In the case of Postal Telegraph Cable Company v. City of Newport, Kentucky (1917), the U.S. Supreme Court ruled in favor of the city, upholding its right to tax telegraph poles and wires owned by a company operating within its jurisdiction. The Postal Telegraph Cable Company had argued that it was exempt from such taxation because it was an interstate commerce business and therefore only subject to federal regulation under the Commerce Clause of the Constitution. However, Justice Joseph McKenna delivered an opinion stating that while interstate businesses were indeed primarily regulated by federal law, this did not make them immune from local taxation or other forms of municipal authority as long as these did not interfere with their operation or contradict federal regulations.

In the dissenting opinion for Postal Telegraph Cable Company v. City of Newport, Kentucky, it was argued that the city's imposition of a tax on telegraph poles and wires owned by the company constituted an infringement upon interstate commerce. The justice contended that since these facilities were used primarily for interstate communication, they should be considered as instrumentalities thereof and thus immune from state taxation under the Commerce Clause of the U.S Constitution. He further asserted that this case differed significantly from previous cases where taxes had been upheld because those involved property with both intrastate and interstate uses whereas in this instance, there was no evidence to suggest any substantial local use. Therefore, he concluded that such a tax amounted to regulation or burden on interstate commerce which is constitutionally impermissible.