AT&T Corp. v. Iowa Utilities Bd., 525 U.S. 366, 33 (1999)

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398

AT&T CORP. v. IOWA UTILITIES BD.

Opinion of Souter, J.

unreasonable in its interpretation of 47 U. S. C. § 251(d)(2) (1994 ed., Supp. II), which requires it to consider whether competitors' access to network elements owned by local exchange carriers (LECs) is "necessary" and whether failure to provide access to such elements would "impair" competitors' ability to provide services. Ante, at 392. Because I think that, under Chevron, the Commission reasonably interpreted its duty to consider necessity and impairment, I respectfully dissent from Part III-B of the Court's opinion.

The statutory provision in question specifies that in determining what network elements should be made available on an unbundled basis to potential competitors of the LECs, the Commission "shall consider" whether "access to such network elements as are proprietary in nature is necessary," § 251(d)(2)(A), and whether "the failure to provide access" to network elements "would impair the ability of the telecommunications carrier seeking access to provide the services that it seeks to offer," § 251(d)(2)(B). The Commission interpreted "necessary" to mean "prerequisite for competition," in the sense that without access to certain proprietary network elements, competitors' "ability to compete would be significantly impaired or thwarted." In re Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, ¶ 282, 11 FCC Rcd 15499, 15641-15642 (1996) (First Report & Order). On this basis, it decided to require access to such elements unless the incumbent LEC could prove both that the requested network element was proprietary and that the requesting competitor could offer the same service through the use of another, nonproprietary element offered by the incumbent LEC. Id., ¶ 283, at 15642.

The Commission interpreted "impair" to mean "diminished in value," and explained that a potential competitor's ability to offer services would diminish in value when the quality of those services would decline or their price rise, absent the element in question. Id., ¶ 285, at 15643. The Commission chose to apply this standard "by evaluating

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