State v. Public Service Commission, No. WD 63580 (MO 12/7/2004)
| Decision Date | 07 December 2004 |
| Docket Number | No. WD 63580,WD 63580 |
| Parties | STATE OF MISSOURI, EX REL. SPRINT MISSOURI, INC., Appellant, v. PUBLIC SERVICE COMMISSION OF THE STATE OF MISSOURI, A STATE AGENCY, AND ITS MEMBERS KELVIN SIMMONS, CONNIE MURRAY, SHEILA LUMPE, STEVE GAW and BRYAN FORBIS IN THEIR OFFICIAL CAPACITY, Respondents, and OFFICE OF PUBLIC COUNSEL, Respondent. |
| Court | Missouri Supreme Court |
Appeal from the Circuit Court of Cole County, Honorable Richard G. Callahan, Judge.
Before James M. Smart, Jr., Presiding Judge, Joseph M. Ellis, Judge and Lisa White Hardwick, Judge.
Appellant, Sprint Missouri, Inc. ("Sprint"), appeals a judgment of the Circuit Court of Cole County affirming an order issued by Respondent, the Missouri Public Service Commission ("Commission" or "PSC"), in Case No. TT-2002-447, In the Matter of the Tariff Filing of Sprint Missouri, Inc., d/b/a Sprint, to Increase the Residential and Business Monthly Rate for the Metropolitan Calling Area (MCA) Plan. Because the Commission's order rejecting Sprint's proposed tariff was unlawful, we reverse the judgment of the circuit court and remand the matter to the Commission for further proceedings.
The facts of this case are not in dispute. As a telecommunications company under § 386.020(51),1 Sprint is subject to the regulatory jurisdiction of the Commission pursuant to § 386.250(2). On August 19, 1999, in Case No. TO-99-359, the Commission reclassified Sprint as a price cap regulated company under § 392.245, a 1996 statute which established a fairly complex price cap regulation scheme. Section 392.245.1 requires "maximum allowable prices" to be established for telecommunications services offered by price cap regulated incumbent local exchange telecommunications companies ("ILECs"),2 and further states that those "maximum allowable prices shall not be subject to increase except as otherwise provided" in § 392.245. Section 392.245.2 provides that large ILECs such as Sprint are subject to price cap regulation under § 392.245 "upon a determination by the commission that an alternative local exchange telecommunications company3 has been certified to provide basic local telecommunications service and is providing such service in any part of the large incumbent company's service area."
The maximum allowable prices for Sprint's telecommunications services were initially set based on the tariffs which were in effect for those services on December 31, 1998. See § 392.245.3. Beginning on August 19, 1999, Sprint was authorized, pursuant to § 392.245.11, to file tariffs increasing the maximum allowable prices for its nonbasic telecommunications services by a maximum of 8% annually.
Sprint offers optional residential and business Metropolitan Calling Area ("MCA") telecommunications service in three geographic areas within the Kansas City, Missouri, metropolitan area, which are further identified as Tiers 3, 4, and 5.4 As of August 19, 1999, when Sprint became a price cap regulated company under § 392.245, the maximum allowable prices and actual rates charged for those services were as follows:
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|August 19, 1999 | Maximum Allowable Price | Actual Rate|
|--------------------------------------------------------------------------|
|Tier 3 MCA Exchanges | | |
|--------------------------------------------------------------------------|
| Residential: | $12.35 | $12.35 |
|--------------------------------------------------------------------------|
| Business: | $24.80 | $24.80 |
|--------------------------------------------------------------------------|
|Tier 4 MCA Exchanges | | |
|--------------------------------------------------------------------------|
| Residential: | $21.55 | $21.55 |
|--------------------------------------------------------------------------|
| Business: | $46.75 | $46.75 |
|--------------------------------------------------------------------------|
|Tier 5 MCA Exchanges | | |
|--------------------------------------------------------------------------|
| Residential: | $32.50 | $32.50 |
|--------------------------------------------------------------------------|
| Business: | $70.70 | $70.70 |
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Since becoming a price cap regulated ILEC, Sprint has filed to increase the maximum allowable prices for these MCA services on two occasions. Effective December 11, 2000, the Commission approved revisions to Sprint's P.S.C. MO. No. 22 tariff that established maximum allowable prices for these MCA offerings which were 8% higher than those in effect on August 19, 1999. However, Sprint did not, at that time, request any increase in the rates actually paid by consumers for those services. This is reflected in the following table:
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|December 11, 2000 | Maximum Allowable Price | Actual Rate|
|------------------------------|----------------------------|---------------|
|Tier 3 MCA Exchanges | | |
|------------------------------|----------------------------|---------------|
| Residential: | $13.33 | $12.35 |
|------------------------------|----------------------------|---------------|
| Business: | $26.78 | $24.80 |
|------------------------------|----------------------------|---------------|
|Tier 4 MCA Exchanges | | |
|------------------------------|----------------------------|---------------|
| Residential: | $23.27 | $21.55 |
|------------------------------|----------------------------|---------------|
| Business: | $50.49 | $46.75 |
|------------------------------|----------------------------|---------------|
|Tier 5 MCA Exchanges | | |
|------------------------------|----------------------------|---------------|
| Residential: | $35.10 | $32.50 |
|------------------------------|----------------------------|---------------|
| Business: | $76.35 | $70.70 |
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A year later, effective December 11, 2001, the Commission approved additional revisions to Sprint's P.S.C. MO. No. 22 tariff which established increased maximum allowable prices for Sprint's MCA service that were 8% over the maximum allowable prices from the previous year. Once again, however, Sprint did not request a corresponding increase in the actual rates charged to consumers for those services. This resulted in the following figures:
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|December 11, 2001 | Maximum Allowable Price | Actual Rate |
|------------------------------|----------------------------|---------------|
|Tier 3 MCA Exchanges | | |
|------------------------------|----------------------------|---------------|
| Residential: | $14.39 | $12.35 |
|------------------------------|----------------------------|---------------|
| Business: | $28.92 | $24.80 |
|------------------------------|----------------------------|---------------|
|Tier 4 MCA Exchanges | | |
|------------------------------|----------------------------|---------------|
| Residential: | $25.13 | $21.55 |
|------------------------------|----------------------------|---------------|
| Business: | $54.52 | $46.75 |
|------------------------------|----------------------------|---------------|
|Tier 5 MCA Exchanges | | |
|------------------------------|----------------------------|---------------|
| Residential: | $37.90 | $32.50 |
|------------------------------|----------------------------|---------------|
| Business: | $82.45 | $70.70 |
------------------------------|----------------------------|---------------
On March 13, 2002, Sprint filed tariff sheet number 200200766, which proposed further revisions to Sprint's P.S.C. MO. No. 22 tariff and had a proposed effective date of May 1, 2002. This tariff sheet requested an increase in the residential and business nonbasic service rates for the optional MCA Plans in Tiers 3, 4, and 5 as follows:
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|May 1, 2002 (proposed) | Maximum Allowable Price | Actual Rate |
|------------------------------|----------------------------|---------------|
|Tier 3 MCA Exchanges | | |
|------------------------------|----------------------------|----------------
| Residential: | $14.39 | $14.00 |
|------------------------------|----------------------------|----------------
| Business: | $28.92 | $28.92 |...To continue reading
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