Full opinion text
ORDER AFFIRMING IN PART AND REMANDING IN PART THE ORDERS OF THE MISSOURI PUBLIC SERVICE COMMISSION LAUGHREY, District Judge. These consolidated cases come to this Court for judicial review of an administra-five order entered by the Missouri Public Service Commission (“PSC”) pursuant to the Telecommunications Act of 1996 (“the Act,” “the Telecommunications Act”), Pub.L. Í04-104, 110 Stat. 56 (codified at various sections of 47 U.S.C.). The Telecommunications Act ended the era of monopoly-based Ideal telephone service by eliminating legal barriers to competition and by requiring local telephone companies to lease elements of their existing networks to new competitors. In the absence of an agreement between the local company and its competitors,- the Act authorizes state utility commissions to determine the terms of these interconnection contracts and the price which the local company can charge its competitors for interconnection services. These consolidated cases involve interconnection agreements between Southwestern Bell Telephone Company (“SWBT”) and AT & T Communications of the Southwest (“AT & T”), which have been ordered by the PSC. I. The Telecommunications Act of 1996 “It would be gross understatement to say that the Telecommunications Act of 1996 is not a model of clarity. It is in many respects a model of ambiguity or even self-contradiction.” AT & T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 119 S.Ct. 721, 738, 142 L.Ed.2d 835 (1999) (Justice Scalia, delivering the opinion of the Court). Even for the United States Supreme Court, interpreting the Telecommunications Act is no simple task. An understanding of the Act’s overall structure and purpose therefore provides an essential background for addressing the many issues raised by the parties in these consolidated cases. Until the 1990s, local telephone service was regarded as a natural monopoly. Id. at 726. States, therefore, granted exclusive franchises to one local exchange carrier (“LEC”) in each area. In exchange, the LECs were required to provide universal service and were subjected to pervasive regulation by state commissions. This legal arrangement encouraged LECs to develop extensive networks that branched out to reach every customer in a particular area. The networks were expensive to build and maintain, and duplication of a network was thought to be economically infeasible. In the 1990s, however, technological advances convinced Congress that competition in local telephone markets was not only possible but also desirable. Congress believed that consumers would reap the benefits of competition in the form of lower prices and better quality services. First Report & Order at ¶ 3, In re Implementation of Local Competition Provisions, 11 FCC Red. 15499 (1996) {“Local Competition Order ”) (listing the principal goals of the Act). Congress, therefore, designed the Act “to promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.” Telecommunications Act, quoted in Iowa Utils. Bd. v. F.C.C., 120 F.3d 753 (8th Cir.1997), rev’d in part on other grounds, 525 U.S. 366, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999). To achieve its goal of ending monopoly based local telecommunication services, Congress preempted state laws that granted exclusive franchises to incumbent local exchange providers (“ILECs”). Realizing that potential competitors would be deterred from entering local telecommunications markets if they had to build entire networks from the ground up before they could begin providing services, Congress also required ILECs to share their networks with new competitors referred to as competitor local exchange providers (“CLECs”). S. Conf. Rep. 104-230, at 148 (“it is unlikely that competitors will have a fully redundant network in place when they initially offer local service.”). The Telecommunications Act imposes the following requirements on ILECs. First, an ILEC must allow its competitors to “interconnect” their equipment to the ILEC’s network at “any technically feasible point,” thus enabling competitors to process telephone calls through the network. 47 U.S.C. § 251(c)(2)(B) (Supp. 1998). This interconnection must be “at least equal in quality” to that which the incumbent provides to itself. § 251(c)(2)(C). Second, an ILEC must provide access to “network elements,” on “an unbundled basis.” § 251(c)(3). A network element is defined broadly as “a facility or equipment used in the provision of a telecommunications service.” § 153(29). Competitors have a right to purchase network elements separately, “in a manner that allows requesting carriers to combine such elements in order to provide telecommunications service.” § 251(e)(3). In determining which network elements must be provided, the FCC was directed to consider whether access was “necessary” and whether the failure to provide such access would impair a CLEC’s ability “to provide the services that it seeks to offer.” § 251(d)(2). The rates ILECs may charge both for interconnection and unbundled network elements (“UNEs”) must be “based on the cost ... of providing the interconnection or network element.” § 252(d)(1). Also, both interconnection and UNEs must be provided “on rates, terms, and conditions that are just, reasonable, and nondiscriminatory.” § 251(c)(2)(D) and (c)(3). Finally, an ILEC must sell its complete retail services at wholesale prices so that competitors can resell those services to their customers. § 251(c)(4). Wholesale rates are retail rates minus the “costs that will be avoided” by selling to a competitor rather than a customer, such as marketing, billing, and collection. § 252(d)(3). ILECs are forbidden from imposing “unreasonable or discriminatory conditions or limitations” on the resale of these services. § 251(c)(4)(B). The Act’s requirements raise a host of questions when applied to a particular local telephone network. What is a network element? What kind of interconnection or level of unbundling is technically feasible? What are an ILEC’s costs of providing services? All such issues must be resolved for incumbents and new competitors to enter interconnection agreements allowing competitors to use incumbents’ networks. Parties, state commissions, and courts are to be guided in their efforts to answer such questions by regulations passed by the Federal Communications Commission (“FCC”). § 251(d)(1). Congress also designed an elaborate dispute resolution system. First, when an incumbent receives a request for interconnection, it may try to reach an agreement with its potential competitor through negotiations. § 252(a). In the event that these negotiations leave some issues unresolved, state utility commissions may arbitrate these disputes, § 252(b)(1), unless the state declines to act, in which case the disputes are arbitrated by the FCC. Congress required that all issues presented for arbitration should be resolved within nine months after the ILEC received the initial request for interconnection. § 252(b)(4)(C). Finally, federal courts hear appeals from the decisions of these state agencies or the FCC. § 252(e)(6) (providing for review in federal district courts). II. The PSC’s Proceedings A. The First Arbitration After the Telecommunications Act was passed