Summary
In Ohio Central Telephone Corp. v. Pub. Util. Comm., 166 Ohio St. 180, this court so held on a record similar to, but less compelling than, the instant one.
Summary of this case from Ohio Bell Telephone Co. v. Pub. Util. CommOpinion
No. 34789
Decided February 27, 1957.
Telephone companies — "Extended-area telephone service" defined — Public Utilities Commission — Jurisdiction — To order extended-area service — To fix fair and reasonable charges to benefited subscribers — To adjust differences between telephone companies involved in such service.
1. "Extended-area telephone service," in relation to separate telephone companies, is that type of service in which a subscriber of one telephone exchange may call a subscriber of another exchange without being required to pay a separate charge therefor.
2. In a proceeding properly instituted under Section 4905.26, Revised Code, the Public Utilities Commission may, under authority of Sections 4905.22 and 4905.38. Revised Code, order two separate telephone companies within its jurisdiction to inaugurate and maintain extended-area service between their respective exchanges in the same locality, where it is made to appear that the needs and convenience of the community demand such service.
3. In the situation described, the Public Utilities Commission possesses jurisdiction to fix or approve fair and reasonable telephone charges to the benefited subscribers of the affected exchanges to meet any increased costs of providing such extended-area service and has jurisdiction to adjust any differences or disputes which may exist or arise between the telephone companies involved, in the inauguration and rendition of such extended-area service.
APPEAL from the Public Utilities Commission.
On November 23, 1955, the Public Utilities Commission, after an extended hearing, issued an order requiring the Ohio Central Telephone Corporation and the Northern Ohio Telephone Company, separate utilities, to inaugurate extended-area dial telephone service on a two-way basis between the Congress exchange of Norther Ohio and the Wooster exchange of Ohio Central.
Ohio Central perfected an appeal from such order to this court, challenging the legality and reasonableness of the order, and the controversy is now here for determination on such questions.
Messrs. Herbruck, Shetler, Kattman Hamaker and Mr. Taylor C. Burneson, for appellant.
Mr. C. William O'Neill, attorney general, Mr. Ralph N. Mahaffey and Mr. Paul Tague, Jr., for appellee.
In June of 1955, the commission, on its own motion (Section 4905.26, Revised Code), instituted a proceeding whereby the two telephone companies above mentioned were cited to show cause why they should not be required to provide reciprocal extended-area service between their respective Congress and Wooster exchanges, both exchanges being located in Wayne County, Ohio, some 13 miles apart.
Northern Ohio in its answer expresses its willingness to inaugurate such service under specified conditions, but appellant, in its answer, objects for several stated reasons, including the claim that there is not a sufficient community of interest between the localities involved to warrant such an arrangement.
"Extended-area service" in relation to separate telephone companies may be defined as that type of service in which a subscriber of one telephone exchange may call a subscriber of another exchange without being required to pay a separate charge therefor.
Although this type of service is not altogether new, it is becoming more and more prevalent to meet the needs, requirements and convenience of the changing and expanding conditions of present-day activities and living. Increasingly, telephone subscribers wish and demand it.
At the hearing before the commission, a number of witnesses testified and a number of exhibits were introduced. From an examination of the record, it appears that there is a considerable interchange of communications between the two exchanges, involving professional, business, emergency and social matters. The great majority of people residing in the Congress area transact their business in the city of Wooster, which is the county seat and the largest municipality of Wayne County. There was testimony on the part of several witnesses that extended-area service, free from toll charges, is necessary and expedient for communicating with physicians, veterinarians, artificial inseminators, farm implement dealers, fire-fighting organizations and county officials.
A May 1953 survey and study made of its toll traffic by Northern Ohio disclosed that in that month 152 of its subscribers made 710 toll calls from its Congress exchange to appellant's Wooster exchange, and the same type of survey and study made by appellant at another time showed an average of 20 calls per day from its Wooster exchange to the Congress exchange.
Notwithstanding that appellant's Wooster exchange has approximately 9,700 subscribers and Northern Ohio's Congress exchange has but about 200, it would seem apparent that the number of toll calls from the Congress exchange to the Wooster exchange and vice versa are not radically disproportionate.
It is not altogether clear from the record as to the exact cost of establishing the extended-area service ordered by the commission. However, it is plain that such cost would not be exhorbitant or prohibitive. It would involve an application and allocation of facilities and an actual all-round expenditure in a sum less than $12,000.
