Document: 535 U.S. 467 VERIZON COMMUNICATIONS INC. et al.v.FEDERAL COMMISSION al. No. 00-511. Supreme Court of the United States. Argued October 10, 2001. Decided May 13, 2002.* CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR EIGHTH CIRCUIT In order to foster competition between monopolistic carriers providing local telephone service and companies seeking enter markets, provisions Telecommunications Act 1996 (Act) entitle new entrants lease elements incumbent carriers' local-exchange networks, 47 U. S. C. § 251(c), direct Federal Communications Commission (FCC) prescribe methods for state utility commissions use in setting rates sharing those elements, 252(d). Such "just reasonable rates" must, inter alia, be "based on cost (determined without reference a rate-of-return or other rate-based proceeding) ... network element." 252(d)(1)(A)(i). Regulations appended FCC's First Report Order under provide, among things, treatment "cost" 252(d)(1)(A)(i) as "forward-looking economic cost," CFR 51.505, something distinct from kind historically based previously relied valuing rate base, see, e. g., FPC v. Hope Natural Gas Co., 320 591, 596-598, 605; define an element [as] sum (1) total long-run incremental [TELRIC,] (2) allocation forward-looking common costs," 51.505(a), "incurred group that "cannot attributed directly individual elements," 51.505(c)(1); and, most importantly, specify TELRIC "should measured efficient telecommunications technology currently available lowest configuration, given existing location incumbent['s] wire centers," 51.505(b)(1). The regulations also contain so-called "combination" rules requiring incumbent, upon request compensation, perform functions necessary combine entrant, unless combination is not technically feasible. §§ 51.315(b)-(f). Challenges regulations, mostly by commissions, were consolidated Eighth Circuit, which initially held, FCC had no authority control commissions' ratesetting methodology misconstrued 251(c)(3)'s plain language implementing rules. Reversing large part AT&T Corp. Iowa Utilities Bd., 525 366, 384-385, this Court, its rulings, upheld jurisdiction impose States reinstated principal rule, Rule 315(b), forbids incumbents separate combined before leasing them who ask form. On remand, incumbents' primary challenge went methodology. Circuit understood 252(d)(1) ambiguous "forward-looking" "historical" cost, so method would presumably reasonable, but held foreclosed because plainly required actual, hypothetical, element. court invalidated additional rules, Rules 315(c)-(f), reading "allow[ing] requesting elements" unambiguously carriers, incumbents, do any all combining. Held: 1. can require set charged leased basis untied investment. Because have met their burden showing unreasonableness defeat deference due FCC, see Chevron A. Inc. Resources Defense Council, Inc., 837, 843-845, Circuit's judgment reversed insofar it TELRIC. Pp. 497-528. (A) This rejects argument 252(d)(1)'s requirement "the cost... element" only mean, particular technical context, past furnishing specific actually, physically, provided, value price paid open market. At basic level usage, has such clear implication. A merchant asked about his goods may reasonably quote current wholesale market price, items shelves, he bought at higher lower prices. When shifts into realm, are still unconvincing. "Cost" used calculating base traditional cost-of-service did stand capital expenditures, prudent, while prudent investment itself could denied recovery when unexpected events rendered useless. Duquesne Light Co. Barasch, 488 299, 312. And even was wholly includable ratemakers often rejected utilities' "embedded own book-value estimates, typically geared maximize with high statements expenditures working capital, unduly low depreciation rates. See, supra, 597-598. Equally important, plain-meaning ignores statutory mandate occurs. First, uses intermediate term calculation rates," 252(d)(1), very point regulatory bodies expressed these terms ample discretion choose methodology, S., 602. Second, strange think Congress tied historical more indication, same sentence requires pricing prohibits "rate-of-return proceeding," each been identified ever since decided. Without better indication meaning than unadorned term, word gives broad methodological leeway, says little employed. 423. 497-501. (B) Also alternative that, calculates centers, actual being neither consistent nor within zone interpretation subject deference. 501-522. simply too protean support bars definition untethered What call "hypothetical" valued piece equipment own. P. 501. Similarly, claim exceeds interpretative leeway objection responsibility reasonable" leaves largely discretion. E. Permian Basin Area Rate Cases, 390 747, 790. nevertheless field three arguments, rejects. (a) argue, first, costs simulate envisioned does induce it. There basically answers no-stimulation claim. 503-517. (i) assumption — perfectly market, one will build contrary fact. assume likely resemble perfection foreseeable time, cf. 389-390, includes several features inefficiency undermine argument. qualified efficiency ratesetters calculate incumbent's 51.505(b)(1), certain priced configuration. practice differ products competitive owing lags adjustments built state-commission process. Finally, measurement available, ibid., marginal entrant alone standard until became competitors corresponding 504-507. (ii) It cannot said acted unreasonably picking promote mandated competition. Comparison alternatives proposed embedded-cost methodologies, component "Ramsey pricing," commonly variant fixed-cost plausibly answered stated reasons reject alternatives, 51.505(d); ¶¶ 655, 696, 705, 709. 507-516. (iii) unreasonable matter law simulates, produce, facilities-based founders say they invested $55 billion facilities through 2000, contest figure. scheme boast substantial spending four years easily described way facilities. 516-517. (b) unavailing second reason calling exercise discretion: supposed incapacity provide enough allowance rational theory's terms. rests fundamentally false premise, limit recognize. contrary, ¶ 702 gave considerable matters, specifically permitting favorable allowances generally allowed ratemaking practice. fallback position, starting points, unpersuasive. attack tends argue highly general terms, whereas calculated elements. Those leave plenty room differences appropriate risk-adjusted depending nature priced. light many across country, prescription "starting point" enough. 517-522. (c) third argument, needlessly complicated impracticable, record suggests proceedings surprisingly smooth-running affairs, presenting two conflicting models supported expert testimony, commissioners customarily assigning some predictions model others counterpart. bottom, battles experts bound scheme, prefer over schemes preserve home-field advantages incumbents. 