                                                            [PUBLISH]

          IN THE UNITED STATES COURT OF APPEALS
                                                           FILED
                FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                  ________________________ ELEVENTH CIRCUIT
                                                    JUL 31, 2006
                        No. 05-11682              THOMAS K. KAHN
                  ________________________            CLERK

                      FCC No. 98-00170

NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER
ADVOCATES,

                                             Petitioner,

NATIONAL ASSOCIATION OF REGULATORY UTILITY
COMMISSIONERS,


                                             Intervenor-Petitioner,

                           versus

FEDERAL COMMUNICATIONS COMMISSION,

                                             Respondent,

AT&T CORPORATION,
CINGULAR WIRELESS, INC.,
LEAP WIRELESS INTERNATIONAL, INC.,
NEXTEL COMMUNICATIONS, INC.,
SPRINT CORPORATION,
T-MOBILE USA, INC.,
VERIZON,
CELLULAR TELECOMMUNICATIONS and INTERNET
ASSOCIATION,

                                             Intervenors-Respondents.
                          ___________________________

                                  No. 05-12601
                          ___________________________

                                 FCC No. 98-00170

VERMONT PUBLIC SERVICE BOARD,

                                                            Petitioner,

      versus

FEDERAL COMMUNICATIONS COMMISSION,

                                                            Respondent.

                            ________________________

                      Petitions for Review of Decisions of the
                       Federal Communications Commission
                           _________________________

                                   (July 31, 2006)

Before BLACK, PRYOR and COX, Circuit Judges.

PRYOR, Circuit Judge:

      The key issue presented in this petition for review is whether the Federal

Communications Commission exceeded its authority, under section 332(c)(3)(A)

of the Communications Act of 1934, when it issued an order that preempted the

states from requiring or prohibiting the use of line items in customer billing for

cellular wireless services. 47 U.S.C. § 332(c)(3)(A); see Truth-in-Billing and

                                           2
Billing Format, Nat’l Ass’n of State Util. Consumer Advocates’ Petition for

Declaratory Ruling Regarding Truth-in-Billing, 20 F.C.C.R. 6448 (2005)

[hereinafter “Second Report and Order” or “the Order”]. The Commission argues,

on the one hand, that the regulation of line-item billing involves “rates charged”

for cellular wireless services, which is the exclusive province of federal regulation.

47 U.S.C. § 332(c)(3)(A). Representatives of state interests argue, on the other

hand, that the regulation of line-item billing involves “other terms and conditions”

of cellular wireless services, which are regulable by the states. Id.

      This appeal also addresses three threshold issues: (1) whether, under the

Hobbs Act, 28 U.S.C. § 2344, this Court lacks subject matter jurisdiction to review

the petition filed by the Vermont Public Service Board (the Vermont Board); (2)

whether the National Association of Regulatory Utility Commissioners (the State

Utility Regulators) may participate as an intervenor; and (3) whether the National

Association of State Utility Consumer Advocates (the State Consumer Advocates)

has standing to petition for review. As to the threshold issues, we dismiss the

petition of the Vermont Board because it is not a “party aggrieved” by the Second

Report and Order, but we allow the State Utility Regulators to continue as an

intervenor and deny the motion to dismiss the petition of the State Consumer

Advocates, which have standing as a consumer of wireless service.



                                           3
      On the key issue, we grant the petitions for review because we conclude that

the Commission exceeded its authority when it preempted the states from requiring

or prohibiting the use of line items. The scope of federal authority to regulate

“rates” or “entry” does not include the presentation of line items on cellular

wireless bills. 47 U.S.C. § 332(c)(3)(A). This billing practice is a matter of “other

terms and conditions” that Congress intended to be regulable by the states. Id.

                                 I. BACKGROUND

      The State Consumer Advocates filed a petition with the Commission that

requested a prohibition on the use of line items by cellular wireless carriers unless

the line item is mandated by state or federal law. In response to this petition, the

Commission issued an order that amended the Truth-in-Billing Rules of the

Commission, preempted the states from requiring or prohibiting the use of line

items in customer billing for wireless service, and proposed further rulemaking to

preempt the states from the regulation of billing practices of wireless service

providers. The State Consumer Advocates and the Vermont Board petition for

review of the Order by the Commission. Sprint Nextel Corp. and Cingular

Wireless LLC (collectively, the Carriers) intervene in support of the Commission,

and the State Utility Regulators intervene in support of the Vermont Board.

      To explain the context of this appeal, we address three preliminary matters.



                                           4
We first describe the enactment and amendment of the Communications Act and

the promulgation of the Truth-in-Billing Rules. We next discuss the petition for

declaratory ruling filed by the State Consumer Advocates and the Second Report

and Order issued by the Commission in response to that petition. We then discuss

motions filed by the Carriers and the Commission to dismiss the petitions of the

Vermont Board and the State Consumer Advocates.

         A. The Communications Act of 1934 and the Truth-in-Billing Rules

      The Communications Act of 1934, 47 U.S.C. §§ 151 to 615b, was enacted

“for the purpose of regulating interstate and foreign commerce in communication

by wire and radio.” Id. § 151. The Act vested the Commission with the authority

to regulate radio frequencies used in wireless services. Id. § 303. In 1993,

Congress amended the Communications Act to create a new regulatory class called

“commercial mobile radio service,” which is “any mobile service [] that is

provided for profit and makes interconnected service available [] to the public or []

to such classes of eligible users as to be effectively available to a substantial

portion of the public.” Id. § 332(d)(1). The amendment granted the federal

government exclusive authority to regulate the “rates charged” and “entry” of

wireless carriers. See id. § 332(c)(3)(A). Although the states were prohibited from

regulating “rates” or “entry,” the amendment provided that the states could



                                            5
continue to regulate “other terms and conditions” of wireless service. Id. §

332(c)(3)(A).

      In May 1999, in response to a growing concern with consumer fraud in the

provision of telecommunications services, the Commission promulgated the Truth-

in-Billing Rules. In the Matter of Truth-in-Billing and Billing Format, 14 F.C.C.R.

7492 (1999) [hereinafter “First Report and Order”]. The stated purpose of the

Rules was “to ensure that consumers are provided with basic information they need

to make informed choices in a competitive telecommunications marketplace, while

at the same time protecting themselves from unscrupulous competitors.” Id. at

7493–94. The Truth-in-Billing Rules required consumer telephone bills to (1) “be

clearly organized, clearly identify the service provider, and highlight any new

providers”; (2) “contain full and non-misleading descriptions of charges”; and (3)

“contain clear and conspicuous disclosure of any information the consumer may

need to make inquiries about, or contest charges, on the bill.” Id. at 7496 ¶ 5.

      The Commission exempted wireless service providers from several of these

rules, id. at 7501–02 ¶¶ 13–19, but the Commission required, among other things,

“(1) that the name of the service provider associated with each charge be clearly

identified on the bill; and (2) that each bill should prominently display a telephone

number that customers may call free-of-charge in order to inquire or dispute any



                                          6
charge contained on the bill.” Id. at 7502 ¶ 15. The Commission sought further

comment on whether the Truth-in-Billing Rules should be applied to wireless

service providers. Id. at 7535 ¶ 68.