in 1996, AT & T and SWBT began negotiating about an interconnection agreement, but these negotiations failed to resolve all of the issues between them. On July 29, 1996, AT & T filed a Petition for Arbitration with the PSC. On August 16, 1996, MCI filed a similar petition. The PSC consolidated the two cases. The PSC allowed the parties to file written testimony and held formal hearings including cross-examination between October 8 and October 17,1996. One key issue in this arbitration was the amount AT & T would be required to pay to use SWBT’s network. The parties presented evidence of the Total Element Long Run Incremental Cost (“TELRIC”) of providing this access, because FCC regulations then in effect mandated that this methodology be used to determine rates under the Telecommunications Act. See 47 C.F.R. §§ 51.503, 51.505 (1999). On October 15, 1996, however, the Eighth Circuit stayed these regulations in part because it found that the FCC lacked jurisdiction to issue them. Iowa Utils. Bd., 120 F.3d at 799. On December 11, 1996, the PSC entered an order setting interim rates using the TELRIC methodology. This order also required SWBT to allow AT & T to use its dark fiber and purchase its subloops separately, i.e., unbundled. On December 20, 1996, SWBT moved for rehearing on the grounds that the interim rates should not have been calculated under the stayed FCC regulations that mandated the TEL-RIC methodology. On January 22, 1997, the PSC denied the motion in a show order. The PSC next confronted the task of setting permanent rates. It ordered its staff to meet with SWBT personnel for two to three days each week in SWBT’s offices, “where software, data, and subject matter experts responsible for critical input values will be readily available.” [Order Granting Clarification and Denying Rehearing at 9, Record on Appeal (“ROA”) 1117]. AT & T would be excluded from these meetings because “SWBT will perhaps be required to disclose extraordinarily confidential information, including trade secret and other proprietary matter.” [M]. Similarly, staff would meet at AT & T’s offices to gather information, and SWBT was excluded from these meetings. Despite AT & T and SWBT’s objections, the PSC followed this investigative procedure. In its Order, the PSC had also announced that it would issue proposed rates and allow the parties to comment before setting permanent rates. [Id. at 9-10]. On June 9, 1997, the PSC issued a notice stating that the parties would have 30 days to comment on proposed rates before they were adopted. On July 31,1997, the PSC issued a Final Arbitration Order adopting permanent rates without previously allowing the parties to comment on any proposed rates. The order stated that “in the interests of due process, the Commission will allow the parties twenty days to move for reconsideration or clarification.” [Final Arb. Order at 2, ROA 1368]. During this twenty-day period, the order did not go into effect. The Final Arbitration Order referenced a lengthy Costing and Pricing Report issued by the PSC staff, and explained that it based its decision only on information included in the Report: “The [Report] contains several hundred pages and constitutes a thorough and exhaustive review of each and every cost factor which the Commission finds relevant to this arbitration.” [Id. at 1371], The staff considered only competing TELRIC models, even though SWBT had argued that historical costs should be used to set rates. In the Final Arbitration Order, the PSC adopted its staffs recommendations. On August 20, 1997, SWBT moved for rehearing arguing in part that the procedure used to set permanent rates violated numerous statutes and the federal constitution. The PSC denied the motion, arguing that its procedures were proper because it was conducting an arbitration rather than a civil trial. On October 10, 1997, the parties filed an interconnection agreement (“the Agreement”) consistent with the PSC’s prior orders. The Agreement included terms stating that SWBT would provide combinations of network elements even if these elements were separate in its own network. On October 30, 1997, SWBT filed a Notice of Clarification advising the PSC that the regulations requiring incumbents to provide combinations of network elements had been vacated by the Eighth Circuit and attempting to preserve its objection to providing combinations of network elements. [ROA 1551]. The Agreement was approved by the PSC on November 5, 1997. In a subsequent Order, the PSC rejected SWBT’s argument in the Notice of Clarification, noting that “the Eighth Circuit’s recent ruling in Iowa Utilities Board has not made SWBT’s and AT & T’s contract provisions illegal.” [ROA 1984]. B. The Second Arbitration On September 10, 1997, AT & T filed a second petition for compulsory arbitration, alleging that there were still unresolved issues about pricing additional unbundled network elements. On October 24, 1997, AT & T and SWBT filed a joint list of 160 remaining unresolved issues. On October 30, 1997, the PSC announced a different procedure to resolve these issues — a mediation followed by an arbitration. The PSC appointed its general counsel to be a Special Master for the proceeding. Under the announced procedures, the parties were first to file written testimony relevant to each disputed issue. The Special Master and staff were then to conduct a lengthy mediation. After the mediation, AT & T and SWBT were to file a Settlement Document identifying the issues that had been resolved in the mediation. They were also to file a Statement of Remaining Issues in “the form of a single pleading filed jointly by AT & T, SWBT and the Special Master.” [Order Adopting Procedural Schedule at 5, ROA 1748]. The Statement was to include AT & T and SWBT’s proposed language and the Special Master’s recommendation about which proposal should be adopted. AT & 'T and SWBT could subsequently file responses to the Special Master’s recommendations. The PSC would then issue an arbitration order- based on the documents filed and any technical expertise provided by its staff. This procedure was followed. On December 23,1997, the PSC issued a Report and Order largely accepting the Special Master’s recommendations. It also rejected AT & T’s proposal that SWBT be required to purchase all necessary licenses and “right to use agreements” necessary to allow AT & T to use SWBT’s network without incurring liability. However, it ordered SWBT to provide a list of all known licences applicable to the relevant network elements, to use its best efforts to facilitate AT & T’s attempts to obtain the necessary licences and agreements, and to negotiate for the provision of alternate elements if a necessary license could not be obtained. On March 4, 1998, the parties filed their agreement. The Agreement was approved on March 19, 1998. C. The Supreme Court’s Decision in Iowa Utilities Board On January 25,1999, the Supreme Court overturned parts of the Eighth Circuit’s decision in Iowa Utilities Board. Specifically, the Supreme Court held that the FCC had jurisdiction to promulgate regulations under the Telecommunications Act, including the regulations mandating the use of TELRIC methodology to measure costs. AT & T, 119 