522. (C) attempt apply rule constitutional avoidance present serious question. They should construed avoid question whether divorced lead taking property violation Fifth (or Fourteenth) Amendment. However, particular, unjust confiscatory, despite fact already put place. want reviewed significant, never considered presented orders alleged confiscatory. Duquesne, 303-304. Indeed, constitutionality raised rates, methods. Thus, policy construing statute questions presumptively out place measure like prescribes method. unpersuasively action placed outside strong signs takings occur if allowed. comparison markets estimate evaluation spurious assumed numbers clearly wrong. misplace reliance dicta 315, effect there body makes opportunistic changes just minimize utility's return evidence decision adopt arbitrary, opportunistic, undertaken confiscatory purpose. indications much contrary. 523-528. 2. networks themselves, entrants. erred invalidating 315(c)-(f ). 528-539. threshold Government's competing invalidation barred waiver Bd. petition review earlier 315(b) extend simultaneous 315(c)-(f). exceeded scope Court's revisited unchallenged portion holding, decline reach validity 315(c)-(f) doing encourage sort strategic, piecemeal litigation disapproved Communist Party Subversive Activities Control 367 1, 30-31. case block consideration here. Addressing issue now "make waste" efforts id., 32, n. 8, threaten ruling pointless, attention isolated, "long-stale" procedural error agency, meant continuing applicability. tactics prompted failure last time appeal reexamined remand behest, carriers'. Any pressed passed federal certiorari, good look significant flux split cases. 528-531. read "[a]n manner allows excusing obligation provided But plain. If treated equals, probably obligations stopped combined. Act, however, proceeds understanding monopolists contending unequal. Cf. 251(c). because, confines, self-evident obligating furnish, silently negated duty combine, reads leaving work combination. Under Chevron, intact show unreasonable. finds, reflect statute. remove practical barriers entry localexchange avoiding interference operations. shall, payment, "perform necessary," 315(c) (d), carrier equal footing unable 294, disadvantage operating network, disadvantage, 315(c)(2). Act's goals nondiscrimination, imposing sensible result requires. 531-538. 219 F. 3d 744, affirmed part, remanded. SOUTER, J., delivered opinion Rehnquist, STEVENS, KENNEDY, GINSBURG, JJ., joined, SCALIA THOMAS, joined Part III, Thomas, IV. BREYER, filed concurring dissenting SCALIA, VI, post, p. 539. O'Connor, took 1 William Barr argued cause Verizon Communications, al., petitioners 00-511, BellSouth respondents Nos. 00-555, etc. With him briefs M. Edward Whelan, Patrick Philbin, Michael Glover, Mark L. Evans, K. Kellogg, Henk Brands, Charles R. Morgan, James G. Harralson, Andrew McBride, Scott Delacourt, Roger Toppins, Gary Phillips, Sean Lev, Steven Bradbury. 2 Solicitor General Olson parties, 00-587, etc., Acting Underwood, Assistant Attorney Nannes, Deputy Wallace, Barbara McD-owell, Catherine O'Sullivan, Nancy Garrison, Laurence N. Bourne. David Murray respondent Sprint Corporation petitioner parties opposition 3 Donald B. Verrilli, Jr., WorldCom, 00-555 Corp., 00-590 Jodie Kelley, Ian Heath Gershengorn, Thomas O'Neil Single IV, Carol Ann Bischoff, Robert McDowell, J. Aamoth. W. Carpenter, Peter D. Keisler, Stephen Kinnaird, Frederick Beckner Rosenblum AT&T. 4 Briefs Irwin Popowsky National Association State Utility Consumer Advocates, Bradford Ramsay Lawrence Malone Public Service New York T. Lake, John H. Harwood II, McKennna Qwest International, Inc.â 5 JUSTICE SOUTER Court.* 6 These cases arise 1996. Each power regulate relationship entering compete entitled, monopolists. issues authorized investment, entrants' We uphold both issues. 7 * 1982 consent decree settling antitrust suit against American Telephone Telegraph Company (AT&T) divested long-distance company, limiting provision service. & 552 Supp. 131 (DC 1982), aff'd sub nom. Maryland States, 460 1001 (1983). nothing, increase persistently thought root natural monopoly industry. See Benjamin, Lichtman, Shelanski, Law Policy 682 (2001) (hereinafter Benjamin al.); Huber, Thorne, 2.1.1, pp. 84-85 (2d ed. 1999) Huber Baumol Sidak, Toward Competition Local Telephony 7-10 (1994); Breyer, Regulation Its Reform 291-292, 314 (1982). addressed (1996 Act), Pub 104-104, 110 Stat. 56, intended eliminate monopolies enjoyed inheritors AT&T's franchises; objective end important step toward boosting broader revising universal 716. 8 Two sets related opening concern us share services agreed markets. 251(c) (1994 ed., V). knowing prospective sometimes disagree prices services, directed risks incentives produce. devised interconnection 252(d)(1),1 imposed implement 251(c)(3), subjects litigation, must background public utilities structure exchanges made accessible Act. 9 Companies traditionally regulated utilities.2 Bonbright, Principles Rates 3-5 (1st 1961) Bonbright); I. Barnes, Economics 37-41 (1942) Barnes). dawn modern regulation, offset ensure affordable, stable access legislatures enacted schedules fix charge. 170-173; 111-112, (1984) Phillips). Smyth Ames, 169 466, 470-476 (1898) (statement case); Munn Illinois, 94 113, 134 (1877). As job complicated, established specialized administrative agencies, first state, then federal, Barnes 173-175; Phillips 115-117. Minnesota 230 352, 433 (1913) (Interstate Commerce Commission); Shreveport 234 342, 354-355 (1914) ( jurisdictional dispute ICC Texas Railroad Commission). McC-raw, Prophets 11-65 (1984). familiar enabling Acts discriminatory. 289. Transportation 1920, 49 1(5) (1934 ed.). 10 All regulation way: retail businesses involved offered utility. Intrastate municipalities, Government, transmission transportation characteristically interstate.3 143. 11 Historically, classic called tariff schedules, applied railroad Interstate 1887, 24 379. After interested notice proposals chance comment, tariffs accepted controlling agency long "reasonable" reasonable") "unduly discriminatory." Hale, Commissions, Rates, Policies, 53 Harv. Rev. 1103, 1104-1105 (1940). Southern Pacific ICC, 433, 445 (1911). followed tariffschedule model. 297-298. Smyth, 470-476. 12 (by Government) respects, different (at level). party charging sophisticated enjoying bargaining power, expected negotiate them. Accordingly, Power 41 1063, again 1938, 52 821, departed purely tariff-based acknowledged contracts commercial buyers sellers ratesetting, 16 824d(d) (Federal Act); 15 717c(c) (Natural Act). Pipe Line Mobile 350 332, 338-339 (1956). avail themselves agreements, relieve contracting rate, Sierra 348, 355 (1956) ("its improvident bargain"), protect potential discrimination contract allied detriment customers. ibid. 331 284, 296 (1947) ("The evil aimed various manifestations"). once summed up matters 13 "[W]hile normally produce less fair return, follow agree affording so, entitled relieved bargain. circumstances sole seem adversely affect interest where might impair financial ability continue service, cast consumers excessive burden, (citation omitted). 