        B. The State Consumer Advocates and the Second Report and Order

      The State Consumer Advocates “are state agencies designated by laws of

their respective jurisdictions to represent the interests of utility consumers before

regulatory agencies and in the courts.” The State Consumer Advocates petitioned

the Commission for a declaratory ruling that prohibited wireless

telecommunications carriers “from imposing any separate line item or surcharge on

a customer’s bill that was not mandated or authorized by federal, state or local

law.” Second Report and Order, 20 F.C.C.R. at 6449 ¶ 1. A line item is “a discrete

charge identified separately on an end user’s bill.” Id. at 6462 ¶ 30. According to

the State Consumer Advocates, the use of line items that were not required by

federal or state law violated the Truth-in-Billing Rules and the Communications

Act because these line items “do not allow customers to accurately assess what

they are being billed for or permit customers to determine whether the amounts

charged conform to the price charged for service.” Id. at 6454 ¶ 13 n.32.

        In response to the request for a declaratory ruling filed by the State

Consumer Advocates, the Commission issued a notice that solicited comments



                                           7
regarding the petition. The notice stated that the Commission “seeks comment,”

about whether telecommunications carriers should be prohibited from “imposing

monthly line-item charges, surcharges or other fees on customers bills unless such

charges have been expressly mandated by a regulated agency.” Nat’l Ass’n of

State Util. Consumer Advocates’ Petition for Declaratory Ruling Regarding Truth-

in-Billing, 19 F.C.C.R. 9541 (2004) (public notice). Comments were submitted by

wireless carriers, the State Utility Regulators, the State Consumer Advocates, and

individual consumers. Many consumers submitted brief comments that expressed

confusion and dissatisfaction with their monthly telephone bills.

      After the public comment period closed, during the so-called “permit but

disclose” proceedings, see 47 C.F.R. § 1.1206, the Commission received ex parte

presentations and letters. On March 3, 2005, the State Utility Regulators provided

notice of oral and written ex parte communications with the members of the

Commission. Also on March 3, the Vermont Board sent an ex parte letter

addressed to the five members of the Commission. On March 4, the permit-but-

disclose period closed, and communications with the Commission were no longer

permitted. See id. § 1.1203. On that date, the Vermont Board electronically filed

notice of the ex parte letter it had sent on March 3, but the Clerk of the

Commission excluded the letter because it “was received during the Sunshine



                                           8
Agenda period, and is associated with, but not made part of the record.”

      On March 18, 2005, the Commission issued its conclusions in an Order that

addressed three issues. First, in a “Second Report and Order,” the Commission

amended or clarified the Truth-in-Billing Rules and applied these rules to wireless

service providers. Second Report and Order, 20 F.C.C.R. at 6454–58 ¶¶ 14–20.

Second, in a “Declaratory Ruling,” the Commission denied the petition filed by the

State Consumer Advocates and preempted the states from requiring or prohibiting

the use of line items on monthly telephone bills by wireless service providers. Id.

at 6458–6467 ¶¶ 21–36. Third, the Commission requested a “Second Further

Notice of Proposed Rulemaking” that proposed to adopt new rules in the billing

practices of wireless service providers. Id. at 6467–6478 ¶¶ 37–57.

      As to the first issue, the Commission reviewed the history of the Truth-in-

Billing Rules and concluded “that [wireless service providers] should no longer be

exempt from [the] requirement that billing descriptions be brief, clear, non-

misleading and in plain language.” Id. at 6456 ¶ 16; see also 47 C.F.R. §

64.2401(b). The Commission found that “the increasing number of consumer

complaints to this Commission and state regulatory agencies regarding wireless

billing practices provides empirical evidence that application of the truth-in-billing

rules to [wireless service providers] is necessary and in the public interest.”



                                           9
Second Report and Order, 20 F.C.C.R. at 6457 ¶ 18. The Commission

“emphasize[d]” that the application of the truth-in-billing rules to wireless service

providers did not “limit[] states’ authority to enforce their own generally applicable

consumer protection laws, to the extent such laws do not require or prohibit use of

line items.” Id. at 6458 ¶ 20.

      As to the second issue, the Commission denied the petition filed by the State

Consumer Advocates because “nothing in the Truth-in-Billing Order prohibits

carriers from using non-misleading line items.” Id. at 6458–59 ¶ 23. Although the

Commission found that consumers and state regulatory agencies were confused

about the use of line items, the Commission “recognize[d] that overbroad state

regulations . . . may frustrate our federal rules and the federal objective of

minimizing regulatory burdens on the competitive [wireless service provider]

industry.” Id. at 6459–60 ¶ 24. The Commission stated that “it is permissible for

carriers to recover [regulatory] costs so long as they do so in a manner that

complies” with the Truth-in-Billing Rules, but “it is a misleading practice for

carriers to state or imply that a charge is required by the government when it is the

carriers’ business decision as to whether and how much of such costs they choose

to recover directly from consumers through a separate line item charge.” Id. at

6460–61 ¶¶ 26–27.



                                           10
       The Commission also concluded that “state regulations requiring or

prohibiting the use of line items . . . constitute rate regulation and . . . are

preempted under section 332(c)(3)(A)” of the Act. Id. at 6462 ¶ 30. The

Commission explained that “rates,” included “rate levels,” “rate structures,” and

“rate elements.” Id. at 6462–63 ¶ 30. After describing line items as a “rate

element,” the Commission reasoned that the prohibition or requirement of line

items “directly affect[s] the manner in which the [wireless service provider]

structures its rates.” Id. at 6463 ¶¶ 30–31.

       The Commission distinguished the ability of the states to mandate or

prohibit line items from the ability to impose taxes, state universal service support

charges, and other disclosure laws, which the Commission left undisturbed. Id. at

6464–65 ¶¶ 32–33. The Commission explained that “requiring or prohibiting the

use of line items” has a “direct effect” on the ability of wireless service providers

to structure rates, but other state regulations have an “indirect effect . . . on a

company’s behavior.” Id. at 6466 ¶ 34 (quoting Wireless Consumers Alliance

Order, 15 F.C.C.R. 17,021, 17,034 ¶ 23 (2000)). The Commission stated that it

“may not always be clear” whether line item regulation is preempted by section

332(c)(3)(A), and it was necessary to look to the “substance, [and] not merely the

form of the line item.” Id.



                                             11
      The Commission premised its decision to preempt state regulation on “the

pro-competitive, deregulatory framework for [wireless service providers]

prescribed by Congress.” Id. at 6466 ¶ 35. The Commission stated, “Congress has

directed that the rate relationships between [wireless service] providers and their

customers be governed ‘by the mechanisms of the competitive marketplace.’” Id.

(quoting Wireless Consumers Alliance Order, 15 F.C.C.R. at 17,032–33 ¶¶

20–21)). Because wireless service providers “have come to structure their

offerings on a national or regional basis,” state laws that prohibit or require the use

of line items would result in a “patchwork of inconsistent rules” that “conflict[s]

with federal policies.” Id.

      As to the third issue, the Commission solicited comments about “the role of

states in regulating billing” and “other truth-in-billing issues.” Id. at 6468 ¶ 37.

