Electric Lightwave, Inc., In re

• Decision Date: 17 March 1994
• Docket Number: No. 59999-8,59999-8
• Citation: 123 Wn.2d 530,869 P.2d 1045
• Parties: In re Consolidated Cases Concerning the Registration of ELECTRIC LIGHTWAVE, INC., and The Registration and Classification of Digital Direct of Seattle, Inc.
• Court: Washington Supreme Court

Page 530

123 Wn.2d 530

869 P.2d 1045

In re Consolidated Cases Concerning the Registration of ELECTRIC LIGHTWAVE, INC., and The Registration and Classification of Digital Direct of Seattle, Inc.

No. 59999-8.

Supreme Court of Washington En Banc.

March 17, 1994.

As Amended on Denial of Reconsideration April 28, 1994.

Vandeberg & Johnson, Richard A. Finnigan, Tacoma, for appellant Washington Independent Telephone Ass'n.

Richard E. Potter, Timothy J. O'Connell, Everett, for appellantGTE Northwest, Inc.

Christine O. Gregoire, Atty. Gen., Donald T. Trotter, Asst., Seattle, for appellant State.

Robert S. Snyder, Seattle, for appellantWhidbey Telephone Co.

Ater, Wynne, Hewitt, Dodson & Skerritt, Arthur A. Butler, Stephen J. Kennedy, Seattle, for respondentsElectric Lightwave, Inc. and Tracer.

Davis, Wright & Tremaine, Daniel M. Waggoner, Gregory J. Kopta, Seattle, for respondent Digital Direct.

Miller, Nash, Wiener, Hager & Carlsen, Clyde H. MacIver, Seattle (Beth M. Andrus, William C. HarrelsonSue E. Weiske, of counsel), for respondent MCI Telecommunications.

UTTER, Justice.

Appellants seek to overturn a superior court order reversing in part and affirming in part three orders issued by the Washington Utilities and Transportation Commission(Commission or WUTC).We affirm the trial court's decisions that the Commission is powerless to grant exclusive rights to telecommunications companies, that the Commission properly registered Electric Lightwave, Inc.(ELI) and Digital Direct of Seattle, Inc.(DDS) as telecommunications companies, and that the Commission properly granted Digital Direct of Seattle, Inc.'s bid for competitive status.We also affirm the trial court's decision to award transcript fees to the Commission.

The issues before us are: (1) Does the Commission have the authority to grant exclusive or quasi-exclusive areas of service to local telephone companies?; (2) Did the Commission properly register ELI and DDS as telecommunications companies?; (3) Did the Commission properly deem DDS a "competitive" company?; and (4) Were transcript fees properly awarded to the Commission?

BACKGROUND

Telephone companies have been operating in Washington since the turn of the century.Historically, these companies have fallen into two significant groups.Local telephone companies, also known as local exchange companies (LECs), have provided a range of telecommunications services within each exchange, including "access service" to local customers (end users).Interexchange telephone companies (IXCs) specialize in providing connections between exchanges.Thus, LECs and IXCs have worked together to connect a call from one exchange to another.In return for its use of an LEC's access services, an IXC compensates the LEC with access-service tariffs.Since IXCs have historically had little choice but to use the access services of LECs to connect to end users, MCI Telecommunications Corporation(MCI)--an interexchange telephone company--has described itself as a "captive customer".SeeBrief of Respondent (MCI), at 8.

The Legislature created the Department of Public Service¹ as a state agency empowered under Title 80 RCW to regulate the rates, services, facilities, and practices of various companies in which the public has an interest.Pursuant to this statute, the Commission has regulated telecommunications companies.The Commission's responsibilities include review of applications for registration of telephone companies.RCW 80.01.040(3).

On September 18, 1990, and July 3, 1991, respectively, ELI and DDS applied to the Commission for approval of their bids to become telecommunications companies.They proposed a host of telecommunications services, including access services which theretofore had been provided mainly by LECs.ELI proposed service in Seattle and "other geographical areas that may seem feasible."Administrative Record (ELI Exhibits--Application for Registration), at 1160.DDS proposed service for the east Puget Sound metropolitan area.Administrative Record (DDS's Application with Attachments--Exhibit A), at 140.DDS noted the possibility of providing "dark fiber"² services, Administrative Record (DDS's Application with Attachments--Exhibit A), at 140, and indicated its intention of leasing fiber from TCI Cablevision (TCI), a corporate parent and cable company, to provide any such services.Transcript of Proceedings (DDS)(Dec. 9, 1991), Vol. IIat 113-14.

DDS additionally sought registration as a "competitive" telecommunications company, claiming it was subject to effective competition.Competitive status allows a telecommunications company to enjoy various statutory benefits, including minimal regulation.RCW 80.36.320(2).

