Ram Broadcasting of Indiana, Inc. v. MCI Airsignal of Indiana, Inc., 2-983A351
| Decision Date | 28 August 1985 |
| Docket Number | No. 2-983A351,2-983A351 |
| Citation | 484 N.E.2d 26 |
| Parties | RAM BROADCASTING OF INDIANA, INC., and Radiotelephone Company of Indiana, Inc., Respondents-Appellants v. MCI AIRSIGNAL OF INDIANA, INC., Petitioner-Appellee, and Indiana Bell Telephone Company, Incorporated, United Telephone Company of Indiana, Incorporated, General Telephone Company of Indiana, Incorporated, Home Telephone Company, Inc., Monrovia Telephone Corporation, Home Telephone Company of Pittsboro, Inc., Communications, Corporation of Indiana, Inc., T.A.S.I., Inc., Hancock Rural Telephone Corp., Hendricks Telephone Corp., Clay County Rural Telephone Corporation, Smithville Telephone Company, Tri-County Telephone Company, Digital Paging Systems of Indiana, Inc., and Multi-Page, Inc., Respondents-Appellees. |
| Court | Indiana Appellate Court |
Jerry Williams, John E. Taylor, Williams & Shoup, Indianapolis, for respondents-appellants.
William B. Powers, Charles J. Somes, Indianapolis, for respondents-appellees.
This is an appeal from a Public Service Commission of Indiana (Commission) decision allowing MCI Airsignal of Indiana (MCI) to enter the telephone paging market Lay people would identify the paging services at issue here as the small rectangular box which beeps when the carrier has a telephone call. The parties explained that in addition to the "beepers," there are also paging devices through which a voice message may be transmitted and devices which have a screen upon which transmitted numbers can be displayed. Apparently, alphabetical display paging is in development and will also be available soon.
in an eight county area surrounding Indianapolis. 1
The paging devices are usually activated by radio wave signals over radio frequencies assigned by the Federal Communications Commission (FCC). Most companies which offer these services are radio common carriers (RCC's) such as RAM Broadcasting, Radiotelephone Company of Indiana, and Digital Paging Systems of Indiana. 2 When MCI's petition was granted, it became the fifth RCC for the eight county area.
The Commission regulates the number of paging market participants. Pursuant to IC 8-1-2-88(a)(1), telephone service is defined as the transmission of intelligence between two or more points through the use of electricity. Telephone service is provided by telephone companies under IC 8-1-2-88(a)(2) and IC 8-1-2-1 defines telephone companies as public utilities which are, of course, subject to certification by the Commission.
The Commission found that MCI met the four criteria necessary for a grant of territorial authority: corporate power, financial and managerial service, service area description and public convenience and necessity. At the Commission hearing, as now, RAM Broadcasting and the other respondents-appellants opposed MCI's entrance into the radio wave paging market in the area surrounding Indianapolis. 3
RAM raises nine issues on appeal:
1. Was the Commission's adoption and application of the theory of regulated competition instead of regulated monopoly contrary to law?
2. Did the Commission err in failing to articulate the meaning it ascribed to "public convenience and necessity?"
3. Did the Commission err where it relied upon policies and rulings of the Federal Communications Commission?
4. Was the Commission's order improper because it did not contain a finding that the radio common carriers serving the area were not willing and able to adequately serve the present and potential customers?
5. Did the Commission improperly perform a rule making function in an adjudicatory proceeding?
6. Did the Commission err when it admitted over objection the study by Walker Research, Inc.?
7. Did the Commission grant MCI excessive relief?
8. Did the Commission show bias in finding that MCI possessed the requisite financial and managerial ability?
9. Did the Commission err by not stating in its order that petitioner-appellee had to file the same tariff as submitted at the hearing?
RAM argues that the Commission has impermissibly changed policy directions by abandoning a course of regulated monopoly for one of regulated competition. Some background is necessary to illuminate the issue before us.
Public Service Commission certification of telephone companies is governed by IC 8-1-2-88(b). It reads in part:
"After the issuance of [a] certificate no other telephone company shall render telephone service in the area or areas ... except pursuant to a certificate granted by the commission, after notice of hearing and hearing, that public convenience and necessity require that telephone service ... be rendered or offered by another company." (emphasis added)
Accordingly, the Commission is given discretion to define "public convenience and necessity" through the wording of this statute. In addition, we have repeatedly held that the public convenience and necessity determination is best left to the informed discretion of the Commission as it is necessarily fact, and circumstance, specific. See, e.g., V.I.P. Limousine Service, Inc. v. Herider-Sinders, Inc. (1976), 171 Ind.App. 109, 355 N.E.2d 441. This flexible approach seems appropriate given the ever-changing technology in the communications field as evidenced by the paging devices themselves in the instant case.
