GTE North, Inc. v. Public Service Com'n, Docket Nos. 177802

Citation544 N.W.2d 678,215 Mich.App. 137
Decision Date12 January 1996
Docket Number177886,Docket Nos. 177802
PartiesGTE NORTH, INCORPORATED, Appellant, Cross-Appellee, v. PUBLIC SERVICE COMMISSION, et al., Appellees, and MICHIGAN EXCHANGE CARRIERS ASSOCIATION, Appellee, Cross-Appellant. MICHIGAN BELL TELEPHONE COMPANY, Appellant, v. PUBLIC SERVICE COMMISSION, et al., Appellees.
CourtCourt of Appeal of Michigan (US)

Loomis, Ewert, Ederer, Parsley, Davis & Gotting, P.C. by William D. Parsley and Gary L. Field, Lansing, William H. Keating, Marion, OH, and A. Randall Vogelzang, Westfield, IN, for GTE North Incorporated.

Michael A. Holmes and Craig A. Anderson, Detroit, (James A. Ault, East Lansing, of counsel), for Michigan Bell Telephone Co.

Don L. Keskey and David A. Voges, Assistant Attorneys General, for Public Service Com'n.

Dykema Gossett, Chicago, IL by Albert Ernst, Lansing, and Michael A. McMenamin, Bloomfield Hills, Marcia Franklin and Joan Campion, Chicago, IL, for MCI Telecommunications Corp.

Fischer, Franklin & Ford by George Hogg, Jr., and Sidney M. Berman, Detroit, and Larry Salustro and Robin P. Charleston, Chicago, IL, for AT & T Communications of Michigan, Inc.

Foster, Swift, Collins & Smith, P.C. by Stephen D. Schultz and Glen A. Schmiege, Lansing, for the Michigan Exchange Carriers Ass'n, Inc.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Orjiakor N. Isiogu, Assistant Attorney General, for the Attorney General.

Before HOEKSTRA, P.J., and HOOD and CURTIS, * JJ.

PER CURIAM.

GTE North, Inc., and Michigan Bell Telephone Company appeal as of right orders of the Michigan Public Service Commission that require GTE and Michigan Bell to implement uniform dialing arrangements for certain intrastate long distance telephone calls by January 1, 1996. The PSC, AT & T Communications of Michigan, Inc., MCI Telecommunications Corporation, and the Attorney General respond as appellees. We affirm.

I

This case concerns toll service for long distance telephone calls within Local Access Transport Areas (LATAs). LATAs comprise geographic regions, generally corresponding to telephone area code regions, which were created pursuant to divestiture of the Bell operating companies in the early 1980s. There are five LATAs in the State of Michigan.

According to divestiture decrees in federal court, Local Exchange Carriers (LECs) such as GTE and Michigan Bell may provide "intraLATA" toll services for long distance calls within a LATA, but are prohibited from providing toll service for calls between LATAs, i.e., "interLATA" service. Accordingly, calls between LATAs are currently handled by Interexchange Carriers (IXCs) such as AT & T and MCI, and many others.

The current dialing arrangements for intraLATA calls serviced by GTE or Michigan Bell only require the caller to add a single digit "prefix" number at the beginning of the number to be called. This is known as "1 +" or "0 +" dialing, depending on whether the required prefix number is a 1 or a 0. When the PSC authorized IXCs such as AT & T and MCI to compete in the Michigan intraLATA market in the late 1980s, it allowed GTE and Michigan Bell to retain exclusive use of "1 +" and "0 +" dialing arrangements for most of their own intraLATA toll services. The dialing arrangements for most intraLATA toll service provided by the IXCs require the caller to dial a five-digit "10xxx" prefix number, with the "xxx" being a three-digit carrier identification code assigned to each IXC, e.g., 10 + +ATT for AT & T's service.

In its December 21, 1989, decision on intraLATA competition in PSC Nos. U-9004, U-9006, and U-9007, the PSC found that the "10xxx" dialing arrangement provided the IXCs with "equal access" to GTE's and Michigan Bell's local exchange networks as required by federal authorities. In declining to require uniform 1 + dialing arrangements for all intraLATA service by all providers, sometimes called "dialing parity" or "presubscription," 1 the PSC reasoned that any competitive advantage GTE or Michigan Bell received from exclusive use of 1 + or 0 + dialing was offset by other competitive advantages held by the IXCs, such as the ability of the IXCs to service both the intraLATA and interLATA markets. The PSC also reasoned that because the type of "two-PIC" technology required to allow customers to choose separate carriers for their intraLATA and interLATA calls was not yet feasible, implementation of presubscription for intraLATA calls would have the effect of driving GTE and Michigan Bell out of the intraLATA toll market completely, since customers could only choose an IXC to handle both their intraLATA and interLATA calls.

