GTE North Inc. v. Public Service Com'n of Wisconsin

• Citation: 169 Wis.2d 649,486 N.W.2d 554
• Decision Date: 04 June 1992
• Docket Number: No. 91-0552,91-0552
• Parties: , Util. L. Rep. P 26,221 GTE NORTH INCORPORATED, Petitioner-Appellant-Cross Respondent, v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent-Respondent-Cross Appellant. d . Opinion Released
• Court: Court of Appeals of Wisconsin

Page 554

486 N.W.2d 554

169 Wis.2d 649, Util. L. Rep. P 26,221

GTE NORTH INCORPORATED, Petitioner-Appellant-Cross Respondent, v. PUBLIC SERVICE COMMISSION OF WISCONSIN,

Respondent-Respondent-Cross Appellant.

d

No. 91-0552.

Court of Appeals of Wisconsin.

Opinion Released June 4, 1992.

Opinion Filed June 4, 1992.

For the petitioner-appellant-cross respondent the cause was submitted on the briefs of David E. Hightower of GTE North Incorporated of Bloomington and Thomas Terwilliger of Terwilliger, Wakeen, Piehler & Conway of Wausau, and oral argument by David E. Hightower.

For the respondent-respondent-cross appellant the cause was submitted on the briefs of Steven M. Schur and Michael S. Varda of Public Service Commission of Wisconsin of Madison, and oral argument by Michael S. Varda.

Before EICH, C.J., and DYKMAN and SUNDBY, JJ.

DYKMAN, Judge.

GTE North, Inc., appeals that part of an order that affirmed a decision of the Public Service Commission. The commission cross-appeals that part of the order that remanded to the commission. The issues are whether: (1) the commission provided a sufficient explanation for its interpretation of a tariff provision; (2) the commission had the authority to order a refund of compensation collected for providing untariffed service; and (3) the commission's notice of hearing provided adequate notice to the utility. We conclude that the commission did not provide a sufficient explanation of its interpretation, did not have the authority to order a refund, and did not give adequate notice. We affirm in part, reverse in part and remand to the commission.

I. BACKGROUND

The Public Service Commission ("the commission") regulates telecommunications utilities in Wisconsin under ch. 196, Stats. GTE North, Inc. ("GTE"), is a telecommunications utility under sec. 196.01, Stats. It provides local telephone service in parts of Wisconsin.

This case has a lengthy procedural history, including an appeal to this court, General Tel. Co. of Wis. v. Auto-Owners Ins. Co., 140 Wis.2d 10, 409 N.W.2d 133 (Ct.App.1987). In 1979 and 1980, Harold Mohr signed two contracts with GTE to obtain time and temperature announcement services in the Eagle River and Minocqua exchanges. Persons calling these services would receive a short, recorded advertisement followed by the time and temperature. Mohr hoped to profit by selling the advertising space. A dispute arose between Mohr and GTE over the listing for these services in the local telephone directories. Mohr ceased payment on the contracts. GTE sued him and the company that provided his performance bond, seeking liquidated damages of approximately $55,000. Mohr counterclaimed for $425,000. On June 14, 1985, the jury found that Mohr, and not GTE, had breached the contracts, but that the breach had caused GTE no damages. GTE filed post-verdict motions on July 3, 1985. Id. at 13-15, 409 N.W.2d at 134-35.

Before the court ruled on those motions, Mohr wrote a letter of complaint to the commission on July 10, 1985. He sought a determination that his time and temperature service contracts with GTE were invalid and unenforceable because GTE was not authorized under its tariffs to enter such agreements. ¹ He also argued that GTE should have given his services a complimentary listing in the classified section ("yellow pages") of the directories.

By letter of September 10, 1985, commission staff determined that GTE had authority to enter the contracts under its tariff provisions for "Special Equipment or Special Assemblies of Equipment." The staff also concluded that GTE should have provided a classified listing under its directory listings tariff. GTE replied by letter, agreeing with the staff's decision on the contracts but appealing its decision on the listing. On October 29, 1985, the commission reopened and vacated the staff decision because of the pending litigation between Mohr and GTE.

Approximately one month later, the trial court ruled on the parties' postverdict motions and ordered a new trial. GTE appealed. We concluded that because the trial failed to resolve the question of whether Mohr was entitled to a complimentary classified listing under the GTE tariff, the contract theory of the case was not fully tried. We ordered a new trial using our discretionary power under sec. 752.35, Stats. We further concluded that this issue raised factual and policy questions that are peculiarly within the ambit of the commission, and we ordered the parties to resolve it by pursuing the administrative remedies of ch. 196, Stats. General Tel. Co., 140 Wis.2d at 19-23, 409 N.W.2d at 137-38.

