 United States Court of Appeals
        FOR THE DISTRICT OF COLUMBIA CIRCUIT




Argued September 13, 2016             Decided May 26, 2017

                      No. 15-1080

                     NEUSTAR, INC.,
                      PETITIONER

                            v.

   FEDERAL COMMUNICATIONS COMMISSION AND UNITED
               STATES OF AMERICA,
                  RESPONDENTS

        CTIA - THE WIRELESS ASSOCIATION, ET AL.,
                     INTERVENORS



                Consolidated with 16-1293



           On Petitions for Review of Orders of
         the Federal Communications Commission



     Kannon K. Shanmugam argued the cause for petitioner.
With him on the briefs were Marcie R. Ziegler, James E.
Gillenwater, Amy E. Murphy, Tyrone Brown, Andrew G.
McBride, Thomas J. Navin, and Brett A. Shumate.
                               2

     David M. Gossett, Deputy General Counsel, Federal
Communications Commission, argued the cause for
respondents. With him on the brief were William J. Baer,
Assistant Attorney General, Robert B. Nicholson and Scott A.
Westrich, Attorneys, Jonathan B. Sallet, General Counsel,
Federal Communications Commission, Jacob M. Lewis,
Associate General Counsel, and Lisa S. Gelb and C. Grey Pash
Jr., Counsel. Richard K. Welch, Deputy Associate General
Counsel, Federal Communications Commission, entered an
appearance.

     Peter Karanjia argued the cause for Association
Intervenors. With him on the brief were Christopher J. Wright,
John T. Nakahata, Mark D. Davis, William B. Sullivan, John
R. Grimm, and James M. Smith. Timothy J. Simeone entered
an appearance.

   Before: TATEL, Circuit Judge, and EDWARDS and
SENTELLE, Senior Circuit Judges.

   Opinion for the Court filed by Senior Circuit Judge
SENTELLE.

     SENTELLE, Senior Circuit Judge: Neustar, Inc. petitions
for review of orders of the Federal Communications
Commission (“FCC” or the “Commission”) naming another
company to replace Neustar as the Local Number Portability
Administrator (“LNPA” or “LNP Administrator”). Petitioner
argues that the Commission erred in not properly determining
issues relating to the new Administrator’s corporate
affiliations. Finding no error in the Commission’s decision, for
the reasons set forth below, we deny the petitions.
                                3
                       I.      BACKGROUND

     The Telecommunications Act of 1996 (“Act”) requires
telecommunications providers to provide “portability” of
telephone numbers, permitting customers to retain their current
numbers when switching carriers. 47 U.S.C. § 251(b)(2); see
also 47 U.S.C. § 153(37). To effectuate this requirement, the
FCC must “create or designate one or more impartial entities
to administer telecommunications numbering and to make such
numbers available on an equitable basis.” 47 U.S.C.
§ 251(e)(1).

     In its 1996 First Report and Order and Further Notice of
Proposed Rulemaking, FCC 96-286, 11 FCC Rcd. 8352
(1996), the FCC “conclude[d] that it is in the public interest for
the number portability databases to be administered by one or
more neutral third parties,” id. ¶ 92, 11 FCC Rcd. at 8400-01
¶ 92. Consequently, the Commission “direct[ed] the [North
American Numbering Council (“NANC” or “Council”)] to
select as a local number portability administrator(s) . . . one or
more independent, non-governmental entities that are not
aligned with any particular telecommunications industry
segment . . . .” Id. ¶ 93, 11 FCC Rcd. 8401 ¶ 93. This led to
the creation of the LNP Administrator. The NANC LNPA
Selection Working Group issued its report (“Working Group
Report”) on April 25, 1997. See generally North American
Numbering Council, Local Number Portability Administration
Selection Working Group (Apr. 25, 1997). In this report, the
NANC recommended Lockheed Martin IMS (“Lockheed”),
predecessor of Neustar, and Perot Systems, Inc. to serve as
LNPAs. Id. § 6.2.4; see Second Report and Order, FCC 97-
289 ¶ 25, 12 FCC Rcd. 12281, 12298 ¶ 25 (Aug. 18, 1997).
The FCC generally adopted the recommendations of the
Working Group in its 1997 Second Report and Order. Second
Report and Order, FCC 97-289 ¶ 33, 12 FCC Rcd. 12281,
                               4
12303 (1997). In 1998, Perot Systems experienced significant
performance difficulties and Lockheed became administrator
for the entire country.

     In 1999, upon finding that Lockheed did not meet the
neutrality criteria, the FCC issued an order allowing the LNPA
contract to be transferred to a new independent affiliate:
Neustar, Inc. Order, FCC 99-346 ¶ 1 (Nov. 17, 1999). It found
“that Neu[s]tar, as currently structured and with the additional
safeguards imposed herein, is in compliance with our neutrality
criteria.” Id. As a result of the transfer of the LNPA contract,
Neustar is the incumbent LNPA. See March 2015 Order, FCC
15-35 ¶ 7.

       In 2009, Telcordia, a wholly owned subsidiary of Ericsson,
petitioned the FCC “to institute a competitive bid process for
the LNPA contract” and the FCC subsequently began a
collaborative public process to develop the procedures to select
the next LNPA. Id. ¶¶ 8-10. After this interactive process and
the release of the bid documents, two companies submitted
bids: Neustar and Telcordia. Id. ¶¶ 8-11. Following the review
of these initial bids, the Commission issued a solicitation for
Best and Final Offers (“BAFO”). Each company submitted a
BAFO. Id. Just over a month later, Neustar submitted a
second, unsolicited BAFO, which the NANC refused to
consider. Id. After reviewing the bids, the NANC ultimately
“recommended the selection of Telcordia as the sole LNPA
. . . .” Id. ¶ 12. Neustar objected to this recommendation on
procedural grounds concerning the selection process, see id.
¶ 14, and on substantive grounds regarding costs and the
bidders’ qualifications, see id. ¶¶ 65, 134, and “challeng[ed]
Telcordia’s neutrality showing,” id. ¶ 167.