When deciding how to gauge public convenience and necessity in the paging market, the Commission took its lead from the FCC. In In the Matter of the Amended Petition of Radiotelephone Co., et al. P.S.C. Cause No. 35983 (October 1, 1981), the Commission expressly adopted a policy toward regulated competition in the RCC industry similar to that of the FCC's. The Commission stated that while new RCC's would not be authorized merely to foster competition, competition was a relevant factor of "public convenience and necessity" since it would force RCC's into providing up-to-date technology and better service to subscribers. Id. at 11. They further emphasized that public convenience and necessity is the primary consideration, thus avoiding the FCC pitfalls highlighted in Hawaiian Telephone Co. v. FCC (D.C.Cir.1974), 498 F.2d 771 which held that the FCC could not use promotion of competition as a key factor apart from public convenience and necessity. "The initial question for the [F.C.C.] ... must be whether public interest requires more or different service." Id. at 346. 4
In applying the new policy standards to MCI the Commission once again explained that it deems competition to be "an element of the ultimate finding of public convenience and necessity for radio common carriers...." In the Matter of MCI Airsignal of Indiana, Inc., P.S.C. Cause No. 37113 (September 9, 1983). There is no indication that the standard has been inconsistently or unevenly applied here. We can find no reason to interfere with the Commission's determination that competition is an element of public convenience and necessity in the area of radio wave paging and its adherence to that standard in the instant case.
RAM presents another issue in a related argument. RAM claims that the Commission neglected to properly articulate its definition of public convenience and necessity. The foundation of RAM's contention is in the administrative law axiom that administrative decisions must be premised upon ascertainable standards. Natural Resources Commission v. Sullivan (1981), Ind.App., 428 N.E.2d 92, 101; Clarkson v. Department of Insurance (1981), Ind.App., 425 N.E.2d 203, 207, transfer denied. As noted above, the Court of Appeals has refused to establish for all cases a qualitative and quantitative evidentiary standard for proof of public convenience and necessity. V.I.P., supra, 171 Ind.App. at 115, 355 N.E.2d at 445.
In this context, then, the ascertainable standards test does not connote an inflexible checklist which the Commission applies to all RCC's seeking certification. See RAM Broadcasting v. Digital Paging Systems (1984), Ind.App., 463 N.E.2d 1104, 1112-13 (hereinafter Digital I); RAM Broadcasting of Indiana v. Digital Paging Systems (1984), Ind.App., 464 N.E.2d 336, 345 (hereinafter Digital II). Our approach is guided by V.I.P. Limousine, supra whereby we scrutinize Commission findings of public convenience and necessity for a rational relationship between facts found and conclusions reached and for an appropriate exercise of discretion. Id., 355 N.E.2d at 445; Digital I at 1113.
The Commission noted at the outset of its findings that the respondents hotly disputed the existence of public need and convenience. It stated:
"The Petitioner presented a variety of evidence on the issue of public convenience and necessity. The bulk of the Petitioner's evidence consisted of Petitioner's Exhibit 20, a survey conducted by Walker Research, Inc., in May of 1983, of the Indianapolis area radio paging market. The survey was prepared under the supervision of Donald J. Hargadon, a telecommunication industry consultant with Walker Research. The survey was conducted by taking a random sample of business telephone numbers in the Indianapolis metropolitan area. The business would then be called and asked a series of questions from a prepared questionnaire. Based on the survey, Hargadon testified that the number of radio paging units that could be leased, rented or sold in the Indianapolis metropolitan area lies between 1,225 and 2,635 at the time of study. As further support of its contention that public convenience and necessity requires the issuance of a certificate of territorial authority to MCI Airsignal of Indiana, the Petitioner brought in three public witnesses who testified that they had present unmet needs for radio paging service in the Indianapolis metropolitan area.
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The essential dispute between the parties on this point did not concern whether or not there would be growth, but which company would benefit from this growth.... The Respondents argued that MCI would...
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