The Commission sought comments about whether other state regulation of billing

practices was preempted by the Communications Act. Id. at 6474 ¶ 50. The

Commission explained that “limiting state regulation of . . . billing practices [by

wireless service providers] . . . will eliminate the inconsistent state regulation that

is spreading across the country, making nationwide service more expensive for

carriers to provide and raising the cost of service to consumers.” Id. at 6475 ¶ 52.

      The State Consumer Advocates and the Vermont Board filed petitions for



                                           12
review of the Order. The State Utility Regulators intervened in support of the

Vermont Board. Sprint Nextel and Cingular Wireless, public corporations that

provide cellular wireless services, intervened in support of the Commission.

                   C. Motions Filed After the Petition for Review

      After the State Consumer Advocates and the Vermont Board petitioned for

review of the Order, the Commission moved to dismiss both the petitions of the

State Consumer Advocates and the Vermont Board. The Commission argued that

the State Consumer Advocates lacked standing to petition for review on behalf of

its members because the State Consumer Advocates failed to establish that “at least

one of its members meets the minimal Article III prerequisites for standing to sue.”

The Commission contended that we lacked subject matter jurisdiction to consider

the petition of the Vermont Board because it was not a party to the agency

proceedings under the Hobbs Act. 28 U.S.C. § 2344. The Carriers supported the

motion to dismiss of the Commission.

      The Vermont Board responded that it was a “party aggrieved” because it had

participated in the proceedings, 28 U.S.C. § 2344, or alternatively, was a party

because the Commission “expressly subjected the [the Vermont Board] to its

Order.” First, the Vermont Board argued that it had participated in the

Commission proceedings because it both submitted comments in the first Truth-in-



                                         13
Billing Order, which had the same agency docket number, and sent an ex parte

letter to the Commissioners on March 3 that was deemed untimely by the Clerk of

the Commission. The Vermont Board moved to correct the administrative record

by including the ex parte letter. Second, the Vermont Board argued that even if it

had failed to participate in the agency proceedings, it could petition for review

because it was “directly bound” by the Order.

       The State Consumer Advocates responded that their association has standing

to challenge the Order either on behalf of its members or as a consumer of wireless

service. The State Consumer Advocates argued that they have associational

standing because the members of the State Consumer Advocates are charged by

state statutes “to advocate on behalf of consumers.” In support of this argument,

the State Consumer Advocates submitted affidavits from three individual members

of the State Consumer Advocates who are consumers of wireless

telecommunications service. The affidavits stated that the preemption Order “will

make it difficult to enact . . . new state laws . . . that are necessary to protect

wireless customers from unreasonable, misleading, deceptive or illegal line item

fees and charges.” The State Consumer Advocates attached the affidavit of John

Perkins, the President of the State Consumer Advocates, who testified, “NASUCA

is itself a consumer of telephone services . . . . All of the monthly bills for service



                                             14
received by [the State Consumer Advocates] contain line items.”

        In response to these arguments, the Commission moved to withdraw the

motion to dismiss the State Consumer Advocates, but continued to move for

dismissal of the Vermont Board. The Carriers then submitted their own motion to

dismiss the petition of the State Consumer Advocates on the same grounds the

Commission had argued in its withdrawn motion. We granted the motion by the

Commission to withdraw its motion to dismiss the petition of the State Consumer

Advocates, and we ordered that the motions to dismiss the petitions of the State

Consumer Advocates and the Vermont Board be carried with the case. The motion

of the Vermont Board to correct the administrative record was also carried with the

case.

                          II. STANDARD OF REVIEW

        We review our subject matter jurisdiction de novo. Williams v. Best Buy

Co., 269 F.3d 1316, 1319 (11th Cir. 2001). We review whether a party has

standing to challenge an order de novo. Bochese v. Town of Ponce Inlet, 405 F.3d

964, 975 (11th Cir.), cert. denied, ___ U.S. ___, 126 S. Ct. 377 (2005). We review

the authority of the Commission to regulate under the Communications Act based

on the standard enunciated in Chevron U.S.A. v. Natural Resource Defense

Council, 467 U.S. 837, 842–43, 104 S. Ct. 2778, 2781 (1984).



                                         15
                                   III. DISCUSSION

       Before we address the petitions for review, we must consider issues about

our jurisdiction. We first address whether the Vermont Board is a “party

aggrieved” by the Order under the Hobbs Act. 27 U.S.C. § 2344. Because we

conclude that the Vermont Board is not a party aggrieved, we next consider

whether the State Utility Regulators may continue as intervenors. We then address

whether the State Consumer Advocates have standing to petition for review of the

Order. After we conclude that the State Consumer Advocates and the State Utility

Regulators have standing, we then turn to the merits of the petitions for review:

whether section 322(c)(3)(A) expressly preempted the ability of the states to

require or prohibit the use of line items by wireless service providers.

          A. The Vermont Board Is Not a “Party Aggrieved” Under the
                                   Hobbs Act.

       The Communications Act provides, “Any proceeding to enjoin, set aside,

annul, or suspend any order of the [Commission] . . . shall be brought as provided

by and in the manner prescribed in” the Hobbs Act. 47 U.S.C. § 407(a). The

Hobbs Act vests exclusive jurisdiction in the courts of appeals to “determine the

validity of [] all final orders of the [Commission].” 28 U.S.C. § 2342. “Any party

aggrieved by the final order may . . . file a petition to review the order . . . .” Id. §

2344. “A ‘party aggrieved’ is one who participated in the agency proceeding.”

                                            16
Ala. Power Co. v. FCC, 311 F.3d 1357, 1366 (11th Cir. 2002). A nonparty to the

proceeding of the Commission must file a petition for reconsideration as a

condition precedent to judicial review of the Order. 47 U.S.C. § 405(a).

      The Vermont Board presents three arguments that it is a “party aggrieved”

by the Order. 28 U.S.C. § 2344. First, the Vermont Board contends that, because

it participated in the First Report and Order, which shares the same docket number

as the Second Report and Order, it has participated in the proceedings. Second, the

Vermont Board argues that it is a “party aggrieved” because it submitted an ex

parte letter to the members of the Commission, which the Vermont Board alleges

was erroneously excluded from the administrative record. As part of this

argument, the Vermont Board moves to correct the administrative record by

including the ex parte communication. Third, the Vermont Board argues that even

if it did not participate in the proceedings, it may challenge the Order because it is

subject to the Order and its arguments challenge the authority of the Commission.

We address each argument in turn and conclude that each argument fails.

         1. Participation in the First Report and Order Does Not Render the
                         Vermont Board a “Party Aggrieved.”

      The Vermont Board argues that the comments it submitted in the

proceedings for the First Report and Order confer party status on it to petition for

review. Because the docket number for the First Report and Order, Docket No. 98-

                                           17
170, is the same as the Second Report and Order, the Vermont Board argues that it

is a “party aggrieved” under the Hobbs Act. We disagree.

        The reliance by the Vermont Board on the docket number to argue that it is

a “party aggrieved” by the Second Report and Order is misplaced. Under the

Hobbs Act, “[a]ny party aggrieved by the final order” may petition for review. 28

U.S.C. § 2344. Although the First and Second Orders and Report share the same

docket number, the Hobbs Act confers party status on those who participated in

proceedings that led to the Order under review. See Ala. Power Co., 311 F.3d at

1366.

