WPC? 2MBVRKZ3|j y.X80,ɒX\  P6G;P"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+999999S9S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN\4  pG;6jC:,<̃Xj9 xOG;X X- X *  X-w  #XP PynXP#Federal Communications Commission`(# FCC 97336 ă  yxdddy *  Њ+2 Before the w Federal Communications Commission  X-Washington, D.C. 20554 ă  X-In the Matter of hh@)  Xv-x` `  hh@)hpp  xx 0(#(#X X_-Silver Star Telephone Company, Inc.@)hCCB Pol 971  XH-Petition for Preemption hh@)h  X1-and Declaratory Ruling @)h  X - ^  MEMORANDUM OPINION AND ORDER ă  X -xAdopted: September 23, 1997@hppReleased: September 24, 1997(#(#X By the Commission:  Xb-  TABLE OF CONTENTS ă Paragraph L"    X(#PXxPI. INTRODUCTION p>"(#L 1 XxPII. BACKGROUND p>"(#L 6  X-XxX` ` xA.` ` Silver Star's Efforts to Obtain a CPCN for the Afton Exchange ` p>"(#L 6  X-XxX` ` X ` ` 1. The Wyoming Commission's Final Order for the Sale of Telephone Exchanges p>"(#L 7  X|-XxX` ` X ` ` 2. The Wyoming Commission's Denial Order p!(#F 11  Xg-XxX` ` xB.` ` The Wyoming Telecommunications Act of 1995 ` p"(#I 15  XP-XxX` ` xC.` ` Section 253 of the Telecommunications Act of 1996 ` p"(#I 17 XxPIII. POSITIONS OF THE PARTIES p"(#I 18  X -XxX` ` xA.` ` Silver Star ` p"(#I 18  X-XxX` ` xB.` ` The Commenters ` p"(#I 24 XxPIV. DISCUSSION p"(#I 34 XxPV. ORDERING CLAUSE p"(#I 48 "j$,D'D'CC(#"Ԍ X-M I. INTRODUCTION ׃  X-x1.` ` On January 16, 1997, Silver Star Telephone Company, Inc. (Silver Star) filed  X-the abovecaptioned petition (Petition) asking the Commission to: (i) preempt the Order  X-Denying Concurrent Certification issued by the Wyoming Public Service Commission  X-(Wyoming Commission) on December 4, 1996,k^R {O -ԍxApplication of Silver Star Telephone Company, Inc. for a Certificate of Public Convenience and  {O-Necessity to Service the Afton Local Exchange Area, Order Denying Concurrent Certification, Docket No. 70006 {O-TA9624 (Wyoming Commission Dec. 4, 1996) (Denial Order).k and (ii) direct the Wyoming Commission to grant Silver Star a Certificate of Public Convenience and Necessity (CPCN) for the Afton,  Xc-Wyoming local exchange area. The Wyoming Commission's Denial Order rejected Silver Star's application for a "concurrent" CPCN to provide local exchange service in competition with the incumbent certificated local exchange carrier (LEC) in the Afton, Wyoming local  X -exchange area.G\ R {O-ԍxIn the parlance of the Wyoming Telecommunications Act of 1995, Wyo. Stat. Ann. 3715101 et  {O-seq., a "concurrent" CPCN is a CPCN granted to a LEC to provide service in an area already served by an incumbent LEC. Wyo. Stat. Ann. 3715201.G Silver Star's Petition asserts that the Wyoming Commission's Denial Order  X -violates section 253(a) of the Communications Act of 1934, as amended,$ R yO-ԍx47 U.S.C. 253(a). Section 253 was added to the Communications Act of 1934 (Communications Act  {O-or Act) by the Telecommunications Act of 1996 (1996 Act), Pub. L. No. 104104, 110 Stat. 56, codified at 47  {O`-U.S.C. 151 et seq. All citations herein to the 1996 Act will be to the 1996 Act as codified in Title 47 of the United States Code. falls outside the  X -scope of authority reserved to the Wyoming Commission by section 253(b) of the Act,G R yO-ԍx47 U.S.C.253(b).G and thus satisfies the requirements for preemption by the Commission pursuant to section 253(d)  X -of the Act.G R yO-ԍx47 U.S.C.253(d).G  X-x2.` ` The Commission placed Silver Star's Petition on public notice on January 21,  X-1997. R {OP-ԍxPleading Cycle Established on Silver Star Telephone Company, Inc.'s Petition for Preemption and  {O -Declaratory Ruling, Public Notice, File No. CCB Pol 971, DA 97143 (rel. Jan. 21, 1997).  The Association for Local Telecommunications Services (ALTS), U S WEST Communications, Inc. (U S WEST), and Union Telephone Company (Union) filed comments, and Silver Star, ALTS, RT Communications, Inc. (RTC), and TCT West, Inc. and Tri County"Sz,D'D'CCg" Telephone Exchange, Inc. (collectively, TCT) filed replies. Moreover, local government  X-officials and bodies,,XR yOb-ԍxThese are: the Lincoln County, Wyoming Board of County Commissioners (Lincoln County Commission), Lincoln County, Wyoming School District No. 2 (Lincoln County Schools), and the Mayor and Town Council of the Town of Afton, Wyoming (Afton Government)., local businesses,R yO-ԍxThese are Tenupah, Schwab Mortuary (Schwab), Polyguard and Co. (Polyguard), Maverik County Stores, Inc. (Maverik), and Star Valley Hospital (Hospital). and local residentsw @R yO-ԍxThese are Dusty L. Skinner, Winston G. Allred, and Elmo H. Newswander.w filed letters supporting the Petition.  X-x3.` ` On April 22, 1997, Silver Star filed a pleading amending its Petition (Amended Petition). The Amended Petition seeks preemption of certain provisions of the Wyoming  X-Telecommunications Act of 1995, R {O-ԍxWyo. Stat. Ann. 3715101 et seq. (1996). The Amended Petition seeks preemption of 37-15-201(c) through (f). as well as preemption of the Denial Order, because those  Xx-statutory provisions were "the basis of [the] Wyoming PSC's decision."G x* R yOS-ԍxAmended Petition at 2.G On April 24, 1997,  Xa-the Commission placed Silver Star's Amended Petition on Public Notice.  a R {O-ԍxSupplemental Pleading Cycle Established for Silver Star Telephone Company, Inc.'s Amended Petition  {O-for Preemption and Declaratory Ruling, Public Notice, File No. CCB Pol 971, DA 97875 (rel. Apr. 24, 1997).  