377:
the new entrants are entitled, among other things, to lease elements of the local telephone networks from the incumbent monopolists. The issues are whether the FCC is authorized (1) to require state utility commissions to set the rates charged by the incumbents for leased elements on a forward-looking basis untied to the incumbents’ investment, and (2) to require incumbents to combine such elements at the entrants’ request when they lease them to the entrants. We uphold the FCC’s assumption and exercise of authority on both issues… The 1996 Act sought to bring competition to local-exchange markets, in part by requiring incumbent local-exchange carriers to lease elements of their networks at rates that would attract new entrants when it would be more efficient to lease than to build or resell. Whether the FCC picked the best way to set these rates is the stuff of debate for economists and regulators versed in the technology of telecommunications and microeconomic pricing theory. The job of judges is to ask whether the
Commission made choices reasonably within the pale of statutory possibility in deciding what and how items must be leased and the way to set rates for leasing them. The FCC’s pricing and additional combination rules survive that scrutiny. The judgment of the Court of Appeals is reversed in part and affirmed in part, and the cases are remanded for further proceedings consistent with this opinion. It is so ordered.
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38:
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accordance with the terms and conditions of the agreement and the requirements of this section and section 252. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service.
407:
I agree with the majority that the
Telecommunications Act of 1996 (Act or Telecommunications Act), 47 U. S. C. §251 et seq. (1994 ed. and Supp. V), does not require a historical cost pricing system. I also agree that, at the present time, no taking of the incumbent firms’ property in violation of the
273:
The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in
245:
The court focused on three main issues, which were the FCC's pricing rules for these unbundled network elements, also whether the exclusion of historical costs in the pricing rules constitutes a governmental taking, and lastly, various rules for combining network elements. It focused primarily on the
435:
is currently looking at its unbundled network element policies, recognizing that a 'course correction' -- as noted by
Chairman Powell -- may be necessary to encourage facilities-based competition as the Telecom Act intended. We hope that the chairman will not follow the bankrupt policies of the past
376:
These cases arise under the
Telecommunications Act of 1996. Each is about the power of the Federal Communications Commission to regulate a relationship between monopolistic companies providing local telephone service and companies entering local markets to compete with the incumbents. Under the Act,
548:
This article draws on the
Supreme Court decision in Verizon to argue that the intersection of ambiguous telecommunication access statues and the limits on judicial review as a result of the separation of powers and the application of Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc.,
559:
Similarly, while we think the Court made some missteps in the Iowa
Utilities and Verizon, overall the Court’s analysis in both of these cases strikes us as reasonable and likely even right. The economic issues at the core of these cases were complicated and at times ambiguous, and the Court in out
287:
is the cost of using long-lived assets in any given period which depends on the original costs of assets. In the telecommunications industry these have the trend of dropping over time due to technological innovation and progress. This cost calculating method may then overstate the current long run
408:
Fifth
Amendment has occurred. I disagree, however, with the Court’s conclusion that the specific pricing and unbundling rules at issue here are authorized by the Act… I cannot find the statutory authority. And I consequently would affirm the lower court on the point. For these reasons, I dissent.
484:
While
Verizon Wireless would like to "rule the air," as this ads suggest, the carrier, along with AT&T, must instead share the air, ruled by the Federal Communications Commission ... to create data-roaming agreements, ensuring all Americans have access to mobile e-mail and Internet services.
228:
had an unreasonable way for setting rates for leasing network elements. It held 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 that the FCC can require incumbents to combine
454:
Feb. 19, 2003: Verizon claims that "rather than bringing stability, certainty and clarity to the regulatory structure for the industry, the commission left a void and handed off the decision-making to the states. This is a recipe for continued disarray in the industry and more
560:
view exercised good judgment in deciding when to wade into the morass and when to defer to technical issues to the
Commission. Out purpose of this article, then, is not to criticize either the Commission of the Court. Instead we, we set out her to move the analysis forward…
513:
The FCC found only one violation of the commission's rules and the
Communications Act. This violation related to the failure of Verizon New Jersey to record a company-specific DNCL request made by Smith in September 2003. The rest of the complaints were
241:
left the FCC freedom to define the standard for leasing rates with very few details. This led to Verizon questioning if the FCC is authorized to be able to require state utility commissions to set the rates charged by the incumbents for leased elements.
622:
348:
entitle the new entrants to lease elements of the incumbent carriers local-exchange networks”. In five separate cases they argued over the FCC's regulations though ultimately the Court of Appeals held that the use of the
343:
from the Supreme Court to the Appeal court they state, “In order to foster competition between monopolistic carriers providing local telephone service and companies seeking to enter local markets provisions of the
108:
Affirmed in part, reversed in part, and remanded. 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
637:
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458:
Feb. 23, 2003: "Verizon Chief Executive Officer Ivan Seidenberg today told financial analysts that the FCC's policies are flawed both legally and as a sustainable business model for creating competition."