        The Vermont Board is not a “party aggrieved by the final order” because the

Vermont Board petitions for review of the Second Report and Order. 28 U.S.C. §

2344. Regardless of the docket number assigned to the proceeding, the Vermont

Board had to be a participant in the proceedings that led to the Second Report and

Order to be a “party aggrieved.” Id. The comments that the Vermont Board

submitted in the proceedings that led to the First Report and Order are immaterial:

those comments make the Vermont Board a “party aggrieved by” the First Report

and Order, but they do not make the Vermont Board a “party aggrieved by” the

Second Report and Order. Id.; see Simmons v. ICC, 716 F.2d 40, 45 (D.C. Cir.

1983) (stating that the petitioner was not a “party aggrieved” where the petitioner



                                         18
participated in a proceeding that was “procedurally and substantially independent”

from the challenged order).

            2. The Ex Parte Letter Submitted by the Vermont Board Failed to
                  Comply with Regulations Issued by the Commission.

          The Vermont Board also contends that it participated in the Commission

proceeding because it submitted an ex parte letter that it asserts was erroneously

excluded from the administrative record. The Commission did not include the

letter in the administrative record because the Vermont Board electronically

submitted notice of the letter during the “Sunshine” period when no

communication was allowed with the Commissioners. See 47 C.F.R. 1.1203(a).

The Vermont Board moves to correct the administrative record by including the

letter. We address the motion filed by the Vermont Board before we consider

whether the ex parte letter is sufficient to confer the Vermont Board with party

status.

          We have discretion to correct the administrative record to “supply any

omission from the record or correct a misstatement.” Fed. R. App. P. 16(b). An

administrative record consists of “the order sought to be reviewed or enforced, the

findings or reports on which it is based, and the pleadings, evidence and

proceedings before the agency.” Fed. R. App. P. 16(a). We may deny a motion to

correct the record where, among other reasons, the proffered item does not fall

                                            19
within the definition of the record, see Deukmejian v. Nuclear Regulatory

Comm’n, 751 F.2d 1287, 1324 (D.C. Cir. 1984), the proffered item is immaterial

or incomplete, Ala. Tissue Ctr. of Univ. of Ala. v. Sullivan, 975 F.2d 373, 376 (7th

Cir. 1992), or the agency did not have the opportunity to consider the evidence, see

Altawil v. INS, 179 F.3d 791, 792 (9th Cir. 1999).

      The regulations of the Commission provide that ex parte presentations are

allowed during the permit-but-disclose period of the agency proceeding. 47 C.F.R.

§ 1.1206(a). Ex parte presentations shall be included in the administrative record if

the presentation includes a cover letter and “shall clearly identify the proceeding to

which it relates, including the docket number, if any, shall indicate that two copies

have been submitted to the Secretary, and must be labeled as an ex parte

presentation.” 47 C.F.R. § 1.1206(b)(1). To be considered, ex parte

communications must comply with these provisions. See id. § 1.1206(a).

      The Vermont Board concedes that its electronic submission on March 4

failed to include a cover letter to explain that it provided notice for the March 3 ex

parte letter. There was no way for the Commission to discern that the letter

electronically filed on March 4 disclosed an ex parte communication that timely

had been submitted to the five Commissioners. Because the electronic submission

failed to identify that it disclosed an ex parte letter submitted on March 3, it is not



                                           20
properly part of the record that the agency should have included. 47 C.F.R. §

1.1206(b)(1) (stating that the cover letter that provides notice “must be labeled as

an ex parte presentation”); see Deukmejian, 751 F.2d at 1324 (“In discharging their

obligation to monitor agency action, courts review a record compiled by the

agency and containing its rationale and supporting findings . . . .”). The

Commission followed its regulations when it excluded the ex parte letter from the

administrative record.

       We deny the motion to supplement the record with the ex parte letter. “We

must give substantial deference to an agency’s interpretation of its own

regulations,” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S. Ct.

2381, 1286 (1994), and the Commission was not “arbitrary and capricious” when it

excluded the letter from the administrative record, 5 U.S.C. § 706(2)(A). The

Vermont Board did not “participate in the proceedings” by submitting the letter.

Ala. Power Co., 311 F.3d at 1366.

         3. No Exception Exists to Allow the Vermont Board to Petition for
                               Review of the Order.

      The Vermont Board alternatively argues that, even if it did not participate in

the proceedings, it is a party entitled to petition for review of the Order for two

reasons. First, the Vermont Board contends that it is a “party aggrieved” because it

is subject to the Order. Second, the Vermont Board argues that “party status is not

                                           21
. . . required when the agency has acted beyond its authority.”

      The argument that the Vermont Board may petition for review because it is

subject to the Order fails because the Vermont Board misunderstands the scope of

our jurisdiction. The Hobbs Act confers the courts of appeals with subject matter

jurisdiction to review the orders of administrative agencies. “Since petitioners

were never parties to the rulemaking proceedings, this court simply does not have

jurisdiction over their claim.” Gage v. U.S. Atomic Energy Comm’n, 479 F.2d

1214, 1218 (D.C. Cir. 1973). The cases cited by the Vermont Board are inapposite

because they involve the extension of personal jurisdiction, Gilchrist v. Gen. Elec.

Cap. Corp., 262 F.3d 295, 300–01 (4th Cir. 2001), R.M.S. Titanic, Inc. v. Haver,

171 F.3d 943, 955 (4th Cir. 1999), or the relaxation of prudential standing

requirements, Devlin v. Scardalletti, 536 U.S. 1, 7–8, 122 S. Ct. 2005, 2009–10

(2002). These cases do not allow a court to expand the statutory grant of subject

matter jurisdiction to review an agency decision.

      The argument that a petitioner need not be a party when the petitioner

challenges the authority of an administrative agency runs contrary to our precedent.

We have held that “[a] ‘party aggrieved’ is one who participated in the agency

proceeding.” Ala. Power Co., 311 F.3d at 1366. In support of its argument, the

Vermont Board cites two decisions from the Fifth Circuit, see Wales Transp., Inc.



                                          22
v. ICC, 728 F.2d 774, 776 n.1 (5th Cir. 1984); Am. Trucking Ass’ns, Inc. v. ICC,

673 F.2d 82, 84 n.4 (5th Cir. 1982), but we are bound by our decision that a

petitioner must be a “party aggrieved” without regard to the type of challenge the

petitioner seeks to bring. Ala. Power Co., 311 F.3d at 1366; cf. Baros v. Tex.

Mexican Ry. Co., 400 F.3d 228, 238 n.24 (5th Cir. 2005) (stating that the

exception to party status discussed in American Trucking Ass’ns has been

“squarely rejected by some of our sister circuits”); see also Erie-Niagara Rail

Steering Comm. v. Surface Transp. Bd., 167 F.3d 111, 112 (2d Cir. 1999)

(concluding that the discussion in American Trucking Ass’ns is dictum and Wales

Transportation erroneously relied on American Trucking Ass’ns). The Vermont

Board is not a “party aggrieved” entitled to petition for review of the Order by the

Commission.