14 345. levels was, hand, focused demand perils discrimination. 298-299. evolved arenas statesanctioned engineered "universal service." 80-85. Vietor 167-185. hold down charges rural population densities lesser volumes use, urban business users subsidizing premiums 84. cross subsidies necessarily transfers truly independent companies, thanks position attained satellites. known "Bell system," mid-20th century come possess overwhelming nationwide, supplying well equipment. 174-175. Garnet, Enterprise: Evolution Bell System's Horizontal Structure, 1876-1909, 160-163 (1985) (Appendix A). pervasive presence providers simple aid frustrated conventional down. 84-85. Before system's predominance, regulators played another get public, Cohen 47-50, strategy virtually impossible single company become provider nearly every town city country. frustration led, turn, thinking ultimately 17 notion navigating straits gouging customers confiscating property. 603 (1944). 289-290; Bonbright 38. More ago, reviewing courts determining sufficiently unconstitutional confiscation touchstone revenue "fair return" "rate base." usually generated similar proceeding, 546, [the utility] convenience public." pegging value," consciously standard, actually good. Id., 543-546. choice prevent "excessive valuation fictitious capitalization" artificially inflating 544, lest "`[t]he subjected stockholders earn dividends,'" 545 (quoting Covington Lexington Turnpike Road Sandford, 164 578, 596 (1896)).4 18 proved troublesome mandate, Justice Brandeis, Holmes, famously observed 25 later. Missouri ex rel. Southwestern Serv. Comm'n Mo., 262 276, 292 (1923) (dissenting opinion). described, irony, mind-numbing complexity enquiry value, investment: 19 "[I]n ascertain [fair] original construction, amount expended permanent improvements, bonds stock, compared probable earning capacity prescribed statute, meet expenses, consideration, weight right case. regarded estimating property." 546-547. 20 To bewildered, threw hands, prescribing declaring facts "relevant."5 294-298, (Brandeis, dissenting). more, customary checks calculations hard property; costly rarely changed hands seldom tagged buyer pay seller accept, 292; West Chesapeake Potomac Baltimore, 295 662, 672 (1935). Neither resort index revenues determined review, valuation. 309, (1989); 601. 21 Small wonder, then, Brandeis able demonstrate how basing Smyth's galactic grossly insufficient gauged capital. He example (simplified) $1 million plant promised returns equity $90,000 year. 304-306. fall $600,000 investments percent, returned least $36,000, shortfall $54,000 rise $1,750,000 comparable stood generating $140,000, $50,000 above costs. 22 upshot specter forced bankruptcy inadequate off drop resulted decline, imprudent investment; robust economy, prescient what seemed rapacious invested. accordingly advocated replacing value" prudently assets although live enjoy success, campaign came fruition 591 23 Gas, disavowed Constitution calculated. 601-602. Pipeline 315 575, 602-606 (Black, Douglas, Murphy, concurring). using "actual legitimate cost" reflecting "sound depletion practices," roughly percent below figure natural-gas company's fair-value "estimated reproduction "trended cost." nn. 4-5. Commission. "Rates enable operate successfully, maintain integrity, attract compensate investors certainly condemned invalid, though meager `fair value' base."6 605. Although repudiate everything product process rate-making," 601, aftermath abandoned old approach turned "cost." Kahn, Regulations: Institutions 40-41 (1988). immune confusion, however; witness invocation "reproduction popular 5, Commission's rejection (apparently, straight-line derivation originally invested) favor 596. Still, agreement developed primus pares, essentially gloss worked "prudently invested" assumed, balance sheet proceeding. Rather, mean "cost service," is, 173; Garfield Lovejoy, 56 (1964). deductions accrued capital,7 282-283 (table 8-1) ("a typical electric base"), naturally leading slow (on useful lives),8 claimed rate-base constituent. 26 formula, prudent-investment temptations outlays producing nothing public. meant, discourage unnecessary "fictitious feared 543-546, ratepayers supporting capacity, abandoned, destroyed, phantom assets. Tardiff, Weisman, years: implementation Commission, Information 319, 330, 27 (1999) give incentive make smart deserving "fair" thus mimic markets9 (though eye fostering defined). theory, qualification ratepayer protection mitigating tendency market's lack mitigation little, match having relevant information manipulate renegotiate set. response adoption "price caps," Assn. 188 521, 524 (CADC 1999), as, example, maximum interexchange re Concerning Dominant Carriers, Rcd. 6786, 6787, (1990). 28 price-cap starts takes benchmark decreased average 2-3 year productivity growth, 330-332, upward adjustment inflation unavoidable "exogenous costs" recover return. Rcd., 5. caps gamesmanship, fought allowable exogenous costs, Assn., 524, "to improve extent possible," entitling outperform keep resulting profits, 6787-6788, 7-9. Ultimately, goal, productive 29 passage cap level, final stage developing throughout era beginning Ames prevailing disagreement advocates turning key ratepayers, advantage superior knowledge employed costof-service ratemaking. remarkable evolution change. enduring feature institution idea allowing identify range ratepayers. period dissatisfaction successive variants. From constancy dissatisfaction, possible lesson drawn methodologies great answer lay moving away methods, discrete endure. 30 local-competition practice, achieve entirely uprooting perpetuated. Conf. Rep. 104-230, 113 (1996). backer Senate goal 31 "This extraordinary sense telling private industry let try beat your brains out.... 32 "It almost jump-start.... I you my business, we bottleneck; monopoly; everything. 33 "Now, legislation anything. You allow nondiscriminatory unbundled type, quality, [a] affords itself." 141 Cong. Rec. 15572 (1995) (remarks Sen. Breaux (La.) Pub. 104-104). 