and from the Supreme's..

Tue May 14 09:23:09 UTC 2002

FYI:

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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]

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