Supreme Court quotes Sidak in Verizon Communications v. Federal Communications Commission decision

In May 2002, the Supreme Court upheld federal regulations aimed at forcing local telephone companies to share their networks with rivals at regulated prices. In a 7 to 1 decision, the court ruled against Verizon Communications Inc. and other incumbent local exchange carriers (ILECs). The ILECs had argued that the Federal Communications Commission (FCC) illegally required them to lease their networks to competitors at artificially low rates.

The Supreme Court reaffirmed the FCC's authority to write the access rules as it sees fit. The FCC sets access rates on the hypothetical costs that a competitor would incur building a new phone network using the best technology currently available--not not on the historical costs that the Bells incurred in actually building their systems, which are estimated to be much higher.

The court cited Criterion president and CEO J. Gregory Sidak to support the proposition that opportunity cost is a forward-looking cost measure.

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