Keith v. Bay Springs Tel. Co.

• Decision Date: 16 November 1964
• Docket Number: No. 43186,43186
• Citation: 168 So.2d 728,251 Miss. 106
• Parties: , 56 P.U.R.3d 407 Robert M. KEITH, Jr., d/b/a Monroe Radiotelephone Company, v. BAY SPRINGS TELEPHONE COMPANY, Inc. and Southern Bell Telephone and Telegraph Company.
• Court: Mississippi Supreme Court

Page 728

168 So.2d 728

251 Miss. 106, 56 P.U.R.3d 407

Robert M. KEITH, Jr., d/b/a Monroe Radiotelephone Company, v. BAY SPRINGS TELEPHONE COMPANY, Inc. and Southern Bell Telephone and Telegraph Company.

No. 43186.

Supreme Court of Mississippi.

Nov. 16, 1964.

Walker, Dillard & Baldwin, Laurel, for appellant.

Charles R. Mayfield, Jr., Butler, Snow, O'Mara, Stevens & Cannada, Atley A. Kitchings, Jr., Jackson, Drury B. Thompson, Eugene M. Anderson, Jr., Atlanta, Ga., for appellees.

ETHRIDGE, Justice.

Bay Springs Telephone Company, Inc. (called Bay Springs) is a certificated landline, telephone public utility, in business for over fifty years. In 1957 it was granted grandfather certificates under section 5(b) of the Public Utility Act of 1956. Miss. Laws 1956, ch. 372; Miss.Code Ann. Sec. 7716-05 (1956). In November 1962 Bay Springs filed an application with the Public Service Commission for establishment of a rate schedule and a certificate of public convenience and necessity, authorizing it to render automatic mobile, dial radiotelephone service to subscribers within its certificated area. Appellant, Robert M. Keith, Jr., doing business as Monroe Radiotelephone Company (called Monroe) filed objections to the application. After a hearing, the Commission found that the type of service proposed by Bay Springs was 'essentially different from the service offered' by Monroe and there was a public need for it. It issued to Bay Springs a certificate and approved its tariff schedule.

On Monroe's direct appeal, the Chancery Court of Hinds County affirmed the agency's order. Southern Bell Telephone and Telegraph Company intervened. On Bay Springs' cross appeal, the lower court held that under existing certificates it already had the authority to render a dial radiotelephone service within its assigned area, without the necessity of obtaining an additional certificate; and the Commission erred in holding a new certificate was necessary, but that issuance of the certificate to Bay Springs (although not required) was within its jurisdiction and therefore not erroneous. The Commission's order was affirmed.

I.

Monroe relies on the existing facility rule, sometimes in this state called the Tri-State Transit rule. Tri-State Transit Co. v. Dixie Greyhound Lines, 197 Miss. 37, 19 So.2d 441 (1944). It is 'that a certificate should not be granted where there is existing adequate service over the route applied for, and, if inadequate, unless the existing carrier has been given an opportunity to furnish such additional service as may be required.' , 197 Miss. at 48, 19 So.2d at 444. This test was applied to the issuance of certificates to public electric utilities under the 1956 act in Capital Electric Power Association v. Mississippi Power & Light Company, 240 Miss. 139, 125 So.2d 739 (1961). Capital Electric held that one purpose of the act was to prevent duplicating facilities and certificates; and '[a]n existing utility within the certificated area has the right and duty to provide the service, and must be given that opportunity. If it fails, the commission can award another franchise to another utility.' 240 Miss. at 151, 125 So.2d at 743. Miss. Power Co. v. East Miss. Elec. Power Ass'n., 244 Miss. 40, 140 So.2d 286 (1962); Delta Elec. Power Ass'n v. Miss. Power & Light Co., 149 So.2d 504 (Miss. 1963).

However, the existing facility rule does not apply unless the services and facilities to be rendered by the new certificate are duplicating and result in waste. Section 5(c) of the Public Utility Act reflects an intent to 'prevent unnecessary and uneconomic duplication of such facilities as between two' utilities. See also Sec. 5(f). The rule is a limitation upon the Commission's power to issue certificates, but it is relevant for the purpose principally of avoiding wasteful duplication of the existing utility service.

The fatal flaw in Monroe's argument is this: There was substantial evidence to support the finding of the Commission that the service which Bay Springs proposes, as a part of its general telephone service, is materially different from, and not duplicative of, the service rendered by Monroe. Hence the rule protecting the holder of an existing certificate does not apply.