Mohr reopened his complaint and the commission set the matter for hearing. The hearing was in July 1988. The commission mailed its decision in July 1989. It concluded that GTE's contracts with Mohr were unlawful because they were not authorized by tariff. It further concluded that Mohr did not have a right to complimentary classified directory listings under the GTE tariff, but that the exclusion of customers such as Mohr made the directory listings tariff unjustly discriminatory. The commission ordered GTE to refund all payments made by Mohr under the unlawful contracts and to revise its directory listings tariff. The commission denied GTE's petition for rehearing in August 1989.

GTE petitioned for circuit court review under secs. 227.52 and 227.53, Stats., in September 1989. In December 1990, the court affirmed in part and set aside and remanded to the commission in part. Both GTE and the commission appeal.

In a chapter 227 review of an administrative decision, we review the decision of the agency, not the trial court. Richland School Dist. v. DILHR, 166 Wis.2d 262, 273, 479 N.W.2d 579, 584 (Ct.App.1991), review granted, --- Wis.2d ----, 485 N.W.2d 412 (1992). In this opinion, we work through the commission's ruling and address the appellant's and cross-appellant's issues as they relate to that ruling. We must affirm the decision of the agency unless there is a basis to do otherwise under sec. 227.57, Stats. Section 227.57(2), Stats.

II. COMMISSION INTERPRETATION OF SPECIAL ASSEMBLIES TARIFF

The commission concluded that GTE's contracts with Mohr for time and temperature ("T & T") service were not specifically authorized by tariff. GTE does not dispute this. The commission also rejected GTE's argument that the contracts were authorized under its special assemblies tariff provision. GTE argues that the commission failed to adequately explain its rationale for adopting the interpretation of the tariff that it did. The circuit court agreed and remanded to the commission.

The special assemblies provision states: "Special equipment or assemblies of equipment, for which provision is not otherwise made in this Tariff, may be provided where practicable, if not detrimental to any of the services furnished by [GTE]. The charge for such facilities will be based on the costs involved."

In its discussion of this issue, the commission first described the service that Mohr had contracted for. GTE was required to "install and furnish all necessary facilities required for an Audichron Time and Temperature System, including the automatic announcement equipment, associated apparatus, and announcement lines." In return, Mohr was to pay an Audichron Announcement Service Charge, an Audichron Announcement Access Charge, and Announcement Change Charges.

The commission then described a Time Announcement Service that GTE offered in the Wausau exchange from 1957 to 1978. This service was offered in its General Exchange Tariff under Miscellaneous and Supplemental Equipment and Services. The commission analyzed the service offered under general tariff in Wausau and found that it was, "in virtually every respect, the same as the Time and Temperature Announcement Service offered by the Company to Mohr with the sole exception that only a time announcement was provided to the caller rather than a time and temperature announcement."

The commission concluded:

The Company has not adequately explained why the Time and Temperature Announcement Service offered to Mohr in two separate exchanges was not offered under tariff rather than under contract pursuant to the Special Assemblies Tariff. As noted above, the Commission has found that the [T & T] Announcement Service was substantially identical to the Time Announcement Service which the Company offered under tariff in the Wausau exchange for approximately 21 years. [Footnote omitted.] The Special Assemblies Tariff, to the extent that it authorizes the provision of telecommunications services in addition to the provision of equipment, must be limited to situations where the equipment or services are so unique to the user and location that the Company could not reasonably anticipate additional requests for the equipment or services by other customers or the same customer at other locations. This was clearly not the case with respect to the [T & T] Announcement Service at issue here. Accordingly, the provision of the [T & T] Announcement Service under contract was not justified under the Special Assemblies Tariff or any other tariff of the company. The untariffed provision of utility service is unlawful and the Commission so finds with respect to the [T & T] Announcement Service provided to Mohr.

GTE makes two arguments about this decision. The first is that the record does not support the commission's finding that the Wausau service offered under tariff and the service offered to Mohr under contract were virtually the same. We may set aside agency action or remand if the agency's action depends on any finding of fact that is not supported by substantial evidence in the record. Section 227.57(6), Stats.

GTE argues that its witness testified without contradiction that the services provided to Mohr were "one-of-a-kind," designed to meet the customer's unique specifications. Also in evidence, however, were the general tariff provisions covering the...