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(WTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN+HH+@<)<<<< H- zNX4ԍ On October 26, 1998, the FCC released an order and afurther notice of proposed rulemaking on the question of how toassess wireless carriers' revenues. The agency made a tentativedecision to provide wireless carriers with interim guidelines forhow to approximate their percentage of interstate wirelessrevenues. Additionally, the agency sought comment on variousproposals for a final guideline on such calculations and commenton the relationship of wireless communications providers touniversal service. This order further supports the FCC's positionthat it has not yet made a final decision on how to handle theseissues. Moreover, recognizing the difficulties thatthe Worksheet raises, the FCC has already granted CMRS providersinterim relief by allowing them to provide good-faith estimatesof the figures required by the Worksheet. Thus, the agency properly asks us to defer judicial review ofits tentative decision until all administrative remedies areexhausted. In analogous situations, courts have postponed review"until relevant agency proceedings have been concluded [to]permit[] an administrative agency to develop a factual record, to"$>0*0*0*" apply its expertise to the record, and to avoid piecemeal zNAappeals." See Telecommunications Research & Action Ctr. v. FCC,750 F.2d 70, 79 (D.C. Cir. 1984) (internal citations omitted). hiv. States' Collection of Universal Service Assessment from CMRS_Carriers.  \ Celpage and the CMRS Providers make a convincing challenge incontesting the FCC's decision to permit states to imposeuniversal service contribution requirements on CMRS providers.They argue that the plain language of 47 U.S.C. 332(c)(3)(A)specifically preempts states from doing so. Additionally, theCMRS Providers contend that  254(f)'s language, relied on by theFCC, does not reach CMRS providers, because they are interstatecarriers. @ (a) Plain Language of  332(c)(3)(A). \ Celpage and the CMRS Providers argue that in 332(c)(3)(A),"Congress has spoken to the precise question at issue," theability of states to assess CMRS providers for universal service zNhAcontributions.  See Chevron, 467 U.S. at 842. Therefore, theyargue that the FCC's interpretation deserves no deference. Theplain language of  332(c)(3)(A) does seem to apply to the issueat hand: Notwithstanding sections 152(b) and 221(b) of this title, noState or local government shall have any authority to regulatethe entry of or the rates charged by any commercial mobileservice or any private mobile service, except that this paragraphshall not prohibit a State from regulating the other terms andconditions of commercial mobile services. Nothing in thissubparagraph shall exempt providers of commercial mobile services(where such services are a substitute for land line telephoneexchange service for a substantial portion of the communicationswithin such State) from requirements imposed by a Statecommission on all providers of telecommunications servicesnecessary to ensure the universal availability oftelecommunications service at affordable rates. Before we discuss the differing interpretations of the statute,we must decide on the proper standard of review. The TenthCircuit recently reviewed the FCC's interpretation of this zN Asection under the second step of Chevron, because the statutedoes not expressly state how we should read  332(c)(3)(A) in zN`"Arelation to 254(f). See Sprint, 149 F.3d at 1061. This standardof review is inappropriate, however, because it would allow the zN#AFCC to receive Chevron deference in almost every situation inwhich two sections of a statute must be read together. Indeed,the Act does contain a specific rule of statutory construction in zNH&A 601(c)(1), reprinted in 47U.S.C. 152 (Addendum A-1): "ThisAct and the amendments made by this Act shall not be construed tomodify, impair or supersede Federal, State or local law unlessexpressly provided in such Act or Amendments."  zNh)A Thus, we disagree with the Sprint court that the lack of a"h)%>0*0*0*." specific provision discussing the relation between  zNA332(c)(3)(A) and 254(f) automatically triggers Chevron deference.To the contrary,  601(c)(1) gives us explicit instruction toread 254(f) ("federal law") as not conflicting with  zN A332(c)(3)(A). Therefore, we conduct a Chevron step-one review andtry to search out the statute's plain meaning. Celpage and the CMRS Providers offer this "plain common sense"reading: Assessments for universal service by state commissionsconstitute regulation of rates or entry for purposes of thestatute. The first sentence of this subsection prohibits thestates from regulating rates or entry, and therefore prohibitsuniversal service assessments, relating to CMRS providers. Thesecond sentence explains that states may impose universal servicerequirements "where such services are a substitute for land linetelephone exchange service . . . ." This plain language, Celpageand the CMRS Providers argue, expressly prohibits states fromrequiring universal service contributions from CMRS providerswithout first making a finding that the CMRS services in questionare a substitute for landline telephone service. The FCC points to plain language that requires it to make"[e]very . . . carrier that provides intrastatetelecommunications service" contribute to the universal service zN0Aprograms as determined by the states. See 47 U.S.C.  254(f). Itthen contends that the provisions of  332(c)(3)(A) should not beread to trump the express commands of  254(f). The FCC finds support for its reading in the second clause ofthe first sentence of  332(c)(3)(A). First, it concludes thatrequiring universal service contributions is neither rate nor zNAentry regulation. See Fourth Reconsideration Order  301. It thennotes that this clause says that a state is not prohibited fromregulating "other terms and conditions of commercial mobileservices." Based on this clause alone, the FCC argues, the statesretain the ability to compel universal service contributions aslong as it does not constitute regulation of rates or entry. Thesecond sentence simply clarifies that states can also regulate"rates and entry" if they make a finding that CMRS providers aresubstituting for landline service.  zNA The Sprint court adopted this reading of  332(c)(3)(A) and zNAadded another argument for the FCC's position. See Sprint,149F.3d at 1061. The second sentence's introductory language,"nothing in this subparagraph . . .," limits the reach of thelandline substitution requirement to  332(c)(3)(A). Therefore,the landline substitution requirement "simply is not relevant to zN!A254(f)." Id. The petitioners argue that the FCC's reading violates the maximof statutory construction that all language of a statute must be zN#4given effect.?X#- zNH&Aԍ See Mississippi Poultry Ass'n v. Madigan, 31 F.3d 293,304 (5th Cir. 1994) (en banc) ("[A] statute should be interpretedso as not to render one part inoperative."). According to the petitioners, if we read theclause "other terms and conditions" to enable states to imposeuniversal service requirements, then the entire second sentence"%&?0*0*0**" would be redundant. There would be no reason to create astatutory requirement for when states may impose conditions foruniversal service if the "other terms and conditions" clausealready allows states to impose universal service requirements onCMRS providers. But the FCC persuasively responds that, under its reading, thesecond sentence clarifies the ability of states to regulate ratesand entry in the name of universal service, while the "otherterms and conditions" clause opens the door to all otheruniversal service regulation. Thus, we do not conclude, as thepetitioners imply we should, that requiring universal servicecontributions necessarily constitutes the regulation of rates and zN` 4entry.@x` - zN 4ԍ A state commission could require a universal servicecontribution based on end-user revenues but leave the carrierfree to set its rates as it pleases while not blocking newcarriers from entering the market. On the other hand, a statecommission would be regulating "rates and entry" if it requiredthe carriers to lower rates for one group of customers as part ofan implicit subsidy. Thus, under the FCC's reading, the states may generallyregulate CMRS providers as they please, but they may regulate therates and entry of CMRS providers only when they make a findingof substitutability. We disagree with the CMRS Providers' further argument that even zNHAthis reading, adopted in Cellular Telecomms. Indus. Ass'n v. FCC, zN4168 F.3d 1332 (D.C. Cir. 1999),A- zNAԍ See also Sprint Spectrum, L.P. v. State Corp. Comm'n,966F. Supp. 1043 (D. Kan. 1997). would render the secondsentence redundant because the third sentence of the subsectionspecifically lays out the procedures under which a state canpetition for the right to regulate CMRS rates. The FCC's readingwould still permit the following understanding of the statute:States (1)in general can never regulate rates and entryrequirements for CMRS providers; (2) are free to regulate allother terms and conditions of CMRS service; (3) may regulate CMRSrates and entry requirements when they have made asubstitutability finding in connection with universal serviceprograms; and (4)may also regulate CMRS rates if they petitionthe FCC and meet certain statutory requirements, including eithersubstitutability or unjust market rates. None of the provisionswould have to be read as inoperative or redundant. Additionally, this reading would avoid conflict with 254(f),which requires that "every telecommunications carrier" contributeto the universal service fund. This rendition of 332(c)(3)(A)allows the FCC to give effect to the plain language of  254(f)while not violating  601(c)'s directive to construe the Act inways that do not "modify, impair, or supersede" federal law. Therefore, the reading offered by Celpage and the CMRS Providersdoes not represent the unambiguous intent of Congress. The FCC'sreading reflects Congress's unambiguous intent as expressed inthe plain language of the statute and takes into account" '` A0*0*0*$" Congress's instruction that  254 be construed in ways that do zN4not conflict with other federal laws.Bx- zN 4ԍ Even if the CMRS providers are right that the plainlanguage does not unambiguously support the FCC's reading, we zNAwould defer to the FCC's reasonable interpretation under Chevron zNxAstep-two. Accord Cellular Telecommunications, 168F.3d at 1336("The bottom line is that Cellular has not demonstrated that itsinterpretation of  332(c)(3)(A) is the only permissible one . .. ."). Therefore, we rejectCelpage and the CMRS providers' challenges to this section of theOrder.  (b) CMRS Providers as Interstate Carriers. \ Celpage and the CMRS Providers raise a weak challenge to statecontribution requirements, contending that CMRS providers are"jurisdictionally interstate" and therefore exempt from stateassessments. We agree with the FCC that the plain language of254(f) simply requires that "[e]very telecommunications carrierthat provides intrastate telecommunications services" contributeto state mechanisms. As the agency found, a significant portion zN( Aof the CMRS providers' services arise from providing intrastate zN 4telecommunications services.EC - zN4ԍ According to one study, interstate revenues accounted foronly 5.6% of total revenues for cellular and personalcommunications service carriers and 24% of total revenues for zNApaging and other mobile service carriers. See FourthReconsideration Order  303.E This undeniably significantinvolvement of CMRS providers in the provision of intrastateservice is more than sufficient to place them within the ambit of 254(f). b. Determining That Interstate Carriers Must Contribute ` on the Basis of Their International Revenues.  \ COMSAT, a small interstate carrier specializing in providinginternational telephone service, challenges the FCC's decision todefine the universal service base to include the internationalrevenues of interstate carriers. COMSAT derives such a smallportion of its revenues from interstate service that it would endup with universal payment obligations exceeding its interstaterevenues. It argues that this bizarre outcome violates  254(d)'srequirement that all universal service contributions be"equitable and nondiscriminatory" and the FCC's own principle ofcompetitive neutrality. At the very least, COMSAT argues, thisresult shows that the FCC's action is arbitrary and capricious. As a threshold matter, the FCC challenges the availability ofjudicial review, because COMSAT failed to petition the agency for zNX4reconsideration, as required by  405 of the Act.?DX - zN(4ԍ 47 U.S.C.  405(a).? COMSATresponds that the absence of a  405 petition for rehearing is" (HD0*0*0* " not a bar to judicial review if the petitioner was a party in therulemaking proceeding and the FCC was afforded an opportunity to zN4rule on the issue.E@- zN4ԍ "The filing of a petition for reconsideration shall notbe a condition precedent to judicial review of any such order,decision, report, or action, except where the party seeking suchreview (1) was not a party to the proceedings resulting in suchorder, decision, report, or action, or (2) relies on questions offact or law upon which the Commission, or designated authoritywithin the Commission, has been afforded no opportunity to pass."47 U.S.C.  405(a). Because COMSAT did participate in the zNX4rulemaking proceeding and did file commentsFXX- zN Aԍ See generally Comments of COMSAT Corp., CC Docket No. zN A96-45 (filed Dec.19, 1996); Comments of COMSAT Corp., CC DocketNo. 96-45 (filed April 12, 1996). with the agency on zN 4this question, we agree that  405 does not bar our review.G   - zNAԍ See Time Warner Entertainment Co., L.P. v. FCC, 144 F.3d75, 80 (D.C. Cir. 1998) ("So long as the issue is necessarilyimplicated by the argument made to the Commission, section 405does not bar our review."). The FCC is more persuasive when it argues that COMSAT is reallyasking for consideration of its individual circumstance ratherthan challenging the rule as a whole. In this situation, the FCCargues that waiver is a more appropriate remedy than is judicialreview. In fact, COMSAT did file a petition for waiver butwithdrew it without explanation shortly before the FCC filed itsbrief in this case. COMSAT now claims to be bringing this claimon behalf of all international carriers in similar circumstances,but it fails to identify any such entities and remains alone inits petition for review. While waiver may be an appropriate remedy, the FCC cites noauthority for the proposition that consideration of a waiver isrequired before judicial review may occur, and our research hasfound no such authority. The case relied on by the FCC standsonly for the proposition that waiver will be allowed as long as zN4the underlying rule is rational.}H- zN Aԍ See National Rural Telecomm. Ass'n v. FCC, 988 F.2d 174,181 (D.C. Cir. 1993).} We see no statutory basis fordenying judicial review on the ground that a party must firstseek a waiver. Therefore, we consider the rule on its merits. COMSAT's attack boils down to the argument that it is beingunfairly treated because it will be forced to pay more inuniversal service contributions than it can generate in zNP4interstate revenues.I P0- zN'4ԍ COMSAT estimates that the application of the FCC'sinterpretation would require it to contribute more in universalservice fees ($5 million) than it would generate in interstaterevenues ($3.8 million). It makes a compelling argument that this"P)I0*0*0*+" result alone violates the equitable language of the statute. TheFCC's response to the statutory challenge simply states thatthere is nothing "inequitable" about requiring a carrierbenefiting from universal service from contributing to it. Under this reading, however, it is difficult to know what theFCC would consider inequitable, because any carrier couldconceivably benefit from universal service. Obviously, thelanguage also refers to the fairness in the allocation ofcontribution duties. In this matter, COMSAT can show that it isbeing forced to pay more under this rule than it can generate inrevenues, yet the FCC does not find even this situation"inequitable." Moreover, the FCC dismisses COMSAT's claim that the agencyviolates the "nondiscriminatory" requirement of  254(d) simplyby saying that the agency has recognized that some providers ofinternational service will be treated differently from others.But this recognition of discrimination hardly saves the agencyfrom the statutory requirement that contributions are collectedon a non-discriminatory basis. The agency falls back on its discretion, under the statute, tobalance the competing concerns set forth in  254(b), whichinclude the need for sufficient revenues to support universalservice. While the statute allows the FCC a considerable amountof discretion, however, that discretion is not absolute. Theheavy inequity the rule places on COMSAT and similarly situatedcarriers cannot simply be dismissed by the agency as aconsequence of its administrative discretion. Therefore, the agency's interpretation of "equitable andnondiscriminatory," allowing it to impose prohibitive costs oncarriers such as COMSAT, is "arbitrary and capricious and zNpAmanifestly contrary to the statute." Chevron, 467 U.S. at 844.COMSAT and carriers like it will contribute more in universalservice payments than they will generate from interstate zN4service.J - zN 4ԍ COMSAT also points out that much of the interstateservice it provides is at the request of the government, toensure service to isolated locations such as Guam and AmericanSamoa. Additionally, the FCC's interpretation is"discriminatory," because the agency concedes that its ruledamages some international carriers like COMSAT more than itharms others. The agency has offered no reasonable explanation ofhow this outcome, which will require companies such as COMSAT toincur a loss to participate in interstate service, satisfies thestatute's "equitable and nondiscriminatory" language. Wetherefore reverse and remand this portion of the Order forfurther consideration. [6. Timing.  a. Timetable for the Implementation of an Explicit System of Universal Service Support. \ On statutory and constitutional grounds, GTE attacks the FCC'stimetable for implementation of an explicit system of universal"$*J0*0*0*("  zN4service support.