AT&T Corp. (AT&T) and Union filed comments, and Silver Star filed a reply.  X -x4.` ` Neither the State of Wyoming nor the Wyoming Commission filed comments, formal or informal, at any stage of this proceeding. By letter dated May 30, 1997, however,  X -Silver Star filed a permissible ex parte submission and attached a Memorandum dated February 27, 1997 from the Office of the Attorney General of the State of Wyoming to the Wyoming Commission. This Memorandum of the Wyoming Attorney General is an "Opinion on preemption issues created by the enactment of the Federal Telecommunications Act of  X-1996."9 \R {O[-ԍxSee Letter dated May 30, 1997 from Dennis L. Sanderson, counsel for Silver Star, to William F. Caton, Secretary, Federal Communications Commission, CCB Pol 971 (filed June 3, 1997) and Attachment thereto  {O-(Attorney General Opinion).9  Xf-x5.` ` For the reasons described below, we grant Silver Star's Amended Petition in  XO-part and deny it in part. Specifically, we preempt the Wyoming Commission's Denial Order  X:-and the section of the Wyoming Telecommunications Act of 1995 on which that Order is  X%-based (i.e., Wyo. Stat. Ann. 3715201(c)), but we decline to preempt other statutory provisions or to direct the Wyoming Commission to grant Silver Star's CPCN application. We expect, however, that upon a request from Silver Star, the Wyoming Commission will": ,D'D'CC" expeditiously reconsider Silver Star's application in a manner consistent with the Communications Act and this Memorandum Opinion and Order.  X-XxPxP(#g II. B ACKGROUND ׃  X-x A.` ` Silver Star's Efforts to Obtain a CPCN for the Afton Exchange   X_-x6.` ` Silver Star is an incumbent LEC certificated by the Wyoming Commission to provide local exchange telecommunications services in Lincoln County in western Wyoming. Its exchange boundary is approximately eight miles from the Town of Afton, Wyoming. The  X -Afton exchange area serves approximately 2336 access lines.c R {O -ԍxSee Petition at 2; U S WEST Comments at 23.c  X -XxX` ` 1.X The Wyoming Commission's Final Order for the Sale of Telephone  X -Exchanges (#  X -x7.` ` The Wyoming Commission determined in 1993 that U S WEST provided inadequate telephone service to subscribers in many of its rural telephone exchanges in  Xy-Wyoming.(yZR {O-ԍxSee Union Telephone Company, Inc. v. Wyoming Public Service Commission, 910 P.2d 1362, 1364  {ON-(Wyo. 1996); Inquiry of the Public Service Commission into Telecommunications Service Capabilities and Needs  {O-in Wyoming, Initial Report on Telecommunications Service in Wyoming with a View Toward Tomorrow,  {O-General Order No. 67 (Wyoming Commission Sept. 24, 1993) (General Order 67). The Wyoming Commission subsequently ordered U S WEST to upgrade its  Xb-Wyoming telephone exchanges.bJR {O]-ԍxSee Union v. Wyoming Commission, supra; General Order 67. U S WEST chose to sell twentyseven of its most rural  XK-exchanges rather than make the necessary upgrades to those exchanges.&KR {O-ԍxSee Union v. Wyoming Commission, supra; Joint Application of U S WEST Communications, Inc., and  {O-TriCounty Telephone Association, Inc., et al., Final Order for the Sale of Telephone Exchanges at 1314, Docket Nos. 70000TA93150, 70000TA93151, 70000TA93152, 70000TA93139, 70001TA937, 70006TA93 {O4-12, 70008TA9310, 70011TA938 (Wyoming Commission Feb. 18, 1994) (Sale Order). In 1993, U S WEST agreed to sell some of those exchanges to TCT's parent company (Tri County Telephone Association, Inc.), others to RTC's parent company (Range Telephone Cooperative,  X-Inc.), and the remainder including the Afton exchange to Union.O R {O!-ԍxSee Sale Order at 1215.O In doing so, U S  X-WEST rejected a bid by Silver Star to purchase the Afton exchange.]\ R {O#-ԍxSee Sale Order at 1415, 10818.] ",D'D'CC"Ԍ X-x8.` ` U S WEST and each of the three purchasers filed with the Wyoming Commission joint applications for approval of the sales and for the requisite amendments to  X-their various CPCNs.^R {OK-ԍxSee Sale Order. Absent such approvals and amendments, the purchasing entities could not lawfully  {O-exercise any rights associated with the telephone exchanges to be purchased. See generally Union v. Wyoming  {O-Commission, 910 P.2d at 1364; Wyo. Stat. Ann.  372205 (Cum. Supp. 1995) The Wyoming Commission consolidated those applications in one  X-proceeding.FR {OZ-ԍxSee Sale Order.F Silver Star intervened in that proceeding and sought an amendment to its CPCN  X-that would allow it, rather than Union, to serve the Afton exchange.cR {O -ԍxSee Sale Order at 1415, 10818.c  Xv- x9.