The Commission registered both ELI and DDS as telecommunications companies with authority to provide interexchange services throughout the state of Washington.Administrative Record (ELI)(Dec. 6, 1991), Third Supplemental Order Granting Registration Application In Part (hereafter Third Supplemental Order)at 41;Administrative Record (ELI)(Mar. 13, 1992), Fourth Supplemental Order on Motion for Partial Reconsideration and Clarification(hereafter Fourth Supplemental Order on Motion)at 1; Administrative Record (DDS)(Apr. 29, 1992), Fourth Supplemental Order Granting In Part Registration Application and Competitive Classification Petition (hereafter Fourth Supplemental Order)at 1.The Commission thereby permitted ELI and DDS to provide services to and from end users to the extent the connections involved an end user in one exchange and a terminus in another.In opening only inter exchange connections to competition from ELI and DDS, the Commission preserved the "exclusive" rights of LECs to provide all "intraexchange"³ services except dark fiber services in US WEST Communications, Inc.(US WEST) exchanges.Administrative Record (ELI)(Dec. 6, 1991), Third Supplemental Orderat 42;Administrative Record (DDS)(Apr. 29, 1992), Fourth Supplemental Orderat 1.The Commission also found that DDS faced effective competition in the marketplace and granted DDS's request for competitive status.Administrative Record (DDS)(Apr. 29, 1992), Fourth Supplemental Orderat 1.

Several parties, including ELI, Washington Independent Telephone Association(WITA), Whidbey Telephone Co.(Whidbey), GTE Northwest, Inc.(GTE), DDS, and Telecommunications Ratepayers Association for Cost-based and Equitable Rates(TRACER), petitioned for judicial review of the ELI orders, and the court consolidated those petitions.Clerk's Papers, at 56-67.The same parties filed a petition for review in the DDS case, and the superior court consolidated the ELI and DDS cases.Clerk's Papers, at 85-90.

On November 13, 1992, the trial court issued its memorandum disposition and final order.Clerk's Papers, at 204-14.It upheld the Commission's approval of DDS's and ELI's respective applications but reversed the Commission's reservation of "exclusive" rights for LECs on the ground the Commission lacks authority under RCW 80.36.230 to confer exclusive rights.⁴The court also awarded the Commission transcript fees in connection with the assorted petitions for judicial review.

On January 11, 1993, the trial court filed its order granting clarification and reconsideration in part.Clerk's Papers, at 308-09.After the trial court denied a motion to clarify its January 11 order, Clerk's Papers, at 325-26, WITA, Whidbey, GTE, and the Commission filed notices of appeal to this court.Clerk's Papers (WITA), at 349-66; Amended Notice of Appeal to Supreme Court;Clerk's Papers (Whidbey), at 471-86; Amended Notice of Appeal to Supreme Court(GTE)(Mar. 4, 1993);Clerk's Papers (Commission), at 385-482.

THE COMMISSION LACKS THE AUTHORITY TO GRANT EXCLUSIVE RIGHTS

TO TELECOMMUNICATIONS COMPANIES

This court examines issues of law de novo.Overton v. Washington State Economic Assistance Authority, 96 Wash.2d 552, 637 P.2d 652(1981).As with all issues of statutory interpretation, the primary objective is to find the intent of the Legislature.That intent must be determined primarily from the statutory language.State Dep't of Transp. v. State Employees' Ins. Bd., 97 Wash.2d 454, 458-59, 645 P.2d 1076(1982).

An agency possesses only those powers granted by statute.Cole v. Washington Util. & Transp. Comm'n, 79 Wash.2d 302, 306, 485 P.2d 71(1971).RCW 80.36.230 reads: "The commission is hereby granted the power to prescribe exchange area boundaries and/or territorial boundaries for telecommunications companies."This language does not confer on the Commission the power to grant monopolies or exclusive rights.Since the Commission is fully capable of exercising its authority under RCW 80.36.230 without the power to grant monopolies or other exclusive rights, the text does not necessarily or impliedly grant such power.SeeIn re Little, 95 Wash.2d 545, 627 P.2d 543(1981)(permitting an agency to exercise power where power is "necessary" to implement statutory scheme), overruled on other grounds inState v. Danforth, 97 Wash.2d 255, 643 P.2d 882(1982);Hillis Homes, Inc., v. Snohomish Cy., 97 Wash.2d 804, 808, 650 P.2d 193(1982)(without express authority, action by county which is considered suspect under the Washington State Constitution is invalid, no matter how necessary it might be).The Commission therefore lacks the authority under RCW 80.36.230 to grant exclusive rights to LECs.

Appellants suggest this holding renders the words "companies" and "and/or territorial boundaries" in RCW 80.36.230 superfluous.SeeBrief of Appellant (WUTC), at 25;Brief of Cross-Appellant (Whidbey), at 17-19.This is not correct.Our interpretation of RCW 80.36.230 enables the Commission to define the geographical limits of a company's obligation to provide service on demand and to delineate the boundaries between local and long distance calling.

Even were the statute ambiguous, our state constitution makes it...