U.S. Sprint Communications Co. v. Marks, s. 69169

• Decision Date: 16 July 1987
• Docket Number: Nos. 69169,69159,s. 69169
• Citation: 509 So.2d 1107,12 Fla. L. Weekly 397
• Parties: 12 Fla. L. Weekly 397 U.S. SPRINT COMMUNICATIONS COMPANY, Appellant, v. John R. MARKS, et al., Appellees. MICROTEL, INC., et al., Appellants, v. John R. MARKS, et al., Appellees.
• Court: Florida Supreme Court

Page 1107

509 So.2d 1107

12 Fla. L. Weekly 397

U.S. SPRINT COMMUNICATIONS COMPANY, Appellant, v. John R. MARKS, et al., Appellees.

MICROTEL, INC., et al., Appellants, v. John R. MARKS, et al., Appellees.

Nos. 69169, 69159.

Supreme Court of Florida.

July 16, 1987.

Bruce W. Renard, of Messer, Vickers, Caparello, French & Madsen, Tallahassee, Stephen P. Bowen, U.S. Sprint Communications Co., and Deborah A. Dupont, of Reboul, MacMurray, Hewitt, Maynard & Kristol, Washington, D.C., for U.S. Sprint Communications Co.

Patrick K. Wiggins, of Ranson and Wiggins, Tallahassee, for Microtel, Inc.

John P. Fons and Robert L. Hinkle, of Aurell, Fons, Radey & Hinkle, Tallahassee, and Daniel Stark and Robert J. McKee, Jr., AT & T Communications, Inc., Atlanta, Ga., for AT & T Communications of the Southern States, Inc.

Richard D. Melson, of Hopping, Boyd, Green & Sams, Tallahassee, and David Baumann, MCI Telecommunications Corp., Atlanta, Ga., for MCI Telecommunications Corp.

William S. Bilenky, General Counsel, Susan F. Clark, Dir. of Appeals and Robert D. Vandiver, Associate Gen. Counsel, Tallahassee, for Florida Public Service Com'n.

Alan N. Berg, Gen. Atty., Altamonte Springs, for United Telephone Co. of Florida

James V. Carideo, Vice President-Gen. Counsel and Thomas R. Parker, Associate Gen. Counsel, Tampa, for Gen. Telephone Co. of Florida.

EHRLICH, Justice.

These consolidated cases are before us for review of Order No. 16343, issued July 14, 1986 by the Public Service Commission. We have jurisdiction, article V, section 3(b)(2), Florida Constitution; sections 350.128 and 364.381, Florida Statutes (1985). We affirm the order of the Public Service Commission.

The issues presented here are the most recent to have arisen during the continuing transition from monopolistic to competitive long-distance telephone service in Florida. In Microtel, Inc. v. Florida Public Service Commission, 464 So.2d 1189 (Fla.1985) (Microtel I ), we recognized that "the legislature made the 'fundamental and primary policy decision' that there be competition in long distance telephone service.... which had not heretofore existed." Id. at 1191. In Microtel, Inc. v. Florida Public Service Commission, 483 So.2d 415 (Fla.1986) (Microtel II ), we further explained that when section 364.335(4) was amended in 1982, the legislature was "motivated by a desire to promote competitive long distance telephone service within Florida.'' Id. at 417.

The historical background needed to understand the issues presented here were set forth in Microtel II. As we explained, telephone service was historically provided on a monopoly basis; this was radically changed by the federal breakup of AT & T:

Broadly, this modified final judgment (MFJ) reorganized AT & T and divested its local telephone companies, restricted the operating areas of local telephone companies, and provided for competitive interstate long distance telephone services.

Id. at 417.

Under the MFJ the former Bell territories were divided into geographic areas or LATAs (local access and transport areas), which marked the boundaries beyond which the Bell operating companies were prohibited from carrying telephone calls. Service between LATAs was to be on a competitive basis by interexchange carriers (IXCs), such as the appellants herein. The size of a LATA, however, necessitated that the local Bell operating companies provide short-haul long distance service within each LATA: "Thus, intra-LATA calls included both toll and non-toll calls." Id. The plan for Florida established seven LATAs, two of which were, because of their size, of concern to the federal court. The court approved the Florida plan, however, because "further division would require large installation costs for new access switches; failure to consolidate the geographic areas would entail rate increases; and, the state regulatory body, PSC, was a strong body committed to promoting intra-LATA competition." Id. In the orders under review in Microtel II, PSC's commitment to intra-LATA competition was evidenced by the fact that the PSC had further divided the federally mandated LATAs into twenty-two smaller geographic areas, Equal Access Exchange Areas (EAEAs). Under the PSC plan, the local exchange companies (LECs) were required to provide equal access to the competing IXCs for inter-EAEA long distance calls. Another provision of the plan established a toll monopoly area (TMA) on intra-EAEA calls; intra-EAEA calls encompass both truly local (non-toll) and short-haul long distance (toll) calls. IXCs wishing to compete for intra-EAEA calls were required to either use the LEC's facilities and compensate the LEC for that use, or if technically not feasible, the IXCs could use their own facilities and compensate the LEC. Id. at 418.

The appellants in Microtel II challenged the PSC's order establishing these toll monopoly areas. We approved the PSC orders and rejected the appellants' claim that the PSC had no authority under section 364.335(4) to establish toll monopoly areas for short-haul long distance calls within an EAEA. We reasoned that first, the TMAs were limited in scope as the PSC had divided the federally mandated LATAs into twenty-two EAEAs, which resulted in a large measure of competition in intra-LATA service. Second, the PSC plan provided for reexamination of the TMAs in September 1986; thus, the TMA concept was limited in time. Third, while we found that section 364.335(4) provided that PSC may grant a certificate for providing long distance service if in the public interest, the statute "does not mandate that such certificates be issued contrary to the public interest." Id. at 418.

We also rejected the appellants' claim that section 364.335(4) contained no guidelines or standards to govern the designation of TMAs, and thus was an unconstitutional delegation of legislative power: "we do not believe that it was the legislative intent that PSC issue certificates of service on demand, where it is not in the public interest, in making the ... orderly transition to full competition on long distance service." Id. at 419. ¹

Finally, we rejected the appellants' claim that the PSC had represented to this Court in Microtel I that it had no authority under section 364.335(4) to deny certificates for long distance service:

we do not believe that it is PSC's position that it has authority to maintain permanent toll monopolies. If that position changes and is challenged after September 1986, we will examine the issue on its merits. It is premature to do so now.

Id.

This rather extended discussion of our decision in Microtel II is necessitated here for two reasons. First, the order under review was issued in fulfillment of the PSC's promise to reexamine the issue of toll monopoly areas in September 1986 "when the beneficiaries of the monopoly will have to justify its retention." Id. at 418. Second, the appellants herein have again raised the same claims that we rejected in Microtel II.

The PSC held hearings on May 1 and 2, 1986 on whether the TMAs should be retained. In its order number 16343, issued July 14, 1986, the PSC determined that it is not yet in the public interest to abolish the TMAs. Predictably, these appeals followed.

We note initially that the decision to revisit, in September 1986, the issue of retaining TMAs was not mandated by any judicial decree, but was instead self-imposed by the PSC as part of its commitment to competition in long distance service. In the order under review, the PSC has refused to set a date certain to again revisit this issue, but has invited any interested party to come forward at any time "with a showing of significantly changed circumstances which would warrant the abolition of TMAs." It is based on...