      We grant the motion by the Commission to dismiss the petition of the

Vermont Board. Neither the participation of the Vermont Board in the First Report

and Order nor the ex parte letter that was procedurally deficient confer party status

on the Vermont Board, and no exception excuses the failure of the Vermont Board

to participate in the proceedings of the Commission. We lack jurisdiction to

consider the petition filed by the Vermont Board.

           B. The State Utility Regulators May Proceed As an Intervenor.



                                          23
      Although we dismiss the Vermont Board, the State Utility Regulators may

continue as an intervenor. “Intervention . . . cannot create jurisdiction if none

existed before,” 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,

Federal Practice and Procedure § 1917, at 457–58 (2d ed. 1986), but we have

discretion to “treat intervention as a separate action, especially when the intervenor

has an independent basis for jurisdiction,” Atkins v. State Bd. of Educ. of N.C.,

418 F.2d 874, 875 (4th Cir. 1969) (per curiam); see 7C Wright, Miller & Kane,

Federal Practice and Procedure § 1917, at 458–59; see also Fuller v. Volk, 351

F.2d 323, 328–29 (3d Cir. 1965). Because the State Utility Regulators participated

in the proceedings by submitting comments and notice of ex parte

communications, the State Utility Regulators have independently established their

status as “party aggrieved.” 28 U.S.C. § 2344. We exercise our discretion to allow

the State Utility Regulators to continue in the petition for review.

        C. The State Consumer Advocates Have Standing to Petition
                                 for Review.

      The Constitution of the United States limits the subject matter jurisdiction of

federal courts to “Cases” and “Controversies.” U.S. Const., Art. III § 2. “[T]he

core component of standing is an essential and unchanging part of the

case-or-controversy requirement of Article III.” Lujan v. Defenders of Wildlife,

504 U.S. 555, 560, 112 S. Ct. 2130, 2136 (1992). The minimum requirements for

                                          24
constitutional standing are “injury in fact,” “a causal connection between the injury

and the conduct complained of,” and that the “injury will be redressed by a

favorable decision.” Id. at 560–61, 112 S. Ct. at 2136. On a motion to dismiss,

“general factual allegations of injury resulting from the defendant’s conduct may

suffice.” Id. at 561, 112 S. Ct. at 2137.

      The Carriers move to dismiss the State Consumer Advocates for failure to

establish associational standing. The Carriers contend that the State Consumer

Advocates cannot establish that at least one of their members has suffered

particularized injury and only the member agencies of the State Consumer

Advocates have the authority to petition for review. The State Consumer

Advocates argue that we need not address this argument because they have

standing on an alternative ground.

      The State Consumer Advocates argue that they need not rely on

associational standing because they are a consumer of wireless telecommunications

services that receives bills. The affidavit submitted by the State Consumer

Advocates from the President of their organization stated, “NASUCA is itself a

consumer of telephone services, both wireline and wireless. It presently has

wireline service with Verizon and AT&T and wireless service with Verizon

Wireless. All of the monthly bills for service received by NASUCA contain line



                                            25
items.”

      The State Consumer Advocates have established “general factual allegations

of injury resulting from the defendant’s conduct.” Lujan, 504 U.S. at 561, 112 S.

Ct. at 2136. The State Consumer Advocates contend that, because the preemption

of the Commission affects the ability of the states to regulate the disclosure of

charges on consumer wireless bills, the Order adversely affects the interests of the

State Consumer Advocates as a consumer of wireless service. The complaints of

the State Consumer Advocates are redressable by granting the petition and

vacating the Order of the Commission. That disposition would allow the states to

require or prohibit the use of line items by wireless service providers, which the

State Consumer Advocates contend would protect consumers from fraud.

      The Carriers argue that the State Consumer Advocates may not rely on their

status as a consumer of wireless service as a basis for standing because the State

Consumer Advocates “chose not to base [their] right to seek review on [their] own

receipt of phone bills” in the petition for review. We disagree. When ruling on

motions to dismiss for lack of standing, federal courts may consider affidavits and

other factual materials in the record. See Lujan v. Nat’l Wildlife Fed’n, 497 U.S.

871, 881, 110 S. Ct. 3177, 3185 (1990) (considering affidavits submitted in

response to a motion for summary judgment to establish standing); FW/PBS, Inc.



                                          26
v. City of Dallas, 493 U.S. 215, 233, 110 S. Ct. 596, 609 (1990), overruled in part

on other grounds by City of Littleton v. Z.J. Gifts D-4, LLC, 541 U.S. 774, 124 S.

Ct. 2219 (2004) (“[S]tanding . . . must affirmatively appear in the record.” (internal

quotations and citations omitted) (emphasis added)). Because the State Consumer

Advocates have established standing to petition for review as a consumer of

wireless service through the affidavit of their President, we deny the motion by the

Carriers. We next turn to the merits of the petitions for review filed by the State

Utility Regulators and the State Consumer Advocates.

        D. The Commission Exceeded Its Authority When It Preempted State
            Regulation of Line-Item Billing Under Section 332(c)(3)(A).

      “This Constitution, and the Laws of the United States which shall be made

in Pursuance thereof . . . shall be the supreme Law of the Land[,] . . . any Thing in

the Constitution or Laws of any State to the Contrary notwithstanding.” U.S.

Const. Art VI. “The Supremacy Clause of Art. VI of the Constitution provides

Congress with the power to pre-empt state law.” La. Pub. Serv. Comm’n v. FCC,

476 U.S. 355, 368, 106 S. Ct. 1890, 1898 (1986). “[A] federal agency acting

within the scope of its congressionally delegated authority may pre-empt state

regulation.” Id. at 369, 106 S. Ct. at 1887–88.

      “Where Congress has directed an administrator to exercise his discretion, his

judgments are subject to judicial review only to determine whether he has

                                          27
exceeded his statutory authority or acted arbitrarily.” Fid. Fed. Sav. & Loan v. De

la Cuesta, 458 U.S. 141, 153–54, 102 S. Ct. 3014, 3022–23 (1982) (quoting United

States v. Shimer, 367 U.S. 374, 381–82, 81 S. Ct. 1554, 1560 (1960)). Where a

federal agency preempts state law, “the inquiry becomes whether the federal

agency has properly exercised its own delegated authority rather than simply

whether Congress has properly exercised the legislative power.” New York v.

FCC, 486 U.S. 57, 68, 108 S. Ct. 1637, 1642 (1988). “Federal regulations have no

less pre-emptive effect than federal statutes.” Fid. Fed. Sav. & Loan, 458 U.S. at

153, 102 S. Ct. at 3022.

      Federal law may preempt state law in three ways. First, express

“[p]re-emption occurs when Congress, in enacting a federal statute, expresses a

clear intent to pre-empt state law.” La. Pub. Serv. Comm’n, 476 U.S. at 368, 106

S. Ct. at 1898. Second, conflict preemption occurs “when there is outright or

actual conflict between federal and state law.” Id. Third, field preemption occurs

“where compliance with both federal and state law is in effect physically

impossible.” Id. “[T]he categories of preemption are not rigidly distinct . . . field

pre-emption may be understood as a species of conflict pre-emption.” Crosby v.