` ` The Wyoming Commission issued its order in that proceeding on February 18,  X_-1994.F_R {O"-ԍxSee Sale Order.F The Wyoming Commission granted all but one of the requested sale approvals and CPCN amendments, with certain conditions not relevant here. The disapproved sale and amendment concerned the Afton exchange. The Wyoming Commission concluded that Silver Star could provide higher quality service to the Afton exchange than Union. Consequently, the Wyoming Commission: (i) denied the joint application of U S WEST and Union to issue certificate authority to Union to serve the Afton exchange; (ii) granted Silver Star's application for amendment of its CPCN to authorize service to the Afton exchange; and (iii) directed U S WEST and Silver Star to negotiate an agreement to sell the Afton exchange to  X -Silver Star rather than to Union._ R {O-ԍxSee Sale Order at 106118, 13738._ Moreover, the Wyoming Commission directed all of the purchasing parties "to complete the upgrade of the purchased facilities to the modern service  Xy-level required by the Commission within a threeyear period from the date of this Order."y6 R {O`-ԍxSale Order at 140. See id. at 10607, 133. The "modern service level required by the Commission" included: (a) equal access, including 10XXX, to all interexchange carriers, where cost effective; (b) single party service to all those who desire it; (c) flat rated or measured service options; (d) touchtone dialing; (e) adequate Private Branch Exchange trunks(ing); (f) provision of 911; (g) available custom calling features, call waiting etc.;  {O-(h) minimum 2400 baud transmission capability; and (i) digital connectivity. Id. at 9899. The Wyoming Commission observed that "the utility facilities which U S WEST proposes to sell are outmoded and substandard for current service requirements of its customers, and do not meet the statutory requirements that service facilities must be adequate and  X-efficient...."NR {O#-ԍxSale Order at 98.N  X- x 10.` ` U S WEST and Union appealed parts of the Wyoming Commission's Sale  X-Order, arguing, inter alia, that the Wyoming Commission lacked authority to invalidate U S"|,D'D'CC" WEST's sale of the Afton exchange to Union and to direct the sale of that exchange to Silver  X-Star.dR {Ob-ԍxSee Union v. Wyoming Commission, supra.d Approximately two years later, in February 1996, the Supreme Court of Wyoming agreed with U S WEST and Union. The Wyoming Supreme Court reversed the grant of authority to Silver Star to serve the Afton exchange, reversed the direction to U S WEST to sell the Afton exchange to Silver Star, and remanded the case to the Wyoming Commission  X-for further proceedings consistent with the Court's opinion.^ZR {O-ԍxSee Union v. Wyoming Commission, supra.^ On remand, the Wyoming Commission approved the sale of the Afton exchange to Union and denied Silver Star's  X_-application to amend its CPCN to serve the Afton exchange.b\_R {O -ԍxSee Joint Application of U S WEST Communications, Inc., and TriCounty Telephone Association, Inc.,  {O -et al., Order on Remand, Docket Nos. 70000TA93150, 70000TA93152, 70006TA9312, 70008TA9310,  yO -70011TA938 (Wyoming Commission March 27, 1996). b  X1<x` ` 2. The Wyoming Commission's Denial Order   X - x 11.` ` On February 27, 1996, Silver Star filed with the Wyoming Commission an application requesting CPCN authority to provide local exchange telecommunications service  X -in the Afton local exchange in competition with the incumbent certificated provider.M R {O-ԍxSee Denial Order at 2.M Union and U S WEST opposed Silver Star's application. They relied on a provision of the Wyoming Telecommunications Act of 1995 (Wyoming Act) that, under certain circumstances, insulates qualifying local exchange carriers from competition (the rural incumbent protection  Xz-provision).|zR {O-ԍxSee Wyo. Stat. Ann. 3715201(c); Denial Order at 2, 610.| As more fully described below,S z4 R {O_-ԍxSee Part II(B), infra.S that provision allows a LEC that (i) was the incumbent certificated provider in an area as of January 1, 1995, and (ii) has 30,000 or fewer access lines in the State of Wyoming, to block the grant of a CPCN to any carrier seeking to provide local exchange service in competition with the incumbent LEC until at least January  X-1, 2005.]! R {O -ԍxSee Wyo. Stat. Ann. 3715201(c).]  X- x 12.` ` The disposition of Silver Star's application hinged on whether U S WEST or Union was the incumbent certificated LEC for the Afton exchange as of January 1, 1995. If Union was the incumbent certificated LEC, the rural incumbent protection provision would require the Wyoming Commission to grant Union's opposition to Silver Star's application, because Union had fewer than 30,000 access lines in Wyoming; if it was U S WEST, the"X !,D'D'CC~" rural incumbent protection provision would not allow U S WEST (or any other LEC) to veto Silver Star's application, because U S WEST had more than 30,000 access lines in  X-Wyoming.M"R {OK-ԍxSee Denial Order at 6.M  X- x 13.` ` On December 4, 1996, the Wyoming Commission held that Union, not U S WEST, was the incumbent certificated provider for the Afton exchange as of January 1,  Xv-1995.Z#vZR {O -ԍxSee Denial Order at 1014.hhZ Accordingly, as required by the rural incumbent protection provision, the Wyoming Commission implemented Union's veto and denied Silver Star's application for certificate authority to provide local exchange telecommunications service in the Afton local exchange in competition with Union:  X -XxThe Commission concludes based upon the clear language of W.S.3715 X -201(c) and the exercise by Union of the certificate protection provided for in  X -subparagraph (iii) that the Commission must deny, based upon Wyoming law, the concurrent certificate application of Silver Star to provide local exchange  X -service to the Afton, Wyoming, exchange.t$ R {OJ-ԍxDenial Order at 14 (emphasis added). See id. at 1314.t  The Wyoming Commission also stated that, "[i]n deciding as we do, we do not express any opinion of the rights which any party may have or come to have under the federal  XQ-Telecommunications Act of 1996."J%Q~R {O-ԍxDenial Order at 14.J  X#- x 14.