* K- zNX4ԍ The FCC asks us to bar review of this question, arguingthat GTE and SBC are collaterally estopped from litigating itbecause they did so during challenges to the Access Charge Order zNAin the Eighth Circuit. See Southwestern Bell, 153 F.3d at 537.Before applying collateral estoppel, we must first decide whether(1) the issue under consideration is identical to that litigatedin the prior action; (2) the issue was fully and vigorouslylitigated in the prior action; (3) the issue was necessary tosupport the judgment in the prior case; and (4) there is nospecial circumstance that would make it unfair to apply the zN( Adoctrine. See Winters v. Diamond Shamrock Chem. Co., 149 F.3d zN A387, 391 (5th Cir. 1998), cert. denied, 119 S. Ct. 1286 (1999). We agree with the petitioners that the challenge to the FCC'shigh-cost support timetable is not "identical," for collateralestoppel purposes, to the issue raised in that case. Although thepetitioners challenge the coordination between implicit subsidiesin the access charge system and those in the new support system,their challenge in this case involves a broader attack on thetiming of the entire universal service high-cost support systemrather than on just its interactions with the access chargesystem. The Eighth Circuit did not consider the contention that GTEbrings before us: that the FCC violated  254(a) by failing toimplement an "explicit" and "sufficient" universal servicesupport system within "fifteen months" of the 1996 Act'senactment. The Eighth Circuit relied on the fact that thedeadline for adopting rules on universal service came after thedate for adopting rules on opening the market to local zNAcompetition. See Southwestern Bell, 153 F.3d at 537. Therefore,there was no need for that court to decide whether  254(a)requires full implementation within "fifteen months" of theenactment, and GTE is not collaterally estopped for pursuing its zNAappeal of  254(a) in this court. See Winters, 149 F.3d at 391n.3 ("[U]nless prior issue sought to be precluded fromrelitigation was a 'critical or necessary part' integral to theprior judgment, collateral estoppel may not apply.").* First, GTE argues that the agency's decisionto wait until January 1, 2000, before implementing its plan forproviding explicit support for universal service violates thestatutory requirements of  254. Second, GTE asserts that thedelay in implementation results in an unconstitutional taking. %i. Statutory Language. \ GTE contends that the delay in implementation violates 254(e)because it fails to provide "sufficient" funding to support zNAuniversal service.^LX@- zN'4ԍ GTE also claims that the FCC's actions violate the"predictable" and "nondiscriminatory" requirements of  254(b).We see no merit to this contention and focus instead on GTE's"h)K0*0*0*)" best statutory argument, which relies on the use of the term"sufficient" in  254(e).^ In fact, between the Order's release on May"+ L0*0*0*8" 8, 1997, and its implementation on January 1, 2000, the FCC willhave provided no explicit support to the ILEC's, while it hasalready exposed them to outside competition. In theory, then, newentrants could begin "cherry-picking" the ILEC's' best low-cost,high-profit customers, leaving the ILEC's stuck with thehigh-cost, money-losing customers that are supposed to besupported by the new universal service subsidy system. This woulderode the old implicit subsidy system before the FCC hadimplemented the new explicit subsidy system. The question is whether the statute's language plainly requiresthe FCC to have implemented explicit subsidies at the same time zNAthat it issued the Order on May 8, 1997. GTE claims the statuterequires immediate implementation. But the plain language of 254(a)(2) requires us to reach the opposite result: The Commission shall initiate a single proceeding to implementthe recommendations from the Joint Board required byparagraph(1) and shall complete such proceeding within 15 monthsafter February 8, 1996. The rules established by such proceedingshall include a definition of the services that are supported by zNAFederal universal service support mechanisms and a specific zNAtimetable for implementation. 47 U.S.C.  254(a)(2)(emphasis added).  zNA By instructing the FCC to establish a "timetable forimplementation" by the statutory deadline, Congress assumed theimplementation process would occur over a transition period afterthe fifteen-month deadline. There is no reason to believe--andGTE does not offer a reason--that the instruction to establish atimetable actually means immediate implementation of the explicit zN4subsidy system at the statutory deadline.M - zNX4ԍ Section 254(e) contemplates that universal support willbe "explicit" and "sufficient" "[a]fter the date on whichCommission regulations implementing this section [ 254(e)] takeeffect." This language further supports the FCC's reading thatCongress did not require implementation of the high-cost supportprogram immediately after the 15-month deadline. Not surprisingly, GTE falls back on the term "sufficient" andargues that even if the FCC may slowly implement the high-costsupport program, the statute still requires the agency to ensurethat support is sufficient during the transition period. Forreasons that we have outlined, the FCC should be accorded a zNXAsubstantial amount of deference when interpreting this word. See zN Asupra part III.A.a.i. GTE essentially asks us to hold that "sufficient" is violatedwhenever there is a change (or the possibility of a change) fromthe current levels of universal service support. The plainmeaning of "sufficient" is far from unambiguous as it pertains tothe timing of the high-cost support program's implementation.Calculating how much support is sufficient to provide support for" ,M0*0*0*$" universal service is a judgment the FCC is better able to makethan are we, and we therefore defer to its reasonable zNAinterpretation under Chevron step-two. As the agency explains, the amount of competition in localmarkets depends on a number of different factors, of which theimplementation of the universal service plan is only one. Toenter a new market, entrants must invoke rights to zNx4interconnection agreements under  251 and 252.Nxx- zN4ԍ The Supreme Court did not issue its final word on these zNAsections until January 25, 1999. See Iowa Utilities, 119 S. Ct.721. In the meantime, many potential entrants were stymied in thearbitration process and by the uncertainty over the FCC'sjurisdiction to implement its local competition order. Therefore,it is not surprising that the agency did not expect an onslaughtof local competition during the interim period. In almost allcases, these agreements require lengthy arbitrations by statecommissions. Even after the completion of such arbitrations,there may be many court challenges. Because only competition inlocal markets can erode the current implicit subsidy system to aninsufficient level, the FCC made a reasonable determination thatthere was little chance of such competition's emerging in thenear future. Where the statutory language does not explicitly commandotherwise, we defer to the agency's reasonable judgment aboutwhat will constitute "sufficient" support during the transitionperiod from one universal service system to another. We followthe Eighth Circuit's recent holding on a similar issue: "TheCommission has made a predictive judgment, based on evidence inthe record and adequately explained in the order, thatcompetitive pressures in the local exchange market will notthreaten universal service during the interim period until thepermanent, explicit universal service support mechanisms have zNAbeen fully implemented." Southwestern Bell, 153 F.3d at 537.  zN4VXii. Taking. \ In some ways, GTE's takings argument is simply another versionof its contention regarding lack of "sufficient" support. On bothissues, GTE argues that the FCC's decision to leave ILEC'sexposed to local competition without first implementing the newuniversal service plan results in a severe reduction of its zNArevenues from local service. Relying on Brooks-Scanlon v. zNARailroad Comm'n, 251U.S. 396 (1920), GTE argues that a regulatedentity cannot be forced to operate one segment of its business ata loss on the expectation that it can make up the shortfalls fromanother competitive line of business. At the very least, GTEsays, the FCC should adopt a narrow construction of the statutory zNx4language to avoid any constitutional infirmities.Ox- zN'Aԍ See Edward J. DeBartolo Corp. v. Florida Gulf Coast zN'ABuilding & Constr. Trades Council, 485U.S. 568, 575 (1988). The FCC responds that before a narrowing construction should beconsidered, GTE must show that a taking will "necessarily" result" -` O0*0*0*5$"  zNAfrom the regulatory actions. See United States v. Riverside zNABayview Homes, 474 U.S. 121, 128 n.5 (1985). Even if GTE can showthat some taking will result, it must demonstrate that its losses zNXAare so significant that the "net effect" is confiscatory. See zN ADuquesne, 488 U.S. at 310-16.  zNA GTE has failed to meet the requirements of Duquesne, because itcannot show that it will lose any revenue at all, much lessenough to constitute a taking under more recent precedent. Its zN@Aattempt to distinguish Duquesne is misguided because, contrary to zNAGTE's claim, the Duquesne Court did not base its finding oftakings on the fact that the market was no longer closed tocompetition.  zN` A Rather, Duquesne stands for the proposition that "no singleratemaking methodology is mandated by the Constitution, whichlooks to the consequences a governmental authority produces zN Arather than the techniques it employs." Duquesne, 488 U.S. at 299 zN A(Scalia,J., concurring). Duquesne does not require courts toengage in a takings analysis whenever an agency opens apreviously regulated market to competition. Further, as weexplained in sustaining the forward-cost looking methodology, zNAGTE's reliance on Brooks-Scanlon is misplaced, because we willnot apply the rule in that case to transitional or temporary zN0Aperiods. See Continental Airlines, 784F.2d at 1251. b. Access Charges at Forward-looking Cost Levels @ as Soon as Cost Models Are Available.  \ MCI asks the FCC to reduce access charges--the fees charged byILEC's on interstate calls--to the forward-looking cost levelused by the agency to calculate support for high-cost areas.Under the FCC's plan, ILEC's will be required to reduce theiraccess charges by the amount they receive in the form of explicituniversal service subsidies. MCI argues that by permitting theILEC's to retain the amount of access charge revenue above cost,the FCC has violated its statutory mandate to eliminate implicitsubsidies when it implements the new universal service plan. This argument differs from GTE's assertions. While GTE seeksimmediate implementation of the explicit subsidy program, MCIseeks to include the elimination of implicit subsidies within therubric of the explicit subsidy program. In fact, GTE's fear thatimplicit subsidies will be eroded during the transition period isprecisely the goal of MCI's intervention. Because GTE does notseek the elimination of the implicit subsidies, it is making anargument different from MCI's. For this reason, we agree with the FCC that MCI cannot properlyintervene on this issue, because none of the petitioners raised zN#Athe same challenges to the Order. In United Gas Pipe Line, 824F.2d at 437, we held that "intervenors may not challenge aspectsof the Commission's orders not raised in the petitions forreview." Because MCI's challenge does not raise an issue broughtup by any of the petitioners, we do not consider its arguments onappeal, but follow the District of Columbia Circuit and declineto grant intervenor standing in a situation in which "we couldgrant [the intervenor] the full relief it seeks while rejecting"h).O0*0*0*j."  zNAall of the petitioners' challenges, and vice versa."  Illinois zNABell Tel. Co. v. FCC, 911 F.2d 776, 786 (D.C. Cir. 1990).~P- zN 4ԍ MCI claims that the FCC is trying to evade review of thisquestion through procedural maneuvering. When BellSouth, in itsEighth Circuit challenge to the Access Charge Order, raised theissue of the FCC's failure to remove all implicit subsidies, theagency argued that this question should be addressed in thiscourt in challenges to the Universal Service Order. Now that MCIhas raised that same issue, MCI argues that the agency should notbe allowed to dodge review again on procedural grounds. Unfortunately for MCI, it was not any manipulation of proceduralrules by the FCC that prevented MCI from properly raising thisissue on appeal. There was no legal reason that prevented MCIfrom filing a brief as a petitioner rather than as an intervenor.Thus, the FCC's procedural moves are irrelevant for purposes ofdeciding whether MCI may properly intervene. The only question,then, is whether MCI's challenge to the Order for failing toreduce access charges immediately is the same as GTE's challengeto the Order for failing to implement explicit subsidiesimmediately. We see no such resemblance.~ c. Plan for Transition to a New Universal Service System  For Rural, Insular, and High-cost Areas.  \ The FCC's transition plan for its new explicit subsidy universalsupport system does not immediately apply to all ILEC's. Allcarriers eligible for universal service support will become partof the new system on January 1, 2000. Small rural carriers,however, will not be required to move into the new system until zN` A2001 at the earliest. See Order  204. Specifically, the agency(1) has exempted rural carriers, defined as those carriersserving study areas of less than 100,000 lines, from the newforward-looking cost methodology until at least January 1, zN 42001,Q h- zNxAԍ See Order  273 (stating that "non-rural carriers" willcome under the new forward-looking cost methodology). and (2)has allowed carriers with 200,000 or fewerworking loops per study area to continue recovering extra supportfrom the high-cost fund until implementation of the new zNAmethodology on January 1, 2000. See Order  210.  zNhA i. Establishing a Longer Transition Period pfor Rural Carriers with fewer than 100,000 lines.   zN4\ VermontRX- zN'4ԍ Kansas initially joined Vermont in this challenge butindicates, in its reply brief, that it now withdraws from thisportion of the appeal. attacks the small rural carrier exemption because itdoes not permit large carriers who happen to serve rural areas"/R0*0*0*" the same delayed transitional treatment that rural carriers withstudy areas of less than 100,000 lines will receive. Vermontargues that there is no statutory or reasonable basis fordistinguishing among rural carriers simply because of their size.For example, census statistics show that Vermont has moreresidents living in rural areas than does any other state, yetits carrier, Bell Atlantic, does not qualify for the sametreatment as do other rural carriers as defined by the FCC's100,000-line distinctions. Vermont does not point to any statutory authority for its claimthat the FCC must give all rural carriers the same treatmentunder the plan. Instead, it simply argues there is no good reasonto treat Bell Atlantic differently from other rural carriers. Forthese reasons, it asks us to reverse on arbitrary-and-capriciousgrounds under the APA. A statute survives judicial scrutiny under the APA's "arbitraryand capricious" standard as long as the agency "articulates arational relationship between the facts found and the choicemade" and "so long as the agency gave at least minimal zNAconsideration to relevant facts contained in the record." Harris,19 F.3d at 1096. The FCC provides at least two reasons thatarticulate such a "rational relationship." First, because the agency delayed the transition for ruralcarriers on the ground that its cost models for small carrierswere inadequate, it was reasonable to treat Bell Atlanticdifferently. After all, Bell Atlantic is a large ILEC for whichthe FCC does have cost models. Second, the FCC justifies itsdelay for small rural carriers because it has found that theywill have greater difficulty adjusting to a new system. Again,such a finding would not apply to Bell Atlantic. These reasonssuffice. Dii. Continuing Application of Existing High-cost Rules until the New Universal Service system Takes Effect.   zNX4\ VermontSXX- zN4ԍ Kansas initially joined Vermont in this challenge, buthas indicated in its reply brief that it now withdraws from thisportion of the appeal. challenges the decision to maintain extra support forILEC's with study areas of 200,000 or fewer loops until the newmethodology is implemented on January 1, 2000. In other words, byexempting carriers with 200,000 or fewer lines from the newhigh-cost support methodology, the FCC again decided to giveextra support to smaller carriers, in this case defined as thosecarriers with study areas containing 200,000 or fewer loops. Asit did in challenging the 100,000 line distinction, Vermontasserts that the distinction is arbitrary and capricious becausethe FCC ignores evidence that size is not a reliable predictor ofcost. The FCC again argues that the 200,000-line rule is transitional,interim relief. The agency has stated that the extra supportprovided by this rule will expire when the new forward-looking"%0S0*0*0*)" cost methodology goes into effect on January 1, 2000. It asks usto accord it the "substantial deference" it needs to develop zNAtransitional solutions to complex regulatory problems. See MCI zNXATelecomms. v. FCC, 750 F.2d 135, 140 (D.C. Cir. 1984). In contrast to the situation involving the rural carrierexemption, the FCC has set a specific date for the end of thistransitional period: January 1, 2000. Accordingly, the agency'scommitment to a specific date for termination of the supportresulting from the 200,000-loop rule makes the rule sufficientlytransitional to avoid judicial review. Therefore, for lack ofripeness, we will not review Vermont's challenge to the effects zN4of the 200,000-loop distinction.?T@- zN 4ԍ Vermont argues that the 200,000-loop distinction willbecome permanent through its incorporation into the "hold zN Aharmless" rule articulated in the Seventh Report and Order.  As zNHAwe have discussed, supra, we do not have jurisdiction to considerthe merits of that new Order except in the way that it affectsour review of the Order. The "hold harmless" principle was zNAintroduced in the Seventh Report and Order and remains outsidethe scope of this proceeding.? l B. Subsidization of Services for $ Schools, Libraries, and Health Care Providers.  \ Section 254(h) adds a new wrinkle to the concept of universalservice by directing the FCC to provide support to elementary andsecondary schools, libraries, and health care providers. Thus,the agency has a new statutory mandate to subsidize support forcertain beneficiaries, irrespective of whether they are high-costconsumers. GTE raises objections to the agency's implementation zN4of this broad statutory mandate,>U- zNX4ԍ As a threshold matter, GTE challenges the timing of theproposal, because it would require support for schools,libraries, and health care providers before the new system forexplicit subsidies has been implemented. For the same reasons we zNxAhave discussed, see supra part III.A.6.1., we extend the FCCgreater discretion in deciding what will be "sufficient" duringthe transition period, especially when there is little reason tobelieve that the old subsidy system will break down during thatperiod.