Public utilities, including telephone companies, unlike many other businesses, must serve public convenience and necessity and are not a law unto themselves. A principal purpose of the creation of the Public Utilities Commission was to use it as a means to secure for the public adequate and efficient service from utilities at a fair and reasonable cost. However, being an administrative body, the commission may exercise only the powers and authority which have been conferred upon it by the General Assembly.
Section 4905.22, Revised Code, provides:
"Every public utility shall furnish necessary and adequate service and facilities, and every public utility shall furnish and provide with respect to its business such instrumentalities and facilities, as are adequate and in all respects just and reasonable. All charges made or demanded for any service rendered, or to be rendered, shall be just, reasonable, and not more than the charges allowed by law or by order of the Public Utilities Commission, and no unjust or unreasonable charge shall be made or demanded for, or in connection with, any service, or in excess of that allowed by law or by order of the commission."
Although appellant argues to the contrary, it is our opinion that the quoted section empowers the commission to inquire into and order extended-area telephone service, where public convenience and necessity demand it (compare Section 4905.38, Revised Code) and where, in the light of existing conditions and requirements, such an order is not unreasonable or unlawful.
Further contesting the order in issue, appellant cites and relies on Section 4905.49, Revised Code, which in part recites:
"No consolidation, purchase, lease, or contract by which two or more telephone companies merge or operate their lines or plants jointly or in connection with each other, shall become valid or effective until after the commission has ascertained and determined the valuation, as provided in such chapters upon which the rates, tolls, charges, and rentals are based and has fixed and determined such rates, tolls, charges, and rentals to be so charged."
As we read that and other related sections, they have reference to a voluntary union or association of telephone companies, wherein by agreement between or among them they join their facilities in rendering a combined service, and such section is not contemplative of a situation such as confronts us here, where two separate companies are ordered by the commission to join their facilities in the public interest.
Naturally, those telephone subscribers benefited and accommodated by extended-area service will, in all probability, have to pay for it in the form of increased rates. That problem is one for the future, and we think there is abundant statutory authority to enable the commission to establish new rates which will be fair and reasonable as to the benefited subscribers of each telephone company and which will, at the same time, insure each company fair treatment, as between themselves, and a fair return to each based on all the factors which should and must be taken into account in arriving at such a result. See Sections 4905.50 and 4905.51, Revised Code.
Appellant asserts that the commission predicated its extended-area service order upon evidence improperly received and considered. We have examined the record and are convinced that there was ample competent evidence before the commission to support and justify its order to meet existing needs and demands in the territory involved. See Chesapeake Ohio Ry. Co. v. Public Utilities Commission, 163 Ohio St. 252, 126 N.E.2d 314.
For the reasons stated, the initial order of the commission requiring the two telephone companies to inaugurate extended-area service between their respective Congress and Wooster exchanges is affirmed.
Order affirmed.
WEYGANDT, C.J., STEWART, BELL, TAFT, MATTHIAS and HERBERT, JJ., concur.
In opposing the order of the commission, Ohio Central took the position that it would be required to furnish without charge to subscribers of Northern Ohio the value of all its property devoted to furnishing service to its Wooster exchange subscribers. It is obvious that, by the order here involved, Ohio Central will be required to furnish to the Congress exchange subscribers of Northern Ohio the value of all Ohio Central's property devoted to furnishing service to its Wooster exchange subscribers. If Ohio Central were required to do this without any compensation either to it or to its subscribers, it is clear that such a requirement would not only constitute a disregard of the statutes of this state but also of Article XIV, Amendments, of the Constitution of the United States, prohibiting the taking of property without due process of law.
It was argued by Northern Ohio that Wooster exchange subscribers of Ohio Central will derive the same advantages from the order in the instant case as those derived by Congress exchange subscribers of Northern Ohio, because each telephone call between the two exchanges will involve a subscriber from each exchange. The fallacy of any such argument can be readily demonstrated by consideration of what makes telephone service of any value, as well as a comparison of the elements of value previously and subsequently available to Wooster exchange subscribers of Ohio Central and to Congress exchange subscribers of Northern Ohio.
