Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.

(Slip Opinion) OCTOBER TERM, 2006 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

No. 05–705. Argued October 10, 2006—Decided April 17, 2007

Under authority of the Communications Act of 1934, the Federal Com

munications Commission (FCC) regulates interstate telephone com

munications using a traditional regulatory system similar to what

other commissions have applied when regulating other common car

riers. Indeed, Congress largely copied language from the earlier In

terstate Commerce Act, which authorized federal railroad regulation,

when it wrote Communications Act §§201(b) and 207, the provisions

at issue. Both Acts authorize their respective commissions to declare

any carrier “charge,” “regulation,” or “practice” in connection with the

carrier’s services to be “unjust or unreasonable”; declare an “unrea

sonable,” e.g., “charge” to be “unlawful”; authorize an injured person

to recover “damages” for an “unlawful” charge or practice; and state

that, to do so, the person may bring suit in a “court” “of the United

States.” Interstate Commerce Act §§1, 8, 9; Communications Act

§§201(b), 206, 207. The underlying regulatory problem here arises at

the intersection of traditional regulation and newer, more competi

tively oriented approaches. Legislation in 1990 required payphone

operators to allow payphone users to obtain “free” access to the long-

distance carrier of their choice, i.e., access without depositing coins.

But recognizing the “free” call would impose a cost upon the pay-

phone operator, Congress required the FCC to promulgate regula

tions to provide compensation to such operators. Using traditional

ratemaking methods, the FCC ordered carriers to reimburse the op

erators in a specified amount unless a carrier and an operator agreed

to a different amount. The FCC subsequently determined that a car

rier’s refusal to pay such compensation was an “unreasonable prac

tice” and thus unlawful under §201(b). Respondent payphone opera

2 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Syllabus

tor brought a federal lawsuit, claiming that petitioner long-distance

carrier (hereinafter Global Crossing) had violated §201(b) by failing

to pay compensation and that §207 authorized respondent to sue in

federal court. The District Court agreed that Global Crossing’s re

fusal to pay violated §201(b), thereby permitting respondent to sue

under §207. The Ninth Circuit affirmed.

Held: The FCC’s application of §201(b) to the carrier’s refusal to pay

compensation is lawful; and, given the linkage with §207, §207 au

thorizes this federal-court lawsuit. Pp. 7–19.

(a) The language of §§201(b), 206, and 207 and those sections’ his

tory, including that of their predecessors, Interstate Commerce Act

§§8 and 9, make clear that §207’s purpose is to allow persons injured

by §201(b) violations to bring federal-court damages actions. The dif

ficult question is whether the FCC regulation at issue lawfully im

plements §201(b)’s “unreasonable practice” prohibition. Pp. 7–9.

(b) The FCC’s §201(b) “unreasonable practice” determination is rea

sonable, and thus lawful. See Chevron U. S. A. Inc. v. Natural Re

sources Defense Council, Inc., 467 U. S. 837, 843–844. It easily fits

within the language of the statutory phrase. Moreover, the underly

ing regulated activity at issue resembles activity long regulated by

both transportation and communications agencies. Traditionally, the

FCC, exercising its rate-setting authority, has divided revenues from

a call among providers of segments of the call. Transportation agen

cies have similarly divided revenues from a larger transportation

service among providers of segments of the service. The payphone

operator and long-distance carrier resemble those joint providers of a

communication or transportation service. Differences between the

present “unreasonable practice” classification and more traditional

regulatory subject matter do not require a different outcome. When

Congress revised the telecommunications laws in 1996 to enhance

the role of competition, creating a system that relies in part upon

competition and in part upon the role of tariffs in regulatory supervi

sion, it left §201(b) in place. In light of the absence of any congres

sional prohibition, and the similarities with traditional regulatory ac

tion, the Court finds nothing unreasonable about the FCC’s §201(b)

determination. United States v. Mead Corp., 533 U. S. 218, 229.

Pp. 9–12.

(c) Additional arguments made by Global Crossing, its supporting

amici and the dissents—that §207 does not authorize actions for vio

lations of regulations promulgated to carry out statutory objectives;

that no §207 action lies for violations of substantive regulations

promulgated by the FCC; that §§201(a) and (b) concern only practices

that harm carrier customers, not carrier suppliers; that the FCC’s

“unreasonable practice” determination is unlawful because it is in

Cite as: 550 U. S. ____ (2007) 3

Syllabus

adequately reasoned; and that §276 prohibits the FCC’s §201(b) clas

sification—are ultimately unpersuasive. Pp. 12–19.

423 F. 3d 1056, affirmed.

BREYER, J., delivered the opinion of the Court, in which ROBERTS,

C. J., and STEVENS, KENNEDY, SOUTER, GINSBURG, and ALITO, JJ.,

joined. SCALIA, J., and THOMAS, J., filed dissenting opinions.

Cite as: 550 U. S. ____ (2007) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 05–705

_________________

GLOBAL CROSSING TELECOMMUNICATIONS, INC.,

PETITIONER v. METROPHONES TELE

COMMUNICATIONS, INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[April 17, 2007]

JUSTICE BREYER delivered the opinion of the Court.

The Federal Communications Commission (Commission

or FCC) has established rules that require long-distance

(and certain other) communications carriers to compen

sate a payphone operator when a caller uses a payphone to

obtain free access to the carrier’s lines (by dialing, e.g., a

1–800 number or other access code). The Commission has

added that a carrier’s refusal to pay the compensation is a

“practice . . . that is unjust or unreasonable” within the

terms of the Communications Act of 1934, §201(b), 48

Stat. 1070, 47 U. S. C. §201(b). Communications Act

language links §201(b) to §207, which authorizes any

person “damaged” by a violation of §201(b) to bring a

lawsuit to recover damages in federal court. And we must

here decide whether this linked section, §207, authorizes a

payphone operator to bring a federal-court lawsuit against

a recalcitrant carrier that refuses to pay the compensation

that the Commission’s order says it owes.

In our view, the FCC’s application of §201(b) to the

carrier’s refusal to pay compensation is a reasonable

2 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

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Opinion of the Court

interpretation of the statute; hence it is lawful. See Chev

ron U. S. A. Inc. v. Natural Resources Defense Council,

Inc., 467 U. S. 837, 843–844, and n. 11 (1984). And, given

the linkage with §207, we also conclude that §207 author

izes this federal-court lawsuit.

I

A

Because regulatory history helps to illuminate the

proper interpretation and application of §§201(b) and 207,

we begin with that history. When Congress enacted the

Communications Act of 1934, it granted the FCC broad

authority to regulate interstate telephone communica

tions. See Louisiana Pub. Serv. Comm’n v. FCC, 476 U. S.

355, 360 (1986). The Commission, during the first several

decades of its history, used this authority to develop a

traditional regulatory system much like the systems other

commissions had applied when regulating railroads, pub

lic utilities, and other common carriers. A utility or car

rier would file with a commission a tariff containing rates,

and perhaps other practices, classifications, or regulations

in connection with its provision of communications ser

vices. The commission would examine the rates, etc., and,

after appropriate proceedings, approve them, set them

aside, or, sometimes, set forth a substitute rate schedule

or list of approved charges, classifications, or practices

that the carrier or utility must follow. In doing so, the

commission might determine the utility’s or carrier’s

overall costs (including a reasonable profit), allocate costs

to particular services, examine whether, and how, individ

ual rates would generate revenue that would help cover

those costs, and, if necessary, provide for a division of

revenues among several carriers that together provided a

single service. See 47 U. S. C. §§201(b), 203, 205(a); Mis

souri ex rel. Southwestern Bell Telephone Co. v. Public

Serv. Comm’n of Mo., 262 U. S. 276, 291–295 (1923)

Cite as: 550 U. S. ____ (2007) 3

Opinion of the Court

(Brandeis, J., concurring in judgment) (telecommunica

tions); Verizon Communications Inc. v. FCC, 535 U. S.

467, 478 (2002) (same); Chicago & North Western R. Co. v.

Atchison, T. & S. F. R. Co., 387 U. S. 326, 331 (1967)

(railroads); Permian Basin Area Rate Cases, 390 U. S. 747,

761–765, 806–808 (1968) (natural gas field production).

In authorizing this traditional form of regulation, Con

gress copied into the 1934 Communications Act language

from the earlier Interstate Commerce Act of 1887, 24 Stat.

379, which (as amended) authorized federal railroad regu

lation. See American Telephone & Telegraph Co. v. Cen

tral Office Telephone, Inc., 524 U. S. 214, 222 (1998).