> and Cincinnati Bell and thestates challenge the proposal to assess contributions to this newuniversal service fund.  1. Mandating Support for Internet Access 4and Internal Connections to Schools and Libraries.  \ While section 254(h) plainly authorizes the FCC to supportdiscounted telecommunications services to schools and libraries,GTE finds no equivalent statutory authority to support discountedinternet access and internal connections. Therefore, GTE argues"1U0*0*0*3" that the agency exceeded its statutory authority when it mandatedsupport for discounted internet services and internalconnections. Although we agree with GTE that the statute and its legislativehistory do not support the FCC's interpretation, the language ofthe statute is ambiguous enough to require deference under zNAChevron step-two. Because, however, the FCC's decision to extenduniversal service support to internet access and internalconnections raises grave doubts as to whether  254(h) creates anunconstitutional tax, we construe the statute narrowly to avoid zN4raising these constitutional problems.^V- zN( 4ԍ Judge Garza does not join our analysis of theconstitutional issues raised by the FCC's decision to providediscounts on internet services for schools and libraries, set zN Aforth in note 97, infra. He would not address these issues, zNHAbecause the parties did not raise them on appeal. See Carducci v. zNARegan, 714 F.2d 171, 177 (D.C. Cir. 1983) (refusing to consider aconstitutional issue of first impression "where counsel has madeno attempt to address the issue" and "where, as here, important zNhAquestions of far-reaching significance are involved"). But see zN0AUnited States Nat'l Bank v. Independent Ins. Agents of Am., 508U.S. 439, 446 (1993) (approving lower court's consideration oflegal claim not argued by either party as part of courts'"independent power to identify and apply the proper construction zNPAof governing law")(internal quotations omitted); United States v. zNAMoore, 110 F.3d 99, 101 (D.C. Cir. 1997) (en banc) (Silberman,J., dissenting) (conceding that the "rigor and integrity of zNACarducci was severely impaired by the unanimous decision of the zNpASupreme Court" in Independent Insurance Agents).^ The FCC concedes that internet access and internal connectionscannot be defined as "telecommunications services" for purposes zN( 4of the section.W ( - zNX4ԍ The FCC has recognized that internet access or internalconnection services are "information services" that cannot be zNAequated with "telecommunications services." See Order  439n.1145. It argues, however, that the plain language of254(h)(1)(B) and (c)(3) authorizes it to require discountedinternet access and internal connections to schools and libraries(but not to health care providers). Subsection 254(h)(1)(B) requires all telecommunicationsproviders to provide to elementary schools, secondary schools,and libraries, on request, discounted services "that are withinthe definition of universal service under subsection(c)(3) ofthis section." Subsection (c)(3) authorizes the FCC to designate"additional services for such support mechanisms for schools,libraries, and health care providers for the purposes ofsubsection(h) of this section." These "additional services" are"[i]n addition to services included in the definition ofuniversal service under paragraph (1)," which defines universalservice as an "evolving level of telecommunications services." The FCC points out that there is no language restricting these"2W0*0*0*" "additional" services to telecommunications services.Furthermore, Congress used the limiting term "telecommunicationsservices" in 254(h)(1)(A) when discussing the provision ofuniversal service support for rural health care providers. Theagency argues that "the varying uses of the terms'telecommunications services' and 'services' in  254(h)(1)(A)and (B) suggests that the terms were used consciously to signifydifferent meanings." Order439. Therefore, the FCC concludedthat the term "additional services" is not limited totelecommunications services. It then decided that, based on thelegislative history and its understanding of the purposes of thestatute, it should require internet access and internal zN` 4connectionsYX` - zN 4ԍ Calling "internal connections" a good and not a service,GTE separately attacks the "internal connections" requirement.The FCC argues that courts have recognized internal connections zNAas services, see NARUC v. FCC, 880 F.2d 422, 430 (D.C. Cir.1989), and that the legislative history's emphasis on connectionsto "classrooms" makes such a requirement reasonable. Given that themaintenance and installation of regular telephone lines also ischaracterized as a "service," we reject GTE's attempt todistinguish "internal connections."Y support for schools and libraries. We first consider whether the FCC's interpretation conflictswith the plain language of  254(h)(1)(B) and (c)(3). Althoughthe best reading of the statute does not authorize the agency'sactions, we find the statute sufficiently ambiguous to invoke zNHAstep- two of Chevron. The statute restricts the FCC's authority to interpret thephrase "additional services" in subsection (c)(3) to "thepurposes of subsection (h) of this section." The use of thephrase "telecommunications services" in the title of 254(h) zN0Aindicates that the "purposes of subsection (h)" are to provide zNAdiscounted support for telecommunications services.*Y` - zNAԍ See United States v. Wallington, 889 F.2d 573, 577 (5thCir. 1989) (stating that the "section heading enacted by Congressin conjunction with statutory text [is considered] to 'come upwith the statute's clear and total meaning.'" (citationomitted)).* We find further support for this reading in the legislativehistory of  254(h): "New subsection (h) of section 254 isintended to ensure that health care providers for rural areas,elementary and secondary school classrooms, and libraries have zNAaffordable access to modern telecommunications services ... zN4."Z- zNH&4ԍ H.R. Conf. Rep. 104-458, at 132 (1996) (emphasis added), zN'Areprinted in 1996 U.S.C.C.A.N. 144. The House Conference Report also elaborates on theinteraction between subsections (h)(1)(B) and (c)(3): New section (h)(1)(B) requires that any telecommunicationscarrier shall, upon a bona fide request, provide services for"3hZ0*0*0*" educational purposes included in the definition of universalservice under new subsection(c)(3) for elementary and secondaryschools and libraries at rates that are less than the amountscharged for similar services to other parties, and are necessary zN Ato ensure affordable access to and use of such telecommunications zNAservices.[- zN@4ԍ H.R. Conf. Rep. 104-458, at 133 (1996) (emphasis added), zNAreprinted in 1996 U.S.C.C.A.N. 144. And while the legislative history of subsection (c)(3) supportsgiving the FCC discretion when designating services for schoolsand libraries, it nevertheless describes the subsection (c)(3)definition as "applicable only to public institutional zNAtelecommunications users."2\ - zNHAԍ Id.2 This language provides more evidencethat Congress intended that the FCC designate additional zN( Atelecommunications services under subsection (c)(3) rather thanany additional services that the agency deems desirable. Indeed, the agency's broad reading of "additional services"would mean that the use of the word "services" in other parts of254(c) could be broadened to include non-telecommunicationsservices. For instance,  254(c)(2) authorizes the Joint Board torecommend modifications to the definition of "services." Underthe FCC's interpretation, the Joint Board (composed of statetelecommunications regulators and members of the FCC) could befree to redefine "services" to include services unrelated totelecommunications. This result is an implausible reading of zN4Congress's intent.]` - zN4ԍ We also agree with GTE that the FCC is assertingunlimited authority to prescribe support for whatever it wishes.At oral argument, counsel for the FCC could not point out how its interpretation could be limited evento internet access services. For instance, the agency could notexplain why satellite television services or even janitorialservices would not fit within its understanding of "additionalservices." In contrast, the plain language of  254 provides aneasily recognizable limit on FCC authority by confining  254(h)support to telecommunications services. The superiority of GTE'sreading, however, does not necessarily make Congress's intentunambiguous. This is not the end of the analysis, however, because someaspects of the statute's language and legislative history alsosupport the FCC's reading. First, the plain language of254(c)(1) invites the FCC periodically to re-define "universalservice" to "tak[e] into account advances in telecommunicationsand information technologies and services." Moreover, the"purposes of subsection(h)" language in subsection (c)(3) couldinclude more than the "telecommunications services" referred toin  254(h)'s section heading. After all, subsection (h)(2)(A),which is also one of the "purposes of subsection (h)," instructs"4]0*0*0*x" the FCC to establish competitively neutral rules to "enhance . .. access to advanced telecommunications and information services. . . ." Finally, some of the legislative history implies that Congressintended for subsection(h) to support internet access: [T]he provisions of subsection (h) will help open new worlds ofknowledge, learning and education to all Americans--rich andpoor, rural and urban. They are intended, for example, to providethe ability to browse library