The Commission found that 'the type of service proposed by applicant is essentially different from the service offered by protestant and that there is a public need and necessity for the mobile dial telephone communication service proposed by the applicant.' The areas proposed to be served, it stated, 'are heavily populated, and support a variety of different businesses which have a need, and have expressed a demand for the type of automatic mobile, dial radiotelephone service proposed.' Public convenience and necessity justified the proposed operation.

Judicial review of the Public Service Commission is based on the substantial evidence rule. An order will not be reversed unless it 'is not supported by substantial evidence, is contrary to the manifest weight of the evidence, is in excess of the statutory authority or jurisdiction of the commission, or violates constitutional rights.' Miss.Laws 1956, ch. 372, Sec. 26(d); Miss.Code Ann. Sec. 7716-26(d) (1956).

II.

Because a mobile telephone service involves the use of radio, there must be compliance with requirements of the Federal Communications Commission and the Federal Communications Act. 48 Stat. 1064, 47 U.S.C.A. Sec. 151 et seq. (1934). The person desiring to have a mobile communication system must apply to the FCC for allocation of radio wave lengths and permission to operate the required equipment. Bay Springs, as a general communications common carrier, will utilize radio frequencies assigned by the FCC for use by landline telephone companies for rendering the proposed mobile service. These frequencies do not interfere with or duplicate those available or assigned to Monroe. The latter, classified as a 'miscellaneous common carrier' under FCC rules, is granted different frequency ranges within which to operate.

Bay Springs' landline service extends to both county seats of Jasper County, Paulding and Bay Springs, and several other communities in that county. It serves also certain certificated areas (mostly rural) in Smith, Jones, Scott and Rankin Counties, Monroe, operating for about six years, maintains base radio stations in Laurel and Hattiesburg, and through them provides radiotelephone service to its subscribers. It is not licensed to operate landline telephone service, such as is provided by Bay Springs. Bay Springs' mobile radiotelephone service will have a physical interconnection with the circuits of its land-based telephone system. The record does not reflect that Monroe has an interconnection agreement or arrangement to connect its mobile radiotelephones with a land-based telephone system. Monroe's transmission to land-based telephones is accomplished by a dispatch method. Each customer of Monroe has a mobile radio in hia car. He calls the dispatcher at Monroe's base station, tells him the telephone number he wishes to call, the dispatcher dials it, and then connects the call with the subscriber. In reverse, Monroe's dispatcher can page him by car number, and when the customer answers, he receives the call.

The Bay Springs mobile unit subscribers will utilize dialing in the same manner as its land-based telephones. On the other hand, Monroe subscribers must first contact a base station operator, who then obtains contact for the caller to the land-based telephone destination. Bay Springs subscribers will have exclusion privacy, since their mobile telephone conversations will not be monitored or heard by other subscribers on the channel; but Monroe subscribers do not have such privacy. The Bay Springs system will involve calling only the particular mobile number. This feature is not available to Monroe subscribers, who will hear the dispatcher paging a particular car number. Bay Springs subscribers will have regular directory listings, the same as maintained for its land-based subscribers. That is not available to Monroe. Bay Springs subscribers will be able to use their mobile until in any area having the same frequencies as the Bell System. . on the other hand, the Monroe system, since it uses different assigned frequency ranges, will not hae such national compatibility.

Proposed service by Bay Springs is further distinguishable with respect to the geographic area to be served. Its base station will be at the Soso Exchange, which will provide nontoll connecting service to other subscribers of Bay Springs, whose service is connected to other central offices at six other communities in the county. In contrast, Monroe's base stations, located at Laurel and Hattiesburg, have nontoll connecting service through its dispatch arrangement extending only to central exchange subscribers connected to those two cities.

The proposed service by Bay Springs will be confined to the area prescribed by the certificate previously issued to Bay Springs. It will serve only people who live in its certificated area. Monroe has no customers there. Bay Springs has an interconnection agreement with Southern Bell Telephone and Telegraph Company. Its mobile sets will be installed under the dashboard, with the trunk containing a transistorized unit. The radiotelephones will be completely dial, probably with push buttons. Bay Springs will have twenty-four-hour automatic service, with no operator involved. The proposed service from Bay Springs will cover some but not a substantial part of the area now actually being served by Monroe.

III.

The existing facility rule began with the regulating of local common carriers operating over fixed routes for transportation of commodities and passengers. It was designed to prevent needless competition and to regulate controlled monopolies for the purpose of preventing economic waste. In re Shelton St. Ry., 69 Conn. 626, 38 A. 362 (1897); 3...