Verizon Communications, Inc. V. FCC - Telecommunications Access Pricing and Regulator Accountability Through Administrative Law and Takings Jurisprudence‪.‬

I. INTRODUCTION The need for regulators to manage changing economic conditions and technology in the telecommunications industry has given rise to access regimes characterized by broad guidelines and considerable flexibility for the regulator. The incumbent local exchange carriers ("ILECs") sought to challenge this broad discretion in Verizon Communications, Inc. v. Federal Communications Commission (1) which required the Supreme Court to scrutinize the Telecommunications Act of 1996 and Implementation of the Local Competition Provision in the Telecommunications Act of 1996, First Report and Order ("Local Competition Provisions"). (2) Two issues before the Court were (1) the legality of using forward-looking economic cost for setting rates for interconnection or leasing of network elements and further, the legality of defining forward-looking economic cost through the total element long-run incremental cost ("TELRIC") of the element which measures costs through a hypothetically efficient network; and (2) whether a rate-setting methodology could amount to a 'taking' for the purposes of the Fifth Amendment, which states "nor shall private property be taken for public use, without just compensation" (the "Takings Clause"). (3)