Indeed, Congress largely copied §§1, 8, and 9 of the Inter

state Commerce Act when it wrote the language of Com

munications Act §§201(b) and 207, the sections at issue

here. The relevant sections (in both statutes) authorize

the commission to declare any carrier “charge,” “regula

tion,” or “practice” in connection with the carrier’s services

to be “unjust or unreasonable”; they declare an “unreason

able,” e.g., “charge” to be “unlawful”; they authorize an

injured person to recover “damages” for an “unlawful”

charge or practice; and they state that, to do so, the person

may bring suit in a “court” “of the United States.” Inter

state Commerce Act §§1, 8, 9, 24 Stat. 379, 382; Commu

nications Act §§201(b), 206, 207, 47 U. S. C. §§201(b), 206,

207.

Historically speaking, the Interstate Commerce Act

sections changed early, preregulatory common-law rate-

supervision procedures. The common law originally per

mitted a freight shipper to ask a court to determine

whether a railroad rate was unreasonably high and to

award the shipper damages in the form of “reparations.”

The “new” regulatory law, however, made clear that a

commission, not a court, would determine a rate’s reason

ableness. At the same time, that “new” law permitted a

shipper injured by an unreasonable rate to bring a federal

4 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Opinion of the Court

lawsuit to collect damages. Interstate Commerce Act §§1,

8–9; Arizona Grocery Co. v. Atchison, T. & S. F. R. Co., 284

U. S. 370, 383–386 (1932); Texas & Pacific R. Co. v. Abi

lene Cotton Oil Co., 204 U. S. 426, 436, 440–441 (1907);

Keogh v. Chicago & Northwestern R. Co., 260 U. S. 156,

162 (1922); Louisville & Nashville R. Co. v. Ohio Valley

Tie Co., 242 U. S. 288, 290–291 (1916); J. Ely, Railroads

and American Law 71–72, 226–227 (2001); A. Hoogenboom

& O. Hoogenboom, A History of the ICC 61 (1976). The

similar language of Communications Act §§201(b) and 207

indicates a roughly similar sharing of agency authority

with federal courts.

Beginning in the 1970’s, the FCC came to believe that

communications markets might efficiently support more

than one firm and that competition might supplement (or

provide a substitute for) traditional regulation. See MCI

Telecommunications Corp. v. American Telephone & Tele

graph Co., 512 U. S. 218, 220–221 (1994). The Commis

sion facilitated entry of new telecommunications carriers

into long-distance markets. And in the 1990’s, Congress

amended the 1934 Act while also enacting new telecom

munications statutes, in order to encourage (and some

times to mandate) new competition. See Telecommunica

tions Act of 1996, 110 Stat. 56, 47 U. S. C. §609 et seq.

Neither Congress nor the Commission, however, totally

abandoned traditional regulatory requirements. And the

new statutes and amendments left many traditional re

quirements and related statutory provisions, including

§§201(b) and 207, in place. E.g., National Cable & Tele

communications Assn. v. Brand X Internet Services, 545

U. S. 967, 975 (2005).

B

The regulatory problem that underlies this lawsuit

arises at the intersection of traditional regulation and

newer, more competitively oriented approaches. Compet

Cite as: 550 U. S. ____ (2007) 5

Opinion of the Court

ing long-distance carriers seek the business of individual

local callers, including those who wish to make a long-

distance call from a local payphone. A payphone operator,

however, controls what is sometimes a necessary channel

for the caller to reach the long-distance carrier. And prior

to 1990, a payphone operator, exploiting this control,

might require a caller to use a long-distance carrier that

the operator favored while blocking access to the caller’s

preferred carrier. Such a practice substituted the opera

tor’s choice of carrier for the caller’s, and it potentially

placed disfavored carriers at a competitive disadvantage.

In 1990, Congress enacted special legislation requiring

payphone operators to allow a payphone user to obtain

“free” access to the carrier of his or her choice, i.e., access

from the payphone without depositing coins. Telephone

Operator Consumer Services Improvement Act of 1990,

104 Stat. 986, codified at 47 U. S. C. §226. (For ease of

exposition, we often use familiar terms such as “long

distance” and “free” calls instead of more precise terms

such as “interexchange” and “coinless” or “dial-around”

calls.)

At the same time, Congress recognized that the “free”

call would impose a cost upon the payphone operator; and

it consequently required the FCC to “prescribe regulations

that . . . establish a per call compensation plan to ensure

that all payphone service providers are fairly compensated

for each and every completed intrastate and interstate

call.” §276(b)(1)(A) of the Communications Act of 1934, as

added by §151 of the Telecommunications Act of 1996, 110

Stat. 106, codified at 47 U. S. C. §276(b)(1)(A).

The FCC then considered the compensation problem.

Using traditional ratemaking methods, it found that the

(fixed and incremental) costs of a “free” call from a pay-

phone to, say, a long-distance carrier warranted reim

bursement of (at the time relevant to this litigation) $0.24

per call. The FCC ordered carriers to reimburse the pay

6 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Opinion of the Court

phone operators in this amount unless a carrier and an

operator agreed upon a different amount. 47 CFR

§64.1300(d) (2005). At the same time, it left the carriers

free to pass the cost along to their customers, the pay-

phone callers. Thus, in a typical “free” call, the carrier

will bill the caller and then must share the revenue the

carrier receives—to the tune of $0.24 per call—with the

payphone operator that has, together with the carrier,

furnished a communications service to the caller. The

FCC subsequently determined that a carrier’s refusal to

pay the compensation ordered amounts to an “unreason

able practice” within the terms of §201(b). (We shall refer

to these regulations as the Compensation Order and the

2003 Payphone Order, respectively. See Appendix A,

infra, for full citations.) See generally P. Huber, M. Kel

logg, & J. Thorne, Federal Telecommunications Law

§8.6.3, pp. 710–713 (2d ed. 1999) (hereinafter Huber).

That determination, it believed, would permit a payphone

operator to bring a federal-court lawsuit under §207, to

collect the compensation owed. 2003 Payphone Order, 18

FCC Rcd. 19975, 19990, ¶32.

C

In 2003, respondent, Metrophones Telecommunications,

Inc., a payphone operator, brought this federal-court

lawsuit against Global Crossing Telecommunications, Inc.,

a long-distance carrier. Metrophones sought compensa

tion that it said Global Crossing owed it under the FCC’s

Compensation Order, 14 FCC Rcd. 2545 (1999). Insofar as

is relevant here, Metrophones claimed that Global Cross

ing’s refusal to pay amounted to a violation of §201(b),

thereby permitting Metrophones to sue in federal court,

under §207, for the compensation owed. The District

Court agreed. 423 F. 3d 1056, 1061 (CA9 2005). The

Ninth Circuit affirmed the District Court’s determination.

Ibid. We granted certiorari to determine whether §207

Cite as: 550 U. S. ____ (2007) 7

Opinion of the Court

authorizes the lawsuit.

II

A

Section 207 says that “[a]ny person claiming to be dam

aged by any common carrier . . . may bring suit” against

the carrier “in any district court of the United States” for

“recovery of the damages for which such common carrier

may be liable under the provisions of this chapter.” 47

U. S. C. §207 (emphasis added). This language makes

clear that the lawsuit is proper if the FCC could properly

hold that a carrier’s failure to pay compensation is an

“unreasonable practice” deemed “unlawful” under §201(b).

That is because the immediately preceding section, §206,

says that a common carrier is “liable” for “damages sus

tained in consequence of” the carrier’s doing “any act,

matter, or thing in this chapter prohibited or declared to be

unlawful.” And §201(b) declares “unlawful” any common-

carrier “charge, practice, classification, or regulation that

is unjust or unreasonable.” (See Appendix B, infra, for full

text; emphasis added throughout).

The history of these sections—including that of their

predecessors, §§8 and 9 of the Interstate Commerce Act—

simply reinforces the language, making clear the purpose

of §207 is to allow persons injured by §201(b) violations to

bring federal-court damages actions. See, e.g., Arizona

Grocery Co., 284 U. S., at 384–385 (Interstate Commerce

Act §§8–9); Part I–A, supra. History also makes clear that

the FCC has long implemented §201(b) through the issu

ance of rules and regulations. This is obviously so when

the rules take the form of FCC approval or prescription for

the future of rates that exclusively are “reasonable.” See

47 U. S. C. §205 (authorizing the FCC to prescribe reason

able rates and practices in order to preclude rates or prac

tices that violate §201(b)); 5 U. S. C. §551(4) (“ ‘rule’ . . .

includes the approval or prescription for the future of

8 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

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Opinion of the Court

rates . . . or practices”). It is also so when the FCC has set

forth rules that, for example, require certain accounting

methods or insist upon certain carrier practices, while (as

here) prohibiting others as unjust or unreasonable under

§201(b). See, e.g. (to name a few), Verizon Tel. Cos. v.

