Indiana Bell Tel. Co., Inc. v. T. A. S. I., Inc.

• Decision Date: 19 April 1982
• Docket Number: No. 2-1079A310,2-1079A310
• Citation: 433 N.E.2d 1195
• Parties: INDIANA BELL TELEPHONE COMPANY, INCORPORATED, Radiotelephone Company of Indiana, Inc. and Ram Broadcasting of Indiana, Inc., Appellants-Respondents, v. T. A. S. I., INC., Appellee-Petitioner, and Hancock Rural Telephone Corp., and Hendricks Telephone Corp., Appellees-Respondents.
• Court: Indiana Appellate Court

Page 1195

433 N.E.2d 1195

INDIANA BELL TELEPHONE COMPANY, INCORPORATED, Radiotelephone Company of Indiana, Inc. and Ram Broadcasting of Indiana, Inc., Appellants-Respondents, v. T. A. S. I., INC., Appellee-Petitioner and Hancock Rural Telephone Corp., and Hendricks Telephone Corp., Appellees-Respondents.

No. 2-1079A310.

Court of Appeals of Indiana, Fourth District.

April 19, 1982.

John C. Carvey, Cartmel, Carvey, Latimer, Howard, Sellmer & McLin, Indianapolis, for appellant Radiotelephone Co. of Indiana, Inc.

Jerry Williams, John E. Taylor, Williams & Shoup, P. C., Indianapolis, for appellant Ram Broadcasting of Indiana, Inc.

Michael J. Huston, Fred E. Schlegel, Baker & Daniels, Indianapolis, for appellee T. A. S. I., Inc.

MILLER, Presiding Judge.

Respondents-appellants Radiotelephone Company of Indiana, Inc. (Radiotel) and RAM Broadcasting of Indiana, Inc. (RAM) ¹ are appealing an order of the Public Service Commission of Indiana because the Commission allegedly acted arbitrarily and failed to make proper findings of fact in granting petitioner-appellee T. A. S. I., Inc. a "Certificate of Territorial Authority to Offer and Furnish Mobile Radio Telephone and Paging Service to the Public Within The record reveals the instant cause was initiated by T. A. S. I. on December 8, 1978, when it filed with the Commission its petition for a certificate of territorial authority to furnish mobile radio telephone and paging service within Marion County, and further requesting approval of its rates, charges and rules, depreciation rates and authority to issue notes to finance new facilities. On March 12, 1979, T. A. S. I. prefiled exhibits and the direct testimony of Jerry Hellyer (president of T. A. S. I.), Robert Teipen (an accountant) and Arthur Peters (an engineer). Public hearings were held thereafter on several dates, on which occasions the Commission received the testimony of 16 additional witnesses for T. A. S. I., four witnesses for RAM, three witnesses for Radiotel, and one witness for Indiana Bell Telephone Co., Inc. (Bell).

                Marion County, Indiana."  2  In essence, RAM and Radiotel challenge the sufficiency of the evidence and the adequacy of basic factual findings supporting the Commission's determination that 1) public convenience and necessity within the meaning of Ind.Code 8-1-2-88(b) require the proposed service by T. A. S. I.; 2) T. A. S. I. has adequate financial ability to render the proposed service; and 3) T. A. S. I. has adequate managerial and technical ability to render the proposed service.  Based on our review of the record and the Commission's order, which included complete and specific factual findings based on substantial evidence, we affirm.  We do not agree with T. A. S. I., however, that the appeal should have been dismissed for failure to timely file an assignment of errors, since this Court had previously granted RAM and Radiotel an extension of time to file the complete record on appeal
                

The basic evidence received by the Commission may be summarized as follows: Originally, the Commission awarded a Certificate of Territorial Authority to Bell for Marion County, pursuant to Ind.Code 8-1-2-88(b), which provides in part:

"The commission shall have the power by order to require telephone companies to report, upon reasonable notice, in such manner as the commission shall prescribe by general rule, the territorial area or areas and the boundaries thereof within the state in which each such company now renders, is reasonably prepared to render, and proposes to render telephone service within a reasonable time. The commission shall have the power to issue to each such company for any territorial area or areas so reported and not covered by a municipal franchise or any indeterminate permit, a certificate of territorial authority. The certificate shall determine and define the area or areas in which each such company shall thereafter render telephone service. In cases of conflict involving two (2) or more telephone companies the commission, considering such reports separately, or by consolidation of two (2) or more or all, shall have the power to issue its certificate after notice of hearing and a hearing.

After the issuance of such certificate no other telephone company shall render telephone service in the area or areas so determined and defined, except pursuant to a certificate granted by the commission, after notice of hearing and hearing, that public convenience and necessity require that telephone service in any such area be rendered or offered by another company...." (Emphasis added.)

