The court of appeals affirmed a judgment of the district court. The court held that under the Telecommunications Act of 1996, states were not authorized to implement §271 terms and rates in interconnection agreements.

Qwest Corporation, an incumbent local exchange carrier in Arizona and an AT&T-subsidiary Bell operating company (BOC), was unsuccessful in voluntarily negotiating an interconnection agreement with DIECA Communications, Inc., d/b/a Covad Communications Company, a competitive local exchange carrier, under §252(a) of the Telecommunications Act of 1996 (the Act).