    In its March 2015 Order approving recommendation of
Telcordia as the LNPA, the FCC specifically addressed these
                              5
concerns. See id. ¶¶ 14-198. First, contrary to Neustar’s
procedural objections, the FCC determined that selection of the
LNPA does not require notice-and-comment rulemaking and
“this proceeding is properly viewed as an informal
adjudication.” Id. ¶ 18; see id. ¶¶ 15, 18. Neustar had argued
that because the prior selection of the LNPAs was incorporated
into FCC rules, the selection of a new LNPA must be
accomplished by a rulemaking to amend the existing rules. The
FCC also sustained the rejection of Neustar’s second BAFO.
Id. ¶ 37.

     The FCC further determined that both bidders were
qualified to serve as the LNPA, id. ¶ 81, and that the cost
analysis warranted recommending Telcordia as the next LNPA,
id. ¶ 153.

    As to neutrality, Neustar argued that Telcordia could not
be neutral because its parent company, Ericsson, is an
equipment manufacturer and service provider. Id. ¶ 169.
Neustar maintained further that Ericsson, as Telcordia’s sole
owner, must be evaluated for alignment, undue influence, and
whether it is a manufacturer of telecommunications network
equipment. Id. The FCC rejected this argument.

     The FCC did, however, order the imposition of further
safeguards and found “that, when considered together in light
of the safeguards and conditions . . . adopt[ed] in this Order,
Telcordia will not be subject to undue influence by Ericsson,
nor will Ericsson adversely affect Telcordia’s ability to serve
as a neutral LNPA.” Id. ¶ 168.

     The FCC supported its neutrality determination with
several points. First, it emphasized that the challenged
telecommunications sector connections were with Ericsson,
not Telcordia. Id. ¶ 172. The FCC determined that “even to
                                6
the extent Ericsson is ‘aligned with’ the wireless industry as
that term is understood in our neutrality rules, it does not follow
that Telcordia is so aligned.” Id. n.593. It grounded this
conclusion on a finding that “Telcordia is a separate company
with a separate independent board of directors, each of whom
owes fiduciary duties to Telcordia.” Id. ¶ 172. The
Commission further analyzed Telcordia’s independence,
reasoning that this independence is sustainable, “particularly
when considered in conjunction with the conditions that we
impose in this Order.” Id. ¶ 172. The FCC emphasized that it
“has, and will exercise ample authority to ensure that the
contract includes targeted conditions to ensure that the LNPA
is neutral and remains neutral throughout the term of the
contract.” Id. ¶ 173. It further stressed that neutrality is a key
consideration and that regulations governing the LNPA and
conditions it adopted in the Order were crafted “to ensure that
such neutrality is preserved.” Id. ¶ 179. The Commission
further noted that Telcordia had implemented a number of
safeguards described in its neutrality showing that, taken
together with the conditions imposed in the Order, led the
Commission to conclude “that Telcordia meets our neutrality
requirements.” Id.

     After detailing some of the conditions, including corporate
structure, a majority independent board of directors, a biannual
neutrality audit and a Code of Conduct, the FCC addressed the
specific concern that “Ericsson might be tempted to prioritize
those [other] contracts and sales over the LNPA contract.” Id.
¶¶ 179-81. It recognized that Ericsson’s role as Telcordia’s
sole owner “could present opportunities for Ericsson to exert
undue influence over Telcordia.” Id. ¶ 181. The Commission
described the concerns about Ericsson as being “somewhat
speculative” but did “acknowledge that they reflect[ed]
potential incentive and ability” for Telcordia to benefit its
parent corporation. Id.
                               7

     However, the Commission further concluded that its rules
provided the flexibility to deal with the potential for undue
influence that might impair neutrality. It noted that the FCC
had “historically addressed such concerns by imposing
conditions on the numbering administrators” and that it was
doing so in the Order. Id. In keeping with this finding, the
Commission “require[d] a condition that will restrict
Ericsson’s ability to exert undue influence on Telcordia by
limiting Ericsson’s direct influence on Telcordia’s board of
directors”: a voting trust. Id. ¶ 182. It ordered that Telcordia
adopt the proposed Code of Conduct with additional FCC-
imposed conditions specifically targeted at this dynamic. Id.
¶ 186. After considering the comments and concerns in the
record, it concluded that Telcordia was not “per se precluded
from serving as the LNPA” by Commission rules, precedent,
or any other reason. Id. ¶ 188. It further concluded that, given
the safeguards and conditions set forth in the order, “Telcordia
has demonstrated its commitment to maintain neutrality in its
LNPA operations . . . .” Id. The Commission therefore
determined that Telcordia met the neutrality requirements for
appointment as the LNPA. The Commission required that the
Code of Conduct “be finalized,” the voting trust be formed, and
the appointment of trustees and independent directors be “in
effect prior to Telcordia commencing to provide LNPA
services . . . .” Id.

     Finally, the FCC ordered “that the North American
Portability Management LLC, with Commission oversight, is
directed to negotiate the proposed terms of the LNPA contract
in accordance with this Order, and submit the proposed
contract to the Commission for approval.” Id. ¶ 199. On July
25, 2016, following successful contract negotiations and
satisfaction of its conditions, the FCC issued a final decision.
In the Matters of Telcordia Technologies, Inc. Petition to
                               8
Reform Amendment 57 and to Order a Competitive Bidding
Process for Number Portability Administration, FCC 16-92
¶ 1, 2016 WL 4006478, at *1 ¶ 1 (July 25, 2016) (July 2016
Order).

    Neustar petitions this Court for review.

                        II.     DISCUSSION

     On petition to this Court, Neustar reiterates the arguments
it made to the FCC regarding the LNPA selection process and
Telcordia’s fitness to serve as the LNPA. Neustar argues that
(1) the FCC violated the Administrative Procedure Act
(“APA”) by failing to engage in notice-and-comment
rulemaking, (2) the FCC’s selection of Telcordia was contrary
to law or arbitrary and capricious based on an improper
understanding and application of the neutrality regulations and
its approach to Ericsson as Telcordia’s sole corporate parent,
and (3) the FCC’s evaluation of the parties’ bid costs was
arbitrary and capricious. The FCC moved to dismiss the
petition, arguing that this Court does not have jurisdiction. For
the reasons discussed below, we conclude that this Court has
jurisdiction, that the Order does not qualify as a rule, and that
there is no requirement of notice-and-comment rulemaking
when selecting the LNPA. We further hold that neither the
FCC’s neutrality determination nor its cost analysis was
arbitrary and capricious and that the FCC’s BAFO
determination was not arbitrary and capricious.


