OCTOBER TERM, 2001
Syllabus
certiorari to the united states court of appeals for the eighth circuit
No. 00-511. Argued October 10, 2001—Decided May 13, 2002*
In order to foster competition between monopolistic carriers providing local telephone service and companies seeking to enter local markets, provisions of the Telecommunications Act of 1996 (Act) entitle the new entrants to lease elements of the incumbent carriers' local-exchange networks, 47 U. S. C. § 251(c), and direct the Federal Communications Commission (FCC) to prescribe methods for state utility commissions to use in setting rates for the sharing of those elements, § 252(d). Such "just and reasonable rates" must, inter alia, be "based on the cost (determined without reference to a rate-of-return or other rate-based proceeding) of providing the . . . network element." § 252(d)(1)(A)(i). Regulations appended to the FCC's First Report and Order under the Act provide, among other things, for the treatment of "cost" under § 252(d)(1)(A)(i) as "forward-looking economic cost," 47 CFR § 51.505, something distinct from the kind of historically based cost previously relied on in valuing a rate base, see, e. g., FPC v. Hope Natural Gas Co., 320 U. S. 591, 596-598, 605; define the "forward-looking economic cost of an element [as] the sum of (1) the total element long-run incremental cost of the element [TELRIC,] and (2) a reasonable allocation of forward-looking common costs," § 51.505(a), "incurred in providing a group of elements that "cannot be attributed directly to individual elements," § 51.505(c)(1); and, most importantly, specify that the TELRIC "should be measured based on the use of the most efficient telecommunications technology currently available and the lowest cost network configuration, given the existing location of the incumbent['s] wire centers," § 51.505(b)(1). The regulations also contain so-called "combination" rules requiring an incumbent, upon request and compensation, to perform the functions necessary to combine network ele*Together with No. 00-555, WorldCom, Inc., et al. v. Verizon Communications Inc. et al., No. 00-587, Federal Communications Commission et al. v. Iowa Utilities Board et al., No. 00-590, AT&T Corp. v. Iowa Utilities Board et al., and No. 00-602, General Communications, Inc. v. Iowa Utilities Board et al., also on certiorari to the same court.
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