495:
480:
In 2010 Verizon Wireless launched its latest advertising campaign creating the new tagline "Rule The Air." The campaign boasts Verizon's superior ability in its 4G network to "send a strong signal."
549:
mean that administrative law has become an ineffective tool in ensuring the accountability of telecommunications regulators…This article argues for Congress to address pricing in greater detail.
307:
and prices only need to avoid being "unjust, unreasonable, or unreasonably discriminatory." Enough interconnection, unbundling and resale agreements with the companies can foster competition.
61:
Verizon Communications Inc., et al. v. Federal Communications Commission, et al.; WorldCom, Inc., et al. v. Verizon Communications Inc., et al.; Federal Communications Commission, et al. v.
266:
on a forward-looking basis, untied to the incumbents' historical or past investments. The methodology of doing this by the FCC is not inconsistent with the act therefore is reasonable.
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83:
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methodology was foreclosed because the Act plainly required rates based on the actual cost of providing the network element and invalidated certain combination rules.
720:
1564:
554:
Verizon Communications, Inc. v. FCC: Telecommunications Access Pricing and Regulator Accountability through Administrative Law and Takings Jurisprudence
17:
918:
303:, which includes Verizon, have the incentive to unbundle their elements. If conditions are met, elements that are unbundled need not be offered at
1574:
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1059:
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methodology as a legal matter, that does not mean this is the best policy for consumers or for the telecommunications industry at large.
263:
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42:
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432:
325:
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259:
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65:, et al.; AT&T Corporation v. Iowa Utilities Board, et al.; General Communications, Inc. v. Iowa Utilities Board, et al.
727:
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1339:
528:
292:
which is why, in contrast, the FCC uses a "forward-looking" cost, referred to as Total Long Run Incremental Cost, or
1349:
502:
The Sherman Antitrust Act and requirements of telecommunications companies under the Telecommunications Act of 1996
97:
3559; 70 U.S.L.W. 4396; 2002 Cal. Daily Op. Service 4078; 2002 Daily Journal DAR 5139; 15 Fla. L. Weekly Fed. S 233
246:
economic implications of the FCC's costing standards which the Court upheld and secondarily on the takings claim.
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1307:
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Souter, joined by Rehnquist, Stevens, Kennedy, Ginsburg; Scalia, Thomas (part III); Thomas (part IV)
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John P. Frantz, vice president and counselor to the general counsel for Verizon Communications.
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721:"On The Relationship Between Historic Cost, Forward-Looking Cost and Long Run Marginal Cost"
472:
1431:
896:"Verizon CEO Says FCC Ruling Continues Flawed Strategy for Telecommunications Competition"
850:"Verizon Reacts to Supreme Court Decision on TELRIC Rates - Decision Maintains Status Quo"
823:
759:
696:
284:
163:
151:
518:
Four cases included in the same certiorari where parties challenged FCC regulations are:
836:
296:, which uses current replacement costs instead of the original cost in its methodology.
258:
allows the FCC the ability to require state utility commissions to set rates charged by
1286:
1256:
1246:
1035:
Douglas Lichtman; Randal C. Picker (2002). "Entry Policy in Local Telecommunications".
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175:
143:
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467:
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The following are other press releases by Verizon that relate to the case decision.
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94:
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16:
This article is about the 2002 Supreme Court case. Not to be confused with
269:
The Act contains unbundled access obligations of local exchange carriers:
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361:
1213:
1044:
525:
Federal Communications Commission et al. v. Iowa Utilities Board et al.
437:
350:
304:
293:
543:
Entry Policy in Local Telecommunications: Iowa Utilities and Verizon
205:
O'Connor took no part in the consideration or decision of the case.
1474:
436:
but will provide leadership on this issue. While the court upheld
300:
213:
Verizon Communications Inc. v. Federal Communications Commission
31:
Verizon Communications Inc. v. Federal Communications Commission
1186:
919:"Verizon, ATandT Must Share the Air with Smaller Carriers: FCC"
37:
1459:
496:
Verizon Communications v. Law Offices of Curtis V. Trinko, LLP
638:"Did The High Court Reach An Economic Low In Verizon v. FCC"
522:
WorldCom, Inc., et al. v. Verizon Communications Inc. et al.
422:
600:
Verizon Communications v. Federal Communications Commission
533:
General Communications, Inc. v. Iowa Utilities Board et al.
413:
Justice Breyer, page 1, 2, 26, and 27 of dissenting opinion
1182:
943:
Verizon Communications v. Law Offices of Curtis V. Trinko
1570:
United States Supreme Court cases of the Rehnquist Court
623:
public domain material from this U.S government document
229:
elements of their networks at the request of entrants.
1176:
320:
The case was decided in an opinion written by Justice
328:(FCC), received six out of eight votes with Justices
777:, 359 F.3d 554 (D.C. Cir. 2004).
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188:
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102:
70:
56:
49:
30:
991:, 308 F.3d 1 (D.C. Cir. 2002).