A telephone service which does not enable a subscriber to contact anyone will obviously have no value. Generally speaking, a telephone service which enables a subscriber to contact 48 other subscribers without any toll charge per call will obviously have much more value than such a service which enables him to contact only one other subscriber. Before the order of the commission in the instant case, a Wooster exchange telephone subscriber of Ohio Central could contact approximately 9,700 other parties without any toll charge. On the other hand, a Congress exchange subscriber of Northern Ohio could contact only about 200 other parties without a toll charge. After the order of the commission in the instant case, a Wooster exchange subscriber of Ohio Central will be able to contact only about 200 more subscribers. He will be to that extent only 200/9,700 times or about 2 per cent better off than he was before. On the other hand by reason of that order of the commission, a Congress exchange subscriber of Northern Ohio will be able to contact approximately 9,700 additional parties. He will be to that extent about 9,700/200 times or 4,850 per cent better off than he was before. Stated another way, after the order of the commission involved in the instant case, each Congress exchange subscriber of Northern Ohio will be able to contact approximately 9,700 additional parties without any toll charge, although each Wooster exchange subscriber of Ohio Central will be able to contact only approximately 200 additional parties without a toll charge. Thus, such a subscriber of Northern Ohio will be afforded an opportunity for about 48 1/2 times as many additional contacts as will be such a subscriber of Ohio Central.
Undoubtedly, it was considerations such as this that led the General Assembly to provide in Section 4905.49, Revised Code, what the commission should do when two telephone companies by either "consolidation, purchase, lease, or contract" undertake to operate "their lines or plants * * * in connection with each other," as these two telephone companies have been ordered to do in the instant case. That statute specifically provides against such operation "until after the commission has ascertained and determined the valuation * * * upon which the rates, tolls, charges, and rentals are based and has fixed and determined such rates, tolls, charges, and rentals to be so charged."
Here, as to the subscribers in this extended area (both Central Ohio and Northern Ohio subscribers), not only the property used in furnishing service to Northern Ohio's Congress exchange but also the property used in furnishing service to Ohio Central's Wooster exchange represents property, upon the valuation of which rates, tolls and charges in these two exchanges would have to be based if the two companies had agreed upon such extended-area service instead of being ordered to render it.
After the order of the commission in the instant case, a Congress exchange subscriber of Northern Ohio will certainly have the same facilities devoted to his service as will a Wooster exchange subscriber of Ohio Central. In view of the greater distances involved in furnishing such service to such Northern Ohio subscribers, it is conceivable that rates to such Northern Ohio subscribers might be higher than those to such Ohio Central subscribers. Buckeye Lake Chamber of Commerce v. Public Utilities Commission, 161 Ohio St. 306, 119 N.E.2d 51. However, for the reasons advanced by this court for that decision, it is inconceivable (in the absence of some other factor such as for example inferiority of Northern Ohio equipment) that rates to such Northern Ohio subscribers could then be lower than those to such Ohio Central subscribers. Certainly, to allow such Northern Ohio subscribers to have the same service as such Ohio Central subscribers at lower rates than charged to those Ohio Central subscribers would amount to the kind of discrimination which the law does not tolerate in the rendering of public utility services. F. R. Lazarus Co. v. Public Utilities Commission, 162 Ohio St. 223, 122 N.E.2d 783.
Since rates charged to Congress exchange subscribers of Northern Ohio are now substantially less than those charged to Wooster exchange subscribers of Ohio Central, it is not unlikely that, after the order involved in the instant case, either the rates charged to such Northern Ohio subscribers will be too low or those charged to such Ohio Central subscribers will be too high. In determining the reasonableness of rates in the future, it is obvious that the valuation, upon which those rates must be determined, is the valuation of all the property used to furnish the service rendered, i.e., the value of the property of both Northern Ohio and of Ohio Central used in rendering this extended-area service. If the result of such rate fixing is an increase of what are now the lower rates paid by Congress exchange subscribers of Northern Ohio, such increase will probably have to be paid either directly or through Northern Ohio to Ohio Central because such increase will probably be caused not merely by the value of any property of Northern Ohio devoted to rendering this public utility service but by the admittedly much greater value of such property of Ohio Central so devoted. If rates of Wooster exchange subscribers of Ohio Central were not too low before the order involved in the instant case, raising of rates of Congress exchange subscribers of Northern Ohio should enable some lowering of rates of such Ohio Central subscribers.
I concur in the judgment because I believe that nothing in the final order of the commission, or in paragraph three of the syllabus herein, may be considered as deciding or otherwise prejudging the question, whether Congress exchange subscribers of Northern Ohio, either directly or through that company, can be required to pay something to Ohio Central for the increase in the value of telephone service which such Northern Ohio subscribers will receive by reason of the facilities and property of Ohio Central which will be made available to them by the order of the commission in the instant case. I am concurring because of that belief and because Ohio Central has not asked for or been denied compensation from either Northern Ohio or its subscribers for the services which the order of the commission in the instant case will require it to render to Northern Ohio and its subscribers.
STEWART, J., concurs in the foregoing concurring opinion.