The report of the company for the year 1922 shows a property and plant value at December 31 of that year amounting to $549,757.18. The additional investment required for the change in type of equipment would bring the total substantially to $670,000. At the end of 1922, the company reported a total of 3,569 stations, of which only 2,925 were main stations. This means that, based on the number of subscribers as of the beginning of 1923, there would be an investment of more than $200 per main station if the new service had been provided at that date. We are familiar with the fact that the investment in automatic equipment is in excess of that for manual equipment, a certain excess being justified by savings in direct operating expenses, but we question whether the actual value of the property of the Wausau Telephone Company after the change has been made will be $670,000. It is probably not necessary to pass upon that matter in connection with this case, but it should be understood that in disposing of this case we are not fixing the fair value of the property of this company. For the year 1922 the company earned $38,452.01 after meeting its operating expenses, including a provision for depreciation, which we are inclined to believe was substantially a correct provision. The testimony is that the proposed change will produce additional revenues of from $12,000 to $15,000 per year. The exact amount cannot be determined until the classification of subscribers resulting from the change has been settled. It is probable, however, that $13,500 per year will substantially represent the amount of the increase. This would mean an income of $51,952 available for return and for such additional provision for depreciation as would result from the additional investment. Making allowance for this additional provision for depreciation it appears that about $47,000 should be available for return upon the book value which will result from the proposed change. This will be equivalent to a return of 7 per cent. or, to put it differently, it would amount to a return of 8 per cent. [Wis. L. 144] upon a valuation of about $585,000. We do not believe that this return will be materially, if any, in excess of a reasonable return to the company in view of all the conditions, although we have not the information available which would be necessary for a final determination of fair value. The company is locally owned, having about 335 stockholders, most of whom are residents of Wausau, and it has apparently pursued a reasonably conservative financial policy, although an analysis of the book value would be necessary before any authoritative statement could be made regarding this. The proposed change has been discussed, according to the testimony, with representatives of the chamber of commerce and with the city attorney, and notice of it has been published in the Wausau papers. No appearance was made in opposition to the proposed change nor has any protest been filed with the Commission. It appears unquestioned that an improvement in service will result and that in any event the present three-wire, local battery equipment would have to be displaced within a comparatively short time. It is our conclusion, therefore, that in the main the company's application should be approved. We do not agree with the proposal to eliminate party line service within the half mile zone outside the city limits. We think that wherever the company undertakes to furnish single party service it should also furnish other classes of local service, and provision will be made accordingly. It is, therefore, ordered, That the applicant, the Wausau Telephone Company, may discontinue its present urban schedule for three-wire, local battery service and to substitute therefor, in accordance with the provisions of this. order, the following schedule for common battery, twowire service: Business Service: One-party line, city One-party, one-half mile zone outside city..... Joint user on single party service, the basic monthly rate, Per Month $4.00 4 50 Four-party line, one-half mile zone outside city... Ten-party line, common battery, automatic, rural, business.. Extension telephones, answering or talking sets only.. Extra directory listing, same business.. Residence Service: Wit Per Month $3.50 3 75 4.00 1 25 50 25 10 Four-party line, one-half mile zone outside city.. Ten-party, common battery, automatic, rural service. Extension telephones, talking sets only... Extension bells Extra directory listing of roomers (six months minimum).. Private Branch Exchanges: 2 50 3.00 2.00 225 3.00 1 00 50 25 25 Present rates shall be unchanged except that the rate for trunk lines shall be the rate for one-party, business service. Rates for rural, magneto service as authorized in our order* of July 23, 1921, shall remain unchanged for such service. It is further ordered, That the rates herein provided shall take effect for common battery, two-wire service, which is in use at the date of this order, for service rendered on and after the first day of December, 1923, and thereafter as common battery, two-wire service is substituted for local battery, three-wire service, the rates herein provided shall be made effective for service rendered on and after the first day of the month subsequent to the cut over. Dated at Madison, Wisconsin, this eighth day of November, 1923. * See Commission Leaflet No. 118, p. 1009. . 144] In re APPLICATION OF THE LAKE PEPIN TELEPHONE COMPANY FOR AUTHORITY TO INCREASE RATES. U-2914. Decided November 23, 1923. Rates for Local Toll Messages Established Free Service Between Exchanges Abolished. OPINION AND DECISION. The application of the Lake Pepin Telephone Company seeking authority to establish an interexchange rate of 5 cents for toll messages of three minutes and 5 cents for each additional three minutes, in lieu of the present free service, was filed with the Commission August 7, 1923. Hearing in the matter was held at Maiden Rock, Wisconsin, September 13, 1923, when the following appearances were entered: G. M. Dwelle and W. G. Ball in behalf of the Lake Pepin Telephone Company; A. L. Hart for the Wisconsin Telephone Company; A. L. Fisher for the Range Line Telephone Company; David Dahl for the Pleasant Corner Telephone Company; Christ Sunby for the Hartland Farmers Telephone Company, and Emil Bjurquist for the Pine Creek Telephone Company. The applicant operates four small telephone exchanges in Pierce and Pepin Counties, viz.: Pepin, 85 subscribers; Plum City, 67 subscribers; Maiden Rock, 81 subscribers, and Waverly, 51 subscribers. The above numbers do not include subscribers of switched lines that receive central office service at the applicant's exchanges. Our records. show the following companies receive this service: The total number of subscribers, then, served by the applicant's exchanges is 560. Some complaints have been made by the representatives of these switched companies against the central office service furnished by the applicant. These complaints appear in the testimony offered at the hearing, and in letters filed with the Commission subsequent to the time the applicant's petition was filed. The major criticism is directed at the failure of the central operators to answer incoming calls. It is admitted, however, by one of the complainants that calls placed in the villages are answered promptly. We are led to believe, therefore, that the trouble may be due to the poor condition of the lines or to the magneto mechanism of the telephones of the switched lines where the party calls. The testimony shows that the condition of repair of some of the switched lines is not such as to result in good service; joints are loose and unsoldered in some instances, and it was pointed out that three of the switched lines had remained crossed for a long period of time and that two others were crossed at the time of the hearing. Further, we have nothing in our service reports which indicates that the applicant's switchboards are in a poor condition of repair, or that there are any defects in the mechanism that would prevent the drops being actuated under normal ringing current. After a study of the data before us, we are led to believe that the failure of switched parties to obtain the central office operator is due to a considerable degree to the poor service conditions on the switched lines. The Lake Pepin Telephone Company has during the past two or three months rebuilt its toll line system with the exception of the Maiden Rock-Pepin circuit. This line is |