431:While this decision maintains the status quo, the
1003:(1997) Iowa Utilities Board v. FCC. 17 April 2011
967:"Consumer.net LLC v. Verizon Communications Inc"
382:Justice Souter, page 2 and 68 of court's opinion
429:
405:
374:
1198:
8:
1585:Federal Communications Commission litigation
1205:
1191:
1183:
27:
640:. Kansas State University. Archived from
18:Verizon Communications Inc. v. FCC (2014)
774:United States Telecom Association v. FCC
595:
593:
591:
589:
587:
466:
391:
360:
583:
506:Consumer.net and Russ Smith v. Verizon
1013:AT&T Corp. v. Iowa Utilities Board
894:Seidenberg, Ivan (February 23, 2003).
873:"Verizon Comments on FCC UNE Decision"
819:
808:
755:
744:
709:P.L. No. 104-104, 110 Stat. 56 (1996).
692:
681:
1060:"Verizon Communications, Inc. v. FCC"
572:Sprint Communications, Inc. v. Jacobs
25:2002 United States Supreme Court case
7:
1537:
719:Rogerson, William (3 October 2005).
636:DENNIS L. WEISMAN (September 2002).
264:competitive local exchange carriers
1103:Verizon Communications Inc. v. FCC
1067:Federal Communications Law Journal
299:Under the Telecommunications Act,
200:Breyer, joined by Scalia (part VI)
43:Supreme Court of the United States
14:
1565:United States Supreme Court cases
1113:467 (2002) is available from:
326:Federal Communications Commission
262:for lease of network elements to
260:incumbent local exchange carriers
1536:
1525:
1524:
871:Tauke, Tom (February 19, 2003).
614:
529:AT&T v. Iowa Utilities Board
36:
1575:2002 in United States case law
1058:Legg, Michael (May 20, 2004).
837:Verizon Communications v. FCC.
402:, author of dissenting opinion
346:Telecommunications Act of 1996
256:Telecommunications Act of 1996
250:Telecommunications Act of 1996
239:Telecommunications Act of 1996
1:
371:, author of majority opinion
216:, 535 U.S. 467 (2002), is a
1340:Verizon High Speed Internet
852:. PR Newswire. May 13, 2002
218:United States Supreme Court
1601:
1163:Oyez (oral argument audio)
621:This article incorporates
476:"Rule the Air" Ad Campaign
15:
1520:
1364:Local telephone companies
204:
117:
107:
35:
1037:The Supreme Court Review
301:Bell Operating Companies
279:Pricing network elements
419:Subsequent developments
50:Argued October 10, 2001
1411:Verizon Washington, DC
974:FCC Enforcement Bureau
818:Cite journal requires
754:Cite journal requires
691:Cite journal requires
562:
551:
487:
477:
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403:
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324:. The Respondent, the
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222:Verizon Communications
839:(2002) 10 March 2011.
557:
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482:
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395:
364:
271:
89:122 S. Ct. 1646; 152
1401:Verizon Pennsylvania
1173:- Verizon's Homepage
988:WorldCom Inc. v. FCC
788:"CommLaw Conspectus"
664:"CommLaw Conspectus"
311:Opinion of the Court
63:Iowa Utilities Board
52:Decided May 13, 2002
1386:Verizon New England
1154:Library of Congress
168:Ruth Bader Ginsburg
140:Sandra Day O'Connor
1580:Verizon litigation
1501:Empire City Subway
1448:Acquired companies
1391:Verizon New Jersey
1272:Clarence Otis, Jr.
1242:Shellye Archambeau
917:Maisto, Michelle.
478:
428:
404:
396:Associate Justice
388:Dissenting opinion
373:
365:Associate Justice
128:Associate Justices
1552:
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1485:TracFone Wireless
1480:XO Communications
1292:Gregory G. Weaver
976:. March 31, 2010.
733:on 6 October 2011
209:
208:
124:William Rehnquist
1592:
1540:
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1528:
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1416:Verizon Virginia
1396:Verizon New York
1376:Verizon Maryland
1371:Verizon Delaware
1334:Verizon Wireless
1329:Verizon Business
1322:Telecom services
1313:Verizon Business
1308:Verizon Consumer
1277:Rodney E. Slater
1267:Karl-Ludwig Kley
1262:M. Frances Keeth
1216:
1207:
1200:
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1179:- FCC's Homepage
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1080:on June 16, 2010
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1073:. Archived from
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644:on July 20, 2012
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473:Verizon Wireless
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357:Majority opinion
224:argued that the
113:Court membership
40:
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1171:Verizon website
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670:. 2003: 221–222
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285:Historical cost
281:
252:
235:
166:
164:Clarence Thomas
154:
152:Anthony Kennedy
142:
132:John P. Stevens
98:
51:
45:
26:
21:
12:
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5:
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1096:External links
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490:Relevant cases
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399:Stephen Breyer
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334:Antonin Scalia
330:Stephen Breyer
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144:Antonin Scalia
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57:Full case name
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1406:Verizon South
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