Thereafter, limited certificates (for radio common carrier service) were awarded to RAM and Radiotel, both of which provide mobile telephone service, tone-only paging service and tone/voice paging service throughout Marion County. ³ Bell provides mobile telephone service and tone-only paging service.

T.A.S.I. filed its petition seeking authority to provide mobile telephone service and both types of paging service in Marion County because "public convenience and necessity require that telephone service...be rendered or offered by another company." IC 8-1-2-88(b), supra. At the time T.A.S.I. filed its petition (and presently) it operated a telephone answering service (which is not regulated by the Commission) serving approximately 1200 customers. The thrust of T.A.S.I.'s evidence was that there is an unmet need in Marion County for the proposed service and that paging and mobile telephone service would also improve the service and convenience of T.A.S.I.'s existing answering service operation.

Thus, T.A.S.I. offered into evidence some 30 contracts and applications for paging and mobile telephone service and introduced the testimony of 16 witnesses who related their need for T.A.S.I.'s proposed service. Although some of these witnesses testified the service provided by other companies was good or adequate, others, such as Donald Fisher and Lowell Pinney, recounted various problems they had encountered with RAM and Radiotel, and many witnesses testified they had never been contacted by RAM or Radiotel regarding their service needs. In this regard, T.A.S.I.'s president, Hellyer, conceded RAM and Radiotel could meet the needs of Marion County with their existing facilities, but that they had failed to do so. Some of the witnesses called by T.A.S.I. indicated they could wait for the proposed services, while others, such as Ronald Felty, clearly identified a "present need" in their businesses.

Other evidence introduced by T.A.S.I. in support of its petition included testimony regarding a survey T.A.S.I. had conducted which revealed 41 persons had expressed an interest in obtaining 45 paging units (24 tone only and 21 voice and tone) and 42 individuals expressed an interest in obtaining 47 two-way mobile telephone units. As noted by the Commission's order, the hearings also disclosed four other organizations (including RAM and Radiotel) have filed applications with the Commission within a one-year period requesting new or additional facilities to meet needs for two-way radio telephone service in Marion County. RAM and Radiotel represented at the hearings they could meet all the paging and mobile telephone needs of that county.

There was some conflict in the evidence concerning the present financial condition of T.A.S.I. and its ability to undertake the proposed service, although it was undisputed the basic equipment costs would be about $39,000 for the paging operation and $58,000 for mobile telephone service. Hellyer testified T.A.S.I. had the financial ability to commence the proposed services, stating the purchase and installations funds would come from three sources: 1) a $20,000 cash contribution to T.A.S.I. by him; 2) a $117,000 loan to T.A.S.I. by First Bank and Trust Co., an indebtedness the company would assume according to its needs; and 3) the cash flow generated by the paging and mobile telephone services rendered by T.A.S.I., which Hellyer estimated would yield a net income of $6,266 in the first 12 months of operation. In addition, Teipen, T.A.S.I.'s independent accountant, testified T.A.S.I. had the financial ability to purchase and install the proposed equipment. His predictions for the first 12 months of operation were identical to Hellyer's; he also testified the company could be expected to receive $41,757 in net income for the second 12 months of operation.

RAM and Radiotel attempted to refute such evidence through cross-examination and the opinions of another accountant, one Bauman. Bauman testified T.A.S.I.' § current liabilities exceed its current assets by over $71,000 with respect to its answering service business (though he acknowledged this is not unusual among radio common carriers) and also asserted that if T.A.S.I. were to assume a $117,000 further indebtedness as proposed, the total amount of its issued securities would improperly exceed the value of the company's equipment and plant by over $140,000. Additionally, RAM and Radiotel also sought to establish numerous irregularities in the books of T.A.S.I. which were unknown to First Bank and Trust Co., when it agreed to loan $117,000 Other evidence was elicited by RAM and Radiotel in efforts to challenge the management of T.A.S.I.'s answering service by Hellyer. Thus, after establishing Hellyer was the director, treasurer, chief operating officer, and sole current stockholder of T.A.S.I., RAM and Radiotel further revealed that Hellyer is uncertain about various aspects of the Company's business, such as the salaries paid to salesmen. With respect to the proposed expansion by T.A.S.I. into paging and mobile telephone service, it was disclosed there were not director resolutions authorizing T.A.S.I. to secure the proposed $117,000 loan and no shareholder authority for T.A.S.I. to grant a security interest to First Bank and Trust Co. in its accounts receivable and equipment as proposed. Hellyer conceded he had no...