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AT&T Corp. v. Iowa Utilities Board

United States Supreme Court
525 U.S. 366 (1999)


Until the 1990s, natural monopolies controlled local phone services due to technological limitations. States typically granted an exclusive franchise in each local service area to a local exchange carrier (LEC). Since the 1990s, technological innovations have made competition among multiple carriers possible. The Telecommunications Act of 1996 (the Act) restructured local communications by providing, among other things, that the LEC must share its network with competitors. After the passage of the  Act, the FCC issued its First Report and Order implementing the local-competition provisions. Rule 319, the primary unbundling rule, sets forth the minimum number of network elements that incumbents must make available to requesting carriers. In bringing suit, the LECs and state commissions argued that Section 201(b) of the Act, which provides that “the Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Act,” limited rulemaking authority to provisions dealing with purely interstate and foreign matters. They argue so because the first sentence of Section 201(a) stated that “it is the first duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor.”

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