542
Opinion of Breyer, J.
the Commission broad legal leeway in respect to the substantive content of the rules, Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402, 416 (1971); FPC v. Hope Natural Gas Co., 320 U. S. 591, 602 (1944), particularly since the subject matter is a highly technical one, namely, ratemaking, where the agency possesses expert knowledge. Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843-844 (1984).
Nonetheless, that leeway is not unlimited. It is bounded, for example, by the scope of the statute that grants authority and by the need for the agency to show a "rational connection" between the regulations and the statute's purposes. State Farm, 463 U. S., at 56. We must determine whether, despite the leeway given experts on technical subject matter, agency regulations exceed these legal limits. See id., at 43; Overton Park, supra, at 416; Administrative Procedure Act, 5 U. S. C. § 706(2)(A) (requiring agency action to be set aside if "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). And, reluctantly, I have come to the conclusion that they do. After considering the incumbents' objections and the Commission's responses, I cannot find that "rational connection" between statutory purpose and implementing regulation that the law demands. State Farm, supra, at 56.
II
Because the critical legal problem concerns the relation of the Commission's regulations to the statute's purpose, I must ask at the outset, what is that purpose? The relevant statutory provision says only that the agency shall set "rate[s]" (for "elements") "based on . . . cost." 47 U. S. C. § 252(d)(1). At first blush the word "cost" calls to mind traditional cost-based ratesetting. See Natural Gas Act, 15 U. S. C. § 717c; Natural Gas Act of 1938, §§ 4a, 5, 52 Stat. 824; Interstate Commerce Act, 49 U. S. C. § 10701 (1994 ed., Supp. V); Federal Aviation Act of 1958, 49 U. S. C. § 1302(c) (1976 ed., Supp. II) (repealed 1980); see also ante, at 478
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