34 For aim interests buyers, reorganize rendering vulnerable interlopers, swallowing reluctance intrude deliberate, hybrid basic, default fail agree, 35 While predecessors tying objectives radically unlike previous statutes "without appears explicit disavowal public-utility (whether incarnations) sales, Implementation 1996, 15499, 15857, 704 (1996) (First Order), novel designed aspiring short B 36 physical incarnation "local exchange," connecting terminals telephones, faxes, modems geographical area city. terminal interface devices, feeder wires, collectively loop," run switches aggregate traffic "trunks." loop traditionally, largely, copper wire, fiber-optic cable used, albeit far long-haul markets.10 Just runs switches, trunks centralized, tandem, hand computer, railway directing trunks. signal sent destination ways necessary, routed back hierarchy exchange communications signals, radiating system "central office" offices larger areas) like. 37 easy why owns (what calls "incumbent carrier," 251(h)) insurmountable routing exchange, but, well. newcomer coming close replicating entire difficult laying "last mile" loop, thousands millions) points houses businesses.11 local-loop connect manufactured selected, conditions fees (called "access charges") network. unregulated world, comply conditions, exchange. II 38 impedes "telecommunications 253(a),12 obligates Section addresses difficulties recognizing strategies competitor pursue. (a "requesting" carrier, 251(c)(2)) decide engage pure competition, replace supplement incumbent. course, "interconnect" competitor's whatever operate. 251(a) (c)(2). spectrum, permits skip construction instead buy resell sell wholesale. 251(b)(1) (c)(4). Between extremes, "network elements,"13 "on basis" "just, nondiscriminatory." 251(c)(3). 39 Since engaged resale, leasing, created addressing either commission orders. 252(a)-(b). Like authorize approved businesses, 252(a);14 251(c)(1) (duty faith). accept discriminates contract, otherwise shown interest. 252(e)(1) (e)(2)(A). option mediation commission, 252(a)(2). comes strings, duties specified 251 standards forth 252(d), interpreted 252(e)(2)(B). 40 pricing, provides "nondiscriminatory" element," "may include profit."15 252(d)(1). are, limitation unknown regulation: "determined proceeding." Ibid. 384-385 (1999), today legality logic chose. required, six months after effective date implemented Order, included appendix issue. order, Appeals Circuit. 120 753, 792 (1997), rev'd 397 (1999). California 124 934, 938 (challenges Provisions 19392 (Second Order)). 42 So bears today, initial charge 51.505(b)(1) (1997). 800. 251(c)(3) 51.315(b)-(f) "an LEC shall requested combines," 51.315(b). 3d, 813. view ownership 328-340, 51.319 broadly, functions, operations systems (e. billing databases), 51.319(f)(1), operator directory assistance, 51.319(g), vertical switching call-waiting caller D., 263, 413. 808-810. 43 reversed. 397. upholding "design methodology" bind 385, barring separating form, 395. striking holding blanket inconsistent "necessary" "impair" 251(d)(2), 392. 387, facilitiesownership requirement, 392-393. 44 establish secure, renewed controversy (Rules 315(c)-(f)) struck along latter rule. 748 (2000). 45 derive "nondiscriminatory," [which] profit," (as seen) forbidden "reference ratebased Within left eliminating dependence chose treating 51.505 Gas. 505, defined [TELRIC]; [and] "costs incurred 51.505(c)(1). Most all, decided centers." 46 "The components, capital." 703 (footnote 51.505(b)(2)-(3) concrete help. Assume element; take $10 payments invest centered carrier's centers (say $100, per annum); $9 (an 11-year life); annual $20.16 ambiguity afforded beyond [incumbent] incurs incur elements." 751-753. Hence, words, "actual" reasoned latter. 750-751. added, wrong permitted, effected "ripe" "resulting applied." 753-754. 48 also, 51.315(c)-(f) "additional combination" apparently before, main 758-759. brief, combine" "technically feasible." 759. us, opposed cost) conclusion presents entrants, side, seek granted 531 1124 (2001), affirm reverse III 50 ignoring occurs element...." theory precludes future means contend refers "what paid" asset, "value," market." Brief Petitioners 19. "past expenditure," suggest equation "embedded" 20, defines recorded LEC's books accounts," 51.505(d)(1) boils proposition provided. 51 picked uphill battle. goods" sells happens speech uphill. begin with, dealt basis, generous claim.17 useless, depreciation. mistake forget value-based figured contemporary valuation.18 equally plainmeaning passing decided.19 54 accounting generally, "a chameleon," Strickland Commissioner, Maine Dept. Human Services, 96 542, 546 (CA1 1996), "virtually meaningless" Estes, Dictionary Accounting 1985). Breyer words "give leeway; `method employed' determine rate." 423 (opinion part). adopted Appeals, 55 stern anchor 843-845 say, violates plain-language claim, considered, explained already, 57 noted, 790 (1968) ("We reiterate breadth responsibilities opportunity formulate solution intensely difficulties"). 866 ("When provision, fairly conceptualized, really wisdom agency's policy, rather gap Congress, fail").20 arguments. contend, hypothetical this, compels. objections answered, needlessly, hence unreasonably, impracticable. 58 (and BREYER'S) critique perfect perversely creates 548-551. purporting exist (in similarly competitive), always 549-550. consider building best (the rate), likewise deterred prospect immediately competitors; TELRIC, assert, instantly cost21 entrant's built. ante, 550; Respondents 28-29. According be, parasitic free riding, incapable stimulating Congress. 59 nostimulation unreasonableness: competitive, plausibility argument; alternatives; (3) belies argument's conclusion. 60 61 explained, build. time. itself. necessary-and-impair reduce, however slightly, equivalent 389-390. "In world equating increased quality) `necessity' `impairment' existence ideal world." 390. 62 Not accord design affecting likelihood squelch principally configuration extent, shorter serve relocated snugger fit geography locations. 63 built-in adjustments. company. Mankiw 283-288, 312-313. out, deter know lose edge entered adjusted price. Wholesale arbitrated agreements 3- 4-year Respondent 39; Reply Worldcom, 6; 7, 3; Petitioner 11-12; claims receive introduces 64 proceeding introduction call; element's greater apparent reflected drawing (including incumbent), forcing lowering innovating install equipment, marketing offering steal customer subscriptions (given limited capture untapped service) register demand. 65 reminding available," Owing condition availability, element.22 66 assess precise significance exceptions functioning criticism assumes. Instead, recognize incorrect. Inefficiencies opportunities perhaps unrelated (such possibility expansion data-transmission deploying "broadband" technologies, (BREYER, part), desirability independence management maintenance elements). event, indicated here, effect, discussed III-B-2-a-(3), infra.23 67 68 Perhaps sensing futility unsupported theoretical attack, complementary done inducing Having proffered rejecting them, 51.505(d) (1997); 630-711, 69 elements: Ramsey pricing.24 arguments preferable claim: fails include, run,25 incorporate competition.26 foot door, inefficient develops drops accordingly, innovate finding reduce retain share. 70 generic degree ought preserved leasing. Of seen tolerates wire-center development described. aside, undercut offer 71 turns compensates lessor perspective run) difference keeps 27, infra. 