` ` On January 2, 1997, Silver Star filed a petition for judicial review of the  X -Denial Order in the District Court of the First Judicial District in and for the County of  X-Laramie, State of Wyoming.O&R {O-ԍxSee Petition, Exhibit B.O That petition for judicial review apparently remains pending to date.  X-x B.` ` The Wyoming Telecommunications Act of 1995   X- x15.` ` The Wyoming Telecommunications Act of 1995 became law on March 1, 1995. In a provision entitled "Legislative Intent," the Wyoming Act describes its purpose as follows: "?&,D'D'CC"ԌXxIt is the intent of this act to ensure essential telecommunications services are universally available to the citizens of this state while encouraging the development of new infrastructure, facilities, products and services....It is the intent of this act to provide a transition from rate of return regulation of a monopolistic telecommunications industry to competitive markets and to maintain affordable essential telecommunications services through the transition  Xv-period....O'vR yO-ԍxWyo Stat. Ann. 3715102.O   XH- x16.` ` As mentioned above, the Wyoming Act contains a provision Wyo. Stat. Ann. 3715201(c) that, under certain circumstances, allows small incumbent LECs to decide  X -whether they will face competition before January 1, 2005.V( XR {O# -ԍxSee Part II(A)(2), supra.V This rural incumbent protection provision requires the Wyoming Commission to honor a qualifying LEC's veto of a potential competitor's CPCN application: XxPrior to January 1, 2005, in the service territory of a local exchange telecommunications company with thirty thousand (30,000) or fewer access lines in the state, the commission shall, after notice and opportunity for hearing, issue a concurrent certificate or certificates of public convenience and necessity  Xb-to provide local exchange service, only if the application clearly shows the applicant is willing and able to provide safe, adequate and reliable local exchange service to all persons within the entire existing local exchange area  X-for which certification is sought and the incumbent local exchange service  X-provider: (i) Consents to a concurrent certificate; or (ii) Is unable or unwilling to provide the local exchange service for which the concurrent certificate is  X-sought; or (iii) Fails to protest the application for the certificate after notice and  X-opportunity for a hearing; or (iv) Has applied for and received a concurrent certificate to provide competitive local exchange telecommunications services in any area of this state; or (v) On or after the effective date of this chapter, begins to provide oneway transmission of radio or video signals through terrestrial, nonsatellite local distribution facilities in an area with existing  XN-service.^)XNR yO -ԍxWyo. Stat. Ann. 3715201(c) (emphasis added). The rural incumbent protection provision "appl[ies] only to telecommunications companies in existence prior to January 1, 1995, and which...have fewer than thirty thousand (30,000) access lines in the state." Wyo. Stat. Ann. 3715201(f).^  Moreover, incumbent LECs protected by the rural incumbent protection provision may extend that protection for an additional three years, up to and including January 1, 2008, if: " ),D'D'CC<"ԌXxthe commission finds that the applicant has demonstrated by clear and convincing evidence that it has yet to substantially recover its investment for upgraded services ordered by the commission or for which it has committed as  X-of [March 1, 1995]....S*R yO4-ԍxWyo. Stat. Ann. 3715201(d).S  Once the protection of the rural incumbent protection provision lapses, the Wyoming Commission: Xxshall...issue a concurrent certificate or certificates of public convenience and necessity to provide local exchange service, if the applicant has a sufficient plan under which it will provide service to the entire local exchange area within five (5) years, or a longer time period as determined by the commission, of the date upon which the applicant first begins to provide local exchange service to  X -the area for which the concurrent certificate is sought.S+ XR yO-ԍxWyo. Stat. Ann. 3715201(e).S   X -x C.` ` Section 253 of the Telecommunications Act of 1996   X-  Xy-x17.` ` Through the 1996 Act, Congress soughtPROCOMPET1 to establish "a procompetitive, de Xb-regulatory national policy framework" for the United States telecommunications industry.,bR {O-#X\  P6G;ɒP#эxPROCOMPT2S. Conf. Rep. No. 104230, 104th Cong., 2d Sess., 1 (1996) (Conference Report). It also sought "to accelerate deployment of advanced telecommunications services to all  X4-Americans by opening all telecommunications markets to competition."g-4zR {O_-#X\  P6G;ɒP#эxId.g To accomplish those objectives, the 1996 Act, among other things, amended the Communications Act by  X-adding new section253. Section253(d))." R yO-#X\  P6G;ɒP#эx47 U.S.C. 253(d). Section 253(d) states: "If, after notice and an opportunity for public comment, the Commission determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b), the Commission shall preempt the enforcement of such  {O-statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency." Id.) directs the Commission to preempt, to the extent necessary, the enforcement of any State or local statute, regulation, or legal requirement that is proscribed by section253(a) and is outside the authority reserved to State and local  X-governments by section 253(b)./  R yOh#-ԍxSection 253(c) also reserves certain authority to State and local governments. 