collections, review the collectionsof museums, or find new information on the treatment of an zN4illness, to Americans everywhere via schools and libraries.z^- zN( Aԍ H.R. Conf. Rep. 104-458, at 132 (1996), reprinted in 1996U.S.C.C.A.N. 144.z The reference to "brows[ing] library collections" indicates thatin drafting subsection (h), Congress envisioned some kind ofsupport for internet access. The best reading of the relevant statutory language nonethelessindicates that the FCC exceeded its authority by mandatingdiscounts for internet access and internal connections. Thestatutory invitation in subsection (c)(1) to "re-define"universal service to include information services does notnecessarily relate to the FCC's authority under subsection(c)(3). Additionally, subsection (h)(2)(A) provides the agency only withauthority to "establish competitively neutral rules to enhanceaccess" to information services. It does not contain specificlanguage supporting provision of such services "at rates lessthan the amounts charged for similar services to other parties,"as in subsection (h)(1)(B). And finally, the legislative historydoes not indicate whether Congress thought the statute wouldenhance access to internet services through discounts ontelecommunications services or, instead, through direct subsidiesfor internet access. Even though GTE has offered a persuasivereading of the statute, its plain language does not make zNACongress's intent sufficiently "unambiguous" for Chevron step-onereview. Therefore, we defer to the FCC's interpretation under zNXAChevron step-two and affirm those aspects of the Order providinginternet services and internal connections to schools and zN4libraries. _ - zN!4ԍ Before we defer to the FCC's interpretation of an zN`"Aambiguously worded statute under the deferential Chevron step-twostandard of review, we consider whether the agency's approachraises constitutional problems that should lead us to construethe statute in the manner urged by GTE. "[W]here a statute is susceptible of two constructions, by one of which grave anddoubtful constitutional questions arise and by the other of whichsuch questions are avoided, our duty is to adopt the latter." zN'AJones v. United States, 119 S. Ct. 1215, 1222 (1999) (internalcitations omitted). This rule "has for so long been applied by zNh)Athis Court that it is beyond debate." DeBartolo, 485U.S. at"h)^0*0*0**" 574-75. It is also of such importance that a court will reject anagency interpretation of a statute that would ordinarily receive zN Adeference under Chevron step-two if it believes the agency's zNAreading raises serious constitutional doubts. Id. (construingstatute narrowly to avoid First Amendment problem). We have identified two ways in which the agency's interpretationcould raise constitutional concerns that might lead us toconstrue the statute more narrowly. First, the FCC's applicationof the universal service fund for non-telecommunications servicescould constitute an improperly delegated tax. Second, itsinterpretation of the reach of  254(h)(1)(B) could havetransformed the Act into a "bil[l] for raising revenue" inviolation of the Origination Clause. Though it is a close question, we conclude that the FCC'sinterpretation does not raise sufficiently serious constitutional zNAdoubts to override our normal Chevron step-two deference. Whilethe relationship between internet services and the publictelecommunications network is more attenuated than is that of zN0Apaging services, see supra part III.A.5.a, we are not convincedthat even this attenuated relationship raises serious doubts zNAunder Munoz-Flores. For similar reasons, this attenuatedrelationship does not raise serious doubts as to whether theFCC's interpretation makes the assessment an improperly delegated zNAtax. See Rural Tel. Coalition v. FCC, 838 F.2d 1307, 1314 (D.C.Cir. 1988) (rejecting unconstitutional tax challenge to universalservice support allocation finding). "5p_0*0*0*Y +"Ԍ  2. Authority To Provide Support Payments l(to Non-telecommunications Entities That Provide Internet Access 4and Internal Connections to Schools and Libraries.  \ The FCC invokes its rulemaking power under  254(h)(2)(A) andits "necessary and proper" authority under  154(i) to providesupport payments to non-telecommunications entities that provideinternet access and internal connections to schools andlibraries. GTE attacks this decision as violating the expressintent of Congress as read through the plain language of thestatute. The FCC does not argue that any specific provision of thestatute authorizes it to add non-telecommunications companies tothe universal service payment system. Rather, it avers that(1)the statute gives it broad authority to establishcompetitively neutral rules; (2) the statute does not speakdirectly to the issue of non-telecommunications providers; and(3) the statute's silence indicates that the agency should zNAreceive Chevron deference. GTE relies on the traditional maxim of statutory construction,"6p_0*0*0*Q"  zNA"expressio unius est exclusio alterius.">` - zNX4ԍ "The expression of one thing implies the exclusion ofanother." "Hence, a statute that mandates a thing to be done in agiven manner . . . normally implies that it shall not be done in zNAany other manner . . . ." 73 Am. Jur. 2d Statutes  211 (1995).> GTE points out that254(h)(1)(B) already discusses how carriers will be reimbursedfor providing discounted services: "[a] telecommunicationscarrier providing service under this paragraph . . . ." Accordingto GTE, Congress's choice of the phrase "telecommunicationscarrier" precludes the FCC from providing those same payments tonon-telecommunications carriers. We conclude that the combination of the FCC's "necessary andproper" authority under  154(i) and the limited usefulness of zNAthe expressio unius doctrine in the administrative context permitthe FCC to expand the reach of universal support tonon-telecommunications carriers. While courts have rightly warnedagainst using silence in a statute to give "agencies virtually zN( 4limitless hegemony,"ga( - zNhAԍ Ethyl Corp. v. EPA, 51 F.3d 1053, 1060 (D.C. Cir. 1995).g we are convinced that Congress intended toallow the FCC broad authority to implement this section of theAct.  zN A In Iowa Utilities Board, the Eighth Circuit offered thisexplanation of the reach of  154(i) in denying the FCCjurisdiction over the pricing of local telephone service:"[Section 154(i)] merely suppl[ies] the FCC with ancillaryauthority to issue regulations that may be necessary to fulfillits primary directives contained elsewhere in the statute. [Itdoes not] confer[] additional substantive authority." 120 F.3d at795. In this matter, however, the FCC is not asserting additional zNAsubstantive authority, as it tried to do in Iowa Utilities. It isnot asserting additional jurisdictional authority, but, rather,is issuing a regulation "necessary to fulfill its primarydirectives." The agency's primary directive is to "enhance access to advancedtelecommunications and information services" for schools and zNpAlibraries. See 254(h)(2)(A). It is taking modest steps toensure that Congress's instructions on expanding universalservice in the form of internet access and internal connections zN4will not be frustrated by local monopolies.b@- zN!4ԍ The District of Columbia Circuit has upheld FCC actionsunder  154(i) that require payments from parties even without zN(#Aexpress statutory authorization. See Mobile Communications Corp. zN#Aof Am. v. FCC, 77 F.3d 1399 (D.C. Cir. 1996); New England Tel. & zN$ATel. Co. v. FCC, 826 F.2d 1101 (D.C. Cir. 1987). For these reasons,we affirm the decision to permit support ofnon-telecommunications carriers providing internet access andinternal connections to schools and libraries. 3. Encroaching on State Authority To Set Discount Rates pfor Intrastate Services to Schools and Libraries."x7 b0*0*0*""Ԍԙ\ Section 254(h)(1)(B) divides the regulation of discount rates onservices offered to schools and libraries between the FCC and thestates. "The discount shall be an amount that the Commission,with respect to interstate services, and the States, with respectto intrastate services, determine is appropriate and necessary toensure affordable access to and use of such services by suchentities."  254(h)(1)(B). The FCC has decided to offer federal universal service funds tohelp support the intrastate rate discounts. Predictably, theagency has conditioned such funding on the states'"establish[ing] intrastate discounts at least equal to thediscounts on interstate services." Order  550. GTE challengesthis condition as an encroachment on the states' statutory rightto "determine [what is] appropriate and necessary to ensureaffordable access." GTE has failed to point to any statutory or other authorityprohibiting the FCC's condition for funding. States are free torefuse federal support for intrastate discounts and, therefore,remain free to determine what is "appropriate and necessary,"consistent with the plain language of the statute. In the TenthAmendment context, this court has refused to view similar federal zNhAconditional grants as "equivalent to coercion." See Texas v. zN0AUnited States, 106 F.3d 661, 666 (5th Cir. 1997). Without expressstatutory language prohibiting such a practice, we reject GTE'schallenge to the FCC's funding conditions. qd4. Exercising Authority in Deciding That Schools and Libraries4Can Obtain Discounts on All Commercially Available \Telecommunications Services.  \ The FCC has also decided that, pursuant to its authority under 254(c)(3), it will allow schools and libraries to obtainsupported discounts on all commercially availabletelecommunications services. The agency believes that thisapproach will maximize schools' and libraries' flexibility topurchase whatever package of services they need. GTE challenges the agency's statutory authority to refuse tolimit the types of services that will be available for support.It contends that the plain language of  254(c)(3) requires theFCC to "designate" which telecommunications services will receiveuniversal service support and which telecommunications serviceswill not. The key to GTE's argument is the meaning of"designate." According to GTE, "designate" denotes some action of specificselection. The standard dictionary definition of "designate"includes "to distinguish as to class" and "to indicate and setapart for a specific purpose, office, or duty." Merriam-Webster'sCollegiate Dictionary 313 (10th ed. 1994). GTE claims that byusing the word "designate," Congress instructed the FCC to"indicate and set apart" which services may receive support under 254(h). GTE also finds support in the legislative history, zN'Awhich says the FCC should "take into account the particular needs"'8b0*0*0*!,"  zN4of . . . schools and libraries."c- zNXAԍ See H. R. Conf. Rep.104-458, at 133 (emphasis added), zN Areprinted at 1996 U.S.C.C.A.N. 144. We disagree with GTE that the plain-meaning understanding of"designate" demonstrates Congress's unambiguous intent to requirethe FCC to specify which services will be supported. By using theword "designate," Congress also could have meant for the agencyto authorize a broad class of services. Thus, by "designating"all commercially available telecommunications service, the FCCcan be said to have "designated" which services may be supported.For this reason, the designation "commercially availabletelecommunications services" does not violate the plain meaning zNAof the statute under Chevron step-one.  zNA Under Chevron step-two, the FCC has reasonably concluded that itcan fulfill its statutory duty to "designate" while givingschools and libraries the maximum flexibility to choose whichservices they need. It is not unreasonable for the FCC toconclude that it could best "take into account . . .theparticular needs" of schools and libraries by allowing support zNH4for all commercially available telecommunications services.d H - zN4ԍ The FCC further concluded that its decision will ensurethat schools and libraries can obtain discounted"state-of-the-art telecommunications technologies as those zNPAtechnologies become available." Order  433.Because Congress's use of "designate" in subsection (c)(3) doesnot unambiguously require the FCC to limit which services may besupported, and because the FCC's decision is reasonable under zNhAChevron step-two, we reject GTE's request and affirm the decisionto allow schools and libraries to obtain support for all"commercially available telecommunications services." 5. Authority To Subsidize Toll-Free Telephone Calls cto Internet Service Providers by Non-rural Health Care Providers.  \ Congress directed the FCC to provide universal service supportfor "any public or nonprofit health provider that serves personswho reside in rural areas."  254(h)(1)(A). Congress alsoinstructed the agency "to enhance, to the extent technicallyfeasible and economically reasonable, access to advancedtelecommunications and information services for all public andnonprofit . . . health care providers." The FCC has seized on themore general language in the second provision as authority forsubsidizing telephone calls to internet service providers by bothrural and non-rural health care providers.  zNA GTE advances an argument based on the expressio unius canon.Because the first provision gives specific instructions onproviding subsidized support for health care providers andexplicitly limits that support to rural health care providers,GTE argues that the FCC has no statutory authority to expand suchsupport to non-rural health care providers. In the agency's view,Congress could have extended support to non-rural providers, but"`"9d0*0*0*&" chose not to. This signifies a Congressional decision that theFCC should respect.  zNA The FCC responds that the expressio unius canon should notresolve a question of statutory interpretation in anadministrative law context. Additionally, it argues that  zNA254(h)(2)(A) obligates the FCC to "enhance, to the extenttechnically feasible and economically reasonable, access toadvanced telecommunications and information services."  zN@A We do not read  254(h)(2)(A)'s "enhancing" language to requirethe FCC to act as it did here. But, we conclude that the languagein  254(h)(2)(A) demonstrates Congress's intent to authorizeexpanding support to "advanced services," when possible, fornon-rural health providers. GTE has already established that 254(h)(1)(A) requires supportfor telecommunications service to rural health care providersonly. We can then read  254(h)(2)(A) as an instruction to theFCC to work to support "advanced services" for non-rural healthcare providers when "economically reasonable." Importantly, theFCC's plan does not extend, to non-rural health providers, thesame telecommunications discounts enjoyed by 254(h)(1)(A) rural zNAhealth providers. Rather, the agency chose to support access(through subsidized telephone calls) to an "advanced ...information service" (an internet service provider), finding thatthis subsidy was "economically reasonable" and "technicallyfeasible." Order 748. The FCC has found a way to "enhance access," as authorized bythe plain language of  254(h)(2)(A), so we affirm this portionof the Order. ~6. Contribution System To Provide Universal Service Funding for Schools, Libraries, and Rural Health Providers.  \ The FCC decided to fund the universal support mechanisms forschools, libraries, and rural health care providers by "assessingboth the interstate and intrastate revenues of providers ofinterstate telecommunications services." Order  808. Theuncertainty of state support for the new  254(h) subsidies andother financial considerations, according to the FCC, justifiesassessing both the intrastate and interstate revenues ofinterstate carriers. Cincinnati Bell ("CBT"), a small carrier with a mostlyintrastate revenue base, attacks the decision as a violation of2(b)'s prohibition on federal regulation of intrastateservices. The states challenge the FCC's related assertion thatit has the authority to require carriers to recover theirintrastate contributions from the states.  a. Authority To Assess Contributions on the Combined Interstate and Intrastate Revenues of Carriers That Provide Interstate Telecommunications Services.  \ Along the same lines as Bell Atlantic's challenge to the "nodisconnect" rule, CBT argues that the FCC's decision to assessintrastate revenues exceeds its jurisdiction, in violation of the"h):d0*0*0*-"  zNAstill-intact Louisiana PSC reading of  2(b). CBT contends that zNAunlike the provisions considered in Iowa Utilities,  254 doesnot "apply" to intrastate matters in a sufficiently unambiguouslymanner so as to confer federal jurisdiction. As we have discussed, we understand  2(b) to serve as both arule of statutory construction in considering whether a provisionapplies to intrastate matters and as a jurisdictional fence zNxAagainst assertions of the FCC's ancillary jurisdiction. See Iowa zN@AUtilities, 119 S. Ct. at 731. Like Bell Atlantic, CBT is using  zNA2(b) to challenge the FCC's construction of  254 to apply tointrastate ratemaking. The FCC's first defense denies that its actions even constitutea "regulation" that would fall under the rule of statutory zN( Aconstruction created by  2(b) and Louisiana PSC. The agencyargues that simply factoring intrastate revenues intocalculations of universal service contributions does notconstitute regulation of those services. The FCC has used bothintrastate and interstate revenues as a basis for imposingaccounting obligations or tariff requirements in other contextswithout any court's finding  2(b) violations. Additionally, theFCC has stated that carriers may recover their contributions only zNhAfrom interstate rates. The agency believes this last requirementwill prevent its contribution requirements from improperlyaffecting intrastate rates. Despite the persuasiveness of this argument, we conclude that 2(b)'s broad language encompasses the FCC's decision to assessintrastate revenues. The plain language of  2(b) discusses"jurisdiction with respect to . . . charges, classifications,practices, services, facilities, or regulations for or inconnection with intrastate communication service . . . ." Weagree with CBT that the inclusion of intrastate revenues in thecalculation of universal service contributions easily constitutesa "charge . . . in connection with intrastate communicationservice." The plain language of  2(b) directs courts to consider FCCjurisdiction over a very broad swathe of intrastate services. Wedecline to exempt the FCC's assessment of intrastate revenues zN4from the ambit of 2(b).e - zN@4ԍ The FCC's decision to prohibit carriers from recoveringthrough intrastate rates does not save it from  2(b) analysis.There is no question that the amount of a carrier's universalservice contributions will increase with the inclusion ofintrastate revenues. This cost, even if recovered only throughinterstate revenues, still constitutes a "charge in connectionwith intrastate service" under  