FCC, 453 F. 3d 487, 494 (CADC 2006) (rates unreasonable

(and hence unlawful) if not adjusted pursuant to account

ing rules ordered in FCC regulations); Cable & Wireless

P. L. C. v. FCC, 166 F. 3d 1224, 1231 (CADC 1999) (failure

to follow Commission-ordered settlement practices unrea

sonable); MCI Telecommunications Corp. v. FCC, 59 F. 3d

1407, 1414 (CADC 1995) (violation of rate-of-return pre

scription unlawful); In re NOS Communications, Inc., 16

FCC Rcd. 8133, 8136, ¶6 (2001) (deceptive marketing an

unreasonable practice); In re Promotion of Competitive

Networks in Local Telecommunications Markets, 15 FCC

Rcd. 22983, 23000, ¶35 (2000) (entering into exclusive

contracts with commercial building owners an unreason

able practice).

Insofar as the statute’s language is concerned, to violate

a regulation that lawfully implements §201(b)’s require

ments is to violate the statute. See, e.g., MCI Telecommu

nications Corp., 59 F. 3d, at 1414 (“We have repeatedly

held that a rate-of-return prescription has the force of law

and that the Commission may therefore treat a violation

of the prescription as a per se violation of the requirement

of the Communications Act that a common carrier main

tain ‘just and reasonable’ rates, see 47 U. S. C. §201(b)”);

cf. Alexander v. Sandoval, 532 U. S. 275, 284 (2001) (it is

“meaningless to talk about a separate cause of action to

enforce the regulations apart from the statute”). That is

why private litigants have long assumed that they may, as

the statute says, bring an action under §207 for violation

of a rule or regulation that lawfully implements §201(b).

See, e.g., Oh v. AT&T Corp., 76 F. Supp. 2d 551, 556 (NJ

1999) (assuming validity of §207 suit alleging violation of

Cite as: 550 U. S. ____ (2007) 9

Opinion of the Court

§201(b) in carrier’s failure to provide services listed in

FCC-approved tariff); Southwestern Bell Tel. Co. v. Allnet

Communications Servs., Inc., 789 F. Supp. 302, 304–306

(ED Mo. 1992) (assuming validity of §207 suit to enforce

FCC’s determination of reasonable practices related to

payment of access charges by long-distance carrier to local

exchange carrier); cf., e.g., Chicago & North Western

Transp. Co. v. Atchison, T. & S. F. R. Co., 609 F. 2d 1221,

1224–1225 (CA7 1979) (same in respect to Interstate

Commerce Act equivalents of §§201(b), 207).

The difficult question, then, is not whether §207 covers

actions that complain of a violation of §201(b) as lawfully

implemented by an FCC regulation. It plainly does. It

remains for us to decide whether the particular FCC

regulation before us lawfully implements §201(b)’s “un-

reasonable practice” prohibition. We now turn to that

question.

B

In our view the FCC’s §201(b) “unreasonable practice”

determination is a reasonable one; hence it is lawful. See

Chevron U. S. A. Inc., 467 U. S., at 843–844. The deter

mination easily fits within the language of the statutory

phrase. That is to say, in ordinary English, one can call a

refusal to pay Commission-ordered compensation despite

having received a benefit from the payphone operator a

“practic[e] . . . in connection with [furnishing a] communi

cation service . . . that is . . . unreasonable.” The service

that the payphone operator provides constitutes an inte

gral part of the total long-distance service the payphone

operator and the long-distance carrier together provide to

the caller, with respect to the carriage of his or her par

ticular call. The carrier’s refusal to divide the revenues it

receives from the caller with its collaborator, the payphone

operator, despite the FCC’s regulation requiring it to do

so, can reasonably be called a “practice” “in connection

10 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

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Opinion of the Court

with” the provision of that service that is “unreasonable.”

Cf. post, at 1–5 (THOMAS, J., dissenting).

Moreover, the underlying regulated activity at issue

here resembles activity that both transportation and com

munications agencies have long regulated. Here the

agency has determined through traditional regulatory

methods the cost of carrying a portion (the payphone

portion) of a call that begins with a caller and proceeds

through the payphone, attached wires, local communica

tions loops, and long-distance lines to a distant call recipi

ent. The agency allocates costs among the joint providers

of the communications service and requires downstream

carriers, in effect, to pay an appropriate share of revenues

to upstream payphone operators. Traditionally, the FCC

has determined costs of some segments of a call while

requiring providers of other segments to divide related

revenues. See, e.g., Smith v. Illinois Bell Telephone Co.,

282 U. S. 133, 148–151 (1930) (communications). And

traditionally, transportation agencies have determined

costs of providing some segments of a larger transporta

tion service (for example, the cost of providing the San

Francisco–Ogden segment of a San Francisco–New York

shipment) while requiring providers of other segments to

divide revenues. See, e.g., New England Divisions Case,

261 U. S. 184 (1923); Chicago & North Western R. Co., 387

U. S. 326; cf. Cable & Wireless P. L. C., supra, at 1231. In

all instances an agency allocates costs and provides for a

related sharing of revenues.

In these more traditional instances, transportation

carriers and communications firms entitled to revenues

under rate divisions or cost allocations might bring law

suits under §207, or the equivalent sections of the Inter

state Commerce Act, and obtain compensation or dam

ages. See, e.g., Allnet Communication Serv., Inc. v.

National Exch. Carrier Assn., Inc., 965 F. 2d 1118, 1122

(CADC 1992) (§207); Southwestern Bell Tel. Co., supra, at

Cite as: 550 U. S. ____ (2007) 11

Opinion of the Court

305 (same); Chicago & North Western Transp. Co., supra,

at 1224–1225 (Interstate Commerce Act equivalent of

§207). Again, the similarities support the reasonableness

of an agency’s bringing about a similar result here. We do

not suggest that the FCC is required to find carriers’

failures to divide revenues to be §201(b) violations in every

instance. Cf. U. S. Telepacific Corp. v. Tel-America of Salt

Lake City, Inc., 19 FCC Rcd. 24552, 24555–24556, and n.

27 (2004) (citing cases). Nor do we suggest that every

violation of FCC regulations is an unjust and unreason

able practice. Here there is an explicit statutory scheme,

and compensation of payphone operators is necessary to

the proper implementation of that scheme. Under these

circumstances, the FCC’s finding that the failure to follow

the order is an unreasonable practice is well within its

authority.

There are, of course, differences between the present

“unreasonable practice” classification and the similar more

traditional regulatory subject matter we have just de

scribed. For one thing, the connection between payphone

operators and long-distance carriers is not a traditional

“through route” between carriers. See §201(a). For an

other, as Global Crossing’s amici point out, the word

“practice” in §201(b) has traditionally applied to a carrier

practice that (unlike the present one) is the subject of a

carrier tariff—i.e., a carrier agency filing that sets forth

the carrier’s rates, classifications, and practices. Brief for

AT&T et al. as Amici Curiae 8–11. We concede the differ

ences. Indeed, traditionally, the filing of tariffs was “the

centerpiece” of the “[Communications] Act’s regulatory

scheme.” MCI Telecommunications Corp., 512 U. S., at

220. But we do not concede that these differences require

a different outcome. Statutory changes enhancing the role

of competition have radically reduced the role that tariffs

play in regulatory supervision of what is now a mixed

communications system—a system that relies in part upon

12 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

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Opinion of the Court

competition and in part upon more traditional regulation.

Yet when Congress rewrote the law to bring about these

changes, it nonetheless left §201(b) in place. That fact

indicates that the statute permits, indeed it suggests that

Congress likely expected, the FCC to pour new substan

tive wine into its old regulatory bottles. See Policy and

Rules Concerning the Interstate, Interexchange Market

place, 12 FCC Rcd. 15014, 15057, ¶77 (1997) (despite the

absence of tariffs, FCC’s §201 enforcement obligations

have not diminished); Boomer v. AT&T Corp., 309 F. 3d

404, 422 (CA7 2002) (same). And this circumstance, by

indicating that Congress did not forbid the agency to apply

§201(b) differently in the changed regulatory environment,

is sufficient to convince us that the FCC’s determination is

lawful.