47 U.S.C. 253(c). That subsection provides: "Nothing in this section affects the authority of a State or local government to manage the public rightsofway or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral basis, for use of public rightsofway on a nondiscriminatory basis, if the compensation"%.,D'D'%"  {O-required is publicly disclosed by such government." Id. No party claims, however, that section 253(c) applies in this matter. Thus, this Memorandum Opinion and Order does not address section 253(c). Section253(a) provides that:" "/,D'D'CC"ԌXx[n]o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any  X-entity to provide any interstate or intrastate telecommunications service.n0"R yO-#X\  P6G;ɒP#эx47 U.S.C. 253(a).n  Section253(b) provides that nothing in section253: Xxshall affect the ability of a State to impose, on a competitively neutral basis and consistent with section 254, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued  X1-quality of telecommunications services, and safeguard the rights of consumers.n11R yO-#X\  P6G;ɒP#эx47 U.S.C. 253(b).n   X -  III. POSITIONS OF THE PARTIES ׃  X -x A.` ` Silver Star   X -x18.` ` Silver Star argues that because the Denial Order precludes Silver Star from  X-lawfully providing local exchange service in the Afton exchange, the Denial Order violates section 253(a)'s proscription of State legal requirements that prohibit the ability of any entity  Xf-to provide any telecommunications service. According to Silver Star, the Denial Order, like  XQ-the franchise denials that our Classic Telephone Decision12QBR {OD-ԍxClassic Telephone, Inc. Petition for Preemption, Declaratory Ruling and Injunctive Relief, Memorandum  {O-Opinion and Order, File No. CCB Pol 9610, 11 FCC Rcd 13082 (1996) (Classic Telephone Decision), petition  {O-for emergency relief, sanctions, and investigation pending (filed Dec. 6, 1996), petition for review held in  {O-abeyance, City of Bogue, Kansas and City of Hill City, Kansas v. FCC, No. 961432 (D.C. Cir. Jan. 14, 1997)  {Ol-(denying petitioner's motion for writ of prohibition and sua sponte holding petition in abeyance), petition for  {O6-emergency relief, sanctions, and investigation denied, FCC 97335, (rel. Sept. 24, 1997).1 preempted, runs afoul of section  X<-253(a) by barring all but one entity from providing a certain telecommunications service.j3< R {O-ԍxSee Petition at 9, 1113; Silver Star Reply at 45.j  X%-Silver Star also contends that, even though the Denial Order arguably may pertain only to  X-intrastate services, section 2(b) of the Communications ActG4X R yO#-ԍx47 U.S.C. 152(b).G does not prevent the Commission  X-from preempting the Denial Order, because section 253 expressly empowers the Commission" 4,D'D'CC" to preempt State and local laws that restrict the provision of intrastate as well as interstate  X-services.J5R {Ob-ԍxSee Petition at 14.J  X-x19.` ` Silver Star further argues that section 253(b) does not save the Denial Order from preemption, because: (i) section 253(b) applies only to postcertification "requirements"  X-attendant to providing service, not to bans on service altogether;M6ZR {O-ԍxSee Petition at 1011.M (ii) the Denial Order makes no finding that its result is "necessary" to accomplish any of the objectives listed in section  Xc-253(b);g7cR {O -ԍxSee Petition at 1011; Silver Star Reply at 46.g (iii) the Sale Order's finding that Silver Star's ability to serve the Afton exchange exceeded Union's ability to do so means that preventing Silver Star from serving the Afton  X7-exchange could not possibly be "necessary" within the meaning of section 253(b);M87~R {Of-ԍxSee Petition at 1011.M (iv) the  X -Denial Order is not "competitively neutral" under section 253(b) because it favors the  X -incumbent LEC over new entrants;R9 R {O-ԍxSee Silver Star Reply at 4.R and (v) neither the Wyoming Commission nor the  X -Wyoming Attorney General has participated in this proceeding to defend the Denial Order or  X -the Wyoming Act as either "competitively neutral" or "necessary" under section 253(b).r: R {O2-ԍxSee Silver Star Reply at 1; Silver Star Supp. Reply at 13.r  X -x20.` ` Silver Star relies on the Attorney General Opinion as support for its position  X-regarding section 253(b). The Attorney General Opinion responds to, inter alia, the following question from the Wyoming Commission: "Is the [Wyoming Act], specifically Wyo. Stat.  Xp-3715201, preempted by the [Communications Act]?" The Attorney General Opinion appears to answer that question in the affirmative. It seems to conclude that Wyo. Stat. Ann.  XD-3715201 conflicts with sections 251(b) and 251(c) of the Communications ActS;D4 R yO)-ԍx47 U.S.C. 251(b), 251(c).S and is not  X--"competitively neutral," "consistent with section 254" of the Communications Act,D<- R yO -ԍx47 U.S.C. 254.D or  X-"necessary" within the meaning of section 253(b).W=T R {O#-ԍxAttorney General Opinion at 68.W  X-x21.