                          A. Jurisdiction

      The FCC initially asserted that this Court lacked
jurisdiction to hear Neustar’s petition to review the challenged
March 2015 Order. The Commission moved to dismiss the
                               9
petition for review on the ground that the Order is not final for
purposes of judicial review under the Hobbs Act, 28 U.S.C.
§ 2342(1), and § 402(a) of the Communications Act, 47 U.S.C.
§ 402(a). The Commission correctly notes that this Court’s
jurisdiction extends “only to final orders” of the FCC. See N.
Am. Catholic Educ. Programming Found. v. FCC, 437 F.3d
1206, 1209 (D.C. Cir. 2006) (emphasis removed); see also Blue
Ridge Envtl. Def. League v. NRC, 668 F.3d 747, 753 (D.C. Cir.
2012).
     On August 18, 2016, however, in Case No. 16-1293,
Neustar filed a petition for review of the FCC’s July 2016
Order approving the terms of a proposed contract for Telcordia
to serve as the next Administrator. On September 1, 2016,
Petitioner made an unopposed motion for consolidation of its
petitions for review in Neustar, Inc. v. Federal
Communications Commission, Nos. 15-1080 and 16-1293,
asserting that consolidation would “serve to moot any potential
jurisdictional objection . . . .” We granted that motion and
consolidated the cases. Given the second petition and
consolidation of the cases, the FCC’s jurisdictional argument
is moot.

              B. Notice-and-Comment Rulemaking

        1. Rulemaking Requirements and Promulgation
                      Under § 251

     Neustar argues that, because § 251 requires that the FCC
issue regulations to implement the statute’s requirements, the
FCC must use rulemaking procedures whenever it acts under
§ 251. In support, it urges that the Supreme Court, in AT&T
Corp. v. Iowa Utilities Board, 525 U.S. 366, 383 n.9 (1999),
“recognized that ‘Section 251(e) . . . requires the Commission
to exercise its rulemaking authority.’” Neustar asserts again
that the FCC’s prior LNPA selection was “the product of
                               10
notice-and-comment rulemaking” and thus, because the Order
in this case effectively repealed that prior rule by
recommending a new LNPA, the new LNPA recommendation
should have followed notice-and-comment rulemaking
procedures. The FCC maintains that it appropriately selected
the new LNPA through informal adjudication and that it does
not “read [its] rules to incorporate a particular LNPA or to
require amendment when selecting a new one.” See March
2015, FCC 15-35 ¶¶ 18, 23.

     Section 251 of Title 47, United States Code, provides in
subsection (d) that generally “[w]ithin 6 months after February
8, 1996, the Commission shall complete all actions necessary
to establish regulations to implement the requirements of this
section.” 47 U.S.C. § 251(d)(1). Subsection (e) addresses
numbering administration and empowers the Commission to
“create or designate” an impartial entity or entities to
administer the telecommunications numbering system. See
§ 251(e).

     Subsection (d) only requires that the FCC “establish
regulations to implement the requirements of this section.”
§ 251(d) (emphasis added). In keeping with this requirement,
regulations establishing the selection process and how it would
select administrators properly provide a means to implement
the statute, even though the regulations in of themselves would
not satisfy ultimate statutory requirements such as selecting the
administrator. Thus, the statute’s text does not compel that all
of the statutory requirements be implemented through
rulemaking. The text is broad enough to encompass the
processes to implement the statutory requirements through
rulemaking even if the ultimate outcomes are achieved via
another process, such as informal adjudication. See id. We
also agree with the FCC that it has not incorporated a specific
LNPA by rule and thus the selection of a new LNPA need not
                                 11
follow rulemaking procedures either. See March 2015, FCC
15-35 ¶ 23.

     In addition to the fact that the statute itself does not require
that every administrator be selected through rulemaking,
review of the FCC’s use of its rulemaking and regulatory
authority under this statute illustrates the distinction between
what must be achieved through rulemaking under the statute
and what may be achieved through informal adjudication. We
review administrative decisions such as the one before us
against a background understanding that agencies perform their
administrative functions both through rulemaking and
adjudication. See generally SEC v. Chenery Corp., 332 U.S.
194 (1947). The FCC “has very broad discretion to decide
whether to proceed by adjudication or rulemaking.”
Conference Grp., LLC v. FCC, 720 F.3d 957, 965 (D.C. Cir.
2013) (citations omitted).

     Rulemaking scenarios generally involve broad
applications of more general principles rather than case-
specific individual determinations.            “This maxim of
administrative law permits an agency to develop a body of
regulatory law and policy either through case-by-case
decisionmaking (a quasi-adjudicative process) or through
rulemaking (a quasi-legislative process).” Am. Tel. & Tel. Co.
v. FCC, 978 F.2d 727, 731 (D.C. Cir. 1992). A rulemaking
under § 251(e) would more properly encompass an action such
as “adoption of a rule stating that ‘[t]oll free numbers shall be
made available on a first-come, first-served basis unless
otherwise directed by the Commission.’” See Kristin Brooks
Hope Ctr. v. FCC, 626 F.3d 586, 588 (D.C. Cir. 2010) (citation
omitted).

   By contrast, agencies may use informal adjudications
when they are not statutorily required “to engage in the notice
                               12
and comment process” or to “hold proceedings on the record
. . . .” See Safe Extensions, Inc. v. FAA, 509 F.3d 593, 604
(D.C. Cir. 2007). Informal adjudications may be used in highly
fact-specific contexts, see Nat’l Biodiesel Bd. v. EPA, 843 F.3d
1010, 1017-18 (D.C. Cir. 2016), and lack “the hallmarks of
legislative rulemaking,” Conference Grp., 720 F.3d at 965.
These informal adjudications still must comply with the
familiar APA standard banning arbitrary and capricious
actions. See 5 U.S.C. § 706(2)(A); Occidental Petrol. Corp. v.
SEC, 873 F.2d 325, 337 (D.C. Cir. 1989).

