AT & T Corp. v. Iowa Utilities Board

In AT & T Corp. v. Iowa Utilities Board, 525 U.S. 366 (1999), the Court faced a controversy over what "necessary" meant in the context of s 251(d)(2) of the Telecommunications Act of 1996. See id. at 388. The Court rejected the FCC's formulation, concluding that "the Act requires the FCC to apply some limiting standard, rationally related to the goals of the Act, which it has simply failed to do." Id. The Court noted that the Commission announced that it would regard the 'necessary' standard as having been met, regardless of whether 'requesting carriers can obtain the requested proprietary element from a source other than the incumbent,' since 'requiring new entrants to duplicate unnecessarily even a part of the incumbent's network could generate delay and higher costs for new entrants, and thereby impede entry by competing local providers and delay competition, contrary to the goals of the 1996 Act.' ... The Commission cannot, consistent with the statute, blind itself to the availability of elements outside the incumbent's network. That failing alone would require the Commission's rule to be set aside. In addition, however, the Commission's assumption that any increase in cost (or decrease in quality) imposed by denial of a network element renders access to that element 'necessary' ... is simply not in accord with the ordinary and fair meaning of the statute's terms. Id. at 389-90.