` ` According to Silver Star, because the Denial Order derives directly from the statutory rural incumbent protection provision, the Commission can preempt that statutory" =,D'D'CC" provision for essentially the same reasons (described above) that require preemption of the  X-Denial Order.+>R {Ob-ԍxSee Amended Petition; Silver Star Reply at 67. Before filing its Amended Petition, Silver Star argued that the Commission could preempt the rural incumbent protection provision pursuant to the "good cause"  {O-exception to 5 U.S.C.553, even though its Petition sought preemption only of the Denial Order. See Silver Star Reply at 6 n.14. The Amended Petition moots that argument, because it expressly seeks preemption of the rural incumbent protection provision.+ Moreover, in Silver Star's view, the absence of legislative history concerning the rural incumbent protection provision or any other provision of the Wyoming Act makes it impossible to conclude that the Wyoming legislature believed the rural incumbent protection provision to be necessary to ensure the continued quality of telecommunications  X-services or to preserve and enhance universal service.W?|R {O -ԍxSee Silver Star Reply at 6 n.13.W Silver Star argues, furthermore, that the Wyoming legislature enacted the rural incumbent protection provision to protect the  Xa-investments of LECs that purchased exchanges from U S WEST, not to protect consumers.Z@aR {O -ԍxSee Silver Star Supp. Reply at 34.Z  X3-x22.` ` Silver Star also maintains that the provisions of the Communications Act  X -pertaining to rural areas primarily sections 214(e)(2), 251(f), and 253(f) ^A R yOm-ԍx47 U.S.C. 214(e)(2), 251(f), 253(f).^ do not authorize States to erect entry barriers to protect rural carriers. Instead, according to Silver Star, those sections create potential protections for rural carriers far short of entry barriers,  X -and they must be read in harmony with section 253(a)'s clear proscription of such barriers.TB 0 R {O-ԍxSee Silver Star Reply at 79.T  X -x23.` ` Silver Star contends, in addition, that the Commission has provided adequate  X-public notice under section 253(d).ZC R {O-ԍxSee Silver Star Supp. Reply at 12.Z Silver Star points out that the second Public Notice specifies the provisions of the Wyoming Act at issue and was served on the Wyoming Attorney General; the Wyoming Commission was aware of this proceeding from the  XM-beginning; and numerous individuals, local businesses, and local officials filed comments.ZDMT R {OR -ԍxSee Silver Star Supp. Reply at 23.Z  X-x B.` ` The Commenters  X- x24.` ` For essentially the same reasons explained by Silver Star, ALTS and AT&T argue that the Commission should preempt the rural incumbent protection provision and any" D,D'D'CC"  X-Wyoming Commission decision implementing that provision.lER {Oy-ԍxSee ALTS Comments at 14; AT&T Supp. Comments at 24.l ALTS and AT&T add that preemption is appropriate also because: (i)the delay in competition mandated by the rural incumbent protection provision is so long as to be tantamount to an absolute entry barrier proscribed by section 253(a), and (ii) the rural incumbent protection provision fails to satisfy section 253's requirements that any State effort to achieve the objectives listed in section  X-253(b) must employ means "carefully tailored and limited to satisfy those [objectives],"AFZR yO-ԍxALTS Reply at 4.A avoid entry barriers proscribed by section 253(a), and eschew prohibitions on entry applicable  X_-only to certain carriers and not others.hG_R {O -ԍxSee ALTS Reply at 14; AT&T Supp Comments at 24.h  X1-x25.` ` All of the commenters who filed letters support Silver Star's position..HZ1|R {O^-ԍxSee Lincoln County Commission Comments; Lincoln County Schools Comments; Afton Government Comments; Tenupah Comments; Schwab Comments; Polyguard Comments; Maverik Comments; Hospital Comments; Skinner Comments; Allred Comments; Newswander Comments.. They state generally that competition in the local exchange market in the Afton exchange would benefit the Afton community. The Afton Government asserts, for example, that "[i]n the new age of technological advances, Afton and much of rural America has been left behind....[O]pen access and competition will substantially improve the substandard  X -communication services Afton and the surrounding areas have endured in the past."I" R {O -ԍxAfton Government Comments at 1. See, e.g., Lincoln County Commission Comments at 1 ("competition in the telecommunications business is good for us so [rural] areas such as our[s] can hopefully benefit from more enhanced services"); Lincoln County Schools Comments at 1 ("it is in the best interest for the public to provide all the options available for telecommunications in this area").  X- x26.` ` U S WEST, Union, RTC, and TCT oppose Silver Star's Petition. U S WEST characterizes the Petition as a ploy by Silver Star to abort U S WEST's sale of its Afton  Xb-exchange to Union.TJb R {O-ԍxSee U S WEST Comments at 17.T Union, RTC, and TCT agree with U S WEST's characterization of the Petition, and provide reasons for their position based on the language and intent of the Wyoming Act and the Communications Act.  X-x27.