378 ("[I]n areas, loops. cases, preventing loops area, thereby denying benefits construct unnecessarily duplicative facilities, misallocating societal resources"). bottleneck $100 (say, switches) $10, own, switch amounts $7 $107. $110) $150, $107 kept out. Is risk keeping capital-intensive lessened facilities? obviously latter.27 72 alternatives. problem instant builds, analogous (but efficient) assuming persists soon builds element, match,28 competitors. point, things simple. said, instantaneous true 73 Once details infirmities evident preferred relies pass lessees embedded cost.29 705. inefficiency, caused poor inflated according inefficiencies need purpose choices pay. 655 74 allegedly book-cost data, possibilities manipulation presents. Even economically temptation remain overstate book perpetuate intractable problems led innovation. 486-487. 75 absolutistic 704,30 seems safe places heavy presumption resembling embedded-cost-of-service ratesetting.31 least, proposing counterintuitive selecting 76 Other pick (ECPR). 40-41. ECPR (presumably, TELRIC) plus 426 part); Sidak Spulber, Deregulatory Takings Regulatory Contract 284-285 708. pegged loss suffered stead former 77 bore relation cost. "We conclude improper compute cost-based. Moreover, mechanism towards levels; given." pre-existing asymmetries straightforward scheme.32 78 category focuses fixed unavoidable, TELRIC's run. 25, supra (defining run). fundamental intuition underlying favored efficiently term. 79 pricing." 426-427 theorized discriminatory taxation commodities generate minimal discouragement desired consumption. Ramsey, Contribution Theory Taxation, Econ. 47, 58-59 (1927). principle taxed demand: taxes relatively inelastic. Train, Optimal Regulation: Economic Monopoly 122-125 (1991). associated run, arbitration agreement. spread 696. Mitchell Vogelsang, Pricing: Practice 43-61 proportion added premium loop-element rate. 80 drawback highest duplication desired, entry, our showed: $110, said: 81 "[W]e exclusively allocating inverse sensitivity used. to, raising of, critical inputs, pro-competitive Act." 696 82 83 day, simulates figures tune (through 2000), Economy (Feb. 2, 2001); Hearing 1542 House Committee Energy Commerce, Ser. 107-24, Henry, Managing Partner, Greenfield Hill Capital, LLP); Glover Epps, Working?, Admin. 1013, 1015 (2000) ($30 1999). statistics indicate partial strategies: June 30, 2001, facilities; reselling services; (26 switching; switching). Competition: Status 2002) (tables 3-4). contradict figures, merely speculate approaches, note recently shifted nonfacilities options. We, suffices facilities.33 84 b 85 assessed preference extended (so bases), supra; noted consequence approach, "book" resemblance Releases Audit Reports RBOCs' Property Records, CC 99-3, 1999 WL 95044 (FCC, Feb. ("[B]ook overstated approximately $5 billion"); 116 (We "[b]y early 1980s, System accumulated vast library belonged alongside dime-store novels works fiction.... By 1987, widely estimated $25 dollars"). seeks elements; gets unfair sense. 86 This, fatal Their constantly changing cheaper, technology; write rapidly anticipate newer gadget portending stuck, sunk unrecoverable depreciation, unrecognized uncompensated.34 87 fact, percentage recognizes life committed matters. 88 "Based record, calculations, LECs bear demonstrating specificity face justify rate.... adjust demonstrates warranted, conducting `rate-of-return proceeding.' uniform intend re-examine riskadjusted ongoing particularly experiences situations." 702. 89 then-current mere need. That 90 start asking threat galloping obsolescence commensurately rising 378, 818 ("As 1995 [l]ocal comprises $109 represents plant"), recent years, gone further twistedpair couple decades. (less lines employ technologies fiber). informed imminently obsolescent radical revision depreciation.35 found federally counterparts 91 materialize retained 2001 1)), adequate 11.25 mentioned 702, "reasonable 92 weakness indeed, loops, example). matter, purchase suspect. expensive notwithstanding cheaper copper-wire voice Lodging Material 655-657 (Opinion 97-2, Apr. 1997 Setting Group Network Elements)). ("millions"), 93 c accusation practical, leveled proffered. "One T[E]LRIC relative ease calculation. Rather task [incumbents] reliable data estimates `green field' assumes scratch." App. 182 (Reply Comments Administration (May 1996)). sorts reckoning exacerbated asymmetry information, benefit. 486-487, 499. 146-147, 367-368 (Fla. Comm'n, re: Determination pursuant 364.025, Florida Statutes, issued Jan. 1999); 589-598, 701-704 (N. Y. Opinion supra). 95 illusion, now, counts. 866. failed trap mischaracterizing departures limitation, lags, refusal costs) inconsistencies pragmatic plan. Nor rebut short, carry therefore C inherent inadequacy deal counterpart saying question, offing, 753-754, we. 97 outset, understand portent usual "so confiscatory," threatening "financial integrity." 307, instance district courts, 252(e)(4) (e)(6). 631 accompanying footnotes ("A number states employ, plans utilize, form [long-run cost] elements"). 98 303-304 (denial $3.5 $15.4 increases bases utilities); (Nebraska carrier-rate schedule taking). Granted, strictly taking, implication said. 602 [just rates] important"); 586 rate-making formula formulas"); Los Angeles Elec. Cal., 289 287, 305 (1933) ("[M]indful distinctive function enforcement rights, refused artificial upset"). Undeniably, 99 rare ones signs, ignore, compare, element-by-element), balance-sheet national 10-11, 6. $180 system, juxtapose representing "total plant" $342 billion. huge proof (citing Statistics Common Carriers (Aug. 2000) 2.9, line no. 32)). 100 comparison, constructing barebones universal-service cover advanced Application Atlantic Authorization 271 3953, 245 aff'd, 220 607 2000). Federal-State Joint Universal Serv., 20432, 41, 125 (explaining "appropriate [for] replacement low. 101 side "balance sheet" patently misstated. above, 310-315. net $166 billion, 50), assume. liabilities ($22 billion) sheet, (line minus 13), rough generous) working-capital $188 cry tout, say: thrown sight unseen. 102 nonrate jeopardized intentional methodologies. rely judged "overall impact orders,"36 dicta. remarked State's arbitrarily bad times benefit raise questions." 315.37 plain-vanilla arbitrary capricious action38 enterprise. 103 itself, exception rate-order here invoked case: failing "switch" brand predecessor "back forth." expectation anchored promise made. 706 ("[C]ontrary assertions [incumbents], guarantee full exceed assurances FCC] past"). 315. investor paying realize indefinitely bar rates.39 IV 104 effort Government overturn draws waiver, companion 813, 819, 39.40 acknowledge sua sponte invited briefing status 315(c)-(f)41 reinstatement 395, again, rationale, today. 30-31 (1961): 105 demands orderly procedure achieving justice brought action, rulings reversal, him, presented. Otherwise promoting `sporting theory' justice, counsel withhold save later tend foist decisions avoided errors earlier." 106 blocks petitioner's trip pursue action. Litigation obviated got saved five during Board [had] twice reconsidered [the] steadily growing ...." 