Nat’l Foreign Trade Council, 530 U.S. 363, 373, 120 S. Ct. 2288, 2294 (2000); see

Caleb Nelson, Preemption, 86 Va. L. Rev. 225, 262 (2000).



                                          28
      “‘[T]he purpose of Congress is the ultimate touchstone’ of pre-emption

analysis.” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S. Ct. 2608,

2617 (1992) (plurality opinion) (quoting Malone v. White Motor Corp., 435 U.S.

497, 504, 98 S. Ct. 1185 (1978)). “[A]ny understanding of the scope of a

pre-emption statute must rest primarily on a fair understanding of congressional

purpose.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485–86, 116 S. Ct. 2240, 2250

(1996). “Congress’ intent may be ‘explicitly stated in the statute’s language or

implicitly contained in its structure and purpose.’” Id. (quoting Jones v. Rath

Packing Co., 430 U.S. 519, 525, 97 S. Ct. 1305 (1977)). Courts interpret the text

of the statute and apply traditional cannons of statutory construction to discern the

intent of Congress. See MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S.

218, 229, 114 S. Ct. 2223, 2231 (1994); see, e.g., La. Pub. Serv. Comm’n, 476 U.S.

at 369, 106 S. Ct. at 1899.

      “When we consider issues that arise under the Supremacy Clause . . . , we

start with the assumption that the historic police powers of the states are not

superseded by federal law unless preemption is the clear and manifest purpose of

Congress.” Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d 1113, 1122 (11th Cir.

2004). “Although the Constitution makes a few of the federal government’s

powers exclusive, the states retain concurrent authority over most of the areas in



                                          29
which the federal government can act.” Nelson, supra, at 225. We accordingly

presume that “Congress does not cavalierly pre-empt state[]law.” Medtronic, Inc.,

518 U.S. at 485, 116 S. Ct. at 2250. “[F]ederal regulation of a field of commerce

should not be deemed preemptive of state regulatory power in the absence of

persuasive reasons—either that the nature of the regulated subject matter permits

no other conclusion, or that the Congress has unmistakably so ordained.” Fla.

Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142, 83 S. Ct. 1210, 1217

(1963). Although the presumption against preemption cannot trump our review of

the Order under Chevron, this presumption guides our understanding of the

statutory language that preserves the power of the States to regulate “other terms

and conditions.” See Smiley v. Citibank, N.A., 517 U.S. 735, 743–44, 116 S. Ct.

at 1730, 1735 (1996). We apply these principles to determine whether Congress

granted the Commission authority to preempt the state regulation of line item

billing.

       In the Second Report and Order, the Commission preempted state regulation

of line-item billing based on the express language of the Communications Act. See

20 F.C.C.R. at 6462–63 ¶ 30, 6466 ¶ 35. The Commission concluded that the

language of section 332(c)(3)(A) of the Communications Act “‘prohibit[s] states

from prescribing, setting or fixing rates’ of wireless service providers.” Id. at 6462



                                          30
¶ 30 (quoting Pittencrief Commc’ns, Inc., 13 F.C.C.R. 1735, 1745 (1997)). The

Commission explained that “[e]fforts by individual states to regulate [wireless

service providers’] rates through line item requirements . . . would be inconsistent

with the federal policy of a uniform, national and deregulatory framework” of the

Communications Act. Id. at 6467 ¶ 35.

      “When a court reviews an agency’s construction of the statute which it

administers, it is confronted with two questions.” Chevron U.S.A., 467 U.S. at

842–43, 104 S. Ct. at 2781. First, we consider “whether Congress has directly

spoken to the precise question at issue. If the intent of Congress is clear, . . . the

court, as well as the agency, must give effect to the unambiguously expressed

intent of Congress.” Id. To determine if “Congress has directly spoken to the

precise question at issue,” id., courts interpret the language of the statute and apply

traditional cannons of statutory construction, see MCI Telecomms. Corp., 512 U.S.

at 229, 114 S. Ct. at 2231. “The construction put on a statute by the agency

charged with administering it is entitled to deference by the courts, and ordinarily

that construction will be affirmed if it has a reasonable basis in law[, b]ut the courts

are the final authorities on issues of statutory construction.” SEC v. Sloan, 436

U.S. 103, 118, 98 S. Ct. 1701, 1712 (1978) (internal citations and quotations

omitted); see also Chevron U.S.A., 467 U.S. at 842–43, 104 S. Ct. at 2781–82.



                                            31
      Second, “if the statute is silent or ambiguous with respect to the specific

issue, the question for the court is whether the agency’s answer is based on a

permissible construction of the statute.” Chevron U.S.A., 437 U.S. at 843, 104 S.

Ct. at 2782 (emphasis added). To determine whether a term within a statute is

ambiguous, we consider the context in which the term is used. See MCI

Telecomms. Corp., 512 U.S. at 226, 114 S. Ct. at 2229 (explaining that Chevron

deference applied because “contextual indications” created ambiguity in the term

“modify”). The interpretation of an ambiguous statute by an administrative agency

is “given controlling weight unless [it is] arbitrary, capricious, or manifestly

contrary to the statute.” Id. at 843–44, 104 S. Ct. at 2782. “Unexplained

inconsistency is . . . a reason for holding an interpretation to be an arbitrary and

capricious change from agency practice.” Nat’l Cable & Telecomms. Ass’n v.

Brand X Internet Servs., ___ U.S. ___, 125 S. Ct. 2688, 2699 (June 27, 2005).

      The Commission premised the preemption of state regulation of line item

billing on the language of section 332(c)(3)(A). That provision states that “no

State or local government shall have any authority to regulate the entry of or the

rates charged by any commercial mobile service, except that this paragraph shall

not prohibit a State from regulating the other terms and conditions of commercial

mobile services.” 47 U.S.C. § 332(c)(3)(A). The Commission found that



                                           32
“Congress did not specifically define ‘rates,’ ‘entry,’ or other key terms in section

332(c)(3)(A),” but explained that “rate regulation extends to regulation of ‘rate

levels and ‘rate structures’ for” wireless service providers. Second Report and

Order, 20 F.C.C.R. at 6462–63 ¶ 30 (citing Sw. Bell Mobile Sys., Inc., 14 F.C.C.R.

19,898, 19,906–07 ¶¶ 18–20(1999)). The Commission reasoned that the “type of

state regulations in question reveals that many directly affect [wireless service

providers’] rates and rate structures in a manner that amounts to rate regulation.”

Id. at 6463 ¶ 31. We disagree with this reasoning.

      The language of section 332(c)(3)(A) unambiguously preserved the ability

of the States to regulate the use of line items in cellular wireless bills. Although

the term “rates charged” is not defined in the Communications Act, the meaning of

this term is clear in this context. A straightforward reading of the complementary

phrases “regulate entry of or the rates charged” and “other terms and conditions,”

47 U.S.C. § 332(c)(3)(A), evidences the “clear and manifest purpose of Congress”

to leave the regulation of line items to the states, Cliff, 363 F.3d at 1122.

