Verizon Florida, Inc. v. Jacobs, SC01-323.

• Decision Date: 14 February 2002
• Docket Number: No. SC01-323.,SC01-323.
• Citation: 810 So.2d 906
• Parties: VERIZON FLORIDA, INC., Appellant, v. E. Leon JACOBS, Jr., et al., Appellees.
• Court: Florida Supreme Court

810 So.2d 906

VERIZON FLORIDA, INC., Appellant, v. E. Leon JACOBS, Jr., et al., Appellees.

No. SC01-323.

Supreme Court of Florida.

February 14, 2002.

Marvin E. Barkin and Marie Tomassi of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., St. Petersburg, FL; and Kimberly Caswell, Tampa, FL, for Appellant.

Harold McLean, General Counsel, and Christiana T. Moore, Associate General Counsel, Florida Public Service Commission, Tallahassee, FL, for Appellees.

Raoul G. Cantero, III of Adorno & Zeder, P.A., Miami, FL, for BellSouth Telecommunications, Inc., Amicus Curiae.

PER CURIAM.

Verizon Florida Incorporated has filed this appeal from Order No. PSC-01-0097-DS-TL of the Public Service Commission, concerning imputation of telephone directory advertising revenues¹. We have jurisdiction. See art. V, § 3(b)(2) Fla. Const. We reverse the decision of the Public Service Commission for the reasons expressed below.

BACKGROUND

Verizon Florida ("Verizon") is a local exchange carrier licensed under chapter 364, Florida Statutes (2001) to provide telecommunications services in certain areas of Florida. Verizon, as a local exchange company, is required to distribute a white pages directory listing its customers' telephone numbers. See Fla. Admin. Code Rule 25-4.040. Verizon contracts with Verizon Directories ("Directories"), its corporate affiliate, to publish the required white pages directories. Directories also publishes and sells yellow pages directory advertising. Under the contract, Verizon bills and collects yellow pages advertising revenue for Directories by including the charges in its telephone bills. Directories pays Verizon for these services and these payments are included in Verizon's regulated revenues. However, Verizon does not include in its regulated revenues the money it bills and collects for Directories or any other company for which it bills and collects.

In 1995, the Legislature enacted section 364.051, Florida Statutes (1995), relating to price regulation of local exchange telecommunications companies. See ch. 95-403, § 9, Laws of Fla. Under section 364.051, a telecommunications company could elect to cap its rates for basic services. In exchange for this, "price-capped" companies are exempted from rate base, rate of return regulation, and the requirements of several statutes,² including section 364.037, Florida Statutes (2001), regarding the inclusion of directory advertising revenues for purposes of rate setting. See § 364.051(1)(c), Fla. Stat. (2001). Effective January 1, 1996, Verizon elected to operate under this price cap regulation scheme.

On October 13, 2000, Verizon requested a declaratory statement asking the Commission to declare that it is not required to pay regulatory assessment fees on the yellow pages advertising revenues that are earned and booked by Directories. In its petition, Verizon argued that it should not be required to pay such fees because they are earned and booked by an affiliate, Directories. Verizon contended that section 364.037, which directs the Commission to consider revenues derived from advertisements in telephone directories when establishing telecommunications rates, no longer applies to Verizon because as a "price-cap" company it is exempt under section 364.051.

The Commission, in Order No. PSC-01-0097-DS-TL, disagreed with Verizon, concluding that it was allowed to impute the yellow pages directory revenues booked by Directories to Verizon. In support of this proposition, the Commission cited its earlier order, In re Investigation into Regulatory Assessment Fee Calculations for 1985 and 1986 for United Telephone Company of Florida, 89 F.P.S.C. 6-224 (1989) (Order No. 21364) issued June 9, 1989, in Docket No. 880149-T L. In that order, the Commission imputed revenues associated with the affiliate company to the local telecommunications company, even though the revenues were recorded on the books of the affiliate. Based on this previous order, the Commission explained here that it did not matter that Directories did not meet the definition of a telecommunications company, so long as the service being provided was one that "Verizon [was] required to provide by virtue of Verizon being certificated to provide basic local telecommunications service." Order No. PSC-01-0097-DS-TL at 4. The Commission found that in the instant case, publishing the yellow pages advertising did not appear to be a separate function from publishing the white pages. See Order No. PSC-01-0097-DS-TL at 7.

APPEAL

On appeal, Verizon contends that the Commission incorrectly interpreted section 364.336, Florida Statutes (2001), when it concluded that Verizon had to pay a regulatory assessment fee on the yellow pages advertising revenues it books and collects for Directories. Verizon argues that the Commission, in its order, failed to give effect to the plain meaning of section 364.336, which would preclude the Commission from including Directories' revenues in the calculation of Verizon's regulatory assessment fees.

An agency's interpretation of the statute it is charged with enforcing is entitled to great deference. See BellSouth Telecommunications, Inc. v. Johnson, 708 So.2d 594, 596 (Fla.1998)

. Further, a court will not depart from the contemporaneous construction of a statute by a state agency charged with its enforcement unless the construction is "clearly erroneous." PW Ventures, Inc. v. Nichols, 533 So.2d 281, 283 (Fla.1988). Verizon contends that the Commission's interpretation of section 364.336, Florida Statutes, is clearly erroneous. We agree.

Section 364.336, Florida Statutes, states in pertinent part: "[E]ach telecommunications company licensed or operating under this chapter ... shall pay to the commission... a fee that may not exceed 0.25 percent annually of its gross operating revenues derived from intrastate business."

Under Florida's rules of statutory construction, the phrase "its gross operating revenues" must be given its plain and ordinary meaning. See Citizens v. Florida Pub. Serv. Comm'n, 425 So.2d 534 (Fla. 1982). There is no need to resort to other rules of statutory construction when the language of the statute is unambiguous and conveys a clear and ordinary meaning. See Starr Tyme, Inc. v. Cohen, 659 So.2d 1064 (1995)

.

The pertinent language of section 364.336 is plain when it states that telecommunications companies, operating under chapter 364, are only required to pay regulatory assessment fees based on a percentage of their own gross operating revenues derived from intrastate business. In its order, the Commission imputes Directories' revenues to Verizon for purposes of regulatory assessment fee calculation. Yet, nothing in the plain language of section 364.336 serves as a basis for allowing the Commission to impute revenues to Verizon from Directories in the regulatory assessment fee calculus. Accordingly, we hold that the Commission does not have the authority under section 364.336 to impute Directories' yellow pages advertising revenues to Verizon.

It appears that Verizon's practice of imputing affiliate revenues is based on the intent of section 364.037,³ to "secure most of the benefits of such profits for telephone companies' ratepayers." In re Investigation into the Regulatory Assessment Fee Calculations for 1985 and 1986 of United Telephone Company of Florida, 89 F.P.S.C. 5:83 (1989) (Order No. 21171). As Commissioner Baez pointed out in his dissent from the instant order, the publication of a directory...