31-32, 8. sought point. 107 Nothing "longstale" behind behest court, carriers. 108 "pressed below" Williams, 504 36, (1992) (internal quotation marks omitted), chooses issue, flux, Virginia Bankshares, Sandberg, 501 1083, 1099, (1991) (citations US MFS Intelenet, 193 1112, 1121 (CA9 (affirming identical rules), cert. denied, 530 1284 Stevens Department Treasury, 500 109 odds fully: "[E]ach 111 . 112 "[t]he feasible just, .... An "Bundling" concepts. Bundling pricing. 394. advance separately simplest function, predesignated comprise themselves. "if subloop [which together constitute loop], single, requested, 295. 315(b)-(f), mechanical connection "in 620. 114 result. refuses except of; refuse happening Incumbents, findings, refusing competitors' technicians plants connections. 3696, 3910, 482 (Third petitions pending Telecom 00-1015, (CADC). 115 challenged substantive procedural, manner, ordinarily combined" "[t]echnically feasible" "[w]ould obtain interconnect" 315(d) combining leases feasible.42 alternatively interpretations. ring, basis." 117 violated literally thereafter sat done. sit context grammar. unequal, ("Additional carriers"), confines expressly mentioned. stretch permissive silence combination, unaware needs 293. instances obligate clarification Order. 118 harmony by, dealing 315(b). reinstating basis," "physically separated," 394, "§ asks odd partner empowers cannot. 837 (1984), 119 survive two, sure, immediate help, prevented dismantling combinations sabotage competitors, splitting joining together. think, nonetheless, repeat restrictions burdens (d) arises 294 ("If so"). obligation, combine," complete 51.315(c)-(d) cost-based fee" does. Parties 34. 34, 14. 121 force discriminate impeding access, feasible," restriction, "decline[d] requested." 296. "could potentially reliability security interconnection, restriction "technical feasibility" limits "economically reasonable," 199, engineering sense, 196-198. security," 296, 622, management, control, performance network," 203. 122 demanding feasibility," protecting There, "pick choose" rule43 matching comers "not 51.809(b)(2). 396. possible, all. 123 purposes 315(c), raises "ordinarily combined," neatly complements facially forbidding requests rights insist, naïve device, switch, link. missed 51.315(c) alone, needed 297 ("[I]ncumbent[s] intend"). aspect combined, BREYER'S, 563) objection; focus rather, "even network." seemingly (ordinarily network) (provided element), second-line connection, fax modem. (providing justified "nondiscriminatory access." "[i]f 294. entrant; contested wanted served Third 481. hardly unreasonable, fee; otherwise, access" bare 126 315(d), 251(c)(2), imposes interconnect. owned manner." Essentially, elementto-element version 251(c)(2). 127 sum, 51.315(c)(2) 128 bring resell. Whether stuff debate economists versed microeconomic theory. judges pale deciding scrutiny. 129 remanded opinion. 130 ordered. O'CONNOR Notes: Together 00-555,WorldCom, 00-590, 00-602, certiorari court. â Harisha Bastiampillai Morton Posner brief Allegiance Telecom, amici curiae urging affirmance joins Parts 252(d) respect reciprocal compensation interconnected 252(d)(2), 252(d)(3) Nationalization, countries, Cohen, Problem 1876-1917, History 42, 46, 55-56, Cohen); Vogel, Freer Markets, Rules: Advanced Industrial Countries 26-27 noteworthy rate-regulation 379, concerned governed interstate subsequent 1934, 1064, Civil Aeronautics 973. 1934 address way. incidentally Mann-Elkins 1910, 539, earliest foreign telegraph revisions ICC. Vietor, Contrived Deregulation America 171 (1994) Vietor) doubt sacrifice situation. " `If corporation highway dividends stockholders, misfortune remedied public.'"Smyth One referents prove primitive criterion SeeMcCardle Indianapolis Water 272 400, 417 (1926); Goddard, Valuation: Cost Reproduction Base, 564, 570-571 (1928). concept survived "used useful" Pennsylvania inDuquesne 299 (1989), prudence useless unforeseen recoverable worthless value. 311-312, unsuccessful approach"). Operating cash, inventory, accounts receivable Current consist payable, taxes, wages, rents, short-term debt. Because, collected due, interim. Z. Bodie Merton, Finance 427 (prelim. 1998) 1997, cycle 14.4 $127 gross $1,836 line), 7.4 Worldcom. Weingarten Stuck, Rethinking Depreciation, Business Review (Oct. becomes unproductive) undersell goods. Mankiw, 308-310 (1998) Mankiw) Some coaxial wireless reported 5) mininetwork customers, correspondingly, exponentially Arthur, Increasing Returns Path Dependence 1-12 Title 253(a) V) provides: "No legal prohibit prohibiting entity intrastate "Network facility features, capabilities including subscriber numbers, databases, signaling systems, sufficient collection transmission, routing, 153(29) 252(a) "(a) Agreements arrived negotiation "(1) Voluntary negotiations "Upon receiving section title, binding regard subsections title. detailed itemized agreement, negotiated February submitted subsection (e) section." purchases covered separately, fraction figure, projection" flat per-usage basis) divided 51.511 economics. Carlton Perloff, Modern Organization 50-74 1994) Perloff). "Sunk costs; practically forward looking, looking. "Opportunity forgone resources employed,"id., Tragedy Telecommons: Pricing Unbundled Elements Colum. 1081, 1093 (1997) Telecommons) ("Opportunity forward-looking"). See,e. Mobil Oil Exploration Producing Southeast, Distribution Cos., 498 211, 224-225 (1991); 744 2d 185, 193-194 1984); Alabama Coop., FERC, 684 1982). Greeting Card Publishers Postal Service, 462 810, 832 relying 252(d)(1)(B) profit." 252(d)(1)(A) factoring profit" income "profit" "normal" profit, firm, costs." 699, 1705 Pearce, MIT 310 (1994)). refer obtaining debt financing" 700. profit") fully incorporated "risk-adjusted capital," namely, "States proceeding.'"Id., BREYER explicitly propriety ofChevron deference, Motor Vehicle Mfrs. Farm Mut. Automobile Ins. 463 29, (1983), "rational connection" deregulatory 554 "changing course" 42; contrast, involve inapposite searching judicial (Indeed, obverse conclusion, explaining course favoring tethered Congress's intent depart Act.) BREYER'S stressing discuss below, unlikely duplicated reduces (particularly smaller competitors) puts afford charge) versions sensibly duplicable. infra, 515-516 (discussing pricing). true, says, "deregulatory," departing "regulatory" coddled monopolies, Breaux), character passive deferring data. property, resale 251(c)(4), promulgation historical-cost "Marginal [of goods] extra unit production." 272; alsoid., 312-313; Perloff 51-52. Michigan commission's September 1994 631, 1508, specifying "currently purchase." Re Methodology Determine Long Run Incremental Cost, 156 4th characterizes permitted III-B-2-a-(2),infra, "coincidences" sheer luck. 552. shares dismisses recognitions. realizing 683 (rejecting premised "hypothetical least-cost network"). proposes "less formal `play ear' system" European Community practices yet alternative, seepost, 558; appear informal 630-671, Court. BREYER's proposal emphasizes vary particulars case, 519-520. "all firm's variable avoidable." 