` ` Union challenges the Commission's power to grant Silver Star's Petition. According to Union, the Commission cannot preempt a Wyoming Commission order issued pursuant to Wyoming law where, as here, the petitioner has not sought preemption of the law" J,D'D'CC"  X-on which the order is based.WKR {Oy-ԍxSee Union Comments at 1314, 16.W Moreover, in Union's view, neither section 253 nor any other section of the Communications Act empowers the Commission to direct the Wyoming  X-Commission to issue a certificate to Silver Star, even if the Commission preempts the Denial  X-Order and/or the rural incumbent protection provision.ULZR {O-ԍxSee Union Comments at 14 n.11.U  X-x28.` ` Union also challenges the procedures by which the Commission solicited comments in this proceeding. With respect to Silver Star's Petition, Union claims that the Commission failed to comply with the notice and comment requirement of section 253(d), because the Commission's Public Notice did not: (i) identify the statute, regulation, or legal requirement that might violate section 253; (ii) describe the Commission's actions under consideration; or (iii) indicate the Commission's interpretation of the phrase "to the extent  X -necessary" in section 253(d) in the context of this matter.SM R {O-ԍxSee Union Comments at 1417.S With respect to Silver Star's Amended Petition, Union claims that the Commission again violated the notice and comment requirement of section 253(d), because the Commission's Public Notice did not (i) indicate the subject matter of the Wyoming law at issue; (ii) state why the Commission was contemplating preemption of the Wyoming law; (iii) provide meaningful notice to "ordinary Wyoming consumers and consumers of other States that may be concerned with the Commission's contemplated preemption action;" or (iv) "provide States and their consumers with any specific guidelines as to what state action [the Commission] deems either consistent  XO-or inconsistent with Section 253(b)."WNO~R {O~-ԍxSee Union Supp. Comments at 25.W  X!-x29.` ` Union further argues that the Wyoming Act's preclusion of certain competition until at least January 1, 2005 "does not constitute an absolute prohibition against entry" proscribed by section 253(a), because it "merely determines an orderly time period for the transition of rural areas from a form of regulation that correlates investment commitment with reasonable assurances of cost recovery to a new form that will no longer present similar risk  X-and reward characteristics."FOR yOo -ԍxUnion Comments at 12.F Union claims, in other words, that "[e]ntry restrictions limited to a reasonable time period to assure stability in a state as extremely rural as Wyoming are  X-not in violation of, or inconsistent with, the 1996 Act."FPR yO#-ԍxUnion Comments at 12.F According to Union, the tentothirteen year period at issue is reasonable, because: (i) rural incumbents need that time to recoup the substantial network investments mandated by the Wyoming Commission, and (ii)"R0 P,D'D'CC" rural incumbents "operat[e] under the constraints imposed by limited customer pools, the risks carried by the revenue reliance on few largevolume customers, and the dependence on  X-regulatory mechanisms for highcost recovery."{QR {OK-ԍxUnion Comments at 6. See id. at 1113; Union Supp. Comments at 59.{  X-x30.` ` Union also contends that, by affording small rural carriers exemptions from and  X-suspensions of interconnection obligations pursuant to sections 3(37) and 251(f) of the Act,TRZR yO-ԍx47 U.S.C.153(37), 251(f).T Congress showed its concern that small rural carriers may need special protections from the  X_-advent of competition in order to preserve and advance universal service.RS_R {O -ԍxSee Union Comments at 811.R According to Union, like section 251(f) of the Communications Act, Wyoming's rural incumbent protection provision stems from "the recognition that all areas of the country, or of a single state, may not be subject concurrently to the same market conditions that would sustain the introduction  X -of competitive local exchange service in a manner that will serve the public interest."GT |R yO0-ԍxUnion Comments at 34.G  X -x31.` ` Union, RTC, and TCT claim that, even if the rural incumbent protection provision falls within the proscription of section 253(a), section 253(b) saves that provision  X -from preemption.U R {Od-ԍxSee Union Comments at 38; RTC Reply at 1014, 1617; TCT Reply at 1016; Union Supp. Comments at 59. In their view, section 253(b) "reflects the Congressional recognition that a state should maintain the authority to enact measures to ensure that the introduction of competition proceeds in a manner that will serve the overall public interest of the citizenry of  Xb-its state."xVbf R {Oy-ԍxUnion Comments at 3. See RTC Reply at 1214; TCT Reply at 1214.x They argue, therefore, that: Xx[t]he Wyoming legislature understood in enacting [the rural incumbent protection provision] that if small, rural telephone companies are to be expected to continue to invest in uneconomic areas, they must have some assurances that their market and their future revenue streams are predictable and sufficient to risk such investments....[T]he temporary measures set forth in the Wyoming law are necessary to ensure that the plan the state established for modernization  X-and infrastructure development in rural Wyoming will be carried out.W R {OS$-ԍxUnion Comments at 78. See id. at 48, 1113; RTC Reply at 217; TCT Reply at 216; Union Supp. Comments at 59.  "R W,D'D'CC"Ԍ X-x32.