That is because we have made clear that where “Con

gress would expect the agency to be able to speak with the

force of law when it addresses ambiguity in the statute or

fills a space in the enacted law,” a court “is obliged to

accept the agency’s position if Congress has not previously

spoken to the point at issue and the agency’s interpreta

tion” (or the manner in which it fills the “gap”) is “reason

able.” United States v. Mead Corp., 533 U. S. 218, 229

(2001); National Cable & Telecommunications Assn., 545

U. S., at 980; Chevron U. S. A. Inc., 467 U. S., at 843–844.

Congress, in §201(b), delegated to the agency authority to

“fill” a “gap,” i.e., to apply §201 through regulations and

orders with the force of law. National Cable & Telecom

munications Assn., supra, at 980–981. The circumstances

mentioned above make clear the absence of any rele-

vant congressional prohibition. And, in light of the tradi

tional regulatory similarities that we have discussed, we

can find nothing unreasonable about the FCC’s §201(b)

determination.

Cite as: 550 U. S. ____ (2007)

13

Opinion of the Court

C

Global Crossing, its supporting amici, and the dissents

make several additional but ultimately unpersuasive

arguments. First, Global Crossing claims that §207 au

thorizes only actions “seeking damages for statutory viola

tions” and not for “violations merely of regulations prom

ulgated to carry out statutory objectives.” Brief for

Petitioner 12 (emphasis in original). The lawsuit before

us, however, “seek[s] damages for [a] statutory violatio[n],”

namely, a violation of §201(b)’s prohibition of an “unrea

sonable practice.” As we have pointed out, supra, at 8,

§201(b)’s prohibitions have long been thought to extend to

rates that diverge from FCC prescriptions, as well as rates

or practices that are “unreasonable” in light of their fail

ure to reflect rules embodied in an agency regulation. We

have found no limitation of the kind Global Crossing

suggests.

Global Crossing seeks to draw support from Alexander

v. Sandoval, 532 U. S. 275 (2001), and Adams Fruit Co. v.

Barrett, 494 U. S. 638 (1990), which, Global Crossing says,

hold that an agency cannot determine through regulation

when a private party may bring a federal court action.

Those cases do involve private actions, but they do not

support Global Crossing. The cases involve different

statutes and different regulations, and the Court made

clear in each of those cases that its holding relied on the

specific statute before it. In Sandoval, supra, at 288–289,

the Court found that an implied right of action to enforce

one statutory provision, 42 U. S. C. §2000d, did not extend

to regulations implementing another, §2000d–1. In con

trast, here we are addressing the FCC’s reasonable inter

pretation of ambiguous language in a substantive statu

tory provision, 47 U. S. C. §201(b), which Congress

expressly linked to the right of action provided in §207.

Nothing in Sandoval requires us to limit our deference to

the FCC’s reasonable interpretation of §201(b); to the

14 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Opinion of the Court

contrary, as we noted in Sandoval, it is “meaningless to

talk about a separate cause of action to enforce the regula

tions apart from the statute. A Congress that intends the

statute to be enforced through a private cause of action

intends the authoritative interpretation of the statute to

be so enforced as well.” 532 U. S., at 284. In Adams Fruit

Co., supra, at 646–647, we rejected an agency interpreta

tion of the worker-protection statute at issue as contrary

to “the plain meaning of the statute’s language.” Given

the differences in statutory language, context, and history,

those two cases are simply beside the point.

Our analysis does not change in this case simply be

cause the practice deemed unreasonable (and hence

unlawful) in the 2003 Payphone Order is violation of an

FCC regulation adopted under authority of a separate

statutory section, §276. The FCC here, acting under the

authority of §276, has prescribed a particular rate (and a

division of revenues) applicable to a portion of a long-

distance service, and it has ordered carriers to reimburse

payphone operators for the relevant portion of the service

they jointly provide. But the conclusion that it is “unrea

sonable” to fail so to reimburse is not a §276 conclusion; it

is a §201(b) conclusion. And courts have treated a car

rier’s failure to follow closely analogous agency rate and

rate-division determinations as we treat the matter at

issue here. That is to say, the FCC properly implements

§201(b) when it reasonably finds that the failure to follow

a Commission, e.g., rate or rate-division determination

made under a different statutory provision is unjust or

unreasonable under §201(b). See, e.g., MCI Telecommuni

cations Corp., 59 F. 3d, at 1414 (failure to follow a rate

promulgated under §205 properly considered unreasonable

under §201(b)); see also Baltimore & O. R. Co. v. Alabama

Great Southern R. Co., 506 F. 2d 1265, 1270 (CADC 1974)

(statutory obligation to provide reasonable rate divisions

is “implemented by orders of the ICC” issued pursuant to a

Cite as: 550 U. S. ____ (2007) 15

Opinion of the Court

separate statutory provision). Moreover, in resting our

conclusion upon the analogy with rate setting and rate

divisions, the traditional, historical subject matter of

§201(b), we avoid authorizing the FCC to turn §§201(b)

and 207 into a back-door remedy for violation of FCC

regulations.

Second, JUSTICE SCALIA, dissenting, says that the “only

serious issue presented by this case [is] whether a practice

that is not in and of itself unjust or unreasonable can be

rendered such (and thus rendered in violation of the Act

itself) because it violates a substantive regulation of the

Commission.” Post, at 2–3. He answers this question

“no,” because, in his view, a “violation of a substantive

regulation promulgated by the Commission is not a viola

tion of the Act, and thus does not give rise to a private

cause of action.” Post, at 3. We cannot accept either

JUSTICE SCALIA’s statement of the “serious issue” or his

answer.

We do not accept his statement of the issue because

whether the practice is “in and of itself” unreasonable is

irrelevant. The FCC has authoritatively ruled that carri

ers must compensate payphone operators. The only prac

tice before us, then, and the only one we consider, is the

carrier’s violation of that FCC regulation requiring the

carrier to pay the payphone operator a fair portion of the

total cost of carrying a call that they jointly carried—each

supplying a partial portion of the total carriage. A prac

tice of violating the FCC’s order to pay a fair share would

seem fairly characterized in ordinary English as an “un

just practice,” so why should the FCC not call it the same

under §201(b)?

Nor can we agree with JUSTICE SCALIA’s claim that a

“violation of a substantive regulation promulgated by the

Commission is not a violation of” §201(b) of the Act when,

as here, the Commission has explicitly and reasonably

ruled that the particular regulatory violation does violate

16 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Opinion of the Court

§201(b). (Emphasis added.) And what has the substan

tive/interpretive distinction that JUSTICE SCALIA empha

sizes, post, at 3, to do with the matter? There is certainly

no reference to this distinction in §201(b); the text does not

suggest that, of all violations of regulations, only viola

tions of interpretive regulations can amount to unjust or

unreasonable practices. Why believe that Congress, which

scarcely knew of this distinction a century ago before the

blossoming of administrative law, would care which kind

of regulation was at issue? And even if this distinction

were relevant, the FCC has long set forth what we now

would call “substantive” (or “legislative”) rules under §205.

Cf. 1 R. Pierce, Administrative Law Treatise §6.4, p. 325

(4th ed. 2002); post, at 4. And violations of those substan

tive §205 regulations have clearly been deemed violations

of §201(b). E.g., MCI Telecommunications Corp., 59 F. 3d,

at 1414. Conversely, we have found no case at all in which

a private plaintiff was kept out of federal court because

the §201(b) violation it challenged took the form of a “sub

stantive regulation” rather than an “interpretive regula

tion.” Insofar as JUSTICE SCALIA uses adjectives such as

“traditional” or “textually based” to describe his distinc

tions, post, at 4, and “novel” or “absurd” to describe ours,

post, at 5, 2, we would simply note our disagreement.

We concede that JUSTICE SCALIA cites three sources in

support of his theory. See post, at 3. But, in our view,

those sources offer him no support. None of those sources

involved an FCC application of, or an FCC interpretation

of, the section at issue here, namely §201(b). Nor did any

involve a regulation—substantive or interpretive—

promulgated subsequent to the authority of §201(b). Thus

none is relevant to the case at hand. See APCC Servs.,

Inc. v. Sprint Communications Co., 418 F. 3d 1238, 1247

(CADC 2005) (per curiam) (“There was no authoritative

interpretation of §201(b) in this case”); Greene v. Sprint

Communications Co., 340 F. 3d 1047, 1052 (CA9 2003)

Cite as: 550 U. S. ____ (2007) 17

Opinion of the Court

(violation of substantive regulation does not violate §276;

silent as to §201(b)). The single judge who thought that

the FCC had authoritatively interpreted §201(b) (as has

occurred in the case before us) would have reached the

same conclusion that we do. APCC Servs., Inc., supra, at

1254. (D. H. Ginsburg, C. J., dissenting) (finding a private

cause of action, because there was “clearly an authorita

tive interpretation of §201(b)” that deemed the practice in

question unlawful). See also Huber §3.14.3, p. 317 (no

discussion of §201(b)).

