In the AT&T Corporation, et al. v. Iowa Utilities Board et al., 1998 case, the Supreme Court was tasked with interpreting certain provisions of the Telecommunications Act of 1996. The Act aimed to foster competition in local telephone service markets by requiring incumbent carriers to share their networks with competitors at regulated rates. Several long-distance and new local carriers challenged rules issued by Federal Communications Commission (FCC) implementing these requirements, arguing that they exceeded FCC's statutory authority and were arbitrary or capricious under administrative law standards. The Supreme Court held that FCC had jurisdiction over intrastate as well as interstate communication but invalidated some specific pricing and access rules for lack of reasoned decision-making or inconsistency with statutory text. For instance, it rejected a rule allowing new entrants to lease elements of an incumbent’s network at cost-based rates without having to demonstrate that denial of access would impair their ability to provide service. This ruling clarified federal-state regulatory relationships in telecommunications sector while also setting boundaries on how far competitive-advantage regulations could go under this particular statute.

In the dissenting opinion for AT&T Corporation v. Iowa Utilities Board, Justice Scalia argued that the majority's decision to uphold FCC regulations was a misinterpretation of the Telecommunications Act of 1996. He believed that Congress intended for states to have more authority in determining local competition standards and pricing structures than what was granted by these federal rules. Furthermore, he disagreed with the majority's interpretation of "necessary" and "impair," arguing that their broad reading could potentially allow any competitor access to an incumbent’s network at regulated rates, which would disincentivize investment in infrastructure improvements or new technologies. In his view, this contradicted Congress' intent when passing the Act - promoting competition while also encouraging innovation and improvement within telecommunications industry.