Lewiston, Greene & Monmouth Telephone Co. v. New England Tel. & Tel. Co.

• Citation: 299 A.2d 895
• Parties: LEWISTON, GREENE AND MONMOUTH TELEPHONE COMPANY et al., Complainant, v. NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY, Respondent. NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY, Plaintiff, v. LEWISTON, GREENE AND MONMOUTH TELEPHONE COMPANY et al., Defendants.
• Decision Date: 26 January 1973
• Court: Supreme Judicial Court of Maine (US)

Page 895

299 A.2d 895

LEWISTON, GREENE AND MONMOUTH TELEPHONE COMPANY et al., Complainant, v. NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY, Respondent.

NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY, Plaintiff, v. LEWISTON, GREENE AND MONMOUTH TELEPHONE COMPANY et al., Defendants.

Supreme Judicial Court of Maine.

Jan. 26, 1973.

Pierce, Atwood, Scribner, Allen & McKusick, by Vincent L. McKusick, and Peter L. Murray, Portland, for New England Telephone and Telegraph Co.

Horace S. Libby, Augusta, for Public Utilities Comm.

Frank E. Southard, Jr., of McLean, Southard & Hunt, Augusta, with whom appeared Harold D. Carroll, of Waterhouse, Carroll & Cyr, Biddeford, Frank W. Linnell, of Linnell, Choate & Webber, Auburn, for Lewiston, Greene & Monmouth Telephone Co., and others, complainants and defendants.

Before DUFRESNE, C. J., and WEATHERBEE, POMEROY, WERNICK and ARCHIBALD, JJ.

WERNICK Justice.

In June of 1970, the Lewiston, Greene and Monmouth Telephone Company filed with the Public Utilities Commission a complaint, pursuant to 35 M.R.S.A. § 251, ¹ against the New England Telephone and Telegraph Company (New England). Alleging that the existing arrangement between it and New England for so-called 'Extended Area Service' (EAS) and 'Extended Local Service' (ELS) ² settlements was unfair and unreasonable, the complaint asked the Commission to establish a more equitable settlement arrangement.

The Commission regarded the complaint as precipitating the generalized question:

'What are the proper procedures and methods for determining EAS/ELS settlements between the telephone companies in the State of Maine rendering this type of interexchange (between exchanges) service to the telephone-using public in Maine?'

In the exercise of discretionary and investigatory powers reposing in it, the Commission ordered the proceeding broadened to include as parties all telephone companies which provide intrastate telephone service in the State of Maine.

Extensive hearings were held. On May 24, 1972 the Commission issued a 'Decree and Order' embodying various findings of fact and conclusions.

On June 22, 1972, purportedly pursuant to 35 M.R.S.A. § 303, ³ (hereinafter 'Section 303') New England filed a notice of 'appeal' and thereafter took all appropriate steps to complete the record on appeal and to have the appeal docketed in the Law Court.

Lewiston, Greene and Monmouth Telephone Company and all of the other independent telephone companies whom the Commission had made parties to the proceeding have filed a motion to dismiss this appeal of New England on the ground that the appeal is 'premature' in that the Commission had not yet made a 'final decision' within the meaning of Section 303. The Commission has joined in the motion.

Two other motions are before us for decision. They arise because New England, in addition to its Section 303 'appeal' and likewise in June of 1972, filed a 'complaint' in the Law Court to invoke the jurisdiction conferred by 35 M.R.S.A. § 305 (hereinafter 'Section 305'). ⁴

The Independent Telephone Companies (the Public Utilities Commission joining with them) have filed a motion to dismiss this Section 305 'compalint.' They rely on two grounds (1) 'prematurity' and (2) 'a waiver of the right of New England . . . to proceed under . . . § 305 because of New England's having concurrently taken a . . . § 303 appeal.'

The second motion concerning New England's Section 305 'complaint' proceeding is a motion by New England, as the complainant asking the Law Court to order the taking of additional evidence. This motion was filed on September 6, 1972 and claims to be pursuant to the provisions of Section 305:

'. . . that in cases where issues of confiscation or of constitutional right are involved the court may order such additional evidence as it deems necessary for the determination of such issues to be taken before the commission upon such terms and conditions as to the court may seem proper.'

New England's motion specifies that its Section 305 'complaint' raises issues of 'confiscation' and 'of constitutional right.' The motion further calls special attention to alleged facts that (1) the Commission's Decree and Order of May 24, 1972 was forthcoming more than a year after the evidentiary record before the Commission had been closed (on May 4, 1971); (2) more than fifteen months had elapsed between the close of evidence and the motion for additional evidence (September 6, 1972); and (3)

'substantial changes have occurred in facts relevant to the issues of confiscation and constitutional right . . . involved . . ..'

