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C. L. 147]

dividend of 6 per cent. on its capital stock and, in addition, carry a few hundred dollars to its surplus account. The condition of the company is such that we do not feel disposed to analyze minutely the financial results from the line in question as long as the facts indicate that there is a considerable use of the line, that it serves a public convenience, that it produces a revenue in some measure, although not fully commensurate with the cost of service. This is particularly true in view of what appears to us to be the probability that the amount of use of the line will be increased as service is improved. It seems to us, therefore, that the application for authority to discontinue the line should be denied.

It is, therefore, ordered, That the application of the Interurban Telephone Company for authority to discontinue a toll line between Lake Mills and Deerfield be, and the same hereby is, denied.

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

In re APPLICATION OF THE RHINELANDER TELEPHONE COM

PANY FOR AUTHORITY TO INCREASE RATES.

U-2956.

Decided January 26, 1924
Book Value Accepted as Rate Base - Federal Income Tax Included in
Operating Expenses Allowance Made of 13 Per Cent. of
Plant Value for Depreciation and Return - In-

crease in Rates Authorized.

OPINION AND DECISION. Application in this case was filed with the Commission by the Rhinelander Telephone Company on November 6, 1923. In its petition the applicant sets forth that owing to the increase in the cost of materials and labor it has furnished telephone service for some time without earning a reasonable return on its investment.

[Wis

Authority is requested to discontinue its present schedule which has been in effect since 1907, and to establish increased rates. The present and proposed rates are as follows:

Per Month

Present Proposed Business Service within Base Rate Area:

Net Rates Net Rates One-party

$2 50 $4 00 Two-party

2 25

3 50 Four-party

1 75 Discontinue Extension telephone, desk or wall type...

50

*1 00

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* Plus 40 cents per month for each one-eight mile of line or fraction thereof on stations located outside premises.

† Plus 25 cents per month for each additional mi'e o" fraction thereof beyond.

Per Month

Present Proposed Private Branch Exchanges :

Net Rates Net Rates Switchboard with operator's set and not to exceed 15 drops, battery included....

$4 50

$6 00 Each additional group of 5 signals or fraction thereof

40 Two-way trunk, each..

2 50

4 00 Generator circuit, each...

1 00

3 00 Each station in same building as switchboard.

75

1 00 Each station outside of building...

1 00

11 00

| Plus 40 cents per month for each one-eighth mile line or fraction thereof beyond,

L. 147]

Per Month

Proposed Hotel Private Branch Erchanges :

Net Rate
Switchboard with operator's set, battery included......... $6 00
Two-way trunk, monthly guarantee of net revenue in local
calls to equal $4.00...

4 00 Generator circuit

3 00 Each station on hotel premises.

50 Outgoing messages 5 cents each, of which the hotel receives 50 per cent.

The company will install and maintain the wiring system between the switchboard and the stations on the premises at the expense of the hotel.

Per Month

Present Proposed ?!iscellaneous Equipment:

Net Rate Net Rate
Extension bell ....

$0 15 $0 25
Extension bell with switch..
Extension gongs:
Six inch gong without switch

40 Six inch gong with switch

55 Twelve inch gong without switch

1 00 Twelve inch gong with switch

1 15 Cam lever

25 Extension bells or gongs located out of doors and in open sheds will be charged for at double the above rates.

40

Ercess Exchange Line Mileage:

No present rate.

Proposed rate: A monthly charge of 75 cents per quarter mile or fraction thereof beyond the specified base rate area will be made in addition to the exchange rates for each circuit extended beyond the base rate area. The additional charge to be divided proportionately among the subscribers based on class of service of the line located beyond the exchange base rate area.

Switching Service:

Present net rate...
Proposed net rate..

Per Month $0 25

50

Hearing in the case was held in Madison on November 26, 1923, at which Geo. F. Mahony, secretary, and J. A. Pratt appeared for the applicant, and A. S. Forsyth appeared for the city of Rhinelander.

[Wis. At the time of the hearing the applicant submitted several exhibits relative to the investment in the property and plant, the operating expenses, and the revenue which would be derived under the proposed rates. It also submitted an exhibit in which a considerable number of the business customers had subscribed to a statement that the proposed rates were generally satisfactory.

The Rhinelander Telephone Company operates a central energy exchange in the city of Rhinelander serving 1,330 local subscribers, 93 rural subscribers, and 67 switched subscribers of other companies.

The property and plant value was reported to be as follows as of December 31, 1922:

Organization expense
Land and buildings....
Central office equipment...
Station equipment
Exchange lines
General equipment
Undistributed construction expenditures.

$71 85 2,409 04 8,956 39 23,861 74 36,309 14 2,648 14

967 00

TOTAL

$75,223 30

The above book value we believe reasonably represents the fair value of the property as of that date. The applicant, however, during the past year has been rebuilding its distribution system and has replaced its open wire with cable, which in the business district has been laid underground. The company also had a fire in the central office during the summer which totally destroyed the central and general office equipment and left the community without telephone service until the company could install new central office equipment. The following table shows the company's statement of the changes that have been made in the book values of the property and plant since June 30, 1923, on account of the rehabilitation of the distribution system and the installation of new central office and general office equipment.

C. L. 147]
Property and plant value June 30, 1923...

$77,151 85
Additions to exchange lines:
Gross additions

$40,693 00 Less value of plant displaced.

12,140 00

NET ADDITION

28,553 00

Additions to central office equipment:
New equipment purchased from Western Elec-
tric Company

$32,500 00
Other equipment:
Shades, 15 at $2.50....

$37 50
Rest room furniture and fixtures.. 350 00
Lighting fixtures

223 32 Lockers, 20 at $9.00.

180 00 Shelving

55 00

845 82

GROSS ADDITIONS

$33,345 82 Less value of central office equipment destroyed. 8,973 64

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Net additions to general office equipment...

823 90

TOTAL PROPERTY AND PLANT VALUE.....

$130,900 93

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