677. 326 ("[A]ll minimized"). general, Variable depend produced, rises longer; rent, event produced. 51-56. timeframe duration production incorporating taken III-C,infra. literature advocate 514-515, premise averting unwanted confiscation, spur compensating incumbents). "firms share,"post, 550 near future), duplicate elements) other, duplicable digital signal-multiplexing technology). accommodation difficulty faced, "unshared" may, simultaneously costly-to-duplicate jointly reality faced hundreds (without Worldcom) gain toeholds 4, 13. (485 firms self-identified carriers). elsewhere "does to" "duplication expensive," 546. "unnecessarily expensive" conjunction consumers. crucial 630 (wholesale send signals"). looking recalibrated 17, understandably, tack); find parenthetical, `(determined proceeding),' type specifies omitted) parenthetical 252(d)(1)(A)(i), version. 652, 104th Cong., 1st Sess., 251(d)(6)(A) ("[T]he ..."). Both bills contained regulation" "eliminated" "abolition." 301(a)(3) provided: "Rate Return Eliminated "(A) instituting flexibility paragraph forms Tier earned 1555, 248(b) stated: "Notwithstanding law, complied sections 242 244 communications, regulation." inferred omission express prohibitions forbid "type proceeding" inference rate-ofreturn proceedings, Boston Edison 233 60, 62, one: balked specificity. Less plausible language, "reflect[ing] Congress' desire speedy results," 559; concludes "specifies yardstick competition," bargain, 252(a)(2); strange, prohibition affirmatively flexibility, firing warning shot steer entrenched perceived monopolies. responded static tether uncompetitive prices, ECPR, properly employed, dynamically readjust opportunity-cost factor drop. Telecommons 1097-1098. cure distortions Nor, assertion stifle "incentive invest" elementsPost, 551. himself notes, "over billion" period. Post, affirms commonsense brings base. underdepreciation,i. e., values excess assets, increasing underdepreciation (to continuation disputes, 38-39) regulators, publicutility regulation. 485-487, know, retail-rate conducted model, services. benefited availability specifically, electrical conduits, 549; negligible (36,000 Nation, 0.02 lines, 5)), whatsoever conduits canceled orders," overall "constitutionally objectionable." 312; ("`It counts'") (1944)). "[n]o reduced jeopardize integrity "inadequate holders modified scheme." White O'CONNOR, concurred, counted" "whether government's confiscatory."Id., 317. 44-49, restatement interpreting foreclose addressed, III-B-2,supra. hospitable underDuquesne: "Incumbent relief rates." 739. willing challenger go method's tendency, "specific information" Additionally, acknowledged, smallest, suffer imposition exempt 252(f)(1), 706, exemptions applying 252(f)(2). claims. Pet. Cert. inAT&T O. 1998, 97-826, 9-10, inIowa 96-3321, (CA8, not, decision, 315(c)-(f)"). 315(e)-(f), denies infeasibility impede others' "An delay arrangement 252 agreement." 51.809(a) 132 whom part. 133 majority (Act seq. V), system. firms' Amendment occurred. disagree, unbundling "promote Preamble, 56; 104-458, effort, "elements" 252. (1)(A). 366 authorizes (FCC Commission) 135 create "start-from-scratch" "Total Element Long-Run Cost" (TELRIC). Info. Kahn) (referring "TELRIC-Blank Slate"). essence, "element" supply past, future. regulator firm future, scratch new, concession presently 15848-15849, 685 Order) (describing center locations, reconstructed requirements"). 136 help explain Imagine major center, downtown Chicago, cables wires poles subsidiary electronic eventually end-user handsets, computer modems, machines located office buildings residences. competitor, entitles "element," five-block buildings. (upon "rates" based) equals real Chicago spend demanded, supplier rebuilding scratch. 137 determine, "`abuse[d]'" statutorily delegated "`discretion'" (1983) Administrative Procedure 706(2)(A)). grant content Citizens Preserve Overton Park, Volpe, 401 402, 416 (1971); (1944), one, ratemaking, possesses knowledge. 843-844 138 Nonetheless, unlimited. bounded, grants statute's purposes. Farm, 56. whether, limits. 43; 416; 706(2)(A) (requiring aside "arbitrary, capricious, abuse discretion, accordance law"). And, reluctantly, do. considering responses, demands. 139 concerns purpose, purpose? "rate[s]" (for "elements") blush mind ratesetting. 717c; 4a, 824; 10701 V); Aviation 1958, 1302(c) (1976 II) (repealed 1980); 478 ratesetting); Danielsen, Kamerschen, 109-110, 388 1988) Sections Cable Television Protection 1992: Regulation, 4527, 4555, (Commission referring "[o]riginal "for valuation"). 140 mandating believes (hypothetically) (often monopoly) competitively structured 486; ("[M]any declared `ideal' prices"); (1988) Regulation) criteria proper borne equilibrium"). arguably replicate results theoretically 679, 738. low, competition-mimicking technology, waste. finds indirect alike, products, promulgate substitution transformation 539 (accepting rationale). hinder transition marketplace 142 Five considerations, together, convince me description accurate one. substitute (stating longdistance markets); 1; 489. 143 history 20th century's primarily decades ground "natural monopolists," i. size. 475-476. 1970's, technological developments change undermining monopoly" rationale. distance newly capable 185-190 (1994). began marked hesitation lingering uncertainty. 53, 86-87 Huber); Geodesic II: 1993 Industry 2.1-2.5 (1992). demanded digging streets stringing overhead poles. 489-491. which, replicate, avoid, significantly wasting remained unclear. 206. wrote permit nonwasteful aspects service; advantages. 206-207. secure feasible, seriously wasteful. 271(c)(1)(A), 271(c)(1)(B) (recognizing firm). 144 Third, congressional end. dismantles wish. 253(a); 491, 12. permission consequently goes ways. 491-492. us), small subscribers automatically retailing desire. 251(c)(4). homes selectively substituting) 145 Suppose, cables, expensive. wasteful duplication. offer, "access" using) regulator, anxious City aware bridge Mississippi River, ordered bridge's owner hard-to-duplicate resource bridge. facilitate remaining A-to-B That, assume, shared "failure offer." 251(d)(2). 392 "substance `necessary' `impair' requirements"); 416-417 part) provision's object prove, degree, duplicate). 146 concretely, imagine wishes voice, text, pictures, entertainment, inside house office. Should house? already-existing electricity conduit? communicate one-way two-way satellite? (4) pair twisted place? impractical expended) claiming "bridge" access. 147 Fourth, promotion preamble describes "giv[ing] signals producers ensur[ing] utilization infrastructure." (emphasis added). entry." adds "Congress input 710; ¶1. 148 Fifth, confirmed oral "encourage market," Tr. Oral Arg. "allow develop technologies," 61. 