S.Ct. at 732-33. The Court expressly declined to rule on the issue of whether the TELRIC regulations are a valid interpretation of the Telecommunications Act. Id. at 728, n. 3. It is expected that the Eighth Circuit will address this issue when the case is remanded. Id. at 738. The Supreme. Court also vacated an FCC regulation listing network elements that incumbent providers of local telephone service would be required to make available to requesting carriers, on the grounds that these elements were chosen under a faulty interpretation of the Act’s necessity and impairment standards. Id. at 735 (interpreting 47 U.S.C. § 251(d)(2)). Finally, the high court upheld an FCC regulation requiring ILECs to provide network elements in combination that were already combined in the ILEC’s own networks. Id. at 738. ' Because the Supreme Court’s opinion was promulgated after this case had been briefed, the parties were allowed to submit supplemental briefing about the impact of the High Court’s decision. The parties were encouraged to discuss what issues in this case had been rendered moot by the decision, and what issues had been affected in some other way. III. Standard and Scope of Review In this appeal, the scope of review will be limited to the administrative record compiled by the PSC. The statutory language relevant to judicial review reads as follows: In any case in which a State commission makes a determination under this section, any party aggrieved by such determination may bring an action in an appropriate Federal district court to determine whether the agreement .or statement meets, the requirements of section 251 of this title and this section. 47 U.S.C. § 252(e)(6). Because the statute simply provides for district court review, without setting forth a specific standard applicable of review, the appeal is confined to the record and no de novo proceeding may be held. Guaranty Sav. & Loan Ass’n v. Federal Home Loan Bank Bd., 794 F.2d 1339, 1342 (8th Cir.1986) (quoting United States v. Carlo Bianchi & Co., 373 U.S. 709, 715, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963)); accord GTE South, Inc. v. Morrison, 6 F.Supp.2d 517, 523 (E.D.Va. 1998) (reaching same conclusion in Telecommunications Act case). In evaluating the record, the Court reviews the PSC’s findings of fact under the arbitrary and capricious standard. See Guaranty Savings & Loan Ass’n, 794 F.2d at 1343 (courts review factual determinations by agencies under arbitrary and capricious standard); GTE South, 6 F.Supp.2d at 523 (arbitrary and capricious standard should be used to review state commission decisions under Telecommunications Act); US West Communications, Inc. v. Hix, 986 F.Supp. 13, 19 (D.Colo.1997) (same). When applying the arbitrary and capricious standard, courts consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment ... Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. [We are] not empowered to substitute our judgment for that of the agency. Guaranty Savings & Loan Ass’n, 794 F.2d at 1343 (8th Cir.1986) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971)). This highly deferential standard of review is especially appropriate when reviewing findings of fact made by agencies enforcing the Telecommunications Act, because the findings may be highly technical and specific to any idiosyncrasies in the incumbent carrier’s network. The parties disagree about the standard of review to be applied to the PSC’s resolution of questions of law. AT & T and SWBT contend that the PSC’s legal conclusions are to be reviewed de novo, while the PSC contends that its interpretations of the Telecommunications Act are entitled to Chevron U.S.A Inc. v. Natural Resources Defense Council, Inc. deference. The Chevron court explained that federal courts should defer to the legal conclusions of administrative agencies that are based on permissible constructions of ambiguous statutes: When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute. 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Chevron court based this conclusion on at least two facts — Congress’s power to delegate policy decisions to administrative agencies, and the expertise of federal executive agencies. First, the Court explained If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation.... If this choice represents a reasonable accommodation of conflicting policies that were committed to the agency’s care by the statute, we should not disturb it unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned. Id. at 843-44,104 S.Ct. 2778 (citing United States v. Shimer, 367 U.S. 374, 382, 81 S.Ct. 1554, 6 L.Ed.2d 908 (1961)). Second, the Court noted that it should defer to agency conclusions “whenever ... a full understanding of the force of the statutory policy in the given situation has depended upon more than ordinary knowledge respecting the matters subjected to agency regulations.” Id. at 844, 104 S.Ct. 2778. Consistently, however, courts have held that interpretations of federal law by state agencies are not entitled to Chevron deference. See Orthopaedic Hosp. v. Belshe, 103 F.3d 1491, 1495 (9th Cir.1997), cert. denied, 522 U.S. 1044, 118 S.Ct. 684, 139 L.Ed.2d 632 (1998) (state agency interpretation of Medicaid Act reviewed de novo); Turner v. Perales, 869 F.2d 140, 141 (2d Cir.1989) (state agency interpretations of housing statute reviewed de novo); Amisub (PSL), Inc. v. State of Colo. Dep’t of Soc. Servs., 879 F.2d 789, 795-96 (10th Cir.), cert. denied, 496 U.S. 935, 110 S.Ct. 3212, 110 L.Ed.2d 660 (1990) (“The state agency’s determination of procedural and substantive compliance with federal law is not entitled to the deference afforded a federal agency!”). These courts have emphasized that “Chevron’s policy underpinnings emphasize the expertise and familiarity of the federal agency with the subject matter of its mandate and the need for coherent and uniform construction of a federal law nationwide. Those considerations are not apt [to a state agency].” Belshe, 103 F.3d at 1495-96 (quoting Turner, 869 F.2d at 141). Similarly, the district courts that have considered this issue in the context of the Telecommunications Act have concluded that state agencies interpreting this Act are not entitled to Chevron deference. See GTE South, 6 F.Supp.2d at 524 (legal conclusions by state commissions reviewed) (de novo); Hix, 986 F.Supp. at 19 (same). The Hix court reasoned that Chevron deference would be inappropriate because state commissions, unlike federal agencies, are not subject to congressional oversight, and because state commissions lack the expertise and nationwide perspective of federal agencies in implementing federal law. Hix, 986 F.Supp. at 17. Finally, a de novo standard of review for legal issues raised by the Telecommunications Act is consistent with the text of the Act. Congress provided that federal courts reviewing state commission decisions shall “determine whether the agreement or statement meets the requirements of section 251 of this title and this section.” 