468
Syllabus
ments for an entrant, unless the combination is not technically feasible. §§ 51.315(b)-(f). Challenges to the regulations, mostly by incumbent carriers and state commissions, were consolidated in the Eighth Circuit, which initially held, inter alia, that the FCC had no authority to control state commissions' ratesetting methodology and that the FCC misconstrued § 251(c)(3)'s plain language in implementing the combination rules. Reversing in large part in AT&T Corp. v. Iowa Utilities Bd., 525 U. S. 366, 384-385, this Court, among its rulings, upheld the FCC's jurisdiction to impose a new ratesetting methodology on the States and reinstated the principal combination rule, Rule 315(b), which forbids incumbents to separate currently combined network elements before leasing them to entrants who ask for them in a combined form. On remand, the incumbents' primary challenge went to the FCC's rate-setting methodology. The Eighth Circuit understood § 252(d)(1) to be ambiguous as between "forward-looking" and "historical" cost, so that a forward-looking ratesetting method would presumably be reasonable, but held that § 252(d)(1) foreclosed the use of the TELRIC methodology because the Act plainly required rates based on the actual, not hypothetical, cost of providing the network element. The court also invalidated the additional combination rules, Rules 315(c)-(f), reading § 251(c)(3)'s reference to "allow[ing] requesting carriers to combine . . . elements" as unambiguously requiring requesting carriers, not providing incumbents, to do any and all combining.
Held:
1. 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. Because the incumbents have not met their burden of showing unreasonableness to defeat the deference due the FCC, see Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843-845, the Eighth Circuit's judgment is reversed insofar as it invalidated TELRIC. Pp. 497-528.
(A) This Court rejects the incumbents' argument that "cost" in § 252(d)(1)'s requirement that "the . . . rate . . . be . . . based on the cost . . . of providing the . . . network element" can only mean, in plain language and in this particular technical context, the past cost to an incumbent of furnishing the specific network element actually, physically, to be provided, as distinct from its value or the price that would be paid for it on the open market. At the most basic level of common usage, "cost" has no such clear implication. A merchant asked about the "cost" of his goods may reasonably quote their current wholesale market price, not the cost of the items on his shelves, which he may have bought at higher or lower prices. When the reference shifts into
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