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These cases present the question whether federal district courts have jurisdiction over a telecommunication carrier’s claim that the order of a state utility commission requiring reciprocal compensation for telephone calls to Internet Service Providers violates federal law.


The Telecommunications Act of 1996 (1996 Act or Act), Pub. L. 104-104, 110 Stat. 56, created a new telecommunications regime designed to foster competition in local telephone markets. Toward that end, the Act imposed various obligations on incumbent local-exchange carriers (LECs), including a duty to share their networks with competitors. See 47 U. S. C. �251(c) (1994 ed., Supp. V). When a new entrant seeks access to a market, the incumbent LEC must “provide … interconnection with” the incumbent’s existing network, �251(c)(2), and the carriers must then establish “reciprocal compensation arrangements” for transporting and terminating the calls placed by each others’ customers, �251(b)(5). As we have previously described, see AT&T Corp. v. Iowa Utilities Bd., 525 U. S. 366, 371-373 (1999), an incumbent LEC “may negotiate and enter into a binding agreement” with the new entrant “to fulfill the duties” imposed by ��251(b) and (c), but “without regard to the standards set forth” in those provisions. ��252(a)(1), 251(c)(1). That agreement must be submitted to the state commission for approval, �252(e)(1), which may reject it if it discriminates against a carrier not a party or is not consistent with “the public interest, convenience, and necessity,” �252(e)(2)(A).

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