     In short, while promulgating procedures for how to select
a new LNPA may appropriately be done by rulemaking, the
actual recommendation of the next LNPA is an individualized
selection process that is sufficiently adjudicatory in nature to
fall outside the scope of any requirement that the FCC
promulgate rules to carry out § 251.

     The history surrounding the selection of prior LNPAs is
consistent with this textual analysis. See March 2015 Order,
FCC 15-35 ¶¶ 23-26. For example, early in the history of the
application of the Act and the associated regulations, the FCC
stated that, in its implementation of the statute, it had entered
the Local Competition Second Report and Order, in which it
concluded that the NANP Order satisfied the requirements of
§ 251(e)(1) for the creation or designation of an impartial
numbering administrator. It further noted the requirement for
the initiation of a new, impartial number administrator and
“established the model for how that administrator would be
chosen.” Third Report and Order and Third Report and Order,
FCC 97-372 ¶ 8 (Oct. 9, 1997). It had therefore at that time
taken “‘action necessary to establish regulations’” for the
designation of such an impartial administrator and therefore
met the requirements of § 251(e)(1). Id.
                                 13
     Thus, the FCC itself has interpreted the statutory mandate
as encompassing measures to implement the ultimate
requirement to designate an administrator—such as
“establish[ing] the model for how that administrator would be
chosen.” Id. While not determinative, this past practice at least
illustrates how the scheme has previously functioned.

     However, the FCC’s interpretation of the statutory
mandate is not entitled to deference in this case. The FCC’s
brief nominally references Chevron’s deferential standard in its
standard of review but did not invoke this standard with respect
to rulemaking. Consequently, it has forfeited any claims to
Chevron deference. See Lubow v. U.S. Dep’t of State, 783 F.3d
877, 884 (D.C. Cir. 2015) (noting Chevron deference is not
jurisdictional and can be forfeited). See generally Silver State
Land, LLC v. Schneider, 843 F.3d 982 (D.C. Cir. 2016)
(deciding statutory matter without citing Chevron). Similarly,
review of the relevant agency orders shows no invocation of
Chevron deference for this matter.

      In any event, upon our review of the statute, we hold that
§ 251’s general regulatory mandate from Congress does not
require that each new administrator be selected by notice-and-
comment rulemaking procedures. Petitioner cites to a footnote
regarding § 251(e) in AT&T Corp. v. Iowa Utilities Board, 525
U.S. 366 (1999), in which the Supreme Court stated that
“[§] 251(e), which provides that ‘[t]he Commission shall create
or designate one or more impartial entities to administer
telecommunications numbering,’ requires the Commission to
exercise its rulemaking authority, as opposed to § 201(b),
which merely authorizes the Commission to promulgate rules
if it so chooses.” Id. at 383 n.9; see also id. at 384 (“[Section]
251 specifically requires the Commission to promulgate
regulations implementing that provision . . . .”). This dicta, see
id. at 383, is not directed to any situation parallel to the question
                               14
raised in the present case. As we hold in this case, the FCC
may, in keeping with the statute, choose to use informal
adjudication to select an administrator, an activity that does not
have any of the distinctions of legislative rulemaking.

     For these reasons, we hold that § 251 does not mandate
that selection or recommendation of an administrator must be
done through rulemaking procedures.

                     2. Rules Under the APA

    Second, the FCC’s Order in this case does not qualify
under the statutory definition of a “rule,” so rulemaking
procedures are not required.

     Under the APA and as noted in Perez v. Mortgage Bankers
Ass’n, 135 S. Ct. 1199 (2015), a rule “is defined broadly to
include ‘statements of general or particular applicability and
future effect’ that are designed to ‘implement, interpret, or
prescribe law or policy.’” Id. at 1203 (quoting 5 U.S.C.
§ 551(4)) (alteration omitted). By contrast, “‘adjudication’
means agency process for the formulation of an order . . . .” 5
U.S.C. § 551(7). “‘[O]rder’ means the whole or part of a final
disposition, whether affirmative, negative, injunctive, or
declaratory in form, of an agency in a matter other than rule
making but including licensing . . . .” Id. § 551(6).

     Statutory interpretation can be “rendered in the form of an
adjudication, not only in a rulemaking.” Conference Grp., 720
F.3d at 958. “The fact that an order rendered in an adjudication
‘may affect agency policy and have general prospective
application,’ does not make it rulemaking subject to APA
section 553 notice and comment.” Id. at 966 (citing N.Y. State
Comm’n on Cable Television v. FCC, 749 F.2d 804, 814 (D.C.
Cir. 1984)). Further, as a general matter, “[i]n interpreting and
                              15
administering its statutory obligations under the Act, the
Commission has very broad discretion to decide whether to
proceed by adjudication or rulemaking.” Conference Grp., 720
F.3d at 965 (citing Qwest Servs. Corp. v. FCC, 509 F.3d 531,
536 (D.C. Cir. 2007); Time Warner Entm’t Co. v. FCC, 240
F.3d 1126, 1141 (D.C. Cir. 2001)).

     In this case, the Order under review determined the rights
and obligations of two parties, Telcordia and Neustar, that were
then entitled to negotiate for the LNPA contract. It applied
existing rules and regulations to Telcordia and determined
Telcordia’s rights as the winning bidder in a fact-intensive
determination that occurred on a case-by-case basis. As we
have stated in a different context, “[g]iven the fact-intensive
nature of the Commission’s role in these proceedings, it is
surely within the agency’s authority to proceed on a case-by-
case basis rather than by rulemaking.” Busse Broad. Corp. v.
FCC, 87 F.3d 1456, 1463-64 (D.C. Cir. 1996) (citing NLRB v.
Bell Aerospace Co., 416 U.S. 267, 294 (1974)). This
individualized determination was not intended to impact law or
policy; rather, it resolved interests in a specific bidding
competition. Cf. Bowen v. Georgetown Univ. Hosp., 488 U.S.
204, 221 (1988) (Scalia, J., concurring) (“Adjudication deals
with what the law was; rulemaking deals with what the law will
be.” (emphasis removed)).