Third, JUSTICE THOMAS (who also does not adopt

JUSTICE SCALIA’s arguments) disagrees with the FCC’s

interpretation of the term “practice.” He, along with

Global Crossing, claims instead that §§201(a) and (b)

concern only practices that harm carrier customers, not

carrier suppliers. Post, at 2–4 (dissenting opinion); Brief

for Petitioner 37–38. But that is not what those sections

say. Nor does history offer this position significant sup

port. A violation of a regulation or order dividing rates

among railroads, for example, would likely have harmed

another carrier, not a shipper. See, e.g., Chicago & North

Western Transp. Co., 609 F. 2d, at 1225–1226 (“Act . . .

provides for the regulation of inter-carrier relations as a

part of its general rate policy”). Once one takes account of

this fact, it seems reasonable, not unreasonable, to include

as a §201(b) (and §207) beneficiary a firm that performs

services roughly analogous to the transportation of one

segment of a longer call. We are not here dealing with a

firm that supplies office supplies or manual labor. Cf.,

e.g., Missouri Pacific R. Co. v. Norwood, 283 U. S. 249, 257

(1931) (“practice” in §1 of the Interstate Commerce Act

does not encompass employment decisions). The long-

distance carrier ordered by the FCC to compensate the

payphone operator is so ordered in its role as a provider of

communications services, not as a consumer of office sup

plies or the like. It is precisely because the carrier and the

18 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Opinion of the Court

payphone operator jointly provide a communications

service to the caller that the carrier is ordered to share

with the payphone operator the revenue that only the

carrier is permitted to demand from the caller. Cf. Cable

& Wireless P. L. C., 166 F. 3d, at 1231 (finding that §201(b)

enables the Commission to regulate not “only the terms on

which U. S. carriers offer telecommunication services to the

public,” but also “the prices U. S. carriers pay” to foreign

carriers providing the foreign segment of an international

call).

Fourth, Global Crossing argues that the FCC’s “unrea

sonable practice” determination is unlawful because it is

inadequately reasoned. We concede that the FCC’s initial

opinion simply states that the carrier’s practice is unrea

sonable under §201(b). But the context and cross-

referenced opinions, 2003 Payphone Order, 18 FCC Rcd.,

at 19990, ¶32 (citing American Public Communications

Council v. FCC, 215 F. 3d 51, 56 (CADC 2000)), make the

FCC’s rationale obvious, namely, that in light of the his

tory that we set forth supra, at 7–9, it is unreasonable for

a carrier to violate the FCC’s mandate that it pay compen

sation. See also In re APCC Servs., Inc. v. NetworkIP,

LLC, 21 FCC Rcd. 10488, 10493–10495, ¶¶ 13–16 (2006)

(Order) (spelling out the reasoning).

Fifth Global Crossing argues that a different statutory

provision, §276, see supra, at 5, prohibits the FCC’s

§201(b) classification. Brief for Petitioner 26–28. But

§276 simply requires the FCC to “take all actions neces

sary . . . to prescribe regulations that . . . establish a per

call compensation plan to ensure” that payphone operators

“are fairly compensated.” 47 U. S. C. §276(b)(1). It no

where forbids the FCC to rely on §201(b). Rather, by

helping to secure enforcement of the mandated regulations

the FCC furthers basic §276 purposes.

Finally, Global Crossing seeks to rest its claim of a §276

prohibition upon the fact that §276 requires regulations

Cite as: 550 U. S. ____ (2007) 19

Opinion of the Court

that secure compensation for “every completed intrastate,”

as well as every “interstate” payphone-related call, while

§201(b) (referring to §201(a)) extends only to “interstate or

foreign” communication. Brief for Petitioner 37. But

Global Crossing makes too much of too little. We can

assume (for argument’s sake) that §201(b) may conse

quently apply only to a portion of the Compensation Or

der’s requirements. But cf., e.g., Louisiana Pub. Serv.

Comm’n, 476 U. S., at 375, n. 4 (suggesting approval of

FCC authority where it is “not possible to separate the

interstate and the intrastate components”). But even if

that is so (and we repeat that we do not decide this ques

tion), the FCC’s classification will help to achieve a sub

stantial portion of its §276 compensatory mission. And we

cannot imagine why Congress would have (implicitly in

this §276 language) wished to forbid the FCC from con

cluding that an interstate half loaf is better than none.

For these reasons, the judgment of the Ninth Circuit is

affirmed.

It is so ordered.

20 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Appendix B to opinion of the Court

APPENDIXES TO OPINION OF THE COURT

A

In re Implementation of the Pay Telephone Reclassification

and Compensation Provisions of the Telecommunications

Act of 1996, 14 FCC Rcd. 2545, 2631–2632, ¶¶190–191

(1999) (Compensation Order).

In re the Pay Telephone Reclassification and Compensa

tion Provisions of the Telecommunications Act of 1996, 18

FCC Rcd. 19975, 19990, ¶32 (2003) (2003 Payphone Or

der).

B

Communications Act §201:

“(a) It shall be the duty of every common carrier en

gaged in interstate or foreign communication by wire

or radio to furnish such communication service upon

reasonable request therefor; and, in accordance with

the orders of the Commission, in cases where the

Commission, after opportunity for hearing, finds such

action necessary or desirable in the public interest, to

establish physical connections with other carriers, to

establish through routes and charges applicable

thereto and the divisions of such charges, and to es

tablish and provide facilities and regulations for oper

ating such through routes.

“(b) All charges, practices, classifications, and regu

lations for and in connection with such communica

tion service, shall be just and reasonable, and any

such charge, practice, classification, or regulation that

is unjust or unreasonable is declared to be unlawful:

Provided, That communications by wire or radio sub

Cite as: 550 U. S. ____ (2007) 21

Appendix B to opinion of the Court

ject to this chapter may be classified into day, night,

repeated, unrepeated, letter, commercial, press, Gov

ernment, and such other classes as the Commission

may decide to be just and reasonable, and different

charges may be made for the different classes of com

munications: Provided further, That nothing in this

chapter or in any other provision of law shall be con

strued to prevent a common carrier subject to this

chapter from entering into or operating under any

contract with any common carrier not subject to this

chapter, for the exchange of their services, if the

Commission is of the opinion that such contract is not

contrary to the public interest: Provided further, That

nothing in this chapter or in any other provision of

law shall prevent a common carrier subject to this

chapter from furnishing reports of positions of ships

at sea to newspapers of general circulation, either at a

nominal charge or without charge, provided the name

of such common carrier is displayed along with such

ship position reports. The Commission may prescribe

such rules and regulations as may be necessary in the

public interest to carry out the provisions of this chap

ter.” 47 U. S. C. §201.

Communications Act §206:

“In case any common carrier shall do, or cause or

permit to be done, any act, matter, or thing in this

chapter prohibited or declared to be unlawful, or shall

omit to do any act, matter, or thing in this chapter re

quired to be done, such common carrier shall be liable

to the person or persons injured thereby for the full

amount of damages sustained in consequence of any

such violation of the provisions of this chapter, to

gether with a reasonable counsel or attorney’s fee, to

be fixed by the court in every case of recovery, which

attorney’s fee shall be taxed and collected as part of

22 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

Appendix B to opinion of the Court

the costs in the case.” 47 U. S. C. §206.

Communications Act §207:

“Any person claiming to be damaged by any com

mon carrier subject to the provisions of this chapter

may either make complaint to the Commission as

hereinafter provided for, or may bring suit for the re

covery of the damages for which such common carrier

may be liable under the provisions of this chapter, in

any district court of the United States of competent

jurisdiction; but such person shall not have the right

to pursue both such remedies.” 47 U. S. C. §207.

Cite as: 550 U. S. ____ (2007) 1

SCALIA, J., dissenting

SUPREME COURT OF THE UNITED STATES

_________________

No. 05–705

_________________

GLOBAL CROSSING TELECOMMUNICATIONS, INC.,

PETITIONER v. METROPHONES TELE

COMMUNICATIONS, INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[April 17, 2007]

JUSTICE SCALIA, dissenting.