2(b). If the point of  2(b) was to protect state authority overintrastate service, allowing the FCC to assess contributionsbased on intrastate revenues could certainly affect carriers'business decisions on how much intrastate service to provide orwhat kind it can afford to provide. This federal influence overintrastate services is precisely the type of intervention that "h)d0*0*0**" 2(b) is designed to prevent. ";Xe0*0*0*L +"Ԍ The FCC then contends that  254 does apply to intrastatematters, because it unambiguously authorizes the agency todevelop universal service mechanisms that are sufficient tosupport both interstate and intrastate service. In support ofthis assertion, the agency points to  254(d)'s requirement that"[e]very telecommunications carrier that provides interstatetelecommunications services shall contribute . . . to thespecific, predictable, and sufficient mechanisms established bythe Commission to preserve and advance universal service." TheFCC then compares this language to 254(f), which allows statesto adopt universal service regulations as long as they do not"rely on or burden Federal universal service support mechanisms."This language, the FCC claims, shows that Congress intended forit to bear the primary responsibility for ensuring thesufficiency of universal service for both interstate andintrastate services. These two provisions do not reflect enough of an unambiguousgrant of authority to overcome the presumption established by zNA2(b). While, under Chevron step-two, we usually give the agencydeference in its interpretation of ambiguous statutory language,the Supreme Court continues to require the agency to overcome the 2(b) statutory presumption with unambiguous language showing zN0Athat the statute applies to intrastate matters. See Iowa zNAUtilities, 119S.Ct. at 731. While the text of the statute does not impose any limitation onhow universal service will be funded, it also does not explicitlystate that the FCC has the responsibility to fund intrastateuniversal services. The agency seeks authority "in the broadlanguage" of the statute, but "we do not find the meaning of thesection so unambiguous or straightforward as to override the zNpAcommand of  152(b)." See Iowa Utilities, 119S. Ct. at 731 zN8A(quoting Louisiana PSC, 476 U.S. at 377). Without a finding that  254 applies, the FCC has no other basis zNAto assert jurisdiction, because Iowa Utilities explicitlyprohibits FCC jurisdiction over intrastate matters stemming from zNXAthe agency's plenary powers. See id. Therefore, we reverse thatportion of the Order that includes intrastate revenues in thecalculation of universal service contributions.  b. Authority To Refer Carriers to the States ` To Seek Recovery of Intrastate Contributions.  \ Though it stated that it had "the authority to refer carriers tothe states to seek authority to recover a portion of theirintrastate contribution from intrastate rates," Order  818, theFCC also declined to exercise this authority. Instead, itdirected carriers to recover their contributions from interstaterevenues only. The states and CBT challenge this assertion of authority on thesame grounds they question the inclusion of intrastate revenuesfor universal service contributions. Because the FCC bases its"'<Xe0*0*0*+" authority on the same provisions it cited on that issue, ourdecision to deny the agency jurisdiction on that question appliesequally to the its claim of authority to assess intrastate rates. The FCC also raises a prudential defense, arguing that becauseit has not chosen to exercise its authority, the issue is not yetripe for judicial review. Additionally, the agency argues thatboth petitioners lack standing. We do not accept either of theseprudential defenses. Ri. Ripeness. \ Conceding that the FCC has not yet acted on its decision toassert authority over intrastate services, the states reject theagency's ripeness claim because the "question presented is purely zN( Alegal." See New Orleans Pub. Serv., Inc. v. Council of the City zN Aof New Orleans, 833 F.2d 583, 587 (5th Cir. 1987).9f` - zNH4ԍ In its most recent action, the FCC reaffirmed itsjurisdictional authority to require carriers to contribute based zNAon both intrastate and interstate revenues. See Seventh Report zNAand Order  87-90. In fact, the FCC appears to be awaiting adecision by this court before taking further action:"Accordingly, pending further resolution of this matter by theFifth Circuit, the assessment base and recovery base forcontributions to the high-cost and low-income universal service zNAsupport mechanism that we adopted in the First Report and Order zNPAshall remain in effect." Seventh Report and Order  90. Thisinvitation to judicial action further undercuts the FCC'sripeness defense.9 Pointing zN Aalso to Pacific Gas & Elec. Co. v. State Energy Resources zN AConservation & Dev. Comm'n, 461 U.S. 190 (1983), the states arguethat when the FCC has asserted its authority in a final decisionon a legal question such as its jurisdiction over intrastaterates, "one does not have to await the ultimate impact of the zNAthreatened injury to obtain preventive relief." See id. at 201. This issue is ripe for judicial review. The two factors forconsidering ripeness--fitness for judicial decision and hardshipto the parties--support our consideration of this question.Courts should be able to resolve a question such as jurisdictionand authority under the Act. Additionally, the states alreadyhave shown one example of the harm in withholding review. Forinstance, MCI, in the face of state opposition, has already begun zN4billing some customers based on revenue from intrastate calls. g - zN`"4ԍ MCI has filed a supplemental brief rejecting this zN(#Acharacterization. It relies on MCI Telecomm. Corp. v. Virginia zN#AState Corp. Comm'n, 11F.Supp. 2d 669 (E.D. Va. 1998), vacated zN$Aas moot, 1999 U.S. App. LEXIS 8749 (4th Cir. May 10, 1999)(unpublished), in which the court granted MCI's motion forinjunctive relief from a Virginia state commission's order andruling that MCI's disputed charges were not charges forintrastate calls. MCI also points to the FCC's recent orderrejecting Virginia's administrative petition of the same issue. zNh)ASee Virginia State Corp. Comm'n v. MCI Telecomm. Corp.,"h)f0*0*0**" No.E-99-01.FCC99-42 (released Mar. 22, 1999). This rulingactually supports the states' ripeness argument, however, becausethe district court's final order on this question, along with theFCC's recent order, further demonstrates the propriety ofjudicial review of this question. "=xg0*0*0*+" Mii. Standing.  \ The FCC's standing defense has even less merit. First, stateshave a sovereign interest in "the power to create and enforce a zNxAlegal code." See Alfred L. Snapp & Son, Inc. v. Puerto Rico,458U.S. 592, 601 (1982). Moreover, the FCC's refusal to exerciseits declared authority does not deprive states of standing. Thestates point out that the District of Columbia Circuit will notfind a lack of standing simply because an agency has refused to zN` Aenforce its own regulations. See Alaska v. United States Dep't of zN( ATransp., 868 F.2d 441, 444 (D.C. Cir. 1989). For the samereasons, we also reject the FCC's standing defense. Riii. Merits. \ Having disposed of the FCC's prudential defenses, we reverse itsclaim that it can refer these carriers to the states for recoveryof those contributions. This is for the same reasons that wereject the agency's assertions of jurisdiction to assessintrastate revenues for contributions. The FCC has failed topoint to any statutory authority that explicitly demonstrates how 254 applies to intrastate universal service. Therefore, we denythe agency's claim of jurisdiction and reverse this portion of zN4the Order.%hx- zN4ԍ Having concluded that the FCC has no jurisdiction overintrastate rates for universal service purposes, we do not reachCBT's final argument challenging the agency's requirement thatcarriers recover their contributions solely from interstaterevenues.% DhIV. Conclusion.  \ It is difficult to disagree with the Supreme Court's assessmentthat the Act is "a model of ambiguity or indeed even zNAself-contradiction." Iowa Utilities, 119 S. Ct. at 738. As theCourt notes, Congress realizes that many of these ambiguitieswill be resolved by the FCC during its implementation of thestatute, and we, like the Court, generally defer to the agency's zN Ainterpretation of the sometimes-mysterious sections. See Chevron,467 U.S. at842-43. In this case, we have done so, and we affirmmost aspects of the Order implementing the universal serviceprogram and dismiss challenges to several parts of the Order asmoot."@>( h0*0*0*#"Ԍ Still, our deferential approach does not require us to affirmthe FCC in every circumstance. In particular, the agency exceededits statutory authority in (1) prohibiting the states fromimposing eligibility requirements and (2) requiring ILEC's torecover their contributions from access charges. Applying theCourt's most recent pronouncements on the Act, we also deny theFCC jurisdiction over state control of local servicedisconnections and universal service contributions based onintrastate revenues. We remand one petition to the agency forreconsideration, so it can reconsider the propriety of assessingthe international revenues of interstate carriers. For the reasons stated, the petitions for review are GRANTED INPART and DENIED IN PART. The May 8, 1997, Universal Service Orderis AFFIRMED in part, REMANDED in part, and REVERSED in part, inaccordance with this opinion.