      A “rate,” as defined by the Oxford English Dictionary, is “[t]he amount of a

charge or payment . . . having relation to some other amount or basis of

calculation.” Oxford English Dictionary (2d ed. 1989). Other dictionaries define a

“rate” as “[a]n amount paid or charged for a good or service,” Black’s Law



                                           33
Dictionary 1268 (7th ed. 1999), or “a charge per unit of a public-service

commodity,” Merriam-Webster Online Dictionary, available at www.m-

w.com/cgi-bin/dictionary (last visited June 27, 2006). “[A]s a basic rule of

statutory interpretation, we read the statute using the normal meanings of its

words.” Horton Homes, Inc. v. United States, 357 F.3d 1209, 1211 (11th Cir.

2004) (quoting Consol. Bank, N.A. v. Dep’t of Treas. 118 F.3d 1461, 1463 (11th

Cir. 1997)). “In the absence of an indication to the contrary, words in a statute are

assumed to bear their ‘ordinary, contemporary, common meaning.’” Walters v.

Metro. Ed. Enters., Inc., 519 U.S. 202, 207, 117 S. Ct. 660, 664 (1997) (quoting

Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 388, 113

S. Ct. 1489, 1494 (1993)).

      The prohibition or requirement of a line item affects the presentation of the

charge on the user’s bill, but it does not affect the amount that a user is charged for

service. State regulations of line items regulate the billing practices of cellular

wireless providers, not the charges that are imposed on the consumer. Because the

presentation of line items on a bill is not a “charge or payment” for service, Oxford

English Dictionary (2d ed. 1989), it is an “other term or condition” regulable by

the states, 47 U.S.C. § 332(c)(3)(A).

      The Commission argues that the Second Report and Order is consistent with



                                           34
its previous decisions because the prohibition or requirement of line items “directly

affect[s] [wireless service providers’] rates and rate structures in a manner that

amounts to rate regulation.” Second Report and Order, 20 F.C.C.R. at 6463 ¶ 31.

According to the Commission, section 332(c)(3)(A) prohibits the state regulation

of “rate structures” and “rate levels.” Id. at 6462–63 ¶ 30. The Commission

contends that state regulation of the use of line items “directly intrudes upon the

carrier’s ability to set rates and establish rate structures for [wireless] service.”

This argument fails.

       In the Second Report and Order, the Commission failed to follow the

common definition of “rates” employed in its previous decisions. The

Commission has stated that “‘rate’ is defined in the dictionary as an ‘amount of

payment or charge based on some other amount.’” Sw. Bell Mobile Sys., Inc., 14

F.C.C.R. at 19,901 ¶ 19. The Commission has also ruled that the phrase “rates

charged” “‘prohibit[s] states from prescribing, setting or fixing rates’ of wireless

service providers.” Cellular Telecomms. Indus. Ass’n v. FCC, 168 F.3d 1332,

1336 (D.C. Cir. 1999) (quoting Pittencrieff Commc’ns., Inc., 13 F.C.C.R. 1735,

1745 ¶ 20 (1997)).

       Until now, the Commission has consistently applied the distinction between

“rates” and “other terms and conditions” to interpret whether a regulation amounts



                                            35
to rate regulation under section 332(c)(3)(A). 47 U.S.C. § 322(c)(3)(A). The

Commission has concluded that the states may not regulate the method by which

wireless service providers calculate the length of a call because it affects “which

services to charge for and how much to charge for these services.” Sw. Bell

Mobile Sys., Inc., 14 F.C.C.R. at 19,898 ¶ 1. Consistent with the distinction of

“rates” and “other terms and conditions,” the Commission has permitted the states

to require wireless service providers “to contribute to state universal service

mechanisms.” Pittencrieff, 13 F.C.C.R. at 1741 ¶ 13. A universal service

mechanism is a charge imposed by state or federal law on providers of telephone

service “to make communications services available to all Americans at affordable

rates.” Cellular Telecomms. Indus. Ass’n, 168 F.3d at 1334. Even though

universal service charges have an “impact on the rates charged” to consumers, the

Commission concluded that “universal service contribution requirement is not,

within the plain meaning of the statute, a rate or entry regulation.” Pittencrieff, 13

F.C.C.R. at 1742 ¶¶ 15, 16. Both decisions by the Commission follow the

definition of “rates” in the dictionary as a “charge or a payment.”

      The Commission, by contrast, has defined a line item on a bill as something

for which “a consumer receives no tangible product.” First Report and Order, 14

F.C.C.R. at 7531 ¶ 61 . According to the definitions espoused by the Commission,



                                          36
a line item is not a rate because “line-item charges cannot be attributed to

individual tangible articles of commerce,” id. at 7531 ¶ 61, but “a ‘rate’ has no

significance without the element of service for which it applies,” Sw. Bell Mobile

Sys., Inc., 14 F.C.C.R. at 19,901 ¶ 19. The Commission asserts that the state

regulation of line items affects “rate structures,” but these regulations do not

require a carrier to recover nor prohibit a carrier from recovering a particular cost.

These regulations pertain only to the presentation of that cost on customer bills.

      The Commission also failed adequately to explain its conclusion that a line

item falls within the definition of “rates” because the use of line items has an

alleged direct effect on rates. In the Second Report and Order, the Commission

explained that “requiring or prohibiting the use of line items” has a “direct effect”

on the ability of wireless service providers to structure rates, but other state

regulations have an “indirect effect . . . on a company’s behavior.” Second Report

and Order, 20 F.C.C.R. at 6466 ¶ 34 (quoting Wireless Consumers Alliance Order,

15 F.C.C.R. 17,021, 17,034 ¶ 23 (2000)). The Commission requested further

comments because it “recognize[s] that the line between prohibited and permissible

state regulations of line items may not always be clear.” Id. (internal quotations

and citations omitted). The attempt by the Commission to distinguish the

regulation of line items on cellular wireless bills from the imposition of universal



                                           37
service charges is unavailing.

      That the prohibition or requirement of a line item has some effect on the

charge to the consumer does not necessarily place a regulation within the meaning

of “rates” and outside the ambit of state regulation of “other terms and conditions.”

The Commission argues that rate regulation includes the regulation of “rate

structures” and “rate levels,” id. at 6463 ¶ 31, but rate levels and rate structures are

still components of “rates.” The inclusion of the specific components “rate levels”

or “rate structures” within the general term “rates” does not magically expand the

authority of the Commission beyond what the statutory language allows.

      The Commission has disavowed the argument that a regulation with some

effect on prices is per se rate regulation under section 322(c)(3)(A). The

Commission, for example, has upheld state regulations that require wireless service

providers to contribute to the state-wide universal service fund as an “other term or

condition.” Pittencrieff, 13 F.C.C.R. at 1742 ¶¶ 42–43, aff’d sub nom. Cellular

Telecomms. Indus. Ass’n, 168 F.3d at 1332. The Commission, in Pittencrieff,

expressly rejected the argument that the imposition of a universal service fee was

rate regulation because it “impacts the rates that a [wireless service] provider

charges its customers.” Id. at 1745 ¶ 20. The Commission stated, “The

Commission has found the ‘rates charged by’ language to prohibit states from



                                           38
prescribing, setting, or fixing rates of [wireless service] providers. We have not

found, however, that it preempts state authority over matters which may have an

impact on the costs of doing business for a [wireless service] operator.” Id.

