Opinion
No. 75-275
Decided February 18, 1976.
Public Utilities Commission — Telephone companies — Order for institution of extended area service — Not unreasonable or unlawful, when.
APPEAL from the Public Utilities Commission.
In July 1972, a complaint was filed on behalf of 587 subscribers of the Laurelville exchange of the General Telephone Company of Ohio for extended area toll-free service between the Laurelville and Circleville exchanges of that company.
In its opinion and order, dated September 6, 1974, the commission made the following findings of fact and conclusions of law.
"1. Through the medium of this complaint, 587 subscribers of the Laurelville exchange of the General Telephone Company of Ohio seek two-way non-optional extended area service between the Laurelville exchange and the Circleville exchange of the General Telephone Company of Ohio.
"2. The two exchanges are contiguous.
"3. Notice of the filing of this complaint was given to all interest [ sic] parties.
"4. The calling rate from Laurelville to Circleville in the study period, March, 1973, was 3.09 calls per main station.
"5. 63.35% of the Laurelville subscribers made calls to Circleville during that period.
"6. The Laurelville exchange now has 824 main stations and is in Band I.
"7. The Circleville exchange now has 6,896 main stations and is in Band III.
"8. The institution of the requested extended area service would place Laurelville in Rate Schedule Band III of the General Telephone Company of Ohio tariff.
"9. The initial survey of the Laurelville subscribers which was filed July 14, 1972 indicated willingness on the part of a substantial majority of these subscribers to pay the higher rates which would prevail as the result of the implementation of the service.
"10. An up-to-date canvass should be conducted so that the present sentiments of the Laurelville subscribers may be obtained and recorded.
"11. Cost data indicate that the respondent would have an initial investment of $115,977 and an annual cost of $34,456 in the installation and maintenance of such service.
"1. The complaint in this case is properly before this commission.
"2. The commission has jurisdiction to hear and determine the issues involved.
"3. The respondent telephone company is a public utility within the purview of Sections 4905.02 and 4905.03, Revised Code.
"4. The evidence demonstrates a community of interest between the Laurelville and Circleville exchanges of the respondent.
"5. The costs of institution and maintenance of the service are not unduly high.
"6. The granting of the two-way non-optional extended area service requested in the complaint would be in the public interest.
"7. The exceptions of the respondent to the report and recommendation of the attorney examiner are not well taken and should be denied.
"8. Conditioned upon the conduct and recording of an updated canvass of the involved subscribers which would evince willingness of 70% or more of them to pay the increased rates which would result from the establishment of the service, this complaint is well made and it should be sustained."
Subsequent to the submission of an "* * * updated canvass, setting forth that 656 of the 857 subscribers to the Laurelville exchange, or approximately 76%, are in favor of the establishment of extended area telephone service and willing to pay the increased rates incidental thereto," the commission, on November 29, 1974, ordered General Telephone to "* * * institute two-way non-optional extended area service between its Laurelville and Circleville exchanges * * *."
From the order of the commission, General Telephone perfected an appeal and the cause is now before this court for review.
Messrs. Power, Jones Schneider and Mr. William H. Schneider, for appellant.
Mr. William J. Brown, attorney general, and Mr. Charles S. Rawlings, for appellee.
The issue in this appeal is whether the order of the Public Utilities Commission is unreasonable or unlawful.
Appellant argues, in a single proposition of law, that "[i]t is unreasonable and unlawful for the Public Utilities Commission to order the institution of extended area service where the need for such service is minimal and the revenues generated by the service are completely inadequate to cover its costs."
Section 23.04 of the Code of Rules and Regulations of the Public Utilities Commission of Ohio provides factors to be considered by a telephone utility when "confronted with a situation suggesting a possible `extended area service' requirement * * *." Factors set forth in Section 23.04 include:
"(1) Community of interest factors:
"a. The volume of message toll telephone traffic between the exchanges involved, i.e., the calling rate.
"b. The distribution of the calling to determine whether the traffic is originated by the subscribers generally or by only a relatively few subscribers.
"* * *
"c. The location of various services, products and activities, a partial list of which is set forth below.
"1) Population movement,
"2) School activities,
"3) Police and Fire Service,
"4) Other governmental services,
"5) Medical, dental and veterinarian service,
"6) Churches,
"7) Agricultural organizations,
"8) Shopping and service centers,
"9) Employment centers, and
"10) Social interest.
"(2) Other pertinent factors:
"a. Investment and cost considerations are of importance. It would not be in the public interest for a telephone utility to enter into exceptionally heavy investments in facilities and incur exceptionally high costs in situations where the `extended area service' requirement was slight. Therefore, each of the factors must be evaluated in relation to all other factors. Timing is an important cost consideration and substantial weight must be given to plans for instituting the service in the most economical manner and at the most economical time.
"b. Willingness of a substantial majority of the subscribers to pay appropriate rates is a basic and necessary condition to the institution of `extended area service.' The demands of a few subscribers should not force the institution of a more costly telephone service contrary to the wishes of a majority of the subscribers."
The commission, in its opinion and order, observed that there was evidence "that General Telephone Company of Ohio would have a total initial investment of $115,977 and that the annual cost of maintenance would amount to $34,456." The commission concluded, however, that these costs "of institution and maintenance of the service are not unduly high"; that "the evidence demonstrates a community of interest between the Laurelville and Circleville exchanges"; and that the "granting of the two-way non-optional extended area service * * * would be in the public interest."
Appellant urges that "the community of interest factors are minimal; that the investment and cost considerations oppose the granting of the requested extended area service; and the willingness of subscribers to pay appropriate rates can be demonstrated only as to rates which are grossly inadequate to pay for the costs associated with the extended area service."
Appellant's arguments are basically directed toward the conclusions drawn by the commission from the evidence before it.
Paragraph four of the syllabus in Cleveland Elec. Illuminating Co. v. Pub. Util. Comm. (1975), 42 Ohio St.2d 403, 330 N.E.2d 1, reads:
"As to evidentiary matters in appeals from the Public Utilities Commission, this court will not substitute its judgment for that of the commission concerning conclusions drawn unless the findings and order are manifestly against the weight of the evidence or there is no evidence."
An examination of the record indicates that there is evidence to support the conclusions of the commission and that the findings and order of the commission are not manifestly against the weight of the evidence.
The order of the commission, being neither unreasonable nor unlawful, is affirmed.
Order affirmed.
O'NEILL, C.J., HERBERT, CORRIGAN, STERN, CELEBREZZE, W. BROWN and P. BROWN, JJ., concur.