Overturning the Sixth Circuit, the Supreme Court Rules that Telephone Companies Must Provide Access to Their Competitors At Cost

In Talk America, Inc. v. Michigan Bell Telephone Co., the Supreme Court resolved a circuit split, holding that state utility commissions can require established telephone companies to provide smaller competitors access to their network at cost.  It overturns a Sixth Circuit decision (which disagreed with decisions from the Seventh, Eighth, and Ninth Circuits) that allowed companies to charge market rates before allowing access to their networks.  Talk America will make it easier for small companies to enter the market and compete with more established telephone companies like Michigan Bell, AT&T or Verizon.  Writing for a unanimous court, Justice Thomas held that the relevant statute (47 U. S. C. § 251(c)) was ambiguous but that the agency’s interpretation of its own regulations was reasonable.  Under Auer v. Robbins, 519 U. S. 452, 461 (1997), the Court then deferred to the agency’s view that competitors can buy access at cost.

In a concurrence, Justice Scalia agreed with the result but noted that he was beginning to doubt the premise of Auer.  He argued that the principle of separation of powers should prevent the Court from deferring to an agency’s interpretation of its own law.

For more analysis on this issue in Talk America, see our previous coverage of this case here and here.