FYI: - - - - - - - - Verizon Communications, Inc. v. Fed. Communications Comm'n Decided: 05/13/02 No. 00-511 Full text: http://laws.findlaw.com/us/000/00-511.html TELECOMMUNICATIONS (Federal Communications Commission's (FCC) Rules Under Telecommunications Act of 1996 Valid) The United States Supreme Court held 8-0 (opinion by Souter; concurrence by Breyer; dissent in part by Breyer; O'Connor took no part in decision) that the FCC can require state commissions to set the rates charged by incumbents for leased elements on a forward-looking basis untied to the incumbents' investment and can also require the combination of elements. The Telecommunications Act of 1996 (Act) was intended to eliminate the monopolies enjoyed by the inheritors of AT&T's local franchises. The Act entitles the new entrants to lease elements of the incumbent carriers' local-exchange networks, and directs the FCC to prescribe methods for state utility commissions to use in setting rates for the sharing of those elements. The FCC promulgated rules that created pricing provisions, based on a forward-looking pricing methodology, and required incumbent local telephone companies to combine certain previously uncombined network-elements when a new entrant requests the combination. Incumbent carriers and state commissions challenged the FCC's rules. The Court of Appeals for the Eighth Circuit invalidated both of these rules, holding that the Act required that rates be based on the actual, not hypothetical, cost of providing the network element and that there was no authority for the FCC to require the combination of elements. The United States Supreme Court reversed, stating that the FCC's rules were reasonable interpretations of the Act and the incumbents did not meet their burden of showing unreasonableness to defeat the deference due the FCC. [Summarized by K'elly Rees] - - - - - - - -