Popowsky v. Pennsylvania Public Utility Com'n
| Decision Date | 22 December 1995 |
| Citation | 669 A.2d 1029 |
| Parties | Irwin A. POPOWSKY, Consumer Advocate, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. PENNSYLVANIA CABLE TELEVISION ASSOCIATION, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. MCI TELECOMMUNICATIONS CORPORATION, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. CENTRAL ATLANTIC PAYPHONE ASSOCIATION, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. AT & T COMMUNICATIONS OF PENNSYLVANIA, INC., Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. CITY OF PITTSBURGH, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. |
| Court | Pennsylvania Commonwealth Court |
Philip F. McClelland and Joan Campion, for petitioner Popowsky, Consumer Advocate.
David M. Kleppinger, for petitioner Pa. Cable Television Assoc.
Joan Campion, for petitioner MCI Telecommunications Corp.
Alan Kohler, for respondent.
Before COLINS, President Judge, and DOYLE, McGINLEY, SMITH, PELLEGRINI, KELLEY and NEWMAN, JJ.
Irwin A. Popowsky, the Consumer Advocate of Pennsylvania (Consumer Advocate), the Pennsylvania Cable Television Association (Cable Association), MCI Telecommunications Corporation, Inc. (MCI), Central Atlantic Payphone Association (Payphone Association), AT & T Communications of Pennsylvania, Inc. (AT & T), Digital Direct of Pittsburgh, Inc. (Digital Direct) and the City of Pittsburgh (Pittsburgh), collectively referred to as the Challengers, appeal a decision of the Pennsylvania Public Utility Commission (Commission) approving Bell Atlantic--Pennsylvania, Inc.'s (Bell), Petition and Plan for Alternative Form of Regulation (Petition and Plan) under Chapter 30 of the Public Utility Code (Code). 1
To place in context the specific facts of this case and the plethora of contentions raised by the Challengers, it is necessary to explain Chapter 30's statutory framework for the alternative form of regulation for telecommunications services. Attempting to respond to the rapid changes taking place in telecommunications, as well as in the telecommunications industry, the General Assembly, in 1993, enacted Chapter 30 to "[m]aintain universal telecommunications service at affordable rates while encouraging the accelerated deployment of universally available, state-of-the-art, interactive, public-switched broadband telecommunications network in rural, suburban and urban areas." 66 Pa.C.S. § 3001(1). Recognizing, however, that implementation "at all costs" was not desirable, the General Assembly also adopted a legislative scheme in Chapter 30 that aimed at protecting the consumers of traditional telecommunications services. For this reason, Chapter 30 also seeks to:
(2) Ensure that customers pay only reasonable charges for local exchange telecommunications services which shall be available on a nondiscriminatory basis.
(3) Ensure that rates for noncompetitive telecommunication services do not subsidize the competitive ventures of providers of telecommunications services.
(4) Provide diversity in the supply of existing and future telecommunications services and products in telecommunications markets throughout this Commonwealth by ensuring that rates, terms and conditions for noncompetitive services, including access services, are reasonable and do not impede the development of competition.
(5) Ensure the efficient delivery of technological advances and new services throughout this Commonwealth in order to improve the quality of life for all Pennsylvanians.
(6) Encourage the provision of telecommunications products and services that enhance the quality of life of people with disabilities.
(7) Promote and encourage the provision of competitive services by a variety of service providers on equal terms throughout all geographic areas in this Commonwealth.
(8) Encourage the competitive supply of any service in any region where there is a market demand.
(9) Encourage joint ventures between local exchange telecommunications companies and other entities where such joint ventures accelerate, improve or otherwise assist a local exchange telecommunications company in carrying out its network modernization implementation plan.
With the purposes of advancing state of the art telecommunications in all areas of the state and protecting traditional consumers of telecommunications in mind, Chapter 30 permits a local exchange telecommunications company (LEC) to file a petition requesting to be regulated under an alternative form of regulation. 66 Pa.C.S. § 3003(a). Chapter 30 defines an alternative form of regulation as being a "form of regulation of telecommunications services other than the traditional rate base/rate of return regulation, to be determined by the commission." 66 Pa.C.S. § 3002. The LEC must submit to the Commission a proposal regarding the method by which it is seeking to assess rates for its noncompetitive services and must provide the Commission with data to support its proposal. Id.
