The US Supreme Court [official website; JURIST news archive] on Thursday ruled [opinion, PDF] unanimously in Talk America Inc. v. Michigan Bell Telephone Co. [Cornell LII backgrounder; JURIST report] that a state utility commission may require an incumbent carrier like Bell Telephone to provide connectivity to its network for a small, independent carrier, without hindrance. The Court agreed with the Federal Communications Commission's (FCC) [official website] interpretation of the Telecommunications Act of 1996 [text, PDF], proposed in their amicus brief [text, PDF]. The Court also explained that the FCC should be given deference to interpret the statute, referencing the Court's decision in Auer v. Robbins [Cornell LII backgrounder]. Justice Clarence Thomas delivered the opinion:
In sum, the Commission's interpretation of its regulations is neither plainly erroneous nor inconsistent with the regulatory text. Contrary to AT&T's assertion, there is no danger that deferring to the Commission would effectively "permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation."The case was consolidated with Isiogu v. Michigan Bell Telephone Co. [Sixth Circuit opinion text, PDF]. Justice Elena Kagan recused herself from the decision. Justice Antonin Scalia concurred, stating he agreed with the result, but suggested a change in the Court's reliance on the "Auer deference": "But when an agency promulgates an imprecise rule, it leaves to itself the implementation of that rule, and thus the initial determination of the rule's meaning. ... It seems contrary to fundamental principles of separation of powers to permit the person who promulgates a law to interpret it as well."
The cases centered on charges for "entrance facilities." Essentially, to ensure fair competition, the Telecommunications Act of 1996 required the major telecommunications companies to grant access to their network, as well as other provisions, to smaller telecommunications companies. In this instance, Michigan Bell (AT&T in the region), could charge only cost-based rates to competitors, rather than market-based. Further, the FCC found that Michigan Bell had an obligation to aid competitors in "connecting" to their entrance facilities.