     Neither does some tangential impact on other entities
necessarily transform an informal adjudication into a
rulemaking since “the nature of adjudication is that similarly
situated non-parties may be affected by the policy or precedent
applied, or even merely announced in dicta, to those before the
tribunal.” Goodman v. FCC, 182 F.3d 987, 994 (D.C. Cir.
1999) (citing NLRB v. Wyman-Gordon Co., 394 U.S. 759, 765-
66 (1969)). Similarly, seeking public comment is not
determinative of whether an action qualifies as a rulemaking or
                               16
as an informal adjudication since “the agency may seek
comment in either a rulemaking or an adjudicatory
proceeding.” Id. The FCC’s interactive public process in this
case, therefore, is not determinative of its APA status.

    Given all these considerations, the FCC’s Order in this
case does not meet the APA’s definition of a rule and does not
require a rulemaking.

     Additionally, “[t]he general principle is that when as an
incident of its adjudicatory function an agency interprets a
statute, it may apply that new interpretation in the proceeding
before it.” Clark-Cowlitz Joint Operating Agency v. FERC,
826 F.2d 1074, 1081 (D.C. Cir. 1987) (en banc) (citations
omitted) (collecting cases). Review of the cited support for this
proposition reveals a focus on adjudicatory holdings as
inherently retroactive and on rulemaking rules and policies as
inherently prospective.      See id. (detailing the specific
circumstances in which “a retrospective application can
properly be withheld”).

     Petitioner, relying on Catholic Health and Goodman,
argues that adjudications must have retroactive effect, even if
they also have some prospective impact. See Catholic Health
Initiatives Iowa Corp. v. Sebelius, 718 F.3d 914, 921-22 (D.C.
Cir. 2013) (“[A]n adjudication must have retroactive effect, or
else it would be considered a rulemaking.”); Goodman, 182
F.3d at 994-95 (for the proposition that adjudications may have
prospective effects but must have retroactive effects). While
Petitioner is correct regarding the general distinction between
an informal adjudication and a rulemaking, it oversimplifies
this distinction and its application in the present case.

    In Catholic Health, we held that although adjudication is
by its nature retroactive, it may be proper to enter an
                                17
adjudicatory order without retroactive effect. We went on to
observe that, “[b]y ‘retroactive effect,’” we are usually
referring to an order or penalty with economic consequences,
“not retroactive application of the rule itself.” 718 F.3d at 921-
22 (citing Williams Nat. Gas Co. v. FERC, 3 F.3d 1544, 1554
(D.C. Cir. 1993); Wyman-Gordon Co., 394 U.S. at 763-66).
And Goodman discussed retroactivity as an aspect of
adjudicatory decisions in contrast to rules, which include “an
‘agency statement of . . . future effect.’” 182 F.3d at 994
(quoting 5 U.S.C. § 551(4)). This prospective-retroactive
distinction consistently focuses on the application of principles
in the past or future. As this Court has previously explained,
because the APA “does not countenance agency use of
adjudicatory powers to announce rules of prospective effect
only, it seems clear that the circumstances in which a rule may
be announced but not applied in an adjudication are few.” Gen.
Am. Transp. Corp. v. ICC, 872 F.2d 1048, 1060-61 (D.C. Cir.
1989) (emphasis added). In sum, “a principle announced in
adjudication is necessarily retroactive . . . .” Heartland Reg’l
Med. Ctr. v. Sebelius, 566 F.3d 193, 196 (D.C. Cir. 2009)
(emphasis added) (citing Rivers v. Roadway Express, Inc., 511
U.S. 298, 311-12 (1994); Goodman, 182 F.3d at 994)).

     Thus, while Petitioner properly articulates this general
principle, its invocation in this case is inapt, as the question at
hand is whether the actual selection of the administrator may
have prospective effect and still qualify as an informal
adjudication. Petitioner never makes clear what retroactive
effect is missing in this Order. The Order does not state a
general principle that fails to relate back. Petitioner’s argument
appears to be that any adjudication without a visible retroactive
effect must be a rulemaking. This argument proves far too
much. Various agencies regularly make licensure and
authorization decisions of various sorts that affect the future
rights and authorizations of the parties before them. None of
                                18
our precedents require that these must all be done by
rulemaking rather than by informal adjudication. We reiterate
that adjudications by nature are likely to be specific to
individuals or entities, while rules tend to be matters of more
general application. See Heckler v. Ringer, 466 U.S. 602, 614
(1984).

     Consequently, precedent supports the determination in this
case that the Order reflects an informal adjudication. In a
fashion more akin to a licensing, as argued by Respondents, the
key and immediate effect in this case is on the bidding parties,
Telcordia and Neustar, by determining which entity is
authorized to negotiate for the LNPA contract.               The
Commission explained that this decision was based on the
application of a pre-existing process to the specific bidding
entities, not on the announcement of any new principles or
rules. Thus, precedent regarding the retroactivity of principles
issued in adjudications is inapposite to an informal adjudication
having immediate effects on the individuals concerned.

     Because the FCC’s Order does not fall within the APA’s
definition of a rule and qualifies as an informal adjudication, it
is not subject to notice-and-comment procedures.

             C. The FCC’s Neutrality Determination

      Under the APA, a “reviewing court shall . . . hold unlawful
and set aside agency action, findings, and conclusions found to
be . . . arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 5 U.S.C. § 706(2)(A). Courts
will “accept the Commission’s findings of fact so long as they
are supported by substantial evidence on the record as a whole,
and will defer to the Commission’s reading of its own
regulations unless that reading is plainly erroneous or
inconsistent with the regulations[.]” Great Lakes Comnet, Inc.
                              19
v. FCC, 823 F.3d 998, 1002 (D.C. Cir. 2016) (citations and
internal quotation marks omitted). Neustar’s challenge to the
FCC’s approval of the recommendation of Telcordia fails. The
FCC’s determination that, given specified safeguards,
Telcordia satisfied the Act’s requirements and the FCC’s
regulations was not arbitrary and capricious.

