Talk America, Inc. v. Michigan Bell Telephone Co.

The Telecommunications Act of 1996 required existing local telephone carriers to share their networks with competitors in two ways relevant here. First, existing providers must lease any elements of their networks that the Federal Communications Commission (FCC) considers necessary to provide service to competitors at individual, “unbundled” cost-based rates. Second, existing carriers must provide “interconnection” between their networks and competitors’ so their customers can call each other. In 2005, the FCC issued a review order that said existing providers no longer had to provide cost-based access to “entrance facilities,” meaning wires or cables that connect existing carriers’ networks to competitors’. The FCC emphasized that the change would not impair competitors’ ability to provide services or alter interconnection rights. Shortly thereafter, Michigan Bell Telephone Company d/b/a AT&T Michigan (AT&T) (defendant) hiked its access rates. Talk America, Inc. and other competitors (plaintiffs) sued, alleging AT&T was abrogating their right to cost-based interconnection. The Michigan Public Service Commission agreed, but a federal district court reversed. On appeal, the FCC submitted amicus briefs interpreting its own regulations to support the competitors’ position. The Sixth Circuit declined to defer to the FCC’s interpretation and affirmed the ruling for AT&T. The Supreme Court granted review.