Section 276(b)(1)(A) of the Communications Act of 1934,

as added by the Telecommunication Act of 1996, in

structed the Federal Communications Commission (FCC

or Commission) to issue regulations establishing a plan to

compensate payphone operators, leaving it up to the FCC

to prescribe who should pay and how much. Pursuant to

that authority, the FCC promulgated a substantive regu

lation that required carriers to compensate payphone

operators at a rate of 24 cents per call (the payphone

compensation regulation). The FCC subsequently de

clared a carrier’s failure to comply with the payphone

compensation regulation to be unlawful under §201(b) of

the Act (which prohibits certain “unjust or unreasonable”

practices) and privately actionable under §206 of the Act

(which establishes a private cause of action for violations

of the Act). Today’s judgment can be defended only by

accepting either of two propositions with respect to these

laws: (1) that a carrier’s failure to pay the prescribed

compensation, in and of itself and apart from the Commis

sion’s payphone-compensation regulation, is an unjust or

unreasonable practice in violation of §201(b); or (2) that a

carrier’s failure to pay the prescribed compensation is an

“unjust or unreasonable” practice under §201(b) because it

2 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

SCALIA, J., dissenting

violates the Commission’s payphone-compensation

regulation.

The Court coyly avoids rejecting the first proposition.

But make no mistake: that proposition is utterly implau

sible, which is perhaps why it is nowhere to be found in

the FCC’s opinion. The unjustness or unreasonableness in

this case, if any, consists precisely of violating the FCC’s

payphone-compensation regulation.1 Absent that regula

tion, it would be neither unjust nor unreasonable for a

carrier to decline to act as collection agent for payphone

companies. The person using the services of the payphone

company to obtain access to the carrier’s network is not

the carrier but the caller. It is absurd to suggest some

natural obligation on the part of the carrier to identify

payphone use, bill its customer for that use, and forward

the proceeds to the payphone company. As a regulatory

command, that makes sense (though the free-rider prob

lem might have been solved in some other fashion); but,

absent the Commission’s substantive regulation, it would

be in no way unjust or unreasonable for the carrier to do

nothing. Indeed, if a carrier’s failure to pay payphone

compensation had been unjust or unreasonable in its own

right, the Commission’s payphone-compensation regula

tion would have been unnecessary, and the payphone

——————

1 See In re the Pay Telephone Reclassification and Compensation Pro

visions of the Telecommunications Act of 1996, 18 FCC Rcd. 19975,

19990, ¶32 (2003) (“[F]ailure to pay in accordance with the Commis

sion’s payphone rules, such as the rules expressly requiring such

payment . . . constitutes . . . an unjust and unreasonable practice in

violation of section 201(b)”); In re APCC Servs., Inc. v. NetworkIP, LLC,

21 FCC Rcd. 10488, 10493, ¶15 (2006) (“[F]ailure to pay payphone

compensation rises to the level of being ‘unjust and unreasonable’ ”

because it is “a direct violation of Commission rules”); id., at 10493,

¶15, and n. 46 (“The fact that a failure to pay payphone compensation

directly violates Commission rules specifically requiring such payment

distinguishes this situation from other situations where the Commis

sion has repeatedly declined to entertain ‘collection actions’ ”).

Cite as: 550 U. S. ____ (2007) 3

SCALIA, J., dissenting

companies could have sued directly for violation of §201(b).

The only serious issue presented by this case relates to

the second proposition: whether a practice that is not in

and of itself unjust or unreasonable can be rendered such

(and thus rendered in violation of the Act itself) because it

violates a substantive regulation of the Commission.

Today’s opinion seems to answer that question in the

affirmative, at least with respect to the particular regula

tion at issue here. That conclusion, however, conflicts

with the Communications Act’s carefully delineated reme

dial scheme. The Act draws a clear distinction between

private actions to enforce interpretive regulations (by

which I mean regulations that reasonably and authorita

tively construe the statute itself) and private actions to

enforce substantive regulations (by which I mean regula

tions promulgated pursuant to an express delegation of

authority to impose freestanding legal obligations beyond

those created by the statute itself). Section 206 of the Act

establishes a private cause of action for violations of the

Act itself—and violation of an FCC regulation authorita

tively interpreting the Act is a violation of the Act itself.

(As the Court explains, when it comes to regulations that

“reasonabl[y] [and] authoritatively construe the statute

itself,” Alexander v. Sandoval, 532 U. S. 275, 284 (2001),

“it is ‘meaningless to talk about a separate cause of action

to enforce the regulations apart from the statute.’ ” Ante,

at 8 (quoting Sandoval, supra, at 284).) On the other

hand, violation of a substantive regulation promulgated by

the Commission is not a violation of the Act, and thus does

not give rise to a private cause of action under §206. See,

e.g., APCC Servs., Inc. v. Sprint Communications Co., 418

F. 3d 1238, 1247 (CADC 2005) (per curiam), cert. pending,

No. 05–766; Greene v. Sprint Communications Co., 340

F. 3d 1047, 1052 (CA9 2003), cert. denied, 541 U. S. 988

(2004); P. Huber, M. Kellogg, & J. Thorne, Federal Tele

4 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

SCALIA, J., dissenting

communications Law §3.14.3 (2d ed. 1999).2 That is why

Congress has separately created private rights of action

for violation of certain substantive regulations. See, e.g.,

47 U. S. C. §227(b)(3) (violation of substantive regulations

prescribed under §227(b) (2000 ed. and Supp. III));

§227(c)(5) (violation of substantive regulations prescribed

under §227(c)). These do not include the payphone

compensation regulation authorized by §276(b).

There is no doubt that interpretive rules can be issued

pursuant to §201(b)—that is, rules which specify that

certain practices are in and of themselves “unjust or un

reasonable.” Orders issued under §205 of the Act, see

ante, at 14, which authorizes the FCC, upon finding that a

practice will be unjust and unreasonable, to order the

carrier to adopt a just and reasonable practice in its place,

similarly implement the statute’s proscription against

unjust or unreasonable practices. But, as explained above,

the payphone-compensation regulation does not imple

ment §201(b) and is not predicated on a finding of what

would be unjust and unreasonable absent the regulation.

The Court naively describes the question posed by this

case as follows: Since “[a] practice of violating the FCC’s

order to pay a fair share would seem fairly characterized

in ordinary English as an ‘unjust practice,’ . . . why should

the FCC not call it the same under §201(b)?” Ante, at 15.

There are at least three reasons why it is not as simple as

that. (1) There has been no FCC “order” in the ordinary

——————

2 TheCourt asserts that “[n]one of th[ese] [cases] involved an FCC

application of, or an FCC interpretation of, the relevant section, namely

§201(b)[,] nor did any involve a regulation—substantive or interpre

tive—promulgated subsequent to the authority of §201(b).” Ante, at 16.

I agree. They involved the payphone-compensation regulation, which

was not promulgated pursuant to §201(b), but pursuant to §276. The

relevant point is that violations of substantive regulations are not

directly actionable under §206.

Cite as: 550 U. S. ____ (2007) 5

SCALIA, J., dissenting

sense, see 5 U. S. C. §551(6), but only an FCC regulation.3

That is to say, the FCC has never determined that peti

tioner is in violation of its regulation and ordered compli

ance. Rather, respondent has alleged such a violation and

has brought that allegation directly to District Court

without prior agency adjudication. (2) The “practice of

violating” virtually any FCC regulation can be character

ized (“in ordinary English”) as an “unjust practice”—or if

not that, then an “unreasonable practice”—so that all FCC

regulations become subject to private damage actions.

Thus, the traditional (and textually based) distinction

between private enforceability of interpretive rules, and

private nonenforceability of substantive rules is effectively

destroyed. And (3) it is not up to the FCC to “call it” an

unjust practice or not. If it were, agency discretion might

limit the regulations available for harassing litigation by

telecommunications competitors. In fact, however, the

practice of violating one or another substantive rule either

is or is not an unjust or unreasonable practice under

§201(b). The Commission is entitled to Chevron deference

with respect to that determination at the margins, see

Chevron U. S. A. Inc. v. Natural Resources Defense Coun

cil, Inc., 467 U. S. 837 (1984), but it will always remain

within the power of private parties to go directly to court,

asserting that a particular violation of a substantive rule

is (“in ordinary English”) “unjust” or “unreasonable” and

hence provides the basis for suit under §201(b).

