AT & T Communications of Southwest, Inc. v. Public Utility Com'n of Texas, s. 14657
| Decision Date | 10 June 1987 |
| Docket Number | Nos. 14657,14658,s. 14657 |
| Citation | 735 S.W.2d 866 |
| Parties | AT & T COMMUNICATIONS OF the SOUTHWEST, INC., et al., Appellants, v. PUBLIC UTILITY COMMISSION OF TEXAS, et al., Appellees. MCI TELECOMMUNICATIONS CORPORATION, et al., Appellants, v. PUBLIC UTILITY COMMISSION OF TEXAS, et al., Appellees. |
| Court | Texas Court of Appeals |
Ray G. Besing, Dallas, J. Alan Holman, Dennis P. Reis, Brown, Maroney, Rose, Barber & Dye, Austin, for MCI.
Thomas M. Pollan, Katie Bond, Bickerstaff, Heath & Smiley, Austin, for Texas Ass'n of Long Distance Telephone Cos.
W. Scott McCollough, Asst. Atty. Gen., Austin, for State Purchasing & Gen. Services Com'n.
Thomas A. Grimaldi, Shawnee Mission, Kan., for U.S. Telecom.
Paul Herrmann, McElroy, Williams & Sullivan, Austin, for U.S. Sprint.
Geoffrey M. Gay, Asst. Public Counsel, Austin, for Office of Public Utility Counsel.
Fernando Rodriguez, Asst. Atty. Gen., Austin, for Public Utility Com'n.
John Andrew Martin, Carrington, Coleman, Sloman & Blumenthal, Dallas, for Continental Tele. Co.
Dale H. Johnson, Brian P. Quinn, McWhorter, Cobb & Johnson, Lubbock, for Texas Statewide Telephone Co-op Brook Bennett Brown, McGinnis, Lochridge & Kilgore, Austin, for Central Telephone Co.
Grace H. Casstevens, Butler & Casstevens, Austin, for Cities.
Jon Dee Lawrence, Southwestern Bell, Robert J. Hearon, Jr., Graves, Dougherty, Hearon & Moody, Austin, for Southwestern Bell Telephone Co.
Joe N. Pratt, Kleberg, Dyer, Redford & Weil, Austin, for AT & T.
Before SHANNON, C.J., and BRADY and CARROLL (not participating), JJ.
Appellant AT & T Communications of the Southwest, Inc., (AT & T), and others, perfected administrative appeals to the district court of Travis County from orders of the Public Utility Commission in docket nos. 5113 and 5220. In docket no. 5113, the Commission established and applied a system of long distance telephone "access charges," while docket no. 5220 concerned Southwestern Bell's application for a rate increase. Appellees Southwestern Bell Telephone Co. (SWB), and others, intervened in the administrative appeals pending in district court. The district court consolidated the administrative appeals into two causes and, upon hearing, rendered judgment in each cause sustaining the respective agency order. Appellants' separate appeals were submitted to this Court consecutively. Because the appeals concern common legal issues, this opinion disposes of both. This Court will reverse the district court's judgments.
By one of their principal points of error, AT & T and the other appellants 1 complain that the district court erred in sustaining the agency orders which imposed access charges on them but not on SWB and other similarly situated telephone companies, even though SWB and the others use the same telephone exchange facilities for the same purposes as appellants.
The origin of the problem in this appeal is found in the federal consent decree ordering divestiture of the Bell Telephone System. With divestiture, the long distance telephone network, traditionally operated by AT & T, in co-operation with the regional Bell Operating Companies, was dismantled. As a result, Texas telephone companies such as SWB, along with small independent telephone companies (local exchange carriers) no longer participated in the revenue generated by the Bell System's long distance network, yet those companies needed their share of this revenue, or an adequate substitute, to cover their costs of operation.
Adopting the system established by the Federal Communicationss Commission on the interstate level, the Public Utility Commission (Commission) instituted the "access charge" process to produce the needed revenue. The Commission formulated the access charge process in Docket 5113 and applied it in the SWB rate case, Docket 5220, as well as in the tariff filings of the local exchange carriers. An access charge is a fee paid by AT & T Communications and the other appellants (other long distance common carriers or "OCCs"). The charge pays for the carrier's "access" to local telephone exchanges operated by SWB and the local exchange carriers.
Access to the local telephone exchange is necessary to originate and complete customers' long distance calls. As explained by the parties, there are three essential components to any long distance telephone call. First, the call must be transmitted from the originating customer to the long distance carrier's switch (originating access). Second, the call must be transmitted from the long distance carriers' switch in the originating customer's service area to a switch in the service area of the called party (interexchange transmission). Finally, the call must be transmitted from the long distance carrier's switch to the called party (terminating access).