     As discussed above, the Act requires that the FCC “create
or designate one or more impartial entities to administer
telecommunications numbering . . . .” 47 U.S.C. § 251(e)(1).
The regulations then define the LNPA as “an independent, non-
governmental entity, not aligned with any particular
telecommunications industry segment, whose duties are
determined by the NANC.” 47 C.F.R. § 52.21(k). The
regulations separately state that an administrator

       shall be [a] non-governmental entit[y] that [is]
       impartial and not aligned with any particular
       telecommunication        industry       segment.
       Accordingly, while conducting [its] respective
       operations     under     this     section,    the
       [Administrator] shall ensure that [it] compl[ies]
       with the following neutrality criteria:

        (i) The [Administrator] may not be an affiliate
        of any telecommunications service provider(s)
        as defined in the Telecommunications Act of
        1996 . . . . ;

        (ii) The [Administrator] and any affiliate
        thereof, may not issue a majority of its debt to,
        nor may it derive a majority of its revenues
        from, any telecommunications service
        provider. . . . ;
                               20
         (iii) Notwithstanding the neutrality criteria set
         forth in paragraphs (a)(1)(i) and (ii) of this
         section, the [Administrator] may be
         determined to be or not to be subject to undue
         influence by parties with a vested interest in
         the outcome of numbering administration and
         activities. NANC may conduct an evaluation
         to determine whether the [Administrator]
         meet[s] the undue influence criterion.

47 C.F.R. § 52.12(a)(1) (emphasis added).

     Giving meaning to the term “accordingly,” the FCC
determines whether an entity is impartial and not aligned based
on an evaluation of the entity under these three neutrality
criteria. Once the FCC found that Telcordia had satisfied the
neutrality requirements in § 52.12(a)(1)(i)-(iii), the FCC could
properly find that it was independent and not aligned as set out
under the regulations in § 52.12(a)(1) and in the definitional
section in § 52.21(k).

     This regulatory analysis reflects the FCC’s interpretation
of its own regulations. The FCC’s current interpretation is
consistent with its prior view of the interaction between these
requirements included in an August 26, 2004 Order modifying
the conditions on Neustar as the Administrator. See In the
Matter of North American Numbering Plan Administration
Neustar Inc., FCC 04-203, 19 FCC Rcd. 16982 (Aug. 26,
2004). There, the FCC explained:

       Section 52.12 of the Commission’s rules
       addresses the NANPA neutrality requirements.
       Specifically, section 52.12(a)(1) states that the
       NANPA must be a non-governmental entity,
       not aligned with any particular industry
                               21
       segment. Thus, a TSP may not be the NANPA.
       Furthermore, the NANPA may not be an
       affiliate of a TSP. The Commission’s rules state
       that the majority of the NANPA’s debt must not
       be issued to, nor may a majority of the
       NANPA’s revenues be received from, a TSP. In
       addition, the NANPA must not be subject to
       undue influence of any party with a vested
       interest in numbering administration.

Id. ¶ 10 (emphasis added). Illustratively, the FCC’s 2004
explanation also reflects its understanding that the three
specific requirements regarding TSP connections and undue
influence flow directly (connoted by the term “thus”) from the
requirement that administrators be non-governmental entities
and not aligned. See id.

     A similar understanding is reflected in the Wireline
Competition Bureau’s final 2015 LNPA vendor qualification
survey, which was “the first step in the [Request for Proposal]
process” and solicited detailed responses from the parties.
Wireline Competition Bureau, 2015 Vendor Qualification 1
(Feb. 4, 2013). That survey states that, “[i]n accordance with
law and FCC regulations,” for an entity to be recommended for
selection as the LNPA, it must meet the requirements set forth
above and further meet the criteria that it (1) not be, own, be
owned by, or be an affiliate of a Telecommunications Service
Provider; (2) “not issue[] a majority of its debt to, nor derive a
majority of its revenues . . . from, any Telecommunications
Service Provider”; and (3) not be “subject to undue influence
by parties with a vested interest in the outcome of numbering
administration and activities . . . .” Id. at 10-11. The FCC
employed a similar understanding in the Order at issue in this
case, as it explained that the Commission has applied the
neutrality criteria set forth in § 52.12 of its rules since their
                               22
adoption and, in particular, that the Commission has required
the Administrator to be impartial, non-governmental, and not
aligned with any industry segment. March 2015 Order, FCC
15-35 ¶ 160 (citing 47 C.F.R. §§ 52.12, 52.21(d), (k)); see also
id. ¶ 164. In that Order, the Commission noted that “[t]his is
the first opportunity that the Commission has had to consider
the neutrality of a newly selected LNPA under the neutrality
requirements as codified in section 52.12 of our rules.” Id.
¶ 164. Thus, the FCC has consistently interpreted these
regulations as providing that neutrality requires an entity to be
impartial and not aligned and, to achieve that goal (connoted
by the terms “accordingly”; “thus”; or “require[s] that”), the
entity first must satisfy the three neutrality requirements.