The Court asks (more naively still) “what has the sub

stantive/interpretive distinction that [this dissent] empha

sizes to do with the matter? There is certainly no refer

——————

3 The Court’s departure from ordinary usage is made possible by the

fact that “the FCC commonly adopts rules in opinions called ‘orders.’ ”

New England Tel. & Tel. Co. v. Public Util. Comm’n of Me., 742 F. 2d 1,

8–9 (CA1 1984) (Breyer, J.). If there had been violation of an FCC

order in this case, a private action would have been available under

§407 of the Act.

6 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

SCALIA, J., dissenting

ence to this distinction in §201(b) . . . . Why believe that

Congress, which scarcely knew of this distinction a cen

tury ago before the blossoming of administrative law,

would care which kind of regulation was at issue?” Ante,

at 15–16 (citation omitted). The answer to these questions

is obvious. Section 206 (which was enacted at the same

time as §201(b), see 48 Stat. 1070, 1072) does not explicitly

refer to the distinction between interpretive and substan

tive regulations. And yet the Court acknowledges that,

while a violation of an interpretive regulation is actionable

under §206 (as a violation of the statute itself), a violation

of a substantive regulation is not. (Were this not true, the

Court’s lengthy discussion of §201(b) would be wholly

unnecessary because violation of the payphone

compensation regulation would be directly actionable

under §206.) The Court evidently believes that Congress

went out of its way to exclude from §206 private actions

that did not charge violation of the Act itself (or regula

tions that authoritatively interpret the Act) but was per

fectly willing to have those very same private actions

brought in through the back door of §201(b) as an “inter

pretation” of “unjust or unreasonable practice.” It does not

take familiarity with “the blossoming of administrative

law” to perceive that this would be nonsensical.4

Seemingly aware that it is in danger of rendering the

limitation upon §206 a nullity, the Court seeks to limit its

novel approval of private actions for violation of substan

——————

4 The Court further asserts that the “the FCC has long set forth what

we now call ‘substantive’ (or ‘legislative’) rules under §205,” “violations

of [which] . . . have clearly been deemed violations of §201(b),” ante, at

16. The §205 orders to which the Court refers are not substantive in

the relevant sense because they interpret §201(b)’s prohibition against

unjust and unreasonable rates or practices. See ante, at 7 (§205 “au

thoriz[es] the FCC to prescribe reasonable rates and practices in order

to preclude rates or practices that violate §201(b)”). The payphone

compensation regulation, by contrast, does not interpret §201(b) or any

other statutory provision.

Cite as: 550 U. S. ____ (2007) 7

SCALIA, J., dissenting

tive rules to substantive rules that are “analog[ous] with

rate-setting and rate divisions, the traditional, historical

subject matter of §201(b),” ante, at 14–15 (emphasis

added). There is absolutely no basis in the statute for

this distinction (nor is it anywhere to be found in the

FCC’s opinion). As I have described earlier, interpretive

regulations are privately enforceable because to violate

them is to violate the Act, within the meaning of the pri

vate-suit provision of §206. That a substantive regulation

is analogous to traditional interpretive regulations, in the

sense of dealing with subjects that those regulations have

traditionally addressed, is supremely irrelevant to

whether violation of the substantive regulation is a viola

tion of the Act—which is the only pertinent inquiry. The

only thing to be said for the Court’s inventive distinction is

that it enables its holding to stand without massive dam

age to the statutory scheme. Better an irrational limita

tion, I suppose, than no limitation at all; even though it is

unclear how restrictive that limitation will turn out to be.

What other substantive regulations are out there, one

wonders, that can be regarded as “analogous” to actions

the Commission has traditionally taken through interpre

tive regulations under §201(b)?

It is difficult to comprehend what public good the Court

thinks it is achieving by its introduction of an unprinci

pled exception into what has hitherto been a clearly un

derstood statutory scheme. Even without the availability

of private remedies, the payphone-compensation regula

tion would hardly go unenforced. The Commission is

authorized to impose civil forfeiture penalties of up to

$100,000 per violation (or per day, for continuing viola

tions) against common carriers that “willfully or repeat

edly fai[l] to comply with . . . any rule, regulation, or order

issued by the Commission.” 47 U. S. C. §503(b)(1)(B). And

the Commission can even place enforcement in private

hands by issuing a privately enforceable order forbidding

8 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

SCALIA, J., dissenting

continued violation. See §§154(i), 276(b)(1)(A), 407. Such

an order, however, would require a prior Commission

adjudication that the regulation had been violated, thus

leaving that determination in the hands of the agency

rather than a court, and preventing the unjustified private

suits that today’s decision allows.

I would hold that a private action to enforce an FCC

regulation under §§201(b) and 206 does not lie unless the

regulated practice is “unjust or unreasonable” in its own

right and apart from the fact that a substantive regulation

of the Commission has prohibited it. As the practice

regulated by the payphone-compensation regulation does

not plausibly fit that description, I would reverse the

judgment of the Court of Appeals.

Cite as: 550 U. S. ____ (2007) 1

THOMAS, J., dissenting

SUPREME COURT OF THE UNITED STATES

_________________

No. 05–705

_________________

GLOBAL CROSSING TELECOMMUNICATIONS, INC.,

PETITIONER v. METROPHONES TELE

COMMUNICATIONS, INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[April 17, 2007]

JUSTICE THOMAS, dissenting.

The Court holds that failure to pay a payphone operator

for coinless calls is an “unjust or unreasonable” “practice”

under 47 U. S. C. §201(b). Properly understood, however,

§201 does not reach the conduct at issue here. Failing to

pay is not a “practice” under §201 because that section

regulates the activities of telecommunications firms in

their role as providers of telecommunications services. As

such, §201(b) does not reach the behavior of telecommuni

cation firms in other aspects of their business. I respect

fully dissent.

I

The meaning of §201(b) of the Communications Act of

1934 becomes clear when read, as it should be, as a part of

the entirety of §201. Subsection (a) sets out the duties and

broad discretionary powers of a common carrier:

“It shall be the duty of every common carrier engaged

in interstate or foreign communication by wire or ra

dio to furnish such communication service upon rea

sonable request therefor; and . . . to establish physical

connections with other carriers, to establish through

routes and charges applicable thereto and the divi

sions of such charges, and to establish and provide fa

2 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

THOMAS, J., dissenting

cilities and regulations for operating such through

routes.”

Immediately following that description of duties and

powers, subsection (b) requires:

“All charges, practices, classifications, and regulations

for and in connection with such communication ser

vice, shall be just and reasonable, and any such

charge, practice, classification, or regulation that

is unjust or unreasonable is declared to be

unlawful . . . .”

The “charges, practices, classifications, and regulations”

referred to in subsection (b) are those “establish[ed]” un

der subsection (a). Having given common carriers discre

tionary power to set charges and establish regulations in

subsection (a), Congress required in subsection (b) that the

exercise of this power be “just and reasonable.” Thus,

unless failing to pay a payphone operator arises from one

of the duties under subsection (a), it is not a “practice”

within the meaning of subsection (b).

Subsection (a) prescribes a carrier’s duty to render

service either to customers (“furnish[ing] . . . communica

tion service”) or to other carriers (e.g., “establish[ing]

physical connections”); it does not set out duties related to

the receipt of service from suppliers. Consequently, given

the relationship between subsections (a) and (b), subsec

tion (b) covers only those “practices” connected with the

provision of service to customers or other carriers. The

Court embraced this critical limitation in Missouri Pacific

R. Co. v. Norwood, 283 U. S. 249 (1931), which held that

the term “practice” means a “ ‘practice’ in connection with

the fixing of rates to be charged and prescribing of service

to be rendered by the carriers.” Id., at 257. In Norwood,

the Court interpreted language from the Interstate Com

merce Act (as amended by the Mann-Elkins Act) that

Congress just three years later copied into the Communi

Cite as: 550 U. S. ____ (2007) 3

THOMAS, J., dissenting

cations Act. Ante, at 3; see §7 of the Mann-Elkins Act of

1910, 36 Stat. 546. In passing the Communications Act,

Congress may “be presumed to have had knowledge” and

to have approved of the Court’s interpretation in Norwood.

See Lorillard v. Pons, 434 U. S. 575, 581 (1978). As a

result, the Supreme Court’s contemporaneous interpreta

tion of “practice” should bear heavily on our analysis.

Other terms in §201 support using Norwood’s restrictive

interpretation of “practice.” A word “is known by the

company it keeps,” and one should not “ascrib[e] to one

word a meaning so broad that it is inconsistent with its

accompanying words.” Gustafson v. Alloyd Co., 513 U. S.

