L. 149] The exchanges included in the free service area are: Gratiot, Wiota, Winslow, South Wayne and Lena. All bills are payable monthly in advance, and are discounted to the net rate if paid on or before the fifteenth of the month for which service is billed. Permission is asked to adjust the above charges, as the present revenues are insufficient to meet the needs of the company. The following schedule, applicable for local service only, is requested by the applicant: scribers, but main lines owned by the applicant, and not more than 3 miles in length..... . . . . Switching service, where main lines exceed 3 miles in length.... Reconnection charge for the same subscribers upon the same premises within one year, $2.50. Non-subscriber charge, local calls, 10 cents. Local toll calls to connecting exchanges, 10 cents. The applicant operates two exchanges, South Wayne, Wisconsin, and Winslow, Illinois. The former serves 285 subscribers and the latter 314 subscribers. Proceedings, similar to those before us, are pending before the Illinois Commission. The classification of the South Wayne subscribers appears in TABLE I. TABLE I. CLASSIFICATION OF SUBSCRIBERS. WINSLOW AND SOUTH WAYNE TELEPHONE COMPANY. SOUTH WAYNE EXCHANGE. 1923. Business, one-party Residence, one-party AS OF DECEMBER 31, 23 53 20 Residence, two-party Residence, three- or four-party. Rural TOTAL ABOVE Switched subscribers 6 123 225 60 285 TOTAL SERVED The service furnished by the applicant is of the magneto type. All lines are full metallic. In the case of some of the switched lines, the applicant owns and maintains the circuits on the main highways, while the branch lines and subscribers' instruments are owned and maintained by the subscribers. The central office board has an ultimate capacity of 200 lines. At the present time, 106 lines are in use-87 local, 15 rural and 4 toll. The distribution system comprises 53 miles of poles, 190 miles of wire, and 73,750 pair feet of cable. The distribution of poles and wire to local, rural and toll is as follows: The applicant states that its investment in the above equipment and in such other property as is necessary to efficiently operate its plant in Wisconsin, is $10,445.50. The detail of its book value as of December 31, 1923, appears in TABLE II. L. 149] TABLE II. BOOK VALUE-WINSLOW AND SOUTH WAYNE TELEPHONE COMPANY. The applicant's total investment, which includes whatever investment it has in switched lines, is equivalent to less than an average investment of $42.00 per telephone. The average pre-war investment of 11 similar exchanges where the Commission made valuations was $46.50 per telephone. We feel, therefore, that the applicant's statement of investment is very reasonable and can be given full consideration in estimating the requirements for return and depreciation. These, we determine, will total $1,462.37 yearly on the basis of existing values. RESULTS OF OPERATION. The applicant's reports to the Commission for the years 1920, 1921, 1922 and 1923, show the following results of operation: STATEMENT OF REVENUES TABLE III. AND EXPENSES WINSLOW AND SOUTH For the Years Ended December 31, 1921 1922 Revenues: 1923 The computed unit expense per telephone is determined. by dividing the total expense by the number of companyowned stations. Because the operating expense includes the cost of extending central office service to 60 switched subscribers, and the maintenance of certain portions of the switched companies' wire plants, and other incidental expenses of switching, this computation makes the unit expense appear high. If we deduct the estimated expense of operating the switched lines from the applicant's 1923 operating expenses, there results average operating expenses of about $15.75 per telephone. While this unit is somewhat higher than the average expenses of Class D telephone plants, the small number of subscribers at South Wayne, and certain fixed expenses for labor in operation make the higher unit unavoidable. The applicant's total requirements for revenues on the basis of 1923 operating expenses as reported and our estimate of requirements for return and depreciation, are $5,447.79. These are in excess of 1923 revenues by $1,302.76. 1. L. 149] The application of the exchange rates proposed by the petitioner to the present distribution of subscribers will produce additional yearly revenues of $598.20. The different classes of subscribers would contribute to this increase as follows: Business, one-party, no change. Annually 3 subscribers, decrease of..... $12 60 90 00 20 subscribers, increase of.... 60 00 Rural 24 subscribers, decrease of.. 102 subscribers, increase of.. 28 80 489 60 Switched service, no change. TOTAL INCREASE $598 20 The rates proposed by the applicant are for local service, and, under the conditions of this schedule all free service is discontinued, and the regular toll charge of 10 cents is applicable on all local toll calls to connecting exchanges. We have no accurate information on the revenues that would accrue to the applicant under the application of the 10-cent toll charge, but we estimate the revenues from this source at from $25.00 to $30.00 per month, with a maximum of $400 per year. Adding this amount to $598.20, the estimated increase to be derived from an increase in exchange rates, gives $998.20 as the total maximum estimated increase. This, it will be noted, is less by $304.56 than the increase in revenues needed to meet the full requirements of the exchange. It appears to us from the above estimates that the request of the applicant is justifiable, and an order granting it will therefore be entered. It is, therefore, ordered, That the applicant, the Winslow and South Wayne Telephone Company, W. H. Phelps, proprietor, be, and the same hereby is, authorized to discontinue its present rates and free service to connecting exchanges and to substitute therefor the following charges: |