` ` According to Union, RTC, and TCT, the Wyoming Commission has determined, after extensive expert inquiry, that massive improvements must be made to many rural telephone exchanges in order to provide safe, reliable, modern, highquality telecommunications services to all of Wyoming's citizens; that such improvements will be made only if the investing carriers are guaranteed a reasonable recovery of their investments; and that the rural incumbent protection provision implements a reasonable method to accomplish such recovery. Indeed, Union, RTC, and TCT profess to have relied on the rural incumbent protection provision in deciding to invest heavily in modern, highquality  XH-infrastructure, facilities, products, and services for their rural exchanges.~XHR {O -ԍxSee Union Comments at 48, 1113; RTC Reply at 217; TCT Reply at 216.~ Thus, in the view of Union, RTC, and TCT, the rural incumbent protection provision is "necessary" to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers within the meaning of section 253(b).  X - x 33.` ` RTC and TCT also argue that the rural incumbent protection provision is  X -"consistent with section 254" of the Act within the meaning of section 253(b).bY ZR {O-ԍxSee RTC Reply at 1014; TCT Reply at 1014.b They state, in particular, that by encouraging small rural carriers to make the investments necessary to provide highquality telecommunications services to all residents in their territories, the rural incumbent protection provision adheres to the "principles" set forth in section 254(b) "for the  XK-preservation and advancement of universal service."GZKR yO-ԍx47 U.S.C. 254(b).G  X- IV. DISCUSSION ׃  X-x!34.` ` Contrary to Union's argument, we find that the noticeandcomment procedures utilized in this proceeding are fully consistent with relevant statutory provisions. Declaratory rulings issued pursuant to section 253 are informal adjudications. The Administrative  X-Procedure Act (APA)S[|R {O-ԍx5 U.S.C 551 et seq.S provides no noticeandcomment procedures applicable to agency  X-informal adjudication.P\R {OR!-ԍxSee 5 U.S.C 555. Indeed, with respect to informal adjudication, the APA only requires that prompt notice be given of the denial of a written petition, and that such notice be accompanied by a brief statement of  {O"-the grounds for denial. See 5 U.S.C. 555(e); Pension Benefit Guaranty Corp. v. LTV Corp., 496 U.S. 633, 65556 (1990). In contrast, the APA prescribes specific notice procedures applicable to agency rulemaking (5U.S.C. 553) and agency formal adjudication (5 U.S.C.  554).P We therefore look to our organic statute for guidance regarding the required procedure in this context. "e \,D'D'CC"Ԍ X-x"35.` ` Section 253(d) of the Communications Act requires the Commission to provide "notice and an opportunity for public comment" before determining whether to preempt a  X-State or local legal requirement pursuant to section 253.G]R yOK-ԍx47 U.S.C. 253(d).G Section 253(d) does not, however, specify any particular means of providing such notice and opportunity for comment. The procedures that we followed in this proceeding are consistent with those that the Commission has used for years with respect to informal adjudications. Specifically, we issued written notices regarding Silver Star's Petition and Amended Petition. These notices briefly summarized the Petition and Amended Petition and described how and when to submit written comments. These notices were available to the public at the Commission, on the Internet, and via numerous subscription services. The Petitions themselves were available to the public for inspection and copying at the Commission. As noted above, we received comments in response to these notices from affected local residents, local businesses, and local government  X -officials and bodies, as well as interested telecommunications entities and trade associations.R^ XR {O-ԍxSee Section I, supra.R  X -x#36.` ` Had Congress intended to require the Commission to follow more elaborate noticeandcomment procedures in preemption proceedings, it could have directed the Commission to employ those mandated by the APA for rulemakings or other types of agency  Xy-action_yR {O-ԍxSee 5 U.S.C.553 (establishing procedures for informal rulemaking), 554 (establishing procedures for formal adjudication). or included more specific procedures in section 253. Because Congress did not do so, we believe that section 253 affords us discretion to use in the preemption context our existing noticeandcomment procedures for informal adjudications. We conclude, therefore, that the procedures we followed in this proceeding afforded adequate notice and opportunity for  X-comment within the meaning of section 253(d).)`DR {O-ԍxSee generally Pension Benefit Guaranty Corp. v. LTV Corp., 496 U.S. at 65556 (holding that APA does  {O-not require notice and opportunity to be heard in informal agency adjudications); Dr. Pepper/SevenUp  {O-Companies, Inc. v. Federal Trade Commission, 991 F.2d 859, 86263 (D.C. Cir 1993)(holding that APA permitted FTC's use of certain "informal notice and comment procedures" in informal adjudication). We note that Silver Star's Amended Petition and the Commission's Public Notice pertaining thereto moot Union's  {O-argument that the Commission cannot preempt the Denial Order because Silver Star had not also sought  yO-preemption of the Wyoming Act.)  X-X` hp x (#%'0*,.8135@8: