrier to make any unjust or unreasonable discrimination in charges ... for or in connection with [a] communication service," id. § 202(a).  See Comptel, 89 F.3d at 529.   Petitioners here argue that neither they nor their customers  caused the E911 costs, and therefore that Comptel prohibits  the Commission from requiring them to pay for the cost of  implementation.

15
The Commission argues that petitioners may not rely on  the cost causation principle because they failed to raise  Communications Act sections 201 and 202 in the proceedings  before the agency.  See 47 U.S.C. § 405(a)(2);  Bartholdi  Cable Co. v. FCC, 114 F.3d 274, 279 (D.C. Cir. 1997) (interpreting section 405(a)(2) as requiring that the Commission  "be afforded an 'opportunity to pass' on an issue as a condition of judicial review.").  Alternatively, the Commission argues, even if the cost causation principle were properly  raised, it applies only when the Commission is setting rates.   Petitioners concede their failure to cite Communications Act  sections 201 and 202 in the proceedings before the Commission, but claim that they have not waived reliance on these  sections because the "issue [was] necessarily implicated by  the argument made to the Commission."  Time Warner  Entm't Co. v. FCC, 144 F.3d 75, 80 (D.C. Cir. 1998).  Additionally, they argue that because the cost causation principle  also rests on the APA's prohibition against arbitrary and  capricious agency action, it applies whether or not the Commission is setting rates.  We need not resolve these disputes,  however, because even if the cost causation principle applies  outside rate-regulated industries and is properly before us,  petitioners' argument fails.

16
Petitioners claim that the "cost causer" for wireless E911 is  "clearly" the PSAP:  "E911 capabilities are not necessary to  provide wireless service.  Rather, carriers are forced to install these E911 capabilities at the instigation of and for the  use of the PSAPs in their provision of emergency services."   Petitioners' Opening Br. at 28.  Compelling carriers rather  than PSAPs to bear financial responsibility for wireless E911  implementation by passing some or all of the costs on to their  customers, petitioners claim, violates the cost causation principle.  We disagree.

17
For one thing, PSAPs are not the cost causers for wireless  E911 implementation.  As the Commission points out:

18
Wireless E911 services are provided for the benefit of all  subscribers, to enable them to call and receive prompt  attention from public safety agencies....  It is entirely  rational for subscribers to wireless services to pay  through their charges for the costs the Commission has  required the carriers to incur to upgrade their systems to  include E911 services.  Subscribers, after all, are the  ultimate beneficiaries when E911 calls go through and  public safety agencies respond.

19
Respondent's Br. at 34-35.

20
Petitioners' argument to the contrary rests on a profound  misunderstanding of PSAPs and their public safety function.   Petitioners seem to think that PSAPs are private businesses--like commercial ambulance makers, to use petitioners' own example--providing for-profit services to the public.   If this were true, petitioners might have a point.  But PSAPs  are governmental entities playing a critical role in the provision of public safety services:  in larger urban areas, they are  stand-alone government-funded organizations;  in smaller rural areas, they may be local law enforcement offices.  PSAPs  themselves derive no benefit from wireless E911 services;   rather, they provide safety services to benefit the public.   Under the Commission's Order, it is the beneficiaries of these  services who ultimately pay most if not all of the cost of  wireless E911 implementation.

21
Petitioners argue that wireless customers have not directly  requested carriers to provide them with E911 services.  This  is certainly true, but the Commission, as their governmental  representative, has made this request on their behalf.  Thus,  in a sense, the Commission itself is the cost causer--it is the  Commission's Order that requires wireless carriers to provide  E911 services in the public interest.  Whether the Commission or the wireless customer is the cost causer, we need not  decide.  What's important is that on no plausible theory are  PSAPs the cost causers:  their only role is providing 911  service.  True, a PSAP request is a precondition of a wireless  carrier's obligation to implement E911 technology, First Report & Order, 11 FCC Rcd 18676 at p 11, but the obligation  itself results from the Commission's Order, and the beneficiary of that obligation is the public.

22
The public nature of wireless E911 services distinguishes  this case from Comptel.  There, the Commission had required  some private businesses (large long-distance carriers) to subsidize others (smaller long-distance carriers).  This produced  competitive distortion in the private market, insulating some  inefficient smaller firms from the pressures of the marketplace.  Comptel, 87 F.3d at 530.  In this case, by contrast,  eliminating the carrier cost recovery requirement produces  no such inefficiencies;  it merely imposes the cost of E911  service on its beneficiaries.

23
Disagreeing, petitioners claim that eliminating the carrier  cost recovery requirement will lead to "inefficient economic  behavior, because [the government is] not required to internalize the costs of building [E911 capabilities]."  Petitioners'  Opening Br. at 29.  Petitioners apparently think that, if  governmental entities are not obliged to cover the costs of the  public benefits they impart, they may order safety services  that wireless customers do not really want, or at least do not  want at the price they must pay.  This potential "inefficiency," petitioners claim, violates the cost causation principle.

24
This argument is breathtaking.  If petitioners were correct,  the Federal Aviation Administration could not require airlines  to install safety equipment without reimbursing them for  their costs, the Environmental Protection Agency would have  to pay factories for the cost of required pollution-reducing  technology, and the Department of Transportation would  have to pay automobile manufacturers to install safety belts  and air bags.  Each of these agencies has "caused" the cost of  its regulatory safety requirements in the same way the  Commission has caused the cost of wireless E911 implementation.  Yet it is ludicrous to suggest that government cannot  pass these costs along to regulated entities.

25
Attempting to distinguish these sorts of safety regulations  from the Commission's action in this case, petitioners' counsel  observed at oral argument that the Commission has chosen to  implement its wireless E911 mandate not directly, but  through PSAPs.  But the manner in which the Commission  chooses to implement its regulations is irrelevant.  The fact  remains that the Commission has imposed upon wireless  carriers an obligation to implement a service in the public  interest.  Whether it does this directly or with the cooperation of other governmental safety organizations, it has no  obligation to compensate carriers for their costs.

26
If, as petitioners fear, the government improperly assesses  the public interest--for instance, if consumers would rather  pay less for wireless phones without E911 or cars without  safety belts--the remedy is political, not judicial.  Granting  petitioners the relief they seek, moreover, would not necessarily have any impact at all on this so-called inefficiency.  If  the carrier cost recovery requirement were still in place, a  state or local government could decide to place a tariff on  wireless service exactly equal to the amount carriers would  have to raise rates to cover the costs of implementation.  At  oral argument, petitioners' counsel conceded that such a tariff  would not violate the cost causation principle (if the Commission could in some way be held responsible for it), because  government would bear the costs of wireless E911 implementation.  Yet any "inefficiency" caused by requiring carriers to  pass implementation costs along to their customers would  result equally from such a state or local tariff.

27
Petitioners claim that eliminating the carrier cost recovery  requirement produces another competitive distortion:  "because rural carriers' costs of implementing E911 capabilities  are higher per customer than those of predominantly urban  carriers, the [Commission's] rule introduces artificial, [Commission]-created competitive inequalities between rural and  urban carriers."  Petitioners' Opening Br. at 30.  We are  skeptical, however, that this claim has anything at all to do  with Comptel's cost causation principle.  Petitioners do not  argue (nor could they) that the Commission has required  rural carriers to subsidize costs caused by urban ones.  Instead, petitioners seem to be arguing that, like the rate  structure invalidated in Comptel, the Commission's elimination of the carrier cost recovery requirement is arbitrary and  capricious because it distorts the competitive marketplace.   But the Commission found insufficient evidence to conclude  that rural carriers' implementation costs are higher.  Second  Recons. Order, 14 FCC Rcd 20850 at p 57.  Even assuming  that they are, however, it is because (as petitioners recognize)  rural carriers do business in areas with lower population  density.  And again, because a cost recovery requirement  could result in tariffs equal in amount to carriers' increased  rates, granting petitioners the relief they seek would not  necessarily alleviate any inequality.

28
Petitioners presumably hope that a government cost recovery mechanism would pool wireless E911 costs, distributing  them equally among rural and urban carriers.  But such  pooling, the Commission found, may itself distort the competitive marketplace:  to preserve competition, carriers ought to  be responsible for the potentially greater costs of doing  business in rural areas.  Id.  Petitioners' solution may thus  create exactly the distortion they seek to avoid.

III

29
This brings us to petitioners' other APA challenges.  They  first argue that the Commission failed to consider alternative  causes of the delay in wireless E911 implementation.  In  particular, petitioners point to three alternatives suggested  by commenters:  lack of liability protection for wireless carriers and PSAPs;  Local Exchange Carriers' failure to fulfil  their obligations;  and disputes between carriers and PSAPs  over which technology to use in implementing wireless E911.   The Commission responds that it found the carrier cost  recovery requirement to be a significant cause of delay,  Second Recons. Order, 14 FCC Rcd 20850 at p 38, and that  even if other causes exist, it need not address all wireless  E911 implementation problems at the same time.  We agree.   As we said in National Association of Broadcasters v. FCC,  agencies need not address all problems "in one fell swoop."   740 F.2d 1190, 1207 (D.C. Cir. 1984) (citing Williamson v. Lee  Optical Co., 348 U.S. 483, 489 (1955) ("[R]eform may take  place one step at a time, addressing itself to the phase of the  problem which seems most acute to the [regulatory] mind.")).   In any event, and contrary to petitioners' claim, the Commission did address these alternative explanations, finding that  problems caused by lack of liability protection were mooted  by legislation granting such protection, Second Recons. Order, 14 FCC Rcd 20850 at p 9;  that the Telecommunications  Act of 1998 and existing regulations already require Local  Exchange Carriers to fulfill their obligations, id. at p 8;  and  that the Commission is available to mediate technology disputes between PSAPs and carriers, id. at p 7.

30
Petitioners next argue that the Commission failed to consider alternative solutions to the problems posed by the carrier cost recovery requirement, including drafting more  specific instructions and guidelines on the most disputed cost  recovery issues and permitting carriers to file federal tariffs  to recover their costs.  As the Commission points out in its  brief, however, it gave reasons for rejecting both alternatives.   Respondent's Br. at 25-27 (citing Second Recons. Order, 14  FCC Rcd 20850 at WW 49-52).  In reply, petitioners, apparently missing this section of the Commission's brief, not only  reassert that the Commission "simply ignored these proposals," Petitioners' Reply Br. at 14, but also make no effort to  argue what they must:  that the Commission's reasons for  rejecting these alternatives were inadequate or unsupported  by record evidence.  See Comm. for Cmty. Access v. FCC, 737 F.2d 74, 83 (D.C. Cir. 1984).

31
Petitioners argue that the Commission's decision to eliminate the carrier cost recovery requirement finds no support  in the record because "none of the parties ... (with the  exception of APCO ... ) recommended the elimination of  carrier cost recovery."  Petitioners' Opening Br. at 37.  But  the Commission has no obligation to take the approach advocated by the largest number of commenters, Natural Res.  Def. Council v. EPA, 822 F.2d 104, 122 n.17 (D.C. Cir. 1987);   indeed, the Commission may adopt a course endorsed by no  commenter.  The Commission's only responsibilities are to  respond to comments, 5 U.S.C. § 553, and to choose a reasonable approach backed up by record evidence, Comm. for  Cmty. Access, 737 F.2d at 83.

32
Next, petitioners argue that, in eliminating the cost recovery requirement, the Commission "dramatically" departed  from precedent without explanation.  Petitioners' Opening  Br. at 38.  In particular, they argue, the Commission gave no  reason for abandoning its goal of achieving parity in wireless  and landline services, so these services can "truly be viewed  as substitute[s] by American consumers."  In re Revision of  the Comm'n's Rules to Ensure Compatibility with Enhanced  911 Emergency Calling Sys., 14 FCC Rcd 10954 p 4 ("Second  Report & Order").  Because landline carriers typically recover E911 costs by obtaining state authorization to add a  surcharge to customers' bills, petitioners claim that to achieve  parity between landline and wireless phone service, wireless  E911 should be funded through a similar state tariff.  But the  Commission's apparent focus in achieving wireless and landline parity is not on making funding methods identical, but on  equalizing services available to consumers:  one of the Commission's parity goals is to ensure that consumers have access  to E911 services whether they use landline or wireless  phones.  Second Report & Order, 14 FCC 10954 at p 4 ("We  expect to continue to explore ways to improve wireless 911  service because the improvement of wireless 911 is an essential element in applying wireless communications to improving public safety and hastening the day when wireless and  [landline] can truly be viewed as substitute services by American consumers.").  Because the Commission found that carrier cost recovery was impeding wireless E911, its action  furthers, not frustrates, the goal of wireless/landline parity.   And as the Commission points out, the difference in funding  mechanisms reflects an important difference in the way each  service is regulated:  landline carriers are rate-regulated;   wireless carriers are not.  Because landline carriers are  unable to pass E911 implementation costs along to customers,  as wireless carriers can, the Commission had more than  sufficient reason to choose a different E911 implementation  scheme for wireless carriers.

33
Finally, petitioners argue that the Commission's analysis of  the impact of its Order on rural carriers was arbitrary and  capricious.  In response to comments that eliminating the  carrier cost recovery requirement would unduly burden rural  carriers, the Commission found insufficient record evidence to  support commenters' claims that the costs of wireless E911  implementation in rural areas would, in fact, be higher.   Second Recons. Order, 14 FCC Rcd 20850 at p 57.  "While  some costs will likely be higher in such areas," the Commission stated, "other costs may actually be lower, such as  construction costs or other infrastructure needs."  Id.  In its  brief in this court, the Commission notes that neither RCA  nor US Cellular submitted any specific financial data to  support their claims of higher costs.  Without specific evidence, the Commission was entitled to conclude that petitioners failed to demonstrate that rural carriers would disproportionately suffer from eliminating the carrier cost recovery  requirement.

34
According to petitioners, Corr, a rural carrier, did supply  specific financial data.  But Corr submitted this evidence for  the first time in its petition for reconsideration of the Second  Reconsideration Order.  Refusing to reopen the proceeding,  Fifth Memorandum & Order, 155 FCC Rcd 22810 at p 30, the  Commission found that Corr had adequate notice of the  possibility that the Commission would drop the carrier cost  recovery requirement, and that Corr had not submitted "new  or persuasive evidence that [the Commission's] conclusions  were in error," id. at p 8.  "Where ... the Commission  refuses to reopen a proceeding, what is reviewable is merely  the lawfulness of the refusal," ICC v. Bhd. of Locomotive  Eng'rs, 482 U.S. 270, 278 (1986) (emphasis omitted)--in this  case, the Commission's determination that adequate notice  had been given and its finding that Corr's data did not qualify  as new evidence requiring reconsideration, see Bowman  Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 295 (1974) (listing cases discussing agency error in failing  to reopen proceedings to consider new evidence).  Because  petitioners offer no challenge to this part of the Commission's  decision, we lack jurisdiction to consider the implications of  Corr's cost data on the Second Reconsideration Order, as  well as other challenges to that order contained in the rejected reconsideration petitions.  Bhd. of Locomotive Eng'rs, 482 U.S. at 282.

IV

35
The Regulatory Flexibility Act obliges federal agencies to  assess the impact of their regulations on small businesses.   See 5 U.S.C. §§ 601-612.  Petitioners claim that the Commission failed to fulfill the RFA's requirement to file a final  regulatory flexibility analysis ("FRFA") containing

36
a description of the steps the agency has taken to  minimize the significant economic impact on small entities consistent with the stated objectives of applicable  statutes, including a statement of the factual, policy, and  legal reasons for selecting the alternative adopted in the  final rule and why each one of the other significant  alternatives to the rule considered by the agency which  affect the impact on small entities was rejected.

37
5 U.S.C. § 604(a)(5).  Purely procedural, however, RFA section 604 requires nothing more than that the agency file a  FRFA demonstrating a "reasonable, good-faith effort to carry  out [RFA's] mandate."  Alenco Communications, Inc. v.  FCC, 201 F.3d 608, 625 (5th Cir. 2000).  Petitioners dispute  neither that the Commission included a FRFA in its Second  Reconsideration Order, 14 FCC Rcd 20850, 20901 app. C, nor  that this statement addresses all subjects required by the  RFA.  Instead, petitioners argue that the Commission's analysis of the impact its action would have on small carriers and  its dismissal of alternatives was arbitrary.  But as we have  already seen, the Commission's analysis of the impact on  small rural carriers, supra at 88, and its reasons for  dismissing alternatives to eliminating the carrier cost recovery requirement, supra at 86-87, were entirely reasonable.

38
Petitioners also argue that the Commission failed to issue  an initial regulatory flexibility analysis as required by RFA  section 603.  5 U.S.C. § 603.  Not only did petitioners fail to  raise this argument until their reply brief, see Corson &  Gruman Co. v. NLRB, 899 F.2d 47, 50 n.4 (D.C. Cir. 1990)  ("We require petitioners and appellants to raise all of their  arguments in the opening brief to prevent 'sandbagging' of  appellees and respondents and to provide opposing counsel  the chance to respond."), but the RFA expressly prohibits  courts from considering claims of non-compliance with section  603, Allied Local & Reg'l Mfrs. Caucus v. EPA, 215 F.3d 61,  79 (D.C. Cir. 2000).

V

39
Because petitioners' remaining claims--that the Commission's action violates the universal service requirements of the  Communications Act, 47 U.S.C. § 254, and the takings clause  of the Fifth Amendment, U.S. Const. amend. V--were raised  only in petitions for reconsideration of the Second Reconsideration Order, thus suffering the same defects as Corr's  submission of cost data, see supra at 88, we lack jurisdiction to consider them. We therefore deny the petition for  review in its entirety.

40
So ordered.