The Commission, after providing notice and conducting a hearing, must review the LEC's petition and plan for alternative form of regulation. 66 Pa.C.S. § 3004(b). The Commission may approve the petition and plan, approve them with modifications, or deny them as not meeting the requirements of Chapter 30. Id. In so doing, the Commission must not only determine whether the rates for noncompetitive services proposed by the LEC in its petition and plan are just, reasonable, and not unduly discriminatory, but it must also determine that the plan does not unduly or unreasonably prejudice or disadvantage a customer class or providers of competitive services. 66 Pa.C.S. § 3004(d). 2
When an LEC petitions for alternative regulation it is also required to show how it will bring its system up to a "state-of-the-art" status by submitting a network modernization implementation plan. Such a plan must commit to converting 100 percent of the LEC's interoffice and distribution telecommunications network to be broadband capability by December 31, 2015. The plan must also set forth the LEC's present and projected deployment of digital switches in its central offices, fiber optic trunk line capability between its central offices, as well as the intelligent network capability and integrated services digital network availability in its central offices. 66 Pa.C.S. § 3003(b)(1). Additionally, the LEC's network modernization plan must also reasonably balance the deployment of its broadband network between rural, urban and suburban areas, and shall deploy the broadband facilities in or adjacent to public rights-of-way abutting public schools, industrial parks and health care facilities. 66 Pa.C.S. §§ 3003(b)(2), (b)(3). The Commission must review the network modernization plan to ensure that it complies with the requirements of Chapter 30 and is in the public interest. 66 Pa.C.S. § 3004(c).
In conjunction with its petition for an alternative form of regulation, the LEC may also petition the Commission for a determination of whether any of its telecommunication services or other service or business activity are competitive. 66 Pa.C.S. § 3005(a). The effect of such a petition, if granted, would result in the deregulation of the competitive service, including the deregulation of rates, tolls, charges, rate structures, rate base, rate of return, or earnings of the competitive service. 66 Pa.C.S. § 3004(d)(3).
With respect to the classification of competitive services, the Commission is required to establish regulations to prevent LECs from engaging in unfair competition and to require the LECs to provide nondiscriminatory access to their competitors. 66 Pa.C.S. § 3005(b). Moreover, when addressing the specific service at issue before it, the Commission must make numerous findings of fact concerning whether the service is, in fact, in a competitive market. 66 Pa.C.S. § 3005(a)(1). Additionally, the Commission must also ensure that there are competitive safeguards that prevent the LEC from discriminating against its competitors in the provision of the basic functions upon which the LEC's competitive services depend. 66 Pa.C.S. § 3005(e).
It is within this statutory framework that we must review the Commission's decision approving Bell's Petition and Plan. For purposes of organization and clarity, we shall first set forth the specific facts of the instant case. We will then address the parties' contentions as they pertain to the requirements for each portion of the Petition and Plan, as well as the necessary findings that must be made by the Commission with respect to each part of the plan.
On October 1, 1993, Bell filed its Petition and Plan with the Commission pursuant to Section 3003 of the Code. 3 The petition was organized into three parts as follows: a price stability mechanism for noncompetitive services, a competitive services deregulation proposal, and a network modernization implementation plan. Bell's plan proposed that it would remain in effect through December 31, 2003.
After three administrative law judges (ALJs) were assigned to the proceedings on Bell's Petition and Plan, several evidentiary hearings were held, during which all of the parties presented the testimony of numerous witnesses. 4 Additionally, separate public input hearings were held in various locations throughout the Commonwealth, during which various customers and competitors of Bell's services expressed their opinions both supporting and opposing Bell's Petition and Plan. 5
At the conclusion of the evidentiary and public input hearings, the ALJs issued a recommended decision denying Bell's Petition and Plan. 6 In so doing, the ALJs concluded that: (1) the price stability mechanism in Bell's plan did not ensure that the rates for its noncompetitive services were just, reasonable, and not unduly discriminatory; (2) Bell's network modernization plan did not meet...
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