47 U.S.C. § 252(e)(6). This language does not suggest a deferential standard of review. The Court, therefore, will review de novo whether the PSC’s interpretation of the Act was correct. IV. Jurisdiction On January 23, 1998, the PSC and its officers “the State Defendants” filed a motion to dismiss based in part on Eleventh Amendment immunity. On April 30, 1998, the Court denied the motion. At that time, many federal courts had held that the Eleventh Amendment did not bar suits against state commissions and their officials. See, e.g., U.S. West Communications, Inc. v. MFS Intelenet, Inc., 35 F.Supp.2d 1221, 1229-30 (D.Or.1998); US West Communications, Inc. v. Public Serv. Comm’n of Utah, 991 F.Supp. 1299, 1301 (D.Utah 1998). These courts reasoned that states consented to suit by agreeing to arbitrate disputes arising under the Telecommunications Act. See, e.g., MFS Intelenet, 35 F. Supp.2d at 1229-30. Such participation was considered a voluntary waiver of Eleventh Amendment immunity. See, e.g., Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 238 n. 1, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985) (noting that states may voluntarily waive their Eleventh Amendment immunity by participating in a federal program). After this. Court denied the motion to dismiss, the Supreme Court rendered its decision in College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 119. S.Ct. 2219, 144 L.Ed.2d 605 (1999). In College Savings Bank, the Supreme Court overruled those cases which had held that states “constructively” waived their sovereign immunity by voluntarily participating in activities regulated by federal statutes. Id. at 2228 (overruling Parden v. Terminal Ry. of Ala. State Docks Dep’t, 377 U.S. 184, 84 S.Ct. 1207, 12 L.Ed.2d 233 (1964)). In Parden, the Supreme Court had allowed employees of a railroad owned and operated by the State of Alabama to bring an action against the State under the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. § 51. The Parden court reasoned as follows: By enacting the [FELA] ... Congress conditioned the right to operate a railroad in interstate commerce upon amenability to suit in federal court as provided by the Act; by thereafter operating a railroad in interstate commerce, Alabama must be taken to have accepted that condition and thus to have consented to suit. 377 U.S. at 192, 84 S.Ct. 1207 (quoted in College Sav. Bank, 119 S.Ct. at 2226). The College Savings Bank Court reversed Par-den, holding that state sovereign immunity was not subject to “Parden-style waivers.” Id. at 2229. However, the Supreme Court noted that Congress may still encourage states to voluntarily waive their immunity by promising a gratuity or gift to states that do so. Id. at 1231. The Court therefore distinguished two cases: Petty v. Tennessee-Missouri Bridge Comm’n, 359 U.S. 275, 79 S.Ct. 785, 3 L.Ed.2d 804 (1959); and South Dakota v. Dole, 483 U.S. 203, 107 S.Ct. 2793, 97 L.Ed.2d 171 (1987). Petty held that states consented to suit when they entered an interstate compact approved by Congress that included a provision subjecting them to suit. 359 U.S. at 280-81, 79 S.Ct. 785. South Dakota held that Congress may condition a grant of funds to states upon their taking certain actions that Congress could not constitutionally require them to take. 483 U.S. at 211-12, 107 S.Ct. 2793. The College Savings Bank Court concluded that Petty and South Dakota remained good law for the following reason: Under the Compact Clause ... States cannot form an interstate compact without first obtaining the express consent of Congress; the granting of such consent is a gratuity. So also, Congress has no obligation to use its Spending Clause power to disburse funds to the States; such funds are gifts. In the present case, however, what Congers threatens if the State refuses to agree to its condition is not the denial of a gift or gratuity, but a sanction: exclusion of the State from otherwise permissible activity- 119 S.Ct. at 2219. Thus, the question for this Court is whether the Telecommunications Act uses a gift or gratuity to entice states to waive their immunity, or whether it compels states to do so by excluding them from otherwise permissible activity. One district court has held that the rule of College Savings Bank barred federal court review of decisions by state commissions under the Telecommunications Act. Wisconsin Bell, Inc. v. Public Serv. Comm’n of Wis., 57 F.Supp.2d 710, 714-15 (W.D.Wis.1999). The court found that the Telecommunications Act imposed a sanction on states that refused to waive their immunity, by restricting their right to regulate telecommunications: [A] state’s continuing to regulate local telephone carriers is hardly the acceptance of a “gift” in the same way that accepting- highway funding is characterized in College Savings Bank. A state’s continued regulation of local enterprise (local telephone carriers) is an “otherwise permissible activity” that can yield no inference as to a state’s motivation for doing it. Id. at 715-16. The Court in this case, however, is not reviewing the state’s general regulation of the local telecommunications industry. Rather, it is reviewing the PSC’s interconnection order to determine if it complies with federal law. Absent Congressional authority, the PSC would have no right to participate in the unique dispute resolution process devised by Congress, in which the PSC is authorized to arbitrate disputes between private telecommunication companies. State commissions, however, may exercise this privilege only if they consent to federal court review of their actions. § 252(e)(6) (expressly providing for district court review of state commission actions). If a state prefers to retain its sovereign immunity, the FCC “shall assume the responsibility of the State commission under this section.” § 252(e)(5). “This statutory structure gives each state the option to involve itself in the regulatory scheme or to let the FCC act in its place.” MCI Telecommunications Corp. v. Illinois Commerce Comm’n, 183 F.3d 558, 565-66 (7th Cir.1999). Hence, the Act preserves existing state authority to regulate local telecommunications, but the Act does impose obligations on the state if it voluntarily chooses to be the arbiter of disputes involving interconnection agreements. For these reasons, the Telecommunications Act is analogous to the spending clause cases described in College Savings Bank The Telecommunications Act granted states a right that they previously lacked — the right to participate in the resolution of disputes between ILEC. and LEC. The states were free to decline this gratuity if they chose. Indeed, one other district court has already reached this conclusion. US West Communications v. Mecham, 2:98CV490K (D.Utah Aug. 16, 1999). If this Court were to reach the opposite conclusion, then states would be allowed to implement a federal dispute resolution scheme free from judicial review. Although Congress cannot force states to administer federal programs, when states voluntarily participate in such enterprises “the power of federal courts to enforce federal law thus presupposes some authority to order state officials to comply.” New York v. United States, 505 U.S. 144, 179, 112 S.Ct. 2408, 120 L.Ed.2d 120 (1992). Furthermore, the Supreme Court has emphasized, in dicta, that states participating in implementing the Act will be subject to federal oversight: “[Tjhere is no doubt ... that if the federal courts believe a state commission is not regulating in accordance with federal policy they' may bring it to heel.” Iowa Utils. Bd., 119 S.Ct. at 730, n. 6. For all of these reasons, the Court concludes that the state defendants voluntarily waived their: immunity from suit by conducting the arbitrations at issue in these cases. Furthermore, College Savings Bank in no way restricted the applicability of the Ex parte' Young doctrine to suits against state officials in .'their official capacities. Under the Young doctrine, “a federal court, consistent with the Eleventh Amendment, may enjoin state officials to conform their future1 conduct to the requirements of federal law.” Quern v. Jordan, 440 U.S. 332, 337, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979). For this reason, the Eleventh Amendment presents no barrier to federal court' cases against state officials seeking prospective compliance with federal law. Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 105, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984). The Supreme Court has recently affirmed the vitality of the Young doctrine. Alden v. Maine, 527 U.S. 706, 119 S.Ct. 2240, 2263, 144 L.Ed.2d 636 (1999). The Sixth Circuit and several district courts have already ruled that state commissioners could be sued under Young for violating the Act. Michigan Bell Tel. Co. v. Climax Tel., 186 F.3d 726, 730-33 (6th Cir.1999) (suit presented “straightforward Ex parte Young case.”); Public Serv. Comm’n of Utah, 991 F.Supp. at 1300; MFS Intelenet, 35 F.Supp.2d at 1229. Nor is Young’s applicability limited by .the Supreme Court’s decision in Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252, cert. denied, 517 U.S. 1133, 116 S.Ct. 1416, 134 L.Ed.2d 541 (1996). The Telecommunication Act’s provision for federal judicial review is far simpler than the “detailed remedial scheme” described in the Indian Gaming Regulatory Act challenged in Seminole Tribe. MCI Telecommunications Corp. v. Illinois Bell Tel. Co., 1998 WL 156678 at *11 (N.D.Ill. March 31, 1998) (reaching this conclusion), but see Wisconsin Bell, 57 F.Supp.2d at 713-14 (reaching the opposite conclusion). Therefore, even if the Court lacked jurisdiction over the PSC, these cases could proceed against the commissioners in their official capacities. Finally, to the extent the parties have raised issues related to the validity of regulations adopted by the FCC, this Court lacks jurisdiction. FCC regulations adopted pursuant to- the Telecommunications Act may only be challenged in the United States Court of Appeals. 28 U.S.C. § 2342(1) (“The court of appeals ... has exclusive jurisdiction to enjoin, set aside, suspend ... or to determine the validity of all final orders of the FCC.”); accord United States v. Any and All Radio Station Transmission Equip., 169 F.3d 548, 551 (8th Cir.1999) (“the court of appeals has exclusive jurisdiction to determine the validity of all final orders of the FCC.”). For the purposes of this proceeding, therefore, FCC regulations that have not been vacated are authoritative law. Southwestern Bell Tel. Co. v. Arkansas Pub. Servs. Comm’n, 738 F.2d 901, 906 (8th Cir.1984) (reversing district court for evaluating validity of FCC regulations because statute grants exclusive jurisdiction over this issue to appellate courts). V. Discussion On the merits, both AT & T and SWBT appeal from the PSC’s decision. SWBT raises the following challenges: (1) the pricing methodology used by the PSC violates the 1996 Act, undermines Congress’s intent, and raises constitutional difficulties; (2) the arbitration violated its constitutional right to due process of law; (3) the PSC unlawfully required SWBT to offer network elements in combination; (4) the PSC unlawfully expanded SWBT’s obligation to provide network elements; and (5) the PSC unlawfully failed to provide any means for SWBT to limit its liability to AT & T customers and failed to consider this cost in setting rates. AT & T raises the following challenges to the PSC’s decision: (1) the PSC violated the Act by erecting unnecessary and discriminatory restrictions on AT & T’s ability to access SWBT’s essential elements; and (2) the PSC unreasonably banned “end-user aggregation” and resale of promotional offerings of fewer than 90 days. The Court will address these issues in turn. A. Whether the PSC’s Pricing Decisions were Arbitrary and Capricious 1. Whether the PSC Should Have Used TELRIC Methodology SWBT originally asserted that the forward-looking TELRIC methodology applied by the PSC violated the Telecommunications Act or the United States Constitution. These claims have been rendered moot by the Supreme Court’s decision in Iowa Utilities Board, 525 U.S. 366, 119 S.Ct. 721, 142 L.Ed.2d 835. When SWBT raised these issues, the regulations requiring state commissions to apply TELRIC methodology had been vacated by the Eighth Circuit on the grounds that the FCC lacked the jurisdiction to promulgate them. Iowa Utils. Bd., 120 F.3d at 799. While this appeal was pending, the Supreme Court reversed the Eighth Circuit’s decision and held that the FCC did have jurisdiction to issue the TELRIC regulations. Iowa Utils. Bd., 119 S.Ct. at 733. It also remanded the case to the Eighth Circuit for further proceedings. Id. at 738. As noted earlier, validly promulgated FCC regulations are not subject to challenge in district courts. SWBT therefore asks this Court to defer ruling on its challenges to the PSC’s application of TELRIC methodology until the Eighth Circuit rules on the validity of the forward-looking TELRIC regulations on remand. The PSC agrees with SWBT’s position that review of the TELRIC issue is premature at this time. AT & T takes the opposite stance, and asks the Court to affirm the PSC’s application of TELRIC to set rates. The Court will not defer ruling on SWBT’s challenges to the validity of TEL-RIC methodology. Resolution of these issues should not be delayed because of the possibility that the Eighth Circuit may vacate the TELRIC regulations when reviewing them under the deferential Chevron standard. Because the TELRIC regulations are binding in this proceeding, the Court affirms the PSC’s decision to apply the TELRIC methodology to set rates. 