Ohio Bell Telephone Co. v. Public Utilities Commission

• Decision Date: 05 July 1924
• Docket Number: No. 272.,272.
• Citation: 3 F.2d 701
• Parties: OHIO BELL TELEPHONE CO. v. PUBLIC UTILITIES COMMISSION OF OHIO et al.
• Court: U.S. District Court — Southern District of Ohio

3 F.2d 701 (1924)

OHIO BELL TELEPHONE CO. v. PUBLIC UTILITIES COMMISSION OF OHIO et al.

No. 272.

District Court, S. D. Ohio, E. D.

July 5, 1924.

Henderson & Burr, of Columbus, Ohio, S. H. Tolles, of Cleveland, Ohio, and George H. Clark, of Columbus, Ohio, for plaintiff.

John W. Bricker, of Columbus, Ohio, and T. M. Miller and J. E. Kinnison, both of Canton, Ohio, for defendants.

Before DONAHUE, Circuit Judge, and SATER and HICKENLOOPER, District Judges.

PER CURIAM.

The hearing in this case proceeded in accordance with the provisions of section 266 of the Judicial Code (Comp. St. § 1243). In 1921 the Ohio Bell Telephone Company and the Ohio State Telephone Company, each then and theretofore owning and operating in Ohio a telephone system and furnishing to the public separate telephone service, exchange, and toll, were consolidated under plaintiff's name, with the consent of the Public Utilities Commission of Ohio and the Interstate Commerce Commission. On September 7, 1921, when the Utilities Commission assented to the consolidation, it directed that the then lawfully existing rates, charges, tolls, and rentals of the constituent companies should be charged by the consolidated company after such merger until altered in the manner provided by law; that, in communities in which dual service had been furnished by such companies, the consolidated company should proceed to unify its service immediately after the rates to be charged for unified service should be legally determined; that nothing in the order sanctioning the consolidation should be construed to be its consent to or approval of any increase in rates or diminution of service in the territory into which the property of such respective consolidated company extends; and that the findings then made as to the value of such properties ($81,316,429.90) or as to the rates and service, should not be binding upon such commission or the consolidated company in any future proceeding involving matters of rates and service, or either of them. The cost of unification (claimed by plaintiff to be about $12,000,000) will necessarily be large.

On June 9, 1922, after unified service had been installed in various exchange areas on rates fixed by the Utilities Commission, application was made to such commission for the fixing of rates in the Canton exchange area. At a hearing had on June 27 next following, plaintiff submitted its evidence as to the value of its telephone property used and useful in furnishing telephone service to the public in such area, and also as to the value of such property after the unification should be completed. It also filed a schedule of the rates it proposed to charge in lieu of those which had prevailed under the dual service, which proposed rates it claims are just, reasonable, nondiscriminatory, and lawful, and will yield no more than a fair return on its used and useful property to be employed in furnishing service. The city of Canton appeared to resist the rates suggested by plaintiff, and has not yet completed its evidence. Whether, as claimed by defendants, the plaintiff consented to the continuances had at the city's request, the time consumed in hearing the case has been greatly prolonged. On account of the delay the plaintiff, in response to the wishes of subscribers and to the knowledge of the Utilities Commission, without awaiting the fixing of rates for the unified service, proceeded to unify the properties of the constituent companies. It filed with such commission a schedule of rates for optional unified private branch exchange service, which were accepted by most of the subscribers for that character of service, and on December 1, 1922, it filed with such body a schedule of rates effective January 1, 1923, for optional unified residence and business service, of which many of its patrons voluntarily availed themselves; section 614-20, G. C. Ohio, providing that no existing rates shall be changed, so as to become effective, except after 30 days' notice to the commission, unless the commission prescribes a less time when they may take effect. No objection appears to have been interposed at the time by the commission to plaintiff's above-mentioned course, which plaintiff alleges was in anticipation of an early fixing of rates for unified service for all subscribers and to speed the work of unification, which would require in all about 12 months.

Complaints having been made of the service rendered, the Utilities Commission, acting on its own motion, and, so it claims, under section 614-21, G. C., caused an investigation to be made. It would seem that some inconvenience would result to telephone users from the work of unification, and it is quite possible the plaintiff was reluctant to make repairs to maintain high efficiency in the dual service, in so far as repairs made might have to be discarded when such service was unified. The plaintiff alleges the causes of the complaints were unprecedented storms and other casualties suffered by its plants and properties, the delay of the city of Canton in producing its evidence before the commission, and the consequent postponement of the announcement of a unified rate order. The commission's expert, whose letter of August 29, 1923, made a part of his affidavit offered by defendants, admits that it is probably true that a great deal of the trouble was due to the large number of severe storms, but states that their effect would not have been so marked, had the plaintiff's plant been in first-class condition. He further...