Opinion for the Court filed by Circuit Judge ROGERS.
This petition for review of three orders of the Federal Communications Commission arises out of the Commission’s efforts to regulate the creation of telephone area codes and the allocation of telephone numbers in an equitable manner that will conserve numbering resources in the United States.
See Report & Order & Further
Sprint Corporation, joined by intervenor Cingular Wireless LLC (together, “Sprint”), challenges the Commission’s decision to lift the ban on specialized overlays as contrary to law and arbitrary and capricious in view of the Commission’s continuing view that the practice is discriminatory and the lack of relevant changed circumstances justifying the practice. We hold that this challenge is not ripe for judicial review, for Sprint’s contentions are intertwined with how the Commission might exercise its discretion in the future. In the meantime, Sprint is free to conduct its business as it sees fit as the Commission’s decision to lift the ban does not require Sprint to do or refrain from doing anything. We therefore dismiss that part of the petition as unripe. In addition, Sprint Corporation alone challenges the Commission’s decisions on rationing, as contrary to Commission rules, and on auditing, as contrary to preemption of state authority. We hold that these challenges are unpersuasive and deny the remainder of the petition.
I.
The telephone numbering system for North America, the North American Numbering Plan (“NANP”), was established in the 1940s by AT&T and created the familiar ten-digit dialing pattern for all telephone numbers, with the first three digits commonly known as the area code, and the second three digits referred to as the central office code or exchange.
Third Order,
17 F.C.C.R. at 254 & n. 1. After years of private arrangements for allocation of numbers (by the local telephone companies and a private corporation called Bellcore, see
NPRM,
14 F.C.C.R. at 10,330;
see also In re Admin. of the North Am. Numbering Plan,
11 F.C.C.R. 2588, 2593-94,
With the threat of exhaustion of all available area codes before 2010 and the enormous costs of conversion to an eleven digit system (preliminary estimates placing the cost at between $50 and $150 billion,
id.
at 10,326 n. 8), the Commission turned its attention to ways to “conserve” numbering resources,
id.
at 10,326. Beginning in 2000, the Commission issued three orders designed “to slow the rate of number exhaustion] ... and to prolong the life of the [NANP].”
Id.
at 10,324;
see First Order,
15 F.C.C.R. at 7578. Among the key conservation actions called for by the Commission was “thousands-block number pooling,” in which service providers are allocated numbers in batches of 1,000, rather than 10,000, in order to reduce inefficient allocation of numbers and control requests.
Second Order,
16 F.C.C.R. at 322. Another key action was requiring service providers to demonstrate their need before additional numbers are allocated in order to end abuse of “stockpiling” unused numbers.
Id.
at 314-15. Of the various other actions aimed at conservation, only three are challenged by Sprint. The first challenge involves “specialized overlay” area codes, in which area codes are restricted for the exclusive use of certain types of technologies or services (e.g., wireless telephones).
Id.
at 359. The Commission had banned specialized overlays in 1995 and decided to reconsider its decision in 1999.
Id.
at 359-60;
NPRM,
14 F.C.C.R. at 10,431. Under the new regime, the Commission could approve on a case-by-case basis, upon consideration of a series of factors, a new overlay area code that would be available (either temporarily or permanently) for certain kinds of telecommunications services or technologies.
Third Order,
17 F.C.C.R. at 285-94. The second challenge involves “rationing.” The Commission delegated authority to state commissions to ration the distribution of central office codes when the area code without rationing would be exhausted before an area code relief plan could be implemented; rationing can be used only where a state has ordered specific area code relief and established an implementation date, and the industry has been unable to agree on a rationing plan.
See In re Petition for Declaratory Ruling & Request for Expedited Action on the July 15, 1997 Order of the Pa. Pub. Util. Comm’n Regarding Area Codes 1.12, 610, 215, and 717,
13 F.C.C.R. 19,009, 19,025-26,
II.
The Commission contends, as a threshold matter, that Sprint’s challenge to its decision to lift the ban on specialized overlays is not ripe for review because the Commission has yet to authorize any over
The seminal case of
Abbott Laboratories v. Gardner,
Fitness of the issues for judicial decision is more likely to be found where “the issue tendered is a purely legal one,”
Abbott Labs.,
The fundamental purpose of the ripeness doctrine is “to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.”
