Talk America, Inc. v. Michigan Bell Telephone Company

131 S.Ct. 2254 (2010)

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Nature of the Case

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Facts

The Telecommunications Act imposed a number of duties on incumbent providers of local telephone service in order to facilitate market entry by competitors. The Act requiring incumbent LECs to share their networks with competitive LECs. This case concerns the incumbent LECs' obligation to share existing entrance facilities with competitive LECs. The FCC recently adopted a regulation specifying that entrance facilities are not among the network elements that § 251(c)(3) requires incumbents to lease to competitors on an unbundled basis at cost-based rates. The specific issue is whether D must lease existing entrance facilities to competitive LECs at cost-based rates. The FCC recently adopted a regulation specifying that entrance facilities are not among the network elements that § 251(c)(3) requires incumbents to lease to competitors on an unbundled basis at cost-based rates. This regulation did not alter the right of competitive LECs to obtain interconnection facilities pursuant to section 251(c)(2). In that regulation, the FCC concluded that entrance facilities were not subject to the unbundling requirement because they are not network elements at all. It stated clearly that entrance facilities are used for two purposes: interconnection and backhauling. The new regulations did not touch on interconnection but only on backhauling. D was not under an obligation to unbundle entrance facilities for the purpose of backhauling traffic. Backhauling does not involve the exchange of traffic between incumbent and competitive networks. D responded by notifying Ps that it would no longer provide entrance facilities at cost-based rates for either backhauling or interconnection, but would instead charge higher rates. P filed a complaint with the Michigan Public Service Commission who ruled in favor of P. D appealed, and the court reversed, and the appeals court affirmed the reversal. The Supreme Court granted certiorari.