(footnotes omitted). “To equate state action that may increase the cost of doing

business with rate regulation would . . . forbid nearly all forms of state regulation, a

result at odds with the ‘other terms and conditions’ portion of the first sentence.”

Cellular Telecomms. Indus. Ass’n, 168 F.3d at 1336, aff’g Pittencrieff, 13

F.C.C.R. 1735. If the imposition of a universal service charge has an “indirect”

relationship with rates that places it within the purview of “other terms and

conditions,” then requiring or prohibiting the use of line items has an even more

attenuated relationship with rates.

      We can discern no logical distinction between what the Commission terms a

“direct effect” caused by the regulation of line items and the alleged “indirect

effect” caused by the imposition of universal service charges. Second Report and

Order, 20 F.C.C.R. at 6466 ¶ 34. The Commission fails to explain why the

imposition of universal service charges, which increases the amount a consumer is

charged, is more attenuated to the amount a consumer pays for service than the

regulation of line items, which affects the presentation of matters on a bill. The

Commission is unable to articulate a logical distinction between these two



                                           39
outcomes.

      The Commission also contends that the Second Report and Order “is

consistent with prior Commission statements equating ‘line items’ with ‘rate

elements.’” Second Report and Order, 20 F.C.C.R. at 6463 ¶ 30 & n.83. In

support of this argument, the Commission relies on its decision in Federal-State

Joint Board of Universal Service, 17 F.C.C.R. 24,952 (2002). In that decision, the

Commission ruled that incumbent local exchange carriers may “recover their

federal universal service contributions costs through a separate line item” as long

as carriers do not “include[] a mark-up above the relevant contribution factor.” Id.

at 24,970 ¶ 31.

      This argument fails for at least two reasons. First, Federal-State Joint Board

is inapposite because the authority of the Commission to regulate federal universal

service contribution derives from section 254(d) of the Communications Act, not

section 332(c)(3)(A). The decision in Federal-State Joint Board does not govern

whether the regulation of line items by the states is preempted under section

332(c)(3)(A). Compare 47 U.S.C. § 254(d) (granting the Commission authority to

impose federal universal service charges), with id. § 332(c)(3)(A) (granting the

Commission authority to regulate “entry” and “rates”). Second, although the

Commission stated in Federal-State Joint Board that a federal universal service



                                          40
contribution is a “rate element” which may be recovered through a line item, id. at

24,979 ¶ 53 n.133, the Commission did not equate the imposition of the universal

service contribution with the presentation of the universal service contribution on

the bill. Federal-State Joint Board does not equate “line items” with “rate

elements.”

      In the Second Report and Order, the Commission also misconstrued the

legislative history of section 332(c)(3)(A). See Second Report and Order, 20

F.C.C.R. at 6464 ¶ 32. The House Committee Report regarding section

332(c)(3)(A) explained that “other terms and conditions” of wireless service,

which are regulated by the states, “include such matters as customer billing

information and practices and billing disputes and other consumer protection

matters.” H.R. Rep. No. 103-111, at 211 (1993), reprinted in 1993 U.S.C.C.A.N.

378, 588. Because “our sole concern is the intent of Congress . . . , it is necessary

to look to the administrative and legislative background of the enactment.” United

States v. Zacks, 375 U.S. 59, 62, 84 S. Ct. 178, 180 (1963). Contrary to the

argument of the Commission, the legislative history shows that Congress intended

to leave the authority to regulate line items with the states.

      The Commission dismisses this statement from the legislative history as

unpersuasive because it “nowhere suggests that states may regulate rates in the



                                           41
guise of regulating billing practices.” The Commission explains that although “not

all regulation relating to a carrier’s billing and its relationship with customers

represents preempted ‘rate regulation,’” state regulations that require or prohibit

line items are regulation. Second Report and Order, 20 F.C.C.R. at 6464 ¶ 33. The

Commission counsels that we should look to the “substance, not merely the form”

of the regulation to determine if it has a direct effect on rates. Id. at 6466 ¶ 34

(quoting Wireless Consumers Alliance Order, 15 F.C.C.R. at 17,037 ¶ 28).

      This argument is flawed for at least two reasons. First, the Second Report

and Order belies the contention by the Commission that line items are not a

“billing practice.” In the Order, the Commission expressly classifies the use of line

items as a “billing practice.” Id. Second, although we agree that the “substance,

not merely the form” of a regulation governs whether it is rate regulation, id., the

Commission does not articulate the “substance” that distinguishes whether a

regulation of line items is a billing practice or rate regulation. The prohibition or

requirement of the use of line items on wireless bills involves “billing information

and practice,” not “rates.”

      The interpretation of the term “rates” urged by the Commission deprives the

complementary phrase “other terms and conditions” of all meaning. 47 U.S.C. §

332(c)(3)(A). “It is a cardinal principle of statutory construction that a statute



                                           42
ought, upon the whole, to be so construed that, if it can be prevented, no clause,

sentence, or word shall be superfluous, void, or insignificant.” TRW Inc. v.

Andrews, 534 U.S. 19, 31, 122 S. Ct. 441, 449 (2001). If the presentation of line

items on consumer bills were a matter of “rates” and not an “other term[] or

condition[]” of wireless service, then the Commission would be free to preempt

virtually any form of state regulation of wireless service, including laws regarding

disclosure and consumer protection. 47 U.S.C. § 332(c)(3)(A). Under the

interpretation of the Commission, even powers historically retained by the states,

such as the imposition of state taxes, would be preempted so long as they impact

“how carriers recover [the] costs of doing business.” Cf. Dows v. City of Chicago,

78 U.S. (11 Wall.) 108, 110 (1871) (“[T]he modes adopted to enforce the taxes

levied [by the states] should be interfered with as little as possible.”). The failure

of the Commission to delineate the proper scope of rate regulation allows the

Commission indefinitely to expand its authority without regard to the mandate by

Congress that “other terms and conditions” remain the realm of state regulation.

47 U.S.C. § 332(c)(3)(A).

      The interpretation by the Commission that the prohibition or requirement of

line items is expressly preempted by the language of section 332(c)(3)(A) is not

supported by the common definition of “rates.” A “rate,” as defined in the



                                           43
dictionary and previous decisions by the Commission, is “[t]he amount of a charge

or payment.” Oxford English Dictionary (2d ed. 1989); see Sw. Bell Mobile Sys.,

Inc., 14 F.C.C.R. at 19,901 ¶ 19. Because the regulation of line-item billing is not

rate regulation, the express language of section 332(c)(3)(A) of the

Communications Act does not preempt state regulations that require or prohibit the

use of line items on cellular wireless bills.

                                 IV. CONCLUSION

         We GRANT the motion to dismiss the petition of the Vermont Board for

lack of subject matter jurisdiction. We DENY the motion by the Vermont Board

to correct the administrative record. We also DENY the motion by the Carriers to

dismiss the petition of the State Consumer Advocates for lack of standing.

Because the Communications Act allows the states to regulate line item billing for

wireless services, we GRANT the petitions for review filed by the State Consumer

Advocates and the State Utility Regulators and VACATE the Second Report and

Order.




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