Nat’l Park Hospitality v. Dep’t of the Interior,
— U.S. —,
To determine whether the Commission has adequately explained its changed position, however, would require the court to address Sprint’s claims that the discriminatory flaws of specialized overlays that were identified by the Commission in imposing the ban are still present, and that specialized overlays will not be viable in the near future because the Commission is about to implement number portability allowing users of both landline and wireless telephones to switch their service without changing their telephone number. These claims concern how the Commission might improperly exercise its discretion in the future. Because the Commission has reserved judgment on whether to approve any specialized overlays that might mandate “take backs” (requiring wireless consumers to change their phone numbers) or that might result in inefficient uses of numbering resources, resolution of Sprint’s claims will depend on the concrete facts of a particular specialized overlay proposal. As for number portability, because (at the time of the Orders on review) the Commission concluded that number portability was a requirement for thousands-block number pooling,
Second Order,
16 F.C.C.R. at 363, its analysis of whether specialized overlays should be restricted to non-pooling service providers and phased out when pooling is introduced,
Third Order,
17 F.C.C.R. at 288-91, also left the question to future case-by-case decisionmaking. In a future decision by the Commission to approve, disapprove, or approve with conditions a specialized overlay proposal, these concerns might well be addressed, and the Commission as a result might never apply the specialized overlay exception in a manner that will harm Sprint.
See, e.g., Ariz. Pub. Serv. Co. v. EPA,
With respect to hardship, until and unless the Commission approves a specialized overlay proposal, Sprint is “free to conduct its business as it sees fit,”
Nat’l Park Hospitality Ass’n,
— U.S. at —,
For these reasons, we hold that Sprint’s challenge to the Commission’s decision to lift the ban on specialized overlays is not ripe for judicial review, and we dismiss that part of the petition.
III.
Sprint also challenges the Commission’s decisions authorizing states to implement rationing of telephone numbers and authorizing state auditing. Consistent with our standard of review that examines whether the Commission’s orders are arbitrary or capricious, an abuse of discretion, or contrary to law,
see United States Telecom Ass’n v. FCC,
A.
As a threshold matter, we reject the contention of the California Public Utilities Commission (“CPUC”) as intervenor that Sprint’s challenge to state rationing is moot. CPUC asserts that “the need for rationing has been all but eliminated,”
Sprint interprets the Commission’s orders as establishing a blanket rule that numbers should only be allocated on a needs-based, first-come, first-served basis, and that rationing is an unexplained violation of this principle. Yet Sprint does not dispute that states were authorized to undertake rationing in the Pennsylvania Numbering Order, which preceded the Orders on review. Further, in the Second Order, the Commission referred to rationing as an authority that had been delegated to states. 16 F.C.C.R. at 331-34; see also Third Order, 17 F.C.C.R. at 293-94.
Thus, even though the First Order did not refer to rationing in developing the needs-based, first-come, first-served principles for general number allocation, there is no conflict between the rationing rules in the Pennsylvania Numbering Order and the allocation principles developed in the First Order. In the First Order, the Commission developed new principles for the general allocation of numbers, but did not disturb its authorization in the Pennsylvania Numbering Order for states to use rationing in specified exigent circumstances. See 15 F.C.C.R. at 7610-21. That is confirmed by Sprint’s characterization of the Second Order as mentioning rationing without stating that it had been eliminated.
The Commission defends the reasonableness of its decision by emphasizing the limited circumstances in which it has authorized rationing, i.e., where an area code will be exhausted before timely and expeditious implementation of an already developed area code relief plan and where industry has been unable to develop a plan to allocate remaining numbers. See Second Order, 16 F.C.C.R. at 333-34. Sprint does not dispute that, in order to qualify for rationing, a service provider must first show need. Further, the Commission emphasizes that in the extreme circumstances when rationing is authorized, the lottery that most rationing programs use is necessary to distribute extremely limited numbering resources in a more equitable manner than first-come, first-served distribution. Under the circumstances, we conclude that the Commission adequately developed its rationale that rationing is superior to first-come, first-served distribution in exigent circumstances in the Pennsylvania Numbering Order when it stated that there is a need to ensure distribution on “an equitable basis until [a] new area code is introduced.” 13 F.C.C.R. at 19,-026. Not only is rationing permissible under current Commission policy but Sprint’s position would result in a race-to-the-regulator filing system when area codes are about to be exhausted, potentially resulting in an inefficient and inequitable distribution of numbers among carriers who have demonstrated a need for numbers.
