  Recent state-of-the-art calculations of A-values and electron impact
excitation rates for Fe III are used in conjunction with the Cloudy modeling
code to derive emission line intensity ratios for optical transitions among the
fine-structure levels of the 3d$^6$ configuration. A comparison of these with
high resolution, high signal-to-noise spectra of gaseous nebulae reveals that
previous discrepancies found between theory and observation are not fully
resolved by the latest atomic data. Blending is ruled out as a likely cause of
the discrepancies, because temperature- and density-independent ratios (arising
from lines with common upper levels) match well with those predicted by theory.
For a typical nebular plasma with electron temperature $T_{\rm e} = 9000$ K and
electron density $\rm N_{e}=10^4 \, cm^{-3}$, cascading of electrons from the
levels $\rm ^3G_5$, $\rm ^3G_4$ and $\rm ^3G_3$ plays an important role in
determining the populations of lower levels, such as $\rm ^3F_4$, which provide
the density diagnostic emission lines of Fe III, such as $\rm ^5D_4$ - $\rm
^3F_4$ at 4658 \AA. Hence further work on the A-values for these transitions is
recommended, ideally including measurements if possible. However, some Fe III
ratios do provide reliable $N_{\rm e}$-diagnostics, such as 4986/4658. The Fe
III cooling function calculated with Cloudy using the most recent atomic data
is found to be significantly greater at $T_e$ $\simeq$ 30000 K than predicted
with the existing Cloudy model. This is due to the presence of additional
emission lines with the new data, particularly in the 1000--4000 \AA\
wavelength region.
