548
Opinion of Breyer, J.
cifically determined that input prices should be based on costs because this would foster competition in the retail market." Id., ¶ 710; see also id., ¶1.
Fifth, the Solicitor General confirmed this view at oral argument when he said that the rates in question should be set in order to "encourage new entrants to come into the market," Tr. of Oral Arg. 60, to "allow them to enter the market at competitive rates," ibid., and to "encourage them to develop new technologies," id., at 61.
The statute, then, seeks new local market competition insofar as local markets can support that competition without serious waste. And we must read the relevant ratesetting provision—including the critical word "cost"—with that goal in mind.
III
The Commission's critics—Verizon, other incumbents, and experts whose published articles Verizon has lodged with the Court—concede that the statute grants the Commission broad authority to define "cost[s]." They also concede that every ratesetting system has flaws. Cf., e. g., Missouri ex rel. Southwestern Bell Telephone Co. v. Public Serv. Comm'n of Mo., 262 U. S. 276, 311-312 (1923) (Brandeis, J., joined by Holmes, J., dissenting) (criticizing "reproduction cost" systems because of the administrative difficulty of determining costs); Economics of Regulation 109-111 (criticizing "historical cost" systems because of their failure to provide proper incentives).
Nonetheless, the critics argue, the Commission cannot lawfully choose a system that thwarts a basic statutory purpose without offering any significant compensating advantage. They take the relevant purpose as furthering local competition where feasible. See Part II, supra. They add that rates will further that purpose (1) if they discourage new firms from using the incumbent's facilities or "elements" when it is significantly less expensive, economically speaking, for the entrant to build or to buy elsewhere, and (2) if
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