The services of (1) SWB and the local exchange carriers, and (2) the interexchange carriers do not generally overlap because the interexchange carriers provide long distance service, while the local exchange carriers provide access and local service. In providing intra-LATA 2 long distance service, however, the two classes of carriers compete. In docket 5113, the Commission leveled access charges against AT & T and the OCCs whether they were providing intra-LATA or inter-LATA service. In contrast, the Commission's order did not require the local carriers and SWB to pay access charges or to reflect an access charge as an element of their intra-LATA toll rate. Instead, the Commission placed SWB and the local exchange carriers into an "intra-LATA toll pool." As we understand, this system involves "pooling" the combined intra-LATA revenues from SWB and the local exchange carriers and apportioning the revenues to the companies through a "separations" process.
The access charge payable by AT & T and the OCCs to the local exchange carriers and SWB permits the local exchange carriers and SWB to recover an element of their operating expenses known as non-traffic sensitive ("NTS") costs. NTS costs are those expenses involved in maintaining local telephone exchange lines and facilities.
When AT & T and the OCCs utilize local facilities to originate and terminate a long distance call, they exact a "cost" to the local system which is compensated for by the access charge. Likewise, when a local exchange carrier or SWB originates and terminates an intra-LATA long distance call, it exacts the same NTS cost to the local system, but under the Commission's order there is no access charge placed on the call.
AT & T and the OCCs urge that the divergence in treatment between them and the local exchange carriers and SWB in the intra-LATA market, has left them saddled with an unlawfully disproportionate burden of the NTS costs. AT & T and the OCCs argue, in effect, that through access charges which, for certain distances, are higher than the entire retail price of the local exchange carrier's or SWB's toll call, they are being forced to subsidize their competitor's toll business. Accordingly, AT & T and the OCCs claim that the Commission's orders, in the area of intra-LATA tolls, are unlawfully discriminatory and anticompetitive in violation of the Public Utility Regulatory Act (PURA), Tex.Rev.Civ.Stat.Ann. art. 1446c (Supp.1987).
In general, AT & T and the OCCs claim that the Commission's failure to level access charges against the local exchange carriers and SWB violates PURA §§ 18, 37, 38, 45, and 47.
PURA § 37 provides that:
the commission is hereby vested with all authority and power of the state of Texas to insure compliance with the obligations of public utilities in this Act. (Emphasis supplied).
PURA § 18 empowers the Commission to formulate:
new rules, policies and principles ... to protect the public interest and to provide equal opportunity to all tele-communications utilities in a competitive marketplace. (Emphasis supplied).
PURA § 38 requires the Commission to insure that public utility rates:
shall not be unreasonably preferential, prejudicial, or discriminatory, but shall be sufficient, equitable, and consistent in application to each class of consumers. (Emphasis supplied).
PURA § 45 provides further that:
No public utility may establish and maintain any unreasonable differences as to rates of service either as between localities or as between classes of services. (Emphasis supplied).
Finally, PURA § 47 addresses anti-competitive conduct as well as discrimination by utilities No public utility may discriminate against any person or corporation that sells or leases equipment or performs services in competition with the public utility, nor may any public utility engage in any other practice that tends to restrict or impair such competition. (Emphasis supplied).
Not all discrimination ordered or countenanced by the Commission is unlawful. Texas Alarm Signal Association v. Public Utility Comm'n, 603 S.W.2d 766 (Tex.1980); Amtel Communications v. Public Utility Comm'n, 687 S.W.2d 95 (Tex.App.1985, no writ). In Texas Alarm, the Supreme Court held that Id. 603 S.W.2d at 772. (Emphasis added). Such distinguishing factors include:
This Court in Amtel wrote: "the antidiscriminatory principle ... includes a permissible range of unequal treatment which, while literally discriminatory, is not unlawfully...
To continue reading
Request your trial
-
Geesa v. State
... ... The STATE of Texas, Appellee ... No. 290-90 ... Court of ... court as the Appellant, standing at the southwest corner of the station (R. V-48, 49). In the bed ... ...
-
Colorado Office of Consumer Counsel v. Public Utilities Com'n
...access charges on local exchange companies and in not treating local exchange companies as customers of themselves), rev'g 735 S.W.2d 866 (Tex.App.--Austin 1987) (relied on by the League and Comptel in their After the decisions of the Commission were handed down in this case, the General As......
-
Omniphone, Inc. v. Southwestern Bell Telephone Co.
...dissimilarity presents a substantial and reasonable ground for treating the parties differently. AT & T Communications v. Pub. Util. Com'n, 735 S.W.2d 866, 871 (Tex.App.1987, writ pending). One major difference between the "Dial 976" service and AT & T's "700" and "900" services is that the......
-
Public Utility Com'n of Texas v. AT & T Communications of the Southwest
...of the district court, holding that the system of access charges implemented by the commission was unreasonably discriminatory. 735 S.W.2d 866 (1987). We find the rate structure adopted by the commission to be reasonably based on differences between the two types of carriers, with the diffe......