In the case of Central Union Telephone Co. v. City of Edwardsville, 1925, the U.S Supreme Court ruled in favor of Central Union Telephone Company (CUTC). The city had passed an ordinance requiring CUTC to obtain a franchise for its operations and pay a fee based on gross receipts from local business. CUTC argued that this was unconstitutional as it already held rights granted by the state to operate within any municipality without needing additional permissions or paying extra fees. The court agreed with CUTC's argument stating that while municipalities have certain powers over their streets, they cannot interfere with statewide franchises granted by the state legislature nor can they impose taxes upon them beyond what is allowed under state law.

The dissenting opinion in the case of Central Union Telephone Co. v. City of Edwardsville argued that the majority's decision to strike down a city ordinance regulating telephone rates was incorrect and overstepped its authority. The dissent contended that it is not within the purview of federal courts to interfere with local rate-setting unless there is clear evidence that such regulations are unreasonable or confiscatory, which they believed was not demonstrated in this case. They also expressed concern about undermining states' rights and local control by intervening in matters traditionally left to state and municipal governments, like utility regulation. Furthermore, they disagreed with the majority's interpretation of "fair value" for determining reasonable rates, arguing instead for an approach based on prudent investment rather than reproduction cost.