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C. L. 147]

jected to a considerable capital expenditure from which it receives a return in revenue for only a comparatively short space of time; that the general public patrons of the telephone company are deprived of the use of so much of the capital expenditures of the utility as are diverted to the private enterprise; and that even the limited number who pay for emergency booth keys ultimately find themselves without the emergency service by reason of the fact that it has not proven self-supporting.

It will be noted that the complainant does not operate under the law as a chartered public service conipany, which carries with it the presumption that it does not consider itself to be engaged in public service. If this presumption on the complainant's part is correct, then it is beyond the reach of regulatory law; this Commission has no jurisdiction over it; there is nothing to compel either adequacy of service or fairness of charges to the public; and no regulatory means to insure fair dealing between the complainant and its patrons. With this presumption the Commission need express neither agreement nor disagreement. But it may be pointed out that if the complainant is in effect and in law a public service company, it has no standing in the present proceedings because it has not subjected itself to the jurisdiction of this Commission, either by having obtained approval for the conduct of a public service business in this Commonwealth or by complying with the law in reference to filing its tariffs, etc. The position the complainant assumes, in effect, is that it itself is not subject to any regulatory provisions of law designed for the protection of the public, but that it has a standing to compel a public utility which is admittedly operating under such regulatory law to extend the public service which it is rendering for the use of a private commercial enterprise.

The question of our jurisdiction to compel the respondent to establish and itself render a new class of service for the accommodation of the public, even for emergency use, where the necessity therefor is shown to exist, is not pre[Penn. sented here and need not now be determined. We are asked to compel the respondent to depart from its established practices, under which its service has been built up and is now being maintained, and to introduce a new practice and classification whereunder a middle-man would be interposed, whose sole function would be to render the limited service proposed.

Although a public service company with an obligation to treat all who apply to it for service without unjust discrimination or undue preference, the respondent has a right to establish rules and regulations under which it renders service, provided they be reasonable and meet the needs of the members of the public for telephone service.

On the evidence presented in this case, we cannot determine that the long-established rule of the respondent, requiring that applications for its service shall be made by the person desiring to use the same, is unreasonable or unjust or unduly or unjustly preferential or discriminatory, and, therefore, we must determine that the complaint herein should be dismissed. An appropriate order will issue.

ORDER. This matter being before The Public Service Commission of the Commonwealth of Pennsylvania upon complaint and answer on file, and having been duly heard and submitted by the parties, and full investigation of the matters and things involved having been had, and the Commission having on the date hereof made and filed of record a report containing its findings of fact and conclusions thereon, which said report is hereby approved and made part hereof,

Now, to wit, January 28, 1924,

It is ordered, That the complaint be, and it is hereby, dismissed.

TENNESSEE.

Railroad and Public Utilities Commission.

In re APPLICATION OF THE CUMBERLAND TELEPHONE AND

TELEGRAPH COMPANY FOR AN INCREASE IN RATES.

Docket No. 534.

Decided February 20, 1924.

Commission Held to be Powerless to Disallow Payment Under 442 Per

Cent. Agreement - Petition for Rehearing Denied.

OPINION AND ORDER. This cause came on to be and was heard before the Railroad and Public Utilities Commission of Tennessee, at its office at Nashville, Tennessee, upon the petition for rehearing filed by the protestants February 6, 1924, and an answer of the Cumberland Telephone and Telegraph Company thereto, filed February 13, 1924.

The petition for rehearing prays for a rehearing of this matter and excepts to and complains of the order* made by the Commission December 22, 1923, upon the grounds that the Commission's order was erroneous in the following particulars:

1. That the Commission erroneously ordered that the 442 per cent. contract between the American Telephone and Telegraph Company and the Cumberland Telephone and Telegraph Company should be allowed to stand as it existed at the time the order was made.

2. That the Commission improperly included in the rate base of the Cumberland Telephone and Telegraph Company going concern value to the amount of approximately 10 per cent. thereof, the protestants insisting in their petition that no sum whatever should have been allowed for going concern value.

* See Commission Leaflet No. 146, p. 442.

570 TENNESSEE RAILROAD AND PUB. UTILITIES COMMISSION.

[Te 3. That the Commission improperly allowed the rates in effect at the time of its order to remain in effect until otherwise ordered by the Commission.

All three of the questions raised in the petition to rehear were presented before this Commission by able counsel, both for the protestants and for the Cumberland Telephone and Telegraph Company, and were thoroughly and carefully considered by this Commission in making the order* entered December 22, 1923.

The same questions now raised in the petition to rehear were both orally argued and presented in briefs of great length before the Commission. No new reason is presented in the petition to rehear that was not presented and pressed upon the Commission in the original hearing, and if the Commission should grant the petition to rehear, and at this time make an order different from the order* made December 22, 1923, it would necessarily be upon the ground that the Commission had made an improper and erroneous order in the cause, and not upon the ground that any new matter has been presented in the petition to rehear.

As stated above, the Commission in the order* made December 22, 1923, after prolonged hearings, and after careful and conscientious consideration of all the facts in the record, made what it considered to be a proper and just order in the cause. After reviewing the record with respect to the matters complained of in the petition to rehear, the Commission is of the opinion that no sufficient reason is advanced why its order* of December 22, 1923, should be in any way changed or modified at this time.

The Commission is still of the opinion that it is powerless to disallow this contract charge of 412 per cent. and that to undertake to do so would conflict with the opinion of the Supreme Court of the United States in the case of State ex rel. Southwestern Bell Telephone Company v. Missouri Public Service Commission, P.U.R. 1923-C, 193. The Supreme Court of the United States in discussing a similar contract between the Southwestern Bell Telephone

* See Commission Leaflet No. 146, p. 442.

L. 147)

Company and the American Telephone and Telegraph Company providing for a charge of 442 per cent. of the gross revenue to be paid by the Southwestern Bell Telephone Company to the American Telephone and Telegraph Company, used this language:

The important item of expense disallowed by the Commission $174,048.60 ~ is 55 per cent. of the 472 per cent. of gross revenues paid by plaintiff in error to the American Telephone and Telegraph Company as rents for receivers, transmitters, induction coils, etc., and for licenses and services under the customary form of contract between the latter company and its subsidiaries. Four and one-half per cent. is the ordinary charge paid voluntarily by local companies of the general system. There is nothing to indicate bad faith. So far as appears, plaintiff in error's board of directors has exercised a proper discretion about this matter requiring business judgment. It must never be forgotten that while the state may regulate with a view to enforcing reasonable rates and charges, it is not the owner of the property of public utility companies and is not clothed with the general power of management incident to ownership.”

While this Commission, as stated in the order* made December 22, 1923, did not approve the contract as being economically sound, it was, however, unable to find from the facts that in this particular case there had been any abuse of discretion, want of good faith, or fraud upon the part of the directors of the Cumberland Telephone and Telegraph Company in entering into this contract, and believed then, and now believes that it is bound by the opinion of the Supreme Court of the United States above referred to, and that it is powerless to disallow the contract charge of 442 per cent.

The Commission is, therefore, of the opinion that the petition to rehear should be denied, and

It is, therefore, ordered by the Commission, That said petition be, and the same is hereby, overruled, denied and dismissed.

February 20, 1924.

See Commission Leaflet No. 146, p. 442.

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