     Further, the regulation itself provides in Shakespearian
terms that the Administrator “may be determined to be or not
to be subject to undue influence” and does not prohibit the use
of safeguards when determining whether an entity is subject to
such influence. See 47 C.F.R. § 52.12(a)(1)(iii). This breadth
allows the FCC to determine whether safeguards could permit
an entity to satisfy these criteria and qualify to serve as the
Administrator. See March 2015 Order, FCC 15-35 ¶ 181. By
way of illustration, in the Order before us, the FCC analogized
to prior uses of other types of safeguards that were tailored to
the unique concerns raised by the entity at issue. Id. ¶ 160.
More specifically, the Commission stated: “For example, in
evaluating Neustar’s ability to serve as a neutral North
American Numbering Plan Administrator when it changed
from a privately held company to a publicly held company, the
Commission determined that no telecommunications service
provider (TSP) or TSP affiliate may own five percent or more
of Neustar’s stock.” Id. (citation omitted). It then explained
that it had “undertaken a careful and . . . extensive review of
Telcordia’s fitness to serve as a neutral LNPA.” Id. ¶ 164.
                               23
     A major concern involves Telcordia’s status as a wholly
owned subsidiary of Ericsson, a Swedish company
manufacturing communications equipment and software and
providing managed network services. “Neustar asserts that . . .
each of these areas provide Ericsson with an opportunity to
affect Telcordia’s neutrality . . . .” Id. ¶ 162. Upon analysis of
this relationship, the FCC looked at the corporate structure and
related business arrangements to find Telcordia satisfied the
neutrality criteria “particularly when considered in conjunction
with the conditions [also referred to as safeguards] that we
impose in this Order.” Id. ¶ 172. It explained that, consistent
with its past practice, “the Commission has, and will[,] exercise
ample authority to ensure that the contract includes targeted
conditions to ensure that the LNPA is neutral and remains
neutral throughout the term of the contract.” Id. ¶ 173.

     Most specifically, the FCC emphasized the importance of
the LNPA but expressly stated that “our regulations concerning
the qualifications of the LNPA and the conditions that we adopt
in this Order are designed to ensure” that neutrality would be
preserved. Id. ¶ 179. It further observed that Telcordia already
implemented some of the safeguards in its neutrality showing
and that such safeguards, “coupled with the conditions we
impose herein,” supported a conclusion that Telcordia met the
neutrality requirements. Id. The Commission also noted that
its “rules give us flexibility to consider potential sources of
undue influence that might impair neutrality. We have
historically addressed such concerns by imposing conditions
on the numbering administrators, and we do so here.” Id.
¶ 181. Using this interpretation, and based on its understanding
of the efficacy of safeguards in this context, the FCC concluded
“that Telcordia has demonstrated its commitment to maintain
neutrality in its LNPA operations, and thus meets our neutrality
requirements.” Id. ¶ 188.
                                24
     Neustar argues that the FCC’s proposed safeguards are
insufficient given underlying corporate law principles.
Because Telcordia is a Delaware corporation and Delaware law
requires that a wholly owned subsidiary’s directors are bound
to act in the best interests of the sole shareholder, the corporate
parent, Neustar asserts that Telcordia, even with safeguards,
would be required to act for Ericsson’s benefit. In support,
Neustar urges that under Delaware corporate law, parent
corporations and their wholly owned subsidiaries share
complete unity of interest, rendering any biases of a parent to
be the shared biases of the subsidiary, which must manage its
business in a way that furthers the best interests of the parent.

     Neustar premises this argument on Delaware corporate
law cases including Anadarko Petroleum Corp. v. Panhandle
Eastern Corp., 545 A.2d 1171 (Del. 1988), which holds that
“in a parent and wholly-owned subsidiary context, the directors
of the subsidiary are obligated only to manage the affairs of the
subsidiary in the best interests of the parent and its
shareholders.” Id. at 1174 (citations omitted). Consequently,
Neustar asserts Ericsson’s biases and alignment should have
been evaluated since Telcordia, as a fully owned subsidiary,
necessarily shares any of its problematic biases and alignment.
Neustar posits that the FCC misunderstood the applicable
corporate law and thus misstated the efficacy of potential
remedial measures and safeguards against these underlying
corporate principles.

     In its March 2015 Order, the FCC concluded that members
of Telcordia’s board of directors each owe fiduciary duties to
Telcordia, maintaining a separation that keeps Telcordia from
being tainted by any neutrality concerns posed by Ericsson
itself. See March 2015 Order, FCC 15-35 ¶ 172; see also id.
¶¶ 178-79. It is this conclusion that Neustar challenges as an
incorrect understanding of and application of Delaware
                               25
corporate law principles. Before the Court, the FCC defends
the Order on several grounds, including that there is no
indication Congress considered corporate law in adopting these
requirements and that Neustar’s proposed interpretation of
Delaware corporate law is impermissibly broad. More
specifically, the FCC urges that there is no indication in
Delaware case law that safeguards would be ineffective in
addressing concerns arising from a subsidiary’s fiduciary
duties to its parent.

      Certainly, Neustar raises legitimate concerns—concerns
that might have justified a Commission decision against
Telcordia. But we must keep in mind the standard of review
for our consideration of Commission decisions. The Court is
not to substitute our judgment for that of the FCC. Rather, the
question is more narrow, as we determine whether the FCC
acted arbitrarily and capriciously. See U.S. Telecom Ass’n v.
FCC, 825 F.3d 674, 696-97 (D.C. Cir. 2016). Neustar itself
acknowledges that the interpretation of Delaware law that the
FCC adopted—an interpretation premised upon the efficacy of
safeguards even in a wholly-owned-subsidiary context—
formed the foundation of the FCC’s determination in the Order.
See March 2015 Order, FCC 15-35 ¶ 172. The FCC’s
understanding of Delaware corporate law principles represents
an interpretation of how corporate law informs the FCC’s
duties and regulations and rejects Neustar’s proposed
interpretation. This Court cannot find that the FCC’s
application of corporate law to its regulations, which allowed
it to conclude that safeguards are sufficient and that Telcordia’s
status as a wholly owned subsidiary does not disqualify it from
serving as Administrator, is sufficiently incorrect, misguided,
or without basis to render it arbitrary and capricious. And, in
further support of the FCC’s reasonable interpretation, some
courts have also rejected Neustar’s broad proposed
interpretation of Anadarko. See In re Scott Acquisition Corp.,
                               26
344 B.R. 283, 287 (Bankr. D. Del. 2006); see also First Am.
Corp. v. Al-Nahyan, 17 F. Supp. 2d 10, 26 (D.D.C. 1998); cf.
Case Fin., Inc. v. Alden, Civ. Action No. 1184-VCP, 2009 WL
2581873, at *7 n.41 (Del. Ch. Aug. 21, 2009). But see
Hamilton Partners, L.P. v. Englard, 11 A.3d 1180, 1208-09
(Del. Ch. 2010).

