Nationwide Cellular Service Inc. v. Public Service Com'n of State of N.Y.
| Decision Date | 07 May 1992 |
| Citation | 180 A.D.2d 24,583 N.Y.S.2d 852 |
| Parties | , Util. L. Rep. P 26,199 In the Matter of NATIONWIDE CELLULAR SERVICE INC., Appellant, v. PUBLIC SERVICE COMMISSION OF the STATE OF NEW YORK, Respondent, and Cellular Telephone Company, Proposed Intervenor-Respondent. |
| Court | New York Supreme Court — Appellate Division |
Couch, White, Brenner, Howard & Feigenbaum (Paul A. Feigenbaum, of counsel), Albany, for appellant.
William J. Cowan (Lawrence G. Malone, of counsel), Albany, for respondent.
Read & Laniado (Howard J. Read, of counsel), Albany, for proposed intervenor-respondent.
Before WEISS, P.J., and YESAWICH, MAHONEY, CASEY and HARVEY, JJ.
Appeal from a judgment of the Supreme Court (Paul E. Cheeseman, J.), entered September 11, 1991 in Albany County, which dismissed petitioner's application, in a proceeding pursuant to CPLR article 78, to review a determination of respondent Public Service Commission approving Cellular Telephone Company's request for certain tariff revisions.
By petition dated March 27, 1991, petitioner sought to challenge the approval by respondent of certain affinity group-based cellular telephone discount tariffs proposed by Cellular Telephone Company (hereinafter CTC). CTC is one of two owners of transmission facilities providing cellular telephone services in the New York City area. Petitioner is one of many resellers of cellular telephone services purchased in bulk from facility owners such as CTC. Cellular telephones are utilities regulated by the Federal Communications Commission, which has preempted regulation by the states except for discretionary authority to prescribe service and rate standards. In this State, respondent has limited its regulation of cellular telephones to the entry of providers into the business and to rate structures. The cellular business is not a monopoly, but rather a highly competitive, aggressively promoted and rapidly expanding industry. Nevertheless, cellular telephones remain utilities and while, by public policy design, the business is driven by competitive market forces, rates are regulated by respondent. In this regard the injuries asserted by petitioner from CTC rates are solely of a competitive economic nature.
Petitioner alleged that the approved affinity group-rate structure is invalid because it violates the Public Service Law ( § 91[2][a], [3]; § 92[3] by treating similar customers differently. After service of respondent's answer and objections in point of law Supreme Court dismissed the petition, finding that it failed to state a cause of action. Petitioner has appealed.
Initially, we find no merit to petitioner's contention that the allegations in the petition are deemed true for purposes of the objections in point of law. Proceedings pursuant to CPLR article 78 are summary in nature; once respondent answered and submitted the record, issue was fully joined and the matter was procedurally ripe for a determination on the merits (cf., Matter of Burke v. Axelrod, 90 A.D.2d 577, 578-579, 456 N.Y.S.2d 135).
Turning to the merits, petitioner contends that the approved tariff for affinity group members includes rate discounts available to a single individual with a single cellular phone making only one call per month. The only qualification necessary for the discount is membership in or employment by a qualified affinity group, which, it is argued, could be created at will. Reduced to its simplest terms, petitioner contends that the tariff as approved can effect two similarly situated individuals differently by granting one a discount for identical cellular telephone usage in violation of antidiscrimination and unreasonable preference sections of the Public Service Law ( § 91[2][a], [3]; § 92[3].
The approved affinity group here was defined as follows:
Employees or members of a corporation, partnership or professional association, having the minimum number of employees or members, as stated in the applicable Flexible Rate Schedule, may become customers of [CTC] and cumulate their usage access numbers in order to qualify for the volume and usage discounts provided * * *.
The number of individuals in the group begins with zero and the number of telephone numbers and usage minutes begin with one. CTC contends its plan is a sound business concept to service large groups. While the concept envisions an aggregation of users and an accumulation of their usage, however, it is not so limited. The potential unequal treatment is not merely theoretical, but is built into the very defining criteria that was approved. Classifications need not be made with mathematical nicety nor mandate absolute equality of treatment, and the concept of affinity groups, if appropriately defined, can be supported by the...
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