For reasons assigned hereinafter, we decide the two motions pertaining to the Section 305 'complaint' proceeding by (1) denying the Independents' (and Commission's) motion to dismiss the proceeding and (2) granting, with limitations, New England's motion for additional evidence.

It is our further conclusion, as hereinafter more fully discussed, that our disposition of the motions concerning the Section 305 proceeding renders presently unnecessary a decision upon the third motion before us-that of the Independents (and the Commission) to dismiss the 'appeal' taken by New England under Section 303; and, accordingly, we retain this motion upon our docket, as continued without decision, to await future developments.

I

Adequate comprehension of the problems presently involved requires extensive description of particular facets of the Commission's Order of May 24, 1972.

First, the Commission found fundamental deficiencies in the existing 'interim' settlement agreement, known as the Originating Responsibility Plan (ORP) and which New England sought to have the Commission approve,-as follows: (1) as to the Independents, their

'average cost per minute of use (on a fully allocated cost basis) is substantially higher than the New England('s) . . . average cost per minute of use'

and (2) ORP is 'unreasonable' because it fails to result in the Independents' recovering in the form of settlements these average relatively higher fully allocated costs as the Independents' contribution to EAS/ELS operations in this State. ⁵

Second, the Commission conceived the key to any reasonable and equitable settlement arrangement to lie in acceptance of the principle that all telephone customers in the State of Maine must be afforded a reasonable, relatively equal, and equitable opportunity to participate in 'non-toll' services 'between' exchanges; and, therefore, the settlement question on these 'non-toll' services 'between' exchanges must be resolved in a manner that will not unduly burden any segment of the present or prospective 'non-toll between exchanges' customer body in Maine. On this basis, 'significant' as an 'element' in the proper resolution of the issue, in the view of the Commission, is:

'recognition of the Independents' (as compared to the Bell System's) relatively higher costs incurred per minute of use of plant and facilities, allocated or assigned to the 'between' exchanges 'non-toll' services.'

Third, the Commission evaluated the plan sponsored for Commission approval by the Independents, known as the 'Stolz-O'Donnell', or 'USITA', Plan. The Commission summarized it as follows:

'. . . the USITA Plan envisions development of EAS/ELS revenue requirements by allocating or assigning the plant investment and associated expenses of all toll services, both intrastate and interstate, consistent with existing toll settlement procedures. The remaining investment and expenses would be associated with combined (a) intraexchange local service, and (b) the interexchange EAS/ELS service. Plant used exclusively for interexchange EAS/ELS, or for intraexchange service would be directly assigned. Plant used jointly for EAS/ELS and intraexchange local service would be apportioned to each service on the basis of relative use. A composite rate curve would then be developed for each class and grade of service reflecting the scope of the local (non-toll) calling area. EAS/ELS revenues would be derived from the composite rate curves by reading and determining the difference on the curve points of the exchange involved, both excluding and including EAS/ELS.'

Fourth, as to the advisability of adopting the USITA Plan, the Commission concluded that 'while the concepts underlying . . . (it) may have merit', the 'data to support the application of the Plan to . . . (the Commission's) satisfaction' had not been adequately provided. As the Commission saw the evidence, 'many questions were left open . . .' including (a)

'would the composite rate curves such as those proposed by the USITA Plan be frozen from the time of installation of EAS, or would the readings on the curves change as growth occurred in each of the exchanges'

and (b) if so,

'how often would the readings be taken on the curve?'

Fifth, having rejected the acceptability of both the settlement plan ORP favored by New England and the plan USITA advocated by the Independents, the Commission concluded that 'the public interest reasonably requires' that the status quo (i. e., the continuing effectiveness of ORP) be changed.

In particular, the Commission believed that the public interest demanded cessation of New England's opportunity, in effect, to force the continuance of ORP, despite the Commission's conclusion of its inequities, by a resort to the expedient that New England

'on the one hand, . . . refrain(s) from developing and filing a uniformly applicable 'between' exchanges 'non-toll' tariff containing rates and charges for . . . 'non-toll' services applicable to its Bell customers and in which the Independents can concur and make the same rates and charges applicable to . . . customers (of Independent Companies); and on the other hand, take(s) the position that either (a) the present composite 'local service' rates cannot be divided to obtain the EAS/ELS portion of such rate for revenue contribution and settlement purposes, or (b) that the methods of...