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* FCC power to set own jurisdiction challenged
* Case involved siting of wireless phone towers
By Jonathan Stempel
WASHINGTON, Jan 16 (Reuters) - The power of federal government agencies over local authorities was at issue before the U.S. Supreme Court on Wednesday, in two complex cases whose outcome could affect the spread of wireless telephone services nationwide.
The specific issue was whether the Federal Communications Commission had authority to step in and try to speed up the process for installing wireless communications towers when state and local authorities were slow to act.
A broad ruling against the FCC could set standards that make courts more willing to limit agencies' authority to interpret and apply laws, which some critics say belongs with elected officials or the courts themselves.
"The dividing line between state authority and federal authority is a more significant one than some of the other questions as to which agencies get deference," Chief Justice John Roberts told Solicitor General Donald Verrilli, who argued on the FCC's behalf.
Roberts described as "vastly different propositions" having the federal judiciary define the limits between state and federal power, and having "an agency of unelected bureaucrats responsible to the executive" do so.
Wednesday's cases involved a federal law requiring state and local governments to act on tower siting applications within a "reasonable period of time."
The FCC decided that 90-day and 150-day deadlines were fair, and a federal appeals court upheld its decision. AT&T Inc, Deutsche Telekom AG's T-Mobile USA Inc and Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc in court papers support that view.
But Los Angeles, San Antonio, Arlington, Texas, and the New Orleans city council said this interfered with their power to enforce local zoning standards. They argued that the court should have exercised its own judgment rather than deferred to the FCC.
In 1984, the Supreme Court in Chevron USA Inc v. Natural Resources Defense Council Inc set out a test for when to defer to a government agency's interpretation of a law it administers.
Under that test, if Congress addressed the issue in dispute, then a court must honor that intent. But if the law were silent or ambiguous, then a court should defer to the agency so long as its interpretation is "permissible."
Thomas Goldstein, a lawyer representing the cities, countered that this was the wrong standard, and that Congress did not give the FCC power to set the time limits.
"We recognize that it has its expertise," he said, referring to the FCC. "The question is, do we have to, when the statute is ambiguous, as it will often be, accept as a matter of law their view that they do have jurisdiction."
Verrilli countered that agencies should not be forced to distinguish between jurisdictional and nonjurisdictional issues.
"Chevron does provide a stable framework for the development of administrative law," he said. Ignoring it, he said, could prompt demands that courts delve into too many agency decisions, and result in the "ossification of the administrative process."
A decision is expected by the end of June.
The cases are City of Arlington et al v. U.S., No. 11-1545; and Cable, Telecommunications, and Technology Committee of the New Orleans City Council v. FCC, No. 11-1547.