2. Whether the PSC Applied TEL-RIC Arbitrarily and Capriciously Next, SWBT argues that even if the PSC were correct to apply TELRIC methodology, it “made numerous arbitrary adjustments” when computing forward-looking costs. First, SWBT asserts that the PSC arbitrarily reduced its estimate of nonrecurring costs by fifty percent. SWBT also argues that the PSC improperly excluded inflation from its pricing model when approving a three-year contract. Finally, SWBT asserts that the PSC removed many cost items from the rates of specific elements without then recategoriz-ing these items as “common costs.” The PSC failed to address these issues in its brief, but AT & T argued that the PSC’s decisions were justified. SWBT argues that “AT & T cannot fill the void left by the State agency’s failure to defend its decisions.” It is true that courts generally limit their review of agency rulemakings to the grounds upon which the agency relied. See Overton Park, 401 U.S. at 419, 91 S.Ct. 814 (“post hoc rationalizations” insufficient to support agency decision); Securities and Exch. Comm’n v. Chenery Corp., 318 U.S. 80, 88, 63 S.Ct. 454, 87 L.Ed. 626 (1943) (confining review of agency decision to “the grounds upon which the [agency] itself based its action.”). However, SWBT does not allege that AT & T is advancing new arguments upon which the PSC did not rely when it made its decisions at the administrative level. Rather, SWBT asserts that any arguments not made by the PSC in this proceeding should be deemed waived. AT & T has - standing to defend the PSC’s adjudication of its rights under the Telecommunications Act, and the Court will consider its arguments even if they were not advanced by the PSC in this litigation, as long as they are supported by the administrative record. See Farmers Union Cent. Exch. v. Federal Energy Regulatory Comm’n, 584 F.2d 408, 417 n. 22 (D.C.Cir.), cert. denied, 439 U.S. 995, 99 S.Ct. 596, 58 L.Ed.2d 669 (1978) (winning party in administrative proceeding may defend agency decision in federal court despite agency’s refusal to take a position in the litigation). Proceeding to the merits of SWBT’s arguments, the Court rejects SWBT’s contention that the PSC arbitrarily excluded 50% its nonrecurring costs (“NRCs”) for unbundled network elements (“UNEs”). NRCs are one-time costs that SWBT will experience when it leases its network to AT & T. The PSC decided to reduce SWBT’s estimate of NRC’s by 50% in its Arbitration Order of July 31, 1997. Attached to this order was a lengthy Costing and Pricing Report (“Report”) issued by the PSC Staff. In this Report, the PSC Staff noted that high NRCs created barriers to market entry: “Staff is not suggesting the cost of NRCs be set solely based upon the incentives they create. Staff does believe that is an important consideration when considering the validity of the information presented by each party and the effect these charges will have on the development of competition.” [Report at 129], SWBT argues that the PSC’s decision should be overturned because it impermissibly relied on this policy factor to reduce its estimate of NRCs. Having reviewed the Report, the Court is convinced that the PSC relied on the effect of NRCs on competition primarily analyze the credibility of the estimates provided by both parties. Because high NRCs discourage competition, SWBT would be expected to overestimate them, while AT & T would be expected to underestimate them. Furthermore, the PSC based its decision to reduce SWBT’s NRCs on flaws in the data from which SWBT compiled its estimate of its NRCs. The PSC Staff expressed concern that SWBT’s estimate of labor time was based upon evidence provided by subject matter experts, rather than time and motion studies:“As the labor estimate is the primary input into the NRCs, its accuracy is of utmost importance.” [Report at 128]. The Staff also- noted that SWBT’s labor costs were double-counted. They were included in its estimate of NRCs and in the “labor factors” included in other costs. [M], The Staff explicitly based its recommendation on these two problems with SWBT’s estimate: “Given that SWBT’s estimation of these NRCs is based solely on the opinions of [subject matter experts] and the fact that at least a portion of these NRCs are recovered through the cost factors applied to UNEs, Staff cannot recommend that the Commission accept the NRCs proposed by SWBT.” [Id. at 131]. Thus, the PSC Staffs reference to a policy factor does not render their measurement of SWBT’s NRC’s arbitrary and capricious or violative of the Telecommunications Act. SWBT next argues that the PSC improperly excluded inflation from its pricing model when it approved a three-year contract. The PSC Staff noted that the cost of labor and capital increases over time, but reasoned that this inflation would be offset by increased efficiency. [Id. at 126]. SWBT argues that because the PSC’s forward-looking methodology already assumed the use of the most efficient technology available, productivity gains that could occur during the duration of the contract had already been taken into account. For this reason, SWBT argues that inflation should have also been included in the pricing model. The PSC Staff specifically considered and rejected this argument in its Report. Id. The staff reasoned that the estimates of operating and maintenance expenses were “based upon historic data from the current network.” Id. Thus, the estimates did “not reflect the productivity gains associated with the new forward-looking technology.” Id. The PSC’s finding that the effects of inflation would be offset by gains in productivity is neither arbitrary nor capricious. Therefore, its ruling will be upheld. Finally, SWBT argues that the PSC Staff failed to modify the “common cost allocator” to accord with other adjustments it made. Common costs are those that cannot be attributed to a specific network element. Overhead and administrative expenses are examples of common costs. These costs are incorporated into the pricing model by including a multiplier to the rate charged for each network element. This multiplier is the common cost allocator. The PSC adopted the common cost allocator proposed by SWBT. Nevertheless, SWBT argues that when the PSC Staff removed some of the cost items from the rates for network elements, it should have recategorized “at least some of’ these rejected network element costs as common costs and adjusted the common cost allocator accordingly. [SWBT Sugg, at 36]. SWBT has not shown that the PSC’s decision was arbitrary or capricious, because it has failed to note any specific costs that should have been recharacterized as common costs. SWBT has not demonstrated that any of the costs excluded by the PSC were even related to common costs such as overhead and administrative expenses. Thus, SWBT has fallen far short of demonstrating that the PSC acted arbitrarily or capriciously in failing to recharacterize the excluded costs as common costs. B. Whether the PSC’s Were Adequate 1. Whether the PSC Violated SWBT’s Right to Due Process SWBT’s due process argument originally focused on its complaint that the PSC refused to allow it to submit evidence relevant to the selection of a pricing methodology and to its historic costs. [SWBT Sugg, at 23]. SWBT asserted that the PSC should have used historic costs to set rates, and that its failure to consider these costs violated due process. Because the Supreme Court upheld the TELRIC regulations in Iowa Utilities Board, however, SWBT can no longer make this argument. As explained in the previous section, these regulations mandate that rates be set using forward-looking costs rather than historic costs. Thus, SWBT suffered no prejudice from the PSC’s refusal to consider evidence of historic costs. Nevertheless, in its supplemental briefing SWBT continued to advance a due process challenge. SWBT’s due process argument now focuses on additional procedures it claims were constitutionally required, without alleging how the PSC’s decisions would have been different if these procedures had been used. To determine whether agency procedures accord with the constitutional guarantee of due process, courts examine the context of each case. Different amounts of process are due in different situations: “Due process is flexible and calls for such procedural protections as the particular situation demands.” Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972); accord Cafeteria and Restaurant Workers Union, Local 473, AFL-CIO v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 6 L.Ed.2d 1230, cert. denied, 368 U.S. 869, 82 S.Ct. 22, 7 L.Ed.2d 70 (1961); Hannah v. Larche, 363 U.S. 420, 442, 80 S.Ct. 1502, 4 L.Ed.2d 1307, reh’g denied, 364 U.S. 855, 81 S.Ct. 33, 34, 5 L.Ed.2d 79 (1960). The burden of proving that constitutional guarantee of due process has been violated rests with the party claiming that the violation occurred. See, e.g., Keith Fulton & Sons, Inc. v. New England Teamsters and Trucking Industry Pension Fund, Inc., 762 F.2d 1137, 1140 (1st Cir.1985) (citing Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15, 96 S.Ct. 2882, 49 L.Ed.2d 752 (1976)). The parties present the Court with three competing lines of cases that they claim define the requirements of due process in this case. The PSC cites cases upholding voluntary arbitration procedures against due process attacks. SWBT relies on cases interpreting the requirements of due process in the context of administrative hearings. Finally, AT & T cites cases describing the requirements of due process in agency rulemaking proceedings. However, the PSC’s arbitrations were not rule-making proceedings, true adjudications, or voluntary arbitrations. The PSC’s arbitra-tions were obviously not voluntary, because SWBT was required to participate. More process is required when arbitration is mandatory than when it is voluntary: The simple and ineradicable fact is that voluntary, arbitration and compulsory arbitration are fundamentally different if only because one may, under our system, consent to almost any restriction upon or deprivation of a right, but similar restrictions or deprivations if compelled by government must accord with procedural and substantive due process. United States v. American Soc’y of Composers, Authors, and Publishers, 708 F.Supp. 95, 96-97 (S.D.N.Y.1989). Also, while the arbitrations included aspects of both rulemaking and adjudication, they do not fit neatly into either category. To determine whether an agency proceeding is a-rulemaking or an adjudication, courts consider several factors. One factor is whether the agency action “singlefs] out any particular [party] for special consideration based on its own peculiar circumstances.” United States v. Florida East Coast Ry., 410 U.S. 224, 246, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973), aff'd, 417 U.S. 901, 94 S.Ct. 2595, 41 L.Ed.2d 207 (1974). Another factor is whether the agency’s decision is prospective or retrospective. Virgin Islands Hotel Ass’n, Inc. v. Virgin Islands Water and Power Auth., 476 F.2d 1263, 1268 (3d Cir.), cert. denied, 414 U.S. 1067, 94 S.Ct. 576, 38 L.Ed.2d 472 (1973). Retrospective decisions are more likely to be adjudications. Finally, courts consider whether historical or policy factors are more important to the decision. Id. Applying these factors to this case reveals that the arbitrations combined aspects of both adjudication and rulemaking. While the PSC’s proceedings were quite fact-specific, the resulting decision was prospective and rested on both historical and policy factors. Thus, none of the lines of cases cited by the parties controls this case. Only a few cases have interpreted the Due Process Clause in the context of mandatory arbitrations like those conducted by the PSC. Essentially, these precedents have applied the balancing of public and private interests described in Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). See, e.g., Republic Indus., Inc. v. Teamsters Joint Council No. 83 of Va. Pension Fund, 718 F.2d 628, 640 (4th Cir.), cert. denied, 467 U.S. 1259, 104 S.Ct. 3553, 82 L.Ed.2d 855 (1984) (“Congress may require arbitration so long as fair procedures are provided and ultimate judicial review is available”); see also Lyeth v. Chrysler Corp., 929 F.2d 891, 896 (2d Cir.1991). Mathews balanced three factors to determine the requirements of due process: First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Id. Under the Mathews balancing test, administrative agencies need not follow the same procedures as federal district courts: The judicial model of an evidentiary hearing is neither a required, nor even the most effective, method of decision-making in all circumstances. The essence of due process is the requirement that “a person in jeopardy of serious loss [be given] notice of the case against him and ’ an opportunity to meet it.” Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, 171-172, 71 S.Ct. 624, 95 L.Ed. 817 (1951) (Frank-further, J, concurring). All that is necessary is that the procedures be tailored, in light of the decision to be made, to “the capacities and circumstances' of those who are to be heard,” Goldberg v. Kelly, 397 U.S. 254, 268-269, 90 S.Ct. 1011, 25 L.Ed.2d 287 (footnote omitted) to insure that they are given a meaningful opportunity to present their case. Id. at 348-^9, 96 S.Ct. 893. The private interest at stake in these arbitrations was obviously quite large. SWBT had invested billions of dollars in its network, and the PSC proceedings determined the terms and conditions under which SWBT would be required to lease that network to its competitor. However, the governmental interest in the ar-bitrations was also significant. Congress passed the Telecommunications Act “to promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.” Telecommunications Act of 1996, Pub.L. No. 104-104 (1996), quoted in Iowa Utils. Bd., 120 F.3d at 791-92. To secure these advantages for consumers as soon as possible, Congress required that interconnection agreements be arbitrated within nine months of a potential competitor’s request for interconnection. Id. at 791-92; 47 U.S.C. § 252(a); 47 U.S.C. § 252(b)(1). Despite these deadlines, the first arbitration took more than one year, and the second took more than six months. After reviewing the record, the Court is convinced that the PSC and the parties worked diligently during this period to develop the interconnection agreement. In short, the private interest at stake in the arbitration weighs in favor of extensive procedures, while the public interest weighs in favor of a prompt resolution. The remaining question is whether the value of the additional safeguards proposed by SWBT outweighs their cost. SWBT points to four procedural safeguards that it alleges that the PSC failed to provide at various times during the two arbitrations at issue. First, SWBT argues that the PSC should have avoided ex parte contacts during the permanent pricing phase of the first arbitration. Second, SWBT asserts that the PSC should have placed all information upon which it relied in the formal record. Third, SWBT asserts that the PSC should have allowed it to cross-examine AT & T’s witnesses during both arbitrations. Finally, SWBT contends that it should have been allowed to present testimony directly to the PSC during the second arbitration. As SWBT’s counsel admitted in oral argument, SWBT has made no specific allegation that it was prejudiced by the PSC’s failure to follow its recommended procedures. Most claims of due process violations require a specific allegation of prejudice. Estes v. State of Texas, 381 U.S. 532, 542, 85 S.Ct. 1628, 14 L.Ed.2d 543, reh’g denied, 382 U.S. 875, 86 S.Ct. 18, 15 L.Ed.2d 118 (1965); accord Griffin-Bey v. Bowersox, 978 F.2d 455, 456 (8th Cir. 1992); United States v. Hood, 593 F,2d 293, 296 (8th Cir.1979). This rule is also applied in administrative cases. See, e.g., United States v. Torres-Sanchez, 68 F.3d 227, 230 (8th Cir.1995) (due process challenge to deportation hearing); Citizens State Bank of Marshfield, Mo. v. Federal Deposit Ins. Corp.,. 