Southwestern Bell Telephone Co. v. Federal Communications Commission

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

On October 4,1990, the Federal Communications Commission (“FCC” or “Commission”) released its LEC Pnce Cap Order, 5 F.C.C. Red. 6786, which ushered in a new era in the regulation of major local exchange telephone carriers (“LECs”). Unlike the pri- or rate-of-return scheme, under which LECs were allowed to recover costs plus a designated rate of return, the price cap system, which took effect on January 1, 1991, set a rate ceiling for “baskets” of LEC services based on July 1,1990 historical rates in order to encourage…