After the PSC's 1989 decision in Nos. U-9004, U-9006, and U-9007, the Legislature enacted the Michigan Telecommunications Act, 1991 P.A. 179, M.C.L. § 484.2101 et seq.; M.S.A. § 22.1469(101) et seq., effective January 1, 1992, which repealed and replaced public acts of 1883 and 1913 regulating telephone service. Act 179 invests the PSC with regulatory authority over certain telecommunication services, including basic local exchange, access, and toll services, while placing certain limits on the PSC's oversight of such regulated services and generally negating the PSC's authority over other, unregulated telecommunication services. In this manner, the act tends to deregulate the telecommunication industry with a view toward fostering competition between telecommunication service providers. This intent is perhaps best reflected in § 103 of the act, which provides:

Except as otherwise provided in this act, this act shall not be construed to prevent any person from providing telecommunication services in competition with another telecommunication provider. [M.C.L. § 484.2103; M.S.A. § 22.1469(103).]

The act has a "sunset" expiration date of January 1, 1996. M.C.L. § 484.2604; M.S.A. § 22.1469(604).

The only place where Act 179 expressly addresses the subject of intraLATA dialing parity is a provision in § 202(f) of the act regarding various matters to be included in a report from the PSC to the Legislature and the Governor due January 1, 1994. Specifically, § 202(f)(x) required the PSC to report upon the technological and economical impact of dialing parity within LATAs:

In addition to the other powers and duties prescribed by this act, the commission shall do all of the following:

* * * * * *

(f) Issue a report to the legislature and governor on or before January 1, 1994. The report shall include all of the following:

* * * * * *

(x) The technological and economical impact of the implementation of INTRA-LATA 1-plus dialing parity within LATAs. [M.C.L. § 484.2202; M.S.A. § 22.1469(202).]

The above language was added by an amendment in the House of Representatives after the Senate had already approved the original version of the act. The House version also contained another amendment of § 312 of the act (offered by Representatives Power and Bandstra) directing the PSC to implement intraLATA dialing parity when the PSC determines it to be technologically and economically feasible:

(3) The commission shall order the implementation of intraLATA 1-plus dialing parity for all toll carriers offering services within the LATA when the commission determines that such parity is technically and economically feasible.

However, the Power/Bandstra amendment was ultimately deleted from the final version of the act following review of a House-Senate joint conference committee.

The instant PSC proceedings were instituted on July 31, 1992, when MCI filed a complaint with the PSC alleging that GTE and Michigan Bell had violated § 312(4) and various provisions of § 305 of Act 179 with regard to intraLATA access by failing to provide 1 + dialing parity. MCI also alleged that the current intraLATA dialing arrangements are adverse to the public interest in violation of § 205(2) of the act.

Section 205 of Act 179 provides:

(1) The commission may investigate and resolve complaints that concern the quality and availability, conditions, deposit requirements, or disconnection of a regulated service, or any other provision of this act that regulates service.

(2) If the commission finds, after notice and hearing, that the quality, general availability, or conditions for the regulated service violate this act or an order of the commission under this act, or is adverse to the public interest, the commission may require changes in how the telecommunication services are provided. The commission's authority includes, but is not limited to, the revocation of a license and issuing cease and desist orders. [M.C.L. § 484.2205; M.S.A. § 22.1469(205).]

A contested case hearing was conducted before a hearing referee in late 1992. AT & T, the Attorney General, and appellee Michigan Exchange Carriers Association (MECA), among others, intervened in the proceedings.

In an opinion and order issued on February 23, 1993, the PSC followed the recommendations of the hearing referee by dismissing MCI's complaint and deferring consideration of whether the PSC should implement intraLATA dialing parity until some future time. Although the PSC found no violations of §§ 305 and 312(4) of Act 179, it agreed with MCI that it is empowered to implement intraLATA dialing parity pursuant to its authority under § 205 of the act to regulate how telecommunication services are provided. The PSC declined to determine whether continuing the existing dialing arrangements would be adverse to the public interest at that time, however, noting that various issues regarding implementation of intraLATA dialing parity remained unresolved, such as the potential economic effect upon GTE and Michigan Bell, the potential effect upon the quality and level of toll services throughout the state and the cost and feasibility of necessary technology.

MCI moved for reopening, rehearing, and reconsideration of...

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