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WISCONSIN.

Railroad Commission.

In re APPLICATION OF THE MISHICOT TELEPHONE COMPANY

FOR AUTHORITY TO INCREASE RATES.

U-2945.

Decided January 25, 1924.

Increase in Rates Authorized.

OPINION AND DECISION. The application in this case was filed with the Commission by the Mishicot Telephone Company on October 18, 1923. In its application the petitioner requests authority to increase its rates for the reason that the revenues under the present rates are insufficient to pay the operating expenses, to provide properly for depreciation and to allow a reasonable return on the investment. The present rates and the rates the applicant proposes are as follows:

Business:

One-party
Two-party
Four-party
Six-party

Net Per Month
Present Proposed
Rates Rates
$1 50

$2 00 None

1 75 1 00 Discontinue 1 00 Discontinue

Residence :

One-party
Four-party
Six-party

None
None
1 00

1 75

1 50 Discontinue

Rural :

Business
Residence

1 00
1 00

1 75
1 50

Extension telephone:

Answering only
Extension bell

None
None

50
25

L. 147]

Hearing in the case was held in Madison on November 20, 1923, at which A. A. Pfingsten appeared for the applicant. There were no. appearances in opposition.

The Mishicot Telephone Company operates an exchange in Mishicot serving 41 local and 154 rural subscribers. The company was originally organized along the lines of a mutual company with each of the 50 shares of capital stock, par value $50.00 per share, held by a different stockholder. In February, 1922, however, the company's property was badly damaged by the sleet storm which visited that section of the State, and as the company was in a poor financial condition it had to go heavily into debt in order to rebuild its plant before service could be reestablished.

As the company could not liquidate the debts of approximately $1,900 which had been incurred, the secretary of the company persuaded Mr. Pfingsten who had been working for the company as a linesman and was one of the company's largest creditors, to take over the property and to assume the outstanding obligations. Under an option which was drawn up for this purpose and which provided that each stockholder that signed would sell his stock to Mr. Pfingsten for $1.00 per share, Mr. Pfingsten acquired the ownership of 49 shares. Since the date of the acquisition of the stock, Mr. Pfingsten has advanced approximately $1,800 for further additions to the plant.

The records of the company have never been kept properly, so it is impossible to determine the investment value of the property. From an inventory of the physical property obtained from Mr. Pfingsten subsequent to the hearing, we conclude that the company should earn at least $600 per annum in order to provide properly for depreciation which, with an allowance of 8 per cent. upon the funds invested by Mr. Pfingsten, would make the total requirement for depreciation and return about $900 per

annum.

[Wis. The following table sets forth our estimate of the operating expenses for the year 1924 which is based upon an examination of the company's records for the year 1923: Operators' wages

$1, 200 00 Central office rent....

120 00 Lineman's salary (part time)

600 00 Batteries

200 00 Auto expense

200 00 Materials and miscellaneous items.

200 00 Taxes

85 00

TOTAL EXPENSES

$2,605 00

900 00

Depreciation and return..

TOTAL REVENUE REQUIRED..

$3,505 00

In order to provide revenues equal to the requirement shown above, the company will need the schedule of rates provided for in the following order. Lower rates to parties who were formerly stockholders would be unlawfully discriminatory and cannot be approved.

It is, therefore, ordered, That the Mishicot Telephone Company be, and hereby is, authorized to discontinue its present schedule of rates and to place in effect the following rates :

Per Month Business :

Gross Net One-party

$2 25 $2 00 Two-party

2 00 1 75

Residence:

One-party
Four-party

2 00
1 75

1 75
1 50

Rural :
Business

2 00 1 75 Residence

1 75 1 50 Extension telephone, answering only...

60 50 Extension bells

35 25 Discount Rule: All subscribers will be billed monthly in advance at the gross rate and have their bills discounted to the net rate if paid on or before the twentieth of the month for which service is billeů.

. L. 147]

Rates authorized herein may be made effective for service rendered on and after the first of the month following the date of this order, and shall apply, without discrimination, to all subscribers.

Dated at Madison, Wisconsin, this twenty-fifth day of January, 1924.

In re APPLICATION OF THE INTERURBAN TELEPHONE COMPANY

FOR AUTHORITY TO DISCONTINUE TOLL LINE.

U-2948.

Decided January 25, 1924.
Application to Discontinue Toll Line Denied.

OPINION AND DECISION. This application was filed with the Commission October 22, 1923. The Interurban Telephone Company operates a telephone system with exchanges at Sun Prairie, Lake Mills, and Waterloo. Among other lines, it owns about half of a metallic toll line between Lake Mills and Deerfield, the other half being owned by the Deerfield Telephone Company.

The applicant states that the present revenues do not warrant the continuance of this line and that there are other through circuits available for use.

Hearing was held at Madison, November 14, 1923. At this hearing E. E. Engsberg appeared on behalf of the Interurban Telephone Company, E. H. Latsche for himself and other subscribers of the Interurban Telephone Company, G. W. Leyda for the Deerfield Telephone Company, F. J. Neefe, H. H. Clark, and J. H. Clark for the Cottage Grove Telephone Company, Andrew Ryan and M. N. Ryan for the Kegonsa Telephone Company, and A. F. Jahnke for the Peoples Telephone Company of McFarland.

The testimony had to do with the amount of traffic over the line, with alternative routing of this traffic in case the

[Wis line were to be discontinued, with service conditions in the use of the line and with alternative use to which the Interurban Telephone Company proposes to place its portion of the line in case of its discontinuance.

It is true that other toll lines are available for the service rendered between Lake Mills and Deerfield, but the routing of the messages is relatively indirect, with slower service naturally resulting. It is true, also, that service conditions on the line have not been satisfactory. We understand that this has been due, in part at least, to conditions existing on the Interurban company's end of the line and that these conditions have now been remedied, and we are informed that at present service conditions are fair.

It is probably true, also, that the revenue derived from the use of the line is rather low in proportion to the investment. Traffic counts submitted for the period from December 11 to January 10, inclusive, indicate total revenue for that month for messages originating at Lake Mills amounting to $8.25. Messages routed from Deerfield to Lake Mills numbered 92 during that period, which at the 15-cent rate which is in effect, would amount to $13.80. Each company keeps the revenue from messages originating at its end of the line.

It is quite possible, also, that with the improvement in service conditions on this line its use will increase to the point where it will be more nearly remunerative than it has been in the past.

We think there is no question that the line affords a considerable convenience to the public and that its discontinuance would result in inconvenience and delay in the handling of toll messages.

The Interurban Telephone Company for the year 1922, which is the last year for which a report is now available, showed earnings of somewhat less than a full return upon the value of its property, although it had a substantial amount available for return after making what appears to have been a complete and adequate provision for depreciation. It was able to meet its interest charges and pay a

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