751 F.2d 209, 213-14 (8th Cir.1984) (due process challenge to FDIC adjudication). In the absence of a specific allegation of prejudice, a litigant making a due process challenge must show that the “procedure employed by the State involves such a probability that prejudice will result that it is deemed inherently lacking in due process.” Estes, 381 U.S. at 544, 85 S.Ct. 1628 (holding that the use of television cameras in the courtroom violated a criminal defendant’s right to due process, even though it was difficult to discern exactly how the defendant had been'prejudiced). Because SWBT has made no specific allegation of prejudice, it must show that the PSC’s procedures were inherently lacking in due process such that prejudice should be presumed. Regarding ex parte contacts, the Court first notes that SWBT has not established that the PSC relied on any secret information. The PSC’s order adopting permanent rates attached a lengthy report detailing all of the facts upon which it relied: “The Costing and Pricing Report contains several hundred pages and constitutes a thorough and exhaustive review of each and every cost factor which the Commission finds relevant to this arbitration.” [ROA at 1371], The Costing and Pricing Report was included in the record certified to this Court for review. “The designation of the administrative record, like any established administrative procedure, is entitled to a presumption of administrative regularity. The court assumes the agency properly designated the administrative record absent clear evidence to the contrary.” Bar MK Ranches v. Yuetter, 994 F.2d 735, 740 (10th Cir.1993) (citation omitted). Thus, the Court will presume that all of the information underlying the PSC’s order was set forth in the Costing and Pricing Report. Nevertheless, SWBT makes a'strong argument that the ex parte contacts rendered the arbitration at issue inherently-lacking in due process. The PSC relied heavily on its staffs recommendations when setting rates, and these staff members had met extensively with AT & T before making their recommendations. Such contact between close aides to the decisionmaker and a party about the merits of a decision ordinarily should occur only in the presence' of the other party. See Home Box Office, Inc. v. FCC, 567 F.2d 9, 57 (D.C.Cir.) cert. denied, 434 U.S. 829, 98 S.Ct. 111, 54 L.Ed.2d 89 (1977) (decisionmakers should refuse to engage in ex parte communication with interested parties). The prohibition of ex parte contacts ensures that parties may respond to the evidence against them and explain any errors in their opponent’s analysis. Thus, the PSC’s decision to meet separately with AT & T and SWBT was highly irregular, and could violate due process if it had prejudiced SWBT. After lengthy deliberation, however, the Court concludes that the PSC’s investigation was not so irregular that prejudice should be presumed. The contacts between PSC staff and AT & T were not secret. Rather, the PSC explained to both parties the procedure it would follow to gather information. Having gathered the relevant information, the PSC then shared all relevant facts with SWBT, and allowed it to move for reconsideration. If SWBT found some flaw in the PSC’s facts, it could have corrected it at that time. See Home Box Office, 567 F.2d at 57 (any ex parte contacts that occur should be summarized on the record so that opposing parties may respond); Overton Park, 401 U.S. at 420, 91 S.Ct. 814 (in most cases, court should not require testimony regarding the evidence an agency considered to reach a decision). Thus, the Court con-eludes that SWBT’s due process rights were not violated by the ex parte contacts between PSC staff and AT & T. SWBT further asserts that the PSC failed to place the evidentiary basis of its decisions in the formal record for this Court to review. Due process ordinarily requires that agencies place the full evi-dentiary basis of their decisions in the record, so that courts can conduct meaningful appellate review. United States Lines, Inc. v. Federal Maritime Comm’n, 584 F.2d 519, 533 (D.C.Cir.1978). SWBT emphasizes that the PSC failed to conduct the second arbitration on the record. The procedure used in the second arbitration was a hybrid of mediation and arbitration. The mediation was an off the record proceeding designed to help the parties reach agreements about contested issues. At the time of the mediation, the parties were aware that any remaining disputes would be arbitrated by the PSC. Because none of the issues resolved in the mediation are contested in this case, the Court’s review is not at all impeded by the lack of a formal record of the mediation. SWBT also notes that the testimony submitted before the mediation was not admitted into evidence. SWBT concedes, however, that “this testimony was of minimal use even to the Special Master.” [SWBT Sugg, at 20], Thus, SWBT has not shown that judicial review is in any way impeded by the omission of this testimony from the record presented to this Court. Indeed, the voluminous record submitted has proven more than adequate to allow this Court to review each challenge raised by the parties to the PSC’s decisions. SWBT also argues that all testimony should have been cross-examined. However, such a procedure would have greatly increased the cost of the arbitra-tions without significantly improving the accuracy of the PSC’s decisions. During the arbitrations, the PSC often relied on written testimony. Requiring these witnesses to testify only in person would have greatly lengthened the PSC’s proceedings. Also, the probable value of cross-examination in a case involving technical issues is less than in a case in which a witness’s credibility and veracity are at issue. “A number of courts have held in cases which ... involved complex and technical factual controversies, that written submissions, possibly supplemented by oral argument, suffice.” Virgin Islands Hotel Ass’n, 476 F.2d at 1268; accord Louisiana Ass’n of Independent Producers and Royalty Owners v. F.E.R.C., 958 F.2d 1101, 1113 (D.C.Cir.1992) (cross-examination not required on a “purely technical issue capable of being resolved not on the basis of a witness’s motive or memory, but rather upon an analysis of the conflicting data and a reasoned judgment as to what the data shows.”). Technical cases like this one typically turn on inferences to be made from fact, rather than upon the credibility of witnesses. Such inferences are best supported by argument, rather than live testimony. The record reveals that SWBT was provided with several opportunities to present such argument. For this rea