New York Tel. Co. v. Public Service Commission
| Decision Date | 23 September 1976 |
| Citation | 387 N.Y.S.2d 524,88 Misc.2d 21 |
| Parties | In the Matter of NEW YORK TELEPHONE COMPANY, Petitioner, for a Judgment Under Article 78 of the Civil Practice Law and Rules v. PUBLIC SERVICE COMMISSION of the State of New York, Respondent. |
| Court | New York Supreme Court |
Davis, Polk & Wardwell, George E. Ashley, Raymond F. Burke, Kenneth L. Demarest, Jr., New York City, for petitioner.
Peter H. Schiff, Albany, Counsel to the Public Service Commission of the State of New York, for respondent; Charles R. Gibson, Albany, of counsel.
The petitioner telephone company moves herein to annul an order of the respondent Commission dated April 28, 1976 as being without jurisdiction and unreasonable. It is the opinion of this court that the order fails in both respects and should, therefore, be invalidated and the petitioner's motion granted.
The order was adopted in response to the complaints of certain classified directory advertisers and consumer affairs groups, about the company's recent attempt, without Commission approval, to change its existing policy and permit 1/2 and 3/8-page display advertising in its 4-column 9 11 Yellow Pages in the Suffolk County Directory, a policy that will continue in future issues. 1 Since World War II the largest size ads permitted were 1/4-page. All other ads were of lesser dimensions. To reduce any dispute that might arise among its advertisers, concerning preferential prositioning, the company adopted during that time a set of 'positioning rules' which granted a preference to the subscribers according to the size ad purchased, and within each size group to the oldest advertiser in order of continuous years of advertising.
In its attempt to resume its policy of permitting larger ads of 1/2 and 3/8-page dimensions, the company applied the same set of 'positioning rules' under which it had operated for so many years. Subscribers to the 1/4-page ads complained to the Commission that such a policy erased any positioning advantage that their years of advertising had given them, in favor of the new advertisers who subscribed to the new larger ads or compelled them to purchase a larger ad in order to retain their preference. The Commission agreed and stamped the company's policy discriminatory and coercive and adopted the subject order to prevent it. The order was promulgated preliminarily, before the Commission's own proceedings were concluded because the issuance of the Suffolk County Classified Section for 1976--1977 was imminent.
By its terms the order required the company to discontinue its prior 'positioning rules' to the extent that the newly permitted ads of 1/2 and 3/8-page dimensions, although larger, could not be positioned ahead of the 1/4-page ads but had to be interspersed therewith permitting the 1/4-page advertisers to retain any preference their past patronage had gained then without the necessity of purchasing one of the new larger ads. Thus, the Commission concluded that the company's 'positioning rules' when applied to the new larger ads would be discriminatory since the advertisers in the already existing 1/4-page ad group would be disadvantaged thereby. The subject order did not prohibit the reintroduction of the larger ads but attempted to eliminate the coercive feature of the company's proposal by placing all advertisers of 1/2, 3/8 and 1/4-page within the same class requiring the oldest consecutive 1/4-page advertisers to be preferred over any subscriber to the new, larger and more expensive ads. The order further provides for a general investigation of the telephone company's priority system in directory advertising at a hearing to be set and held in the future. Alternatively, the telephone company was permitted to elect not to provide ads in excess of 1/4-page and was ordered to contact all advertisers who placed orders for 1/2-page and 3/8-page ads to advise them of the order and to give them the option of changing their ads.
The company contends that its decision in regard to classified advertisers is a purely business one, beyond the Commission's jurisdiction and, in any event, the company's 'positioning rules' as they have heretofore operated without challenge are reasonable and continue to be so when applied to the new larger ad groups.
At most, the Commission's jurisdiction in regard to classified advertising and the revenues produced thereby is limited. The Commission derives no statutory authority from the Public Service Law over classified advertising. Such ads and listings do not constitute service 'over the line' of the telephone company so as to be included within Public Service Law § 92, Subdiv. 1. See Solomon v. Public Service Commission, 286 App.Div. 636, 146 N.Y.S.2d 439. In the exercise of its general regulatory powers under the Public Service Law the jurisdiction prescribed by Solomon, supra, is extended only to the 'light faced alphabetical listings' in the classified directory and to discrimination prevented by Public Service Law § 91(3). What control had been exercised formerly over display advertising assured only that the 'light face listings', as an integral part of telephone service, suffered no interference from overloading by the display, making the finding of the name and number of a subscriber difficult and further assured that the privilege of inserting advertisements was and is available to all subscribers upon the same terms and conditions, without discrimination. See Solomon v. Public Service Commission, supra. This authority held that not all aspects of classified advertising are matters of concern to the Commission, however, and that in this regard such advertising is similar in some respects to advertising in other media. In approving and following Solomon the Court of Appeals indicated an intention to limit rather than to...
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