Weyauwega Tel. Co. v. Public Service Commission

• Decision Date: 31 October 1961
• Citation: 111 N.W.2d 559,14 Wis.2d 536
• Parties: , 41 P.U.R.3d 479 WEYAUWEGA TELEPHONE COMPANY, a corporation, and Wisconsin Telephone Company, a corporation, Respondents, v. PUBLIC SERVICE COMMISSION, Appellant.
• Court: Wisconsin Supreme Court

Page 559

111 N.W.2d 559

14 Wis.2d 536, 41 P.U.R.3d 479

WEYAUWEGA TELEPHONE COMPANY, a corporation, and Wisconsin Telephone Company, a corporation, Respondents, v. PUBLIC SERVICE COMMISSION, Appellant.

Supreme Court of Wisconsin.

Oct. 31, 1961.

Rehearing Denied Dec. 29, 1961.

Action initiated on March 20, 1959, by a petition for service by the Wisconsin Telephone Company (hereinafter 'Wis. Tel. Co.') signed by fifteen persons residing in the unincorporated community of Royalton. This community is located in the northeast corner of the town of Royalton, and the southwest corner of the town of Lebanon. It is divided by the Little Wolf river which runs approximately west of northwest through it in the town of Royalton. All petitioners resided southwest of the river. This area was not included in Wis. Tel. Co.'s 'exchange-area' map on file with the Public Service Commission (hereinafter 'PSC'), but was included in the exchange-area map filed by the Weyauwega Telephone Company (hereinafter 'Weyauwega'). Presently, Weyauwega serves seven of the nineteen homes southwest of the river and is the only telephone service southwest of the river. Five of Weyauweka's customers joined in the petition along with ten others who do not presently have telephone service.

Wis. Tel. Co. has exchange facilities in New London, which is located about six miles east of the community of Royalton. Through these facilities, service is rendered to the portion of unincorporated Royalton lying northeast of the river. This area is designated as 'open territory' and is also served by the Manawa Telephone Company (hereinafter 'Manawa'). Manawa has twelve subscribers and Wis. Tel. Co. fifteen subscribers in this territory.

Under the present situation a person living in the community must place a toll call in order to reach a party on the opposite side of the river. The business district in the community is located on the northeast side of the river. Petitioners initated this proceeding primarily because of their desire to have direct telephone communication without toll to the portion of the community northeast of the river and to New London. Service is requested from Wis. Tel. Co. because New London is the locality in which petitioners' business, employment, medical, and social activities are most frequently conducted.

Both Wis. Tel. Co. and Weyauwega opposed the petition, and offered instead a foreign exchange service providing a direct hook-up with Wis. Tel. Co.'s New London exchange for those customers desiring it and willing to pay a higher rate and an installation charge.

The PSC held a hearing on the petition and concluded that: 'Public convenience and necessity and the furnishing of reasonably adequate service to the public require that Wisconsin Telephone Company extend New London exchange service to the fifteen petitioners who reside in Royalton.' As a result, the PSC issued an order, dated, August 10, 1959, which directed such an extension of service.

Wis. Tel. Co. and Weyauwega requested a circuit court review of this determination pursuant to ch. 227, Stats. Upon review, the PSC order was reversed and the matter remanded to the commission for further proceedings to determine when and under what circumstances Wis. Tel. Co. first rendered service in the town of Royalton. Judgment was entered accordingly under date of January 31, 1961. From this judgment the PSC has appealed.

John W. Reynolds, Atty. Gen., William E. Torkelson, Chief Counsel, Pub. Serv. Comm., Madison, for appellant.

Petersen, Sutherland, Axley & Brynelson, Madison, for respondent Weyauwega Tel. Co.

Francis J. Hart, Milwaukee, Wm. E. McGavick and John R. Collins, Milwaukee, of counsel, for respondent Wisconsin Tel. Co.

George G. Blake, Aberg, Bell, Blake & Metzner, Madison, amicus curiae.

CURRIE, Justice.

As we view it, four questions are presented on this appeal:

(1) Does Wis. Tel. Co. have an indeterminate permit to provide telephone service in the town of Royalton which imposes upon it a correlative duty to extend service anywhere in the town that the PSC may properly find to be required by public convenience and necessity?

(2) What is the effect of the exchange-area map, filed by Wis. Tel. Co. pursuant to the PSC order authorizing the filing of such maps, upon Wis. Tel. Co.'s undertaking?

(3) If question (1) is answered in the negative, has there been any undertaking by Wis. Tel. Co. to extend service throughout the unincorporated community?

(4) Is there substantial evidence in view of the entire record to support the PSC finding that public convenience and necessity requires Wis. Tel. Co. to extend service as provided in the commission's order?