149 mind. 150 critics Verizon, whose published articles lodged concede "cost[s]." flaws. Cf., 311-312 dissenting) (criticizing costs); 109-111 "historical incentives). 151 lawfully thwarts advantage. furthering supra. add expensive, speaking, elsewhere, so. "element") things. Kahn 330 (prices "incremental "increment," challengers "proper target shoot" reflects society more" less); Knieps, Interconnection Access, Ford. Int'l (2000); (arguing market-determined (M-ECPR) satisfies misunderstood M-ECPR system). Commission's, "most efficient" hypothetically scratch, 685, neither. exactly opposite, creating objective. 152 ask, why, element? compulsory buying elsewhere. (if general), applies (based on, wireless) wires). Why conduit, when, definition, wires? assessing special penalty worry insist regulation-determined developments. 153 maintaining wires) conduits) exceed) "best practice" (namely, will, cheapest). predicted, differences), uneconomically result, circumstances, undermines achieve. 509-510, 154 "sharing" pairs) embodies written promote. share, grain auction 429 ("It unshared, shared, portions enterprise meaningful emerge"). Yet monetary 51.319(f)-(g) 413, widespread supervision create. 386-387 element"). "serve transitional fledgling networks." 3700, Order). Why, "fledgling competitors" fly own? 155 "element?" cost-reducing successful innovation, stagnate? Jorde, Teece, Innovation, Investment, Unbundling, Yale Reg. savings fiat"); Managed Industries, 117, 124-125 deprived irreversible investments, made, future"); Armstrong, Scoffs Possible Carrier Status, Reports, Nov. 9, 1998 (Chief Executive Officer AT&T, supports regulations), cited 206, 611 ("`No billions dollars penny ounce risk, ride others'"). enforce slows trickle. cites $30 $60 516. broadband, offers substitute. been. 2.7); 2.7) (incumbents' billion); 2000/2001 2.9) (total depreciated $220 516, 521 (new 33%). Regardless, incentives, "start scratch" best, coincidences describe have, happily pass. 554, 556, 560-561. 157 mention exacerbate "stranded once-regulated technologically outdated, III-C, ante. redundant negotiation. 252(a)(1). about? than, agree. Mathias Worldcom Technologies, 00-878, 18, ("[A]s matter" negotiate). 158 critics' view, offsetting administration Justices Holmes purposes) historic inaccuracy. 292-296 opinion); 481-483. imaginary rebuild dig streets, unsightly poles, pole users, operators turn "efficient" (hypothetical) circumstances. speculative enterprise, battle experts, guess. 333, 334, 335 introduced expenses 27% gains, utilities, producers, Hampshire's administratively 25%). (past future) Affidavits Baumol, Ordover, Willig, Docket 96-98: Matter 16, (TELRIC's "do architecture, sizing, decisions" "as calculating" costs). Assumptions inevitable. uncertainties somewhat random alleviate coincidence. 522 "customarily assig[n] counterpart"). 159 criticisms serious, severing responses important. Do criticisms, blunt edges, virtues? responses. none convincing. 160 "most-efficient-firm" reconcile equipment's diminishes 686 ("[P]roperly account declines goods"). If, historically, $50 million, predict "most-efficient-firm-building-from-scratch" replication recoup missing $20 million. complex 161 response, say. varying perverse incentives. strongly opposite. charges. "current" LECs" "burden Unless swallow "business risks" situation ordinary circumstance language. Biennial Depreciation Requirements Incumbent Exchange 242, nowhere Hence respond transform 162 permissible profit But, matter. point." They, too, exception, LEC's" successfully "bear reasons. 163 "time" "tentative guidance," 11-12, profits high, 687. additions, III's claims, rest hope significantly, somehow magically adverse effects Affidavit Hausman Telcom Association, 96-98 197 (testifying double triple investment). Hubbard Lehr, Capital Recovery Issues Response Professor Jerry (July 216, 221 defenders overstates change, stating modest"). belief realized. Ante, "competition materialize," "it say" "`reasonable point'"). sympathize problem. quickly foresee set, detail, 252(a)(1), commissions. 412-420 reasonableness practicality states" nations. 681. domestic experience, prior surprising tried produced MCI GTE Northwest, 1157, 1168-1169, (Ore. TELRIC). 165 "foreign nation" paper goal. Communities, Recommendation liberalised C(97) 3148, 3.3, 3.5 15, 1997), http://europa.eu.int/ ISPO/infosoc/telecompolicy/en/r3148-en.htm (Apr. 2002). Britain's absence additions Office (Oftel), Access Bandwidth: Indicative principles http://www.oftel.gov.uk/ publications/ broadband/llu/llu0500.htm 166 follows: encourages picture, "unbundle," running house. exercising authority, upon, agreed-upon blocking reached, formulas, nations 167 "play ear" intended. break deadlocks, variety experience appropriate, mysterious phrase "(determined proceeding)," view. results. Utilities, 424-425 "se[t] case-by-case basis"). recognize, extraordinarily standards, further, obstacles seeks. 168 firm" "building "simulate" replicat[e], 679; attack. 543, grows trying entry. sake, "replicate" efficient, tend. 326-327 achieved market); Whom Gods Would Destroy, How Deregulate scratch). successful, sharing, disincentives independently, "interconnection" creation supplant, promote, congenial institutional differs dramatically about. 387-392 (setting granting element). underlies criticism. 170 suggestive, depart. 11-12. conclusive "suggestive" (refusing characterize forth, "requirements," "`preferred outcomes,'" "would arbitration, guidance parties' options negotiations"). Sixth, "regulatory lag" solve 505-506. independently costly. 548-550. regulator's am significant. differ, circumstance, introducing might, ameliorate effects. 172 majority's V 173 Judges recognized substance decisionmaking. Compare Ethyl EPA, 541 1976) (en banc) (Bazelon, concurring) guard scrutinize merits [but to] decision-making assures decision" omitted)), (Leventhal, assure, "conformance requirements rationality," acquiring "whatever necessary"). emphasized limitations judges' procedures. Vermont Yankee Nuclear 435 519, 543-548 (1978). nonetheless rationality decisions, decisions. agencies undertake translating preparing challenges difficulty, generalist importance name expertise, wrest control. 174 Agencies areas. Judge Leventhal judges," "must act restraint." 2d, 69. "abstain review." 68. strong. "forced leasing" twin, 388-392 (finding unlawful), about, demands, characterized innovation mandarin decisionmaking decentralized interaction freely forces. replies unsatisfactory. reasonable. supportable. not. abstention from, indeed abdication insists. 706(2)(A); ("[W]e given"). it, "Restraint, yes, abdication, no." pages careful analysis, abdicate responsibility; Consequently, determination unlawful. VI 175 176 "duty 177 pointing request) How, speaks they, elements? 178 uncombine recognizes, 534-535, rationale absent apart discriminating discriminate? discriminate, it? 179 authority. 180 reasons, dissent.

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