   For all these reasons, this Court cannot conclude that the
FCC’s neutrality determination was arbitrary and capricious.

           D. The BAFO Decision and Cost Analysis

     Finally, Neustar argues that the FCC erred in that it
(1) unjustifiably refused to consider Neustar’s second BAFO
and (2) premised its cost evaluation on an improper assumption
regarding the length of the transition period between Neustar
and Telcordia as LNPAs, leading it to conclude improperly that
Telcordia’s proposal provided a cost advantage.

    Neustar contends that the FCC improperly failed to
evaluate its second BAFO and that the subcommittee
improperly failed to even consider it. Because it posits that its
second BAFO was superior to Telcordia’s BAFO, Neustar
urges that this Court should vacate the FCC’s Order.

     The FCC deemed the NANC’s decision not to consider
Neustar’s second BAFO “reasonable,” March 2015 Order,
FCC 15-35 ¶ 37, explaining that the governing process had
“provided prospective bidders with no right to even a first
BAFO, much less multiple BAFOs,” id. ¶ 42. The request for
proposals description framed the possibility of a BAFO
solicitation as permissive, using the language “may decide to
seek,” and thus “belies Neustar’s claim that it had a reasonable
expectation that it would be invited to submit a second BAFO.”
Id. ¶ 42. We agree with the Commission. We are tempted to
                               27
ask, what part of “best” and, particularly, of “final” does
Neustar not understand? The bidding process had to come to
an end at some point. Even without the arbitrary and capricious
standard of review, it would be difficult to hold that a
commission errs by treating a best and final offer as final.

     In further support, the FCC highlighted the efficiency
reasons for declining another round of offers that would
involve “substantial time and effort” to review, given the
existing “ample record on which to proceed without another
bidding round.” Id. ¶ 44. “In these circumstances, the decision
to allow another round of bidding and evaluation of those bids
had to be weighed against the desire to keep the process moving
forward, and we find that, in light of this balancing, the
[delegated decisionmaker’s] decision . . . not to seek further
bids was reasonable.” Id. Any guidance it provided on this
question, the FCC explained in the Order, was also proper as it
only provided oversight to the selection process and remained
impartial. Id. ¶ 46. Especially in light of the FCC’s reasoned
explanation, this Court could not possibly hold that the decision
not to hold an additional round of bidding, and thus to reject
Neustar’s second and unsolicited BAFO, was arbitrary and
capricious.

     Neustar argues that the FCC did not find that either bid
was qualitatively superior in technical or managerial factors
and therefore the determinative inquiry was the cost analysis.
To calculate comparative cost, Neustar asserts that the
Commission would have to consider not only the relevant price
difference between the bids but also the transition costs
associated with switching to a new LNPA. It concludes that
the FCC improperly found that transition costs did not obviate
the price difference between the bids because the FCC assumed
that the transition would require a shorter period of time than
                                28
was supported by the record and misapplied the relevant
transition costs.

     The FCC specifically addressed analysis of transition risks
and costs and the parties’ technical and management
qualifications in its Order. It did “agree with the NANC
recommendation that both bidders are qualified to serve as
[the] LNPA.” March 2015 Order, FCC 15-35 ¶¶ 65, 73, 76, 81.
But when looking beyond basic competency to the nuanced
qualifications, committee “members [had given] Telcordia
higher rankings based on its technical and management
qualifications.” Id. ¶ 71. The FCC reiterated, before entering
its cost analysis, that despite both bidders’ competency to serve
as the LNPA, Telcordia was ranked higher for technical and
management qualifications and was originally recommended
to serve as the next LNPA. Id. ¶ 135. The FCC emphasized
the importance of technical and management qualifications but
further recognized that cost is an important consideration and,
when good quality can be achieved at a lower cost, “it is
reasonable to take that into account in the analysis of the bids.”
Id. ¶ 138.          The Commission accepted its staff’s
recommendation and review and expressed its confidence “in
Telcordia’s ability to perform well.” Id. Thus, while the FCC
certainly engaged in a cost analysis, it also clarified in its Order
that the determination was not based solely on cost and other
qualitative factors had informed its analysis. See id. This
conclusion further underscores this Court’s determination that
the FCC’s comparison of the bids was not arbitrary and
capricious.

    As to transition costs in general, the FCC explained that it
considered that transition costs would be avoided by
maintaining Neustar as the Administrator but reasoned that
“competitive selections bring opportunities for lower costs and
innovation, and we do not agree that we should maintain the
                                 29
same LNPA indefinitely merely to avoid transition.” Id. ¶ 153.
It further stated: “There is an inherent trade-off between
keeping the same LNPA, which offers predictability and
proven experience, and opening up the contract to competition
and potentially a new vendor, which can lead to lower costs
and innovations.” Id. ¶ 150. Analyzing the overall context and
benefits of the bids led the FCC to conclude that the benefits
“outweigh the costs and potential adjustments associated with
the transition to a new LNPA.” Id. ¶ 153. It found this “even
assuming that Neustar’s estimate of the costs to the industry of
transition are correct . . . .” Id. In a footnote explaining its cost
calculations and analysis, the FCC compared “the two bidders’
prices over time, and add[ed] [in] Neustar’s estimated costs of
transition to the price of Telcordia’s bid” to its calculation
before making its comparison and ultimate price determination.
Id. n.535. Review of the FCC’s calculations shows that it
intended to calculate a high estimated transition cost when
explaining the merits of the ultimate recommendation. Id.
¶ 153 & n.535. Even using Neustar’s high estimates for the
sake of argument, the FCC reiterated that Telcordia’s bid had
merit that “outweigh[ed] the costs and potential adjustments
associated with the transition to a new LNPA.” Id. ¶ 153. For
these reasons, this Court cannot conclude that the cost analysis
was arbitrary and capricious.

                         III.    CONCLUSION

     For the reasons set forth above, we conclude that the
FCC’s process and recommendation were proper exercises of
the FCC’s authority. We therefore hold that Neustar’s petitions
for review are

                                                            Denied.
