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Supreme Court of the United States
January 13, 1986, Argued ; May 27, 1986, Decided 1
[*358] [***375] [**1893] JUSTICE BRENNAN delivered the opinion of the Court.
In these consolidated cases, we are asked by 26 private telephone companies and the United States to sustain the holding of the Court of Appeals for the Fourth Circuit that orders of the Federal Communications Commission (FCC or Commission) respecting the depreciation of telephone plant and equipment pre-empt inconsistent state regulation. They are opposed by the Public Service Commissions of 23 States, backed by 30 amici curiae, who argue that the Communications Act of 1934 (Act), 48 Stat. 1064, as amended, 47 U. S. C. § 151 et seq., expressly denied the FCC authority to establish depreciation practices and charges insofar as they relate to the setting of rates for intrastate telephone service.
Respondents suggest that the heart of the cases is whether [****8] the revolution in telecommunications occasioned by the federal policy of increasing competitionin the industry will be thwarted by state regulators who have yet to recognize or [*359] accept this national policy and who thus refuse to permit telephone companies to employ accurate accounting methods designed to reflect, in part, the effects of competition. We are told that already there may be as much as $ 26 billion worth of "reserve deficiencies" on the books of the Nation's local telephone companies, a reserve which, it is insisted, represents inadequate depreciation of a magnitude that threatens the financial ability of the industry to achieve the technological progress and provide the quality of service that the Act was passed to promote. Petitioners answer that the Act clearly establishes a system of dual state and federal authority over telephone service. They contend that the Act vests in the States exclusive power over intrastate ratemaking, which power, petitioners argue, includes final authority over how depreciation shall be calculated for the purpose of setting those intrastate rates. Petitioners note also that the [***376] Due Process Clause of the Fourteenth [****9] Amendment necessarily represents a check on the power of the States to set depreciation rates at what would amount to confiscatory levels, and that respondents therefore overstate the danger of the States crippling the financial vitality of phone companies.
[**1894] In deciding these cases, it goes without saying that we do not assess the wisdom of the asserted federal policy of encouraging competition within the telecommunications industry. Nor do we consider whether the FCC should have the authority to enforce, as it sees fit, practices which it believes would best effectuate this purpose. Important as these issues may be, our task is simply to determine where Congress has placed the responsibility for prescribing depreciation methods to be used by state commissions in setting rates for intrastate telephone service. In our view, the language, structure, and legislative history of the Act best support petitioners' position that the Act denies the FCC the power to dictate to the States as it has in these cases, and accordingly, we reverse.
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476 U.S. 355 *; 106 S. Ct. 1890 **; 90 L. Ed. 2d 369 ***; 1986 U.S. LEXIS 74 ****; 54 U.S.L.W. 4505; 60 Rad. Reg. 2d (P & F) 502
LOUISIANA PUBLIC SERVICE COMMISSION v. FEDERAL COMMUNICATIONS COMMISSION ET AL.
Prior History: [****1] APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT.
Disposition: 737 F.2d 388, reversed and remanded.
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Business & Corporate Compliance, Federal Versus State Law, Intrastate Communications, State Regulation of Intrastate Communications, Communications Law, Regulated Entities, Broadcasting, General Overview, Transportation Law, Intrastate Commerce, Federal Acts, Federal Communications Act, Cable Systems, US Federal Communications Commission Jurisdiction, Administrative Law, Separation of Powers, Primary Jurisdiction, Regulators, US Federal Communications Commission, Jurisdiction, Judicial Review, Civil Procedure, Jurisdiction, Subject Matter Jurisdiction, Jurisdiction Over Actions, Exclusive Jurisdiction, Rate Regulation, Legislative Controls, Implicit Delegation of Authority, Constitutional Law, Supremacy Clause, Federal Preemption, Governments, Federal Government, US Congress, Claims By & Against, Legislation, Interpretation