Although we conclude, contrary to the Commission’s brief, that Sprint preserved in comments to the Commission its contention that a rationing system is a state barrier to entry in violation of 47 U.S.C. § 332(c)(3)(A), the contention fails. Section 332(c)(3)(A) generally prohibits a state or local government from “regulatfing] the entry of or the rates charged by any commercial mobile [phone] service.” However, Commission policy requires states to establish a “safety valve”
Sprint’s other rationing objections fail. The Commission was not required to respond in the Orders to Sprint’s conclusory comments that § 332(c)(3)(A) prevents rationing because rationing “constitute[s] entry regulation that the Act prohibits.” Petitioner’s Br. at 37;
cf. Reytblatt v. United States Nuclear Regulatory Comm’n,
B.
Regarding state audits, Sprint contends that § 251(e)(1) has preempted all state authority in telephone numbering administration, and consequently, the Commission’s attempt to authorize state audits is unlawful. Section 251(e)(1) does provide that the Commission has “exclusive jurisdiction over those portions of the [NANP] that pertain to the United States.” 47 U.S.C. § 251(e)(1). But it also provides that “[n]othing in this paragraph shall preclude the Commission from delegating to State commissions or other entities all or any portion of such jurisdiction.” Id. The only question then is what audit authority the Commission has delegated to state commissions.
The Commission declined in the Second Order “to delegate authority to the states to conduct” audits of service providers’ use of telephone numbers or compliance with the numbering regulations. 16 F.C.C.R. at 347. The Commission also stated, however, that “[i]n declining to delegate authority to states to perform audits under the national program, we do not intend to preempt any state authority to perform audits under state law.” Id. In the Third Order the Commission stated that:
in recognition that states can serve a valuable role in helping the Commission to monitor carriers’ number use, we clarify that states may conduct audits, at their own expense, to determine whether a particular carrier is in compliance with the Commission’s numbering rules to discharge their own responsibilities. For example, state audits that seek to gather information needed to facilitate area code relief decisions would be appropriate to the extent that the information sought is not available through another source.
17 F.C.C.R. at 297. Although the Commission did not use the word “delegate,” it is clear that the Commission was referring to its prior delegation to state commissions. In the First Order, the Commission addressed whether states could require regular reporting of data from service providers with respect to number utilization:
We will not delegate authority to the states to impose additional regularly scheduled reporting requirements on any carriers. Such independent authority would undermine the purpose of establishing regularly scheduled federal reporting requirements, namely a uniform standard that all carriers could use in their record keeping and reporting activities.... Thus, we supersede the authority specifically delegated to some states to require such reporting. We do not intend, however, to supplant independent state authority exercised pursuant to state law unrelated to number administration, but we encourage state commissions to rely on the reporting requirements that we adopt herein. Moreover, we do recognize that from time to time a state may need to audit a specific carrier and will need access to more granular data. Therefore, our prohibition on state-ordered reporting does not apply in instances where states need to gather data for a specific purpose, as long as these data reporting requirements do not become regularly scheduled state-level reporting requirement[s].
15 F.C.C.R. at 7606-07. Moreover, the Commission specifically granted authority to state commissions to “investigate and determine whether code holders have ‘activated’ [central office codes] assigned to them within the time frames specified.” 15 F.C.C.R. at 7680.
Considering the
First Order
and
Third Order
together, we agree with the Commission’s statement in its brief that the Commission did not intend to prevent state commissions from performing audits in areas in which the Commission has delegated authority to the state commissions to the extent that the commissions have auditing authority under state law. Respondent’s Br. at 36-38. Examples discussed in the Orders are area code relief, where the Commission has delegated authority to state commissions,
see, e.g., Third Order,
17 F.C.C.R. at 297, and utilization reports, which are necessary in order for the states “to meet their obligations with respect to area code relief,”
First Order,
15 F.C.C.R. at 7606. Because this analysis is sufficiently developed in the Orders on review, Sprint’s post hoc attack fails. Moreover, to the extent that Sprint responds that state audits might serve no particular purpose because of the conditions that the Commission has imposed,
see Third Order,
17 F.C.C.R. at 297, or that state audits might pose an unnecessary burden on its operations, its challenge is unripe as a response will depend on the particular context of a state audit.
See Beach Communications, Inc. v. FCC,
