This led to Verizon questioning if the FCC is authorized to be able to require state utility commissions to set the rates charged by the incumbents for leased elements.

It focused primarily on the economic implications of the FCC's costing standards which the Court upheld and secondarily on the takings claim.

[2] The Telecommunications Act of 1996 allows the FCC the ability to require state utility commissions to set rates charged by incumbent local exchange carriers for lease of network elements to competitive local exchange carriers on a forward-looking basis, untied to the incumbents' historical or past investments.

The Act contains unbundled access obligations of local exchange carriers: The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252.

The Respondent, the Federal Communications Commission (FCC), received six out of eight votes with Justices Stephen Breyer and Antonin Scalia dissenting.

In the certiorari from the Supreme Court to the Appeal court they state, “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 entitle the new entrants to lease elements of the incumbent carriers local-exchange networks”.

[1] In five separate cases they argued over the FCC's regulations though ultimately the Court of Appeals held that the use of the TELRIC methodology was foreclosed because the Act plainly required rates based on the actual cost of providing the network element and invalidated certain combination rules.

Whether the FCC picked the best way to set these rates is the stuff of debate for economists and regulators versed in the technology of telecommunications and microeconomic pricing theory.

[1] While this decision maintains the status quo, the FCC is currently looking at its unbundled network element policies, recognizing that a 'course correction' -- as noted by Chairman Powell -- may be necessary to encourage facilities-based competition as the Telecom Act intended.

[12] Verizon Communications v. Law Offices of Curtis V. Trinko, LLP Consumer.net and Russ Smith v. Verizon et al. Four cases included in the same certiorari where parties challenged FCC regulations are: This article draws on the Supreme Court decision in Verizon to argue that the intersection of ambiguous telecommunication access statues and the limits on judicial review as a result of the separation of powers and the application of Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., mean that administrative law has become an ineffective tool in ensuring the accountability of telecommunications regulators…This article argues for Congress to address pricing in greater detail.