Existence and Extent of Indeterminate Permit.

It is a fundamental principle of public utility law that a public utility is required to serve only within the scope of its undertaking, or profession of service. City of Milwaukee v. Public Service Comm., 1954, 268 Wis. 116, 120, 66 N.W.2d 716; 1 Wyman, Public Service Corporations, p. 219, sec. 250.

A public utility may make a profession of service in several ways. One is by the acceptance of a franchise which gives it the right to serve in a certain specified area. 43 Am.Jur., Public Utilities and Services, pp. 586, 587, sec. 22, and pp. 601, 602, sec. 47; 1 Wyman, Public Service Corporations, p. 179, sec. 212. In Wisconsin, public utility franchises have been converted into indeterminate permits. Sec. 196.01(5), Stats. This court recognized in Northern States Power Co. v. Public Service Comm., 1944, 246 Wis. 215, 224, 16 N.W.2d 790, that an obligation to extend service may arise by acceptance of and operation under an indeterminate permit.

The crucial question is whether Wis. Tel. Co. did accept and operate under a franchise in the nature of an indeterminate permit applying to the town of Royalton. If it did, we are satisfied that under the foregoing authorities it could be compelled to extent telephone service anywhere in the town that the PSC might order under a proper finding of public convenience and necessity.

Respondents Wis. Tel. Co. and Weyauwega espouse entirely different theories on the question of whether Wis. Tel. Co. operates under an indeterminate permit in the town of Royalton. Wis. Tel. Co. takes the position that it is impossible for a telephone utility to acquire an indeterminate permit within the limits of a town. On the other hand, Weyauwega concedes that Wis. Tel. Co. is operating in the town under an indeterminate permit, but contends that the area to which such permit extends is confined to that in which it has made a profession of service as evidenced by its exchange-area map filed with the PSC.

The PSC grounds its contention, that Wis. Tel. Co. has accepted and is operating in Royalton under a town-wide indeterminate permit, upon sec. 182.017, Stats., ¹ and the holding of this court in City of Kenosha v. Kenosha Home Telephone Co., 1912, 149 Wis. 338, 135 N.W. 848. Subs. (1) and (7) of sec. 182.017 were formerly part of sec. 180.17, which was sec. 1778 prior to the renumbering under the decimal system. Sec. 1778, first enacted in 1851, contained substantially the same language as present sub. (1) of sec. 182.017. The provision of present sub. (7) was not added by the legislature until 1905. The particular holding in the City of Kenosha Case, relied upon by the PSC, was thus stated by the court (149 Wis. at page 340, 135 N.W. at page 849):

'The first question presented by the appeal is: Was the ordinance of March, 1903, purporting to grant to the Citizens' Telephone & Telegraph Company the right to operate a general telephone system in the city of Kenosha, valid as a franchise? This court has repeatedly answered the question in the negative. The only franchise needed by a telephone company to enable it to conduct its business anywhere within the state is the franchise conferred upon it by birtue of section 1778, Stats., when it is incorporated pursuant thereto. [Citing cases.]' (Emphasis supplied.)

The Wisconsin Public Utility Law was originally enacted as ch. 499, Laws of 1907. Sec. 1797m-1, subd. 5, of this act provided for the transformation of certain public utility franchises into indeterminate permits. Present sec. 196.01 (5), Stats., is the successor to this statute. ² As originally enacted, sec. 1797m-1, subd. 5, did not apply to telephone utilities. This was because express statutory language limited it to 'grant, directly or indirectly from the state * * * to own, operate, manage or control any plant or equipment * * * within this state for the production, transmission, delivery or furnishing of heat, light, water or power * * *.' Thus, telephone utilities were not expressly included. In 1929, by means of a revisor's bill this statute was amended to read 'any public utility,' in which from it was substantially the same as present sec. 196.01(5).

In 1930 the attorney general ruled that under the holding of the City of Kenosha Case any utility company organized under sec. 180.17, now 182.017, Stats., acquires an indeterminate permit upon entering a town for the purpose of rendering utility service, if no other utility already is operating in the town under an indeterminate permit. See, 19 Op.Atty.Gen. 378. This is essentially the present contention of the PSC, except it also maintains that, if a second telephone utility obtains a certificate of convenience and necessity to operate in the town, such second telephone utility also operates in the town under an indeterminate permit.

However, this opinion of the attorney general and the present contention of the PSC were rejected by this court in South Shore Utility Co. v. Railroad Comm., 1932, 207 Wis. 95, 240 N.W. 784, 786. There the railroad commission had determined that the first electric utility to enter a town and render service thereby obtained an indeterminate permit which continued after the part of the town in which it served was incorporated as a...