560
Opinion of Breyer, J.
market); A. Kahn, Whom the Gods Would Destroy, or How Not to Deregulate 4 (2001) (stating that a firm in an actual market would determine efficient investment in light of its actual system, not a hypothetical system built from scratch). Still, those rules, if successful, would produce the strong incentives to demand sharing, and the strong disincentives to build independently, that Part II describes—for they would create a "sharing" or "interconnection" price equal to or lower than any price associated with the creation of independent facilities. They would thereby tend toward a system in which regulatory price setting would supplant, not promote, competition. And however congenial institutional regulators might find such a system, it differs dramatically from the system that the statute seeks to bring about. See Part II, supra. Cf. Iowa Utilities Bd., 525 U. S., at 387-392 (setting aside Commission rules granting new entrants power to obtain access to virtually any existing element). At least that is the claim that underlies much of the criticism set forth in Part III, supra. And the Commission's response that its system simulates the conditions of a competitive market does not respond to that basic criticism.
Fifth, the Commission says that its regulations are simply suggestive, leaving States free to depart. Reply Brief for Federal Parties 11-12. The short but conclusive answer to this response is that the Commission considered a "suggestive" approach and rejected it. See Order ¶ 66 (refusing to characterize rules as setting forth, not "requirements," but " 'preferred outcomes,' " because the latter approach "would fail to establish explicit national standards for arbitration, and would fail to provide sufficient guidance to the parties' options in negotiations").
Sixth, the majority (but not the Commission) points out that local commissions are likely to leave any given set of rates in effect for some period of time. And this "regulatory lag" will solve the problem. See ante, at 505-506. I do not understand how it could solve the main problem—that of
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