561, 575 (1995). Of the quartet “charges, practices, classi

fications, and regulations,” the terms “charges,” “classifi

cations,” and “regulations” could apply only to the party

“furnish[ing]” service. “[C]harges” refers to the charges for

physical connections and through routes. 47 U. S. C.

§§201(a), 202(b). “[R]egulations” relates to the operation

of through routes. §201(a). “[C]lassifications” refers to

different sorts of communications that carry different

charges. §201(b). These three terms involve either setting

rules for the provision of service or setting rates for that

provision. In keeping with the meaning of these terms,

the term “practices” must refer to only those practices “in

connection with the fixing of rates to be charged and pre

scribing of service to be rendered by the carriers.” Nor

wood, supra, at 257.

The statutory provisions surrounding §201 confirm this

interpretation. Section 203 requires that “[e]very common

carrier . . . shall . . . file with the Commission . . . sched

ules showing all charges for itself and its connecting carri

ers . . . and showing the classifications, practices, and

regulations affecting such charges.” See also §§204–205

(also using the phrase “charge, classification, regulation,

or practice” in the tariff context). The “charges” referred

to are those related to a carrier’s own services. §203

4 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

THOMAS, J., dissenting

(“charges for itself and its connecting carriers”). The

“classifications, practices, and regulations” are also limited

to a carrier’s own services. Ibid. (applying only to prac

tices “affecting such charges”). In this context, “practices”

must mean only those “in connection with the fixing of

rates to be charged.” Norwood, 283 U. S., at 257. Section

202—outside of the tariff context—also supports this

limitation. It forbids discrimination “in charges, practices,

classifications, regulations, facilities, or services.” Dis

crimination occurs with respect to a carrier’s provision of

service—not its purchasing of services from others. I am

unaware of any context in which §§202–205 were applied

to conduct relating to the service that another party pro

vided to a telecommunications carrier.

In this case, Global Crossing has not provided any ser

vice to Metrophones. Rather, Global Crossing has failed to

pay for a service that Metrophones supplied. The failure

to pay a supplier is not in any sense a “ ‘practice’ in con

nection with the fixing of rates to be charged and prescrib

ing of service to be rendered by the carriers.” Id., at 257.

Accordingly, Global Crossing has not engaged in a practice

under subsection (b) because the failure to pay has not

come in connection with its provision of service or setting

of rates within the meaning of subsection (a). On this

understanding of §201, Global Crossing’s failure to pay

Metrophones is not a statutory violation. All that remains

is a regulatory violation, which does not provide Metro-

phones a private right of action under §207.1

——————

1 Other enforcement mechanisms exist to redress Global Crossing’s

failure to pay. The Federal Communications Commission (FCC) has

the power to impose fines under 47 U. S. C. §§503(b)(1)(B) and (2)(B).

In addition, the FCC may have the authority to create an administra

tive right of action under §276(b)(1) (giving the FCC power to “take all

actions necessary” to “establish a per call compensation plan” that

ensures “all payphone service providers are fairly compensated”).

Cite as: 550 U. S. ____ (2007) 5

THOMAS, J., dissenting

II

The majority suggests that deference under Chevron

U. S. A. Inc. v. Natural Resources Defense Council, Inc.,

467 U. S. 837 (1984), compels its conclusion that a car

rier’s refusal to pay a payphone operator is unreasonable.

But “unjust or unreasonable” is a statutory term, §201(b),

and a court may not, in the name of deference, abdicate its

responsibility to interpret a statute. Under Chevron, an

agency is due no deference until the court analyzes the

statute and determines that Congress did not speak di

rectly to the issue under consideration:

“The judiciary is the final authority on issues of statu

tory construction and must reject administrative con

structions which are contrary to clear congressional

intent. . . . If a court, employing traditional tools of

statutory construction, ascertains that Congress had

an intention on the precise question at issue, that in

tention is the law and must be given effect.” Id., at

843, n. 9.

The majority spends one short paragraph analyzing the

relevant provisions of the Communications Act to deter

mine whether a refusal to pay is an “ ‘unjust or unreason

able’ ” “ ‘practice.’ ” Ante, at 7. Its entire statutory analysis

is essentially encompassed in a single sentence in that

paragraph: “That is to say, in ordinary English, one can

call a refusal to pay Commission-ordered compensation

despite having received a benefit from the payphone op

erator a ‘practice . . . in connection with [furnishing a]

communication service . . . that is . . . unreasonable.’ ”

Ibid. (omissions and modifications in original). This

analysis ignores the interaction between §201(a) and

§201(b), supra, at 1–2; it ignores the three terms sur

rounding the word “practice” and the context those terms

provide, supra, at 3–4; it ignores the use of the term “prac

tice” in nearby statutory provisions, such as §§202–205,

6 GLOBAL CROSSING TELECOMMUNICATIONS, INC. v.

METROPHONES TELECOMMUNICATIONS, INC.

THOMAS, J., dissenting

supra, at 4; and it ignores the understanding of the term

“practice” at the time Congress enacted the Communica

tions Act, supra, at 2–3.

After breezing by the text of the statutory provisions at

issue, the majority cites lower court cases to claim that

“the underlying regulated activity at issue here resembles

activity that both transportation and communications

agencies have long regulated.” Ante, at 7–8 (citing Allnet

Communication Serv., Inc. v. National Exch. Carrier

Assn., Inc., 965 F. 2d 1118 (CADC 1992), and Southwest

ern Bell Tel. Co. v. Allnet Communications Serv., Inc., 789

F. Supp. 302 (ED Mo. 1992)). It argues that these cases

demonstrate that “communications firms entitled to reve

nues under rate divisions or cost allocations might bring

lawsuits under §207 . . . and obtain compensation or dam

ages.” Ante, at 8. But in both cases, the only issue before

the court was whether the lawsuit should be dismissed

because the FCC had primary jurisdiction; and in both

cases, the answer was yes. Allnet, supra, at 1120–1123;

Southwestern Bell, supra, at 304–306. The Court’s reli

ance on these cases is thus entirely misplaced because

both courts found they lacked jurisdiction; the cases do not

address §201 at all—the interpretation of which is the sole

question in this case; and both cases assume without

deciding that §207 applies, thus not grappling with the

point for which the majority claims their support.2

III

Finally, independent of the FCC’s interpretation of the

——————

2 Themajority’s citation to Chicago & North Western Transp. Co. v.

Atchison, T. & S. F. R. Co., 609 F. 2d 1221 (CA7 1979), is similarly

misplaced. There, the Court of Appeals interpreted the meaning of the

statutory requirement to “ ‘establish just, reasonable, and equitable

divisions’ ” under the Interstate Commerce Act. Id., at 1224. It is

difficult to understand why the Seventh Circuit’s interpretation of

different statutory language is relevant to the question we face in this

case.

Cite as: 550 U. S. ____ (2007) 7

THOMAS, J., dissenting

language “unjust or unreasonable” “practice,” the FCC’s

interpretation is unreasonable because it regulates both

interstate and intrastate calls. The unjust-and

unreasonable requirement of §201(b) applies only to “prac

tices . . . in connection with such communication service,”

and the term “such communication service” refers to “in

terstate or foreign communication by wire or radio” in

§201(a) (emphasis added). Disregarding this limitation,

the FCC has applied its rule to both interstate and intra

state calls. 47 CFR §64.1300 (2005). In light of the fact

that the statute explicitly limits “unjust or unreasonable”

“practices” to those involving “interstate or foreign com

munication,” the FCC’s application of §201(b) to intrastate

calls is plainly an unreasonable interpretation of the

statute. To make matters worse, the FCC has not even

bothered to explain its clear misinterpretation. See In re

Pay Telephone Reclassification and Compensation Provi

sions of the Telecommunications Act of 1996, 18 FCC Rcd.

19975 (2003).

The majority avoids directly addressing this argument

by stating there is no reason “to forbid the FCC from

concluding that an interstate half loaf is better than

none.” Ante, at 13. But if the FCC’s rule is unreasonable,

Metrophones should not be able to recover for intrastate

calls in a suit under §207. Because intrastate calls cannot

be the subject of an “unjust or unreasonable” practice

under §201, there is no private right of action to recover

for them, and the Court should cut off that half of the loaf.

By sidestepping this issue, the majority gives the lower

court no guidance about how to handle intrastate calls on

remand.

IV

Because the majority allows the FCC to interpret the

Communications Act in a way that contradicts the unam

biguous text, I respectfully dissent.