Summary
In Chillicothe Telephone Co. v. Public Utilities Commission, 163 Ohio St. 398, 126 N.E.2d 917, the court approved the Commission's order directing Foreign Exchange Service and noted that this type of service is growing in volume.
Summary of this case from Blakeley v. Corporation CommissionOpinion
No. 34217
Decided May 25, 1955.
Telephone companies — Public utility service — Full-period private-line telephone service — Duty to furnish — Public Utilities Commission — Authority to require telephone companies to co-operate in furnishing.
1. The furnishing of publicly needed full-period private-line telephone service by a public utility telephone company is a public utility service which may be required to be rendered by such company under the jurisdiction and orders of the Public Utilities Commission.
2. The Public Utilities Commission under its jurisdiction over public utility telephone companies in this state may require two or more telephone companies to co-operate in furnishing full-period private-line telephone service to private parties having need for such public service, under just and reasonable terms fixed by the commission.
APPEAL from the Public Utilities Commission.
This is an appeal from an order of the Public Utilities Commission, appellee herein, which orders the appellant, the Chillicothe Telephone Company, hereinafter designated as Chillicothe, to join with the Ohio Bell Telephone Company, hereinafter designated as Bell, and the Ohio Consolidated Telephone Company, hereinafter designated as Consolidated, all public utilities under the laws of Ohio, to render a continuous full-period exclusive-line telephone service to Commercial Motor Freight, Inc., a motor transportation company, hereinafter designated Commercial, as requested in Commercial's application, as soon as the necessary telephone facilities are available for that purpose. The record shows that Commercial is a common carrier by motor vehicle rendering state-wide and interstate service and with its principal place of business in Columbus. It has 1,690 employees and owns and operates equipment consisting of 187 trucks, 330 tractors and 1,615 trailers.
In its amended complaint before the commission, Commercial requests the commission to order Chillicothe to join in an agreement with Bell and Consolidated to furnish full-period private-line telephone service, with the necessary facilities, connecting the offices of Commercial at Columbus, Lancaster, Newark, Zanesville, Chillicothe and Portsmouth. Commercial alleges that it already had in operation such a private-line service connecting its offices at Columbus, Lancaster, Newark and Zanesville, and that it desires an extension of such service to its offices at Chillicothe and Portsmouth. Commercial alleges further that Bell and Consolidated are willing to co-operate in furnishing such service, but that Chillicothe refuses to so co-operate.
The amended answer of Chillicothe admits that it is a public utility engaged in the business of furnishing telephone service to the public in the city of Chillicothe and contiguous territory, but denies that it is engaged in the business of furnishing full-period private-line telephone service. It alleges further that it has established 65 full-time talking circuits radiating from Chillicothe in all directions throughout central Ohio; that none of them can be reserved for the exclusive use of any person, firm or corporation without impairment of the public service; that the rate quoted by Bell for this suggested full-time service is $664 per month; that Bell offered Chillicothe as its share of the compensation $25.45 per month, which is wholly inadequate and would result in great disparity as to the earnings Chillicothe would receive from such circuits used to serve the general public; that a public utility should not grant special services, rates and privileges to one patron when it can not grant like service, rates and privileges to others similarly situated; and that if such service were installed it would be at a large financial loss to Chillicothe.
Testimony was taken before the commission's attorney examiner, and on his report the commission entered its order on July 6, 1954. The commission adopted the following finding of facts:
1. "The Chillicothe Telephone Company's articles of incorporation do not limit or restrict it as to the type or types of telephone service it holds itself out to render to the public."
2. "The Chillicothe Telephone Company's `Tariff P.U.C.O. No. 7, General Exchange Tariff' discloses that it is presently holding itself out to render an exclusive line service to a certain segment of the public."
3. "Certain segments of the public have a need for exclusive line telephone service."
4. "Commercial Motor Freight, Inc., has a need for exclusive line telephone service as requested in its application."
5. "The evidence adduced at the hearing of the instant case is not sufficient or conclusive enough for the commission to arrive at a decision on what would be just and reasonable rates or charges for the rendition of the requested exclusive line service."
6. "The Chillicothe Telephone Company has been and is presently engaged in rendering an exclusive type of telephone service in conjunction with The Ohio Bell Telephone Company between Chillicothe and other points in Ohio to certain telephone customers requesting this type of service."
The evidence presented shows, among other things, that Commercial has for about 16 or 17 years been using private-line service connecting its office at Columbus with many points in Ohio; that Commercial needs the service sought to provide greater speed and efficiency in tracing shipments and in dispatching; that private-line telephone service has been furnished by telephone companies in Ohio for many years; that Bell has furnished private-line telephone service since its incorporation in 1921; that on about March 4, 1954, Bell had in service 264 full-period talking circuits which terminated at 95 different exchanges, 57 of which were Bell exchanges and 38 of which were connecting company exchanges; that Bell has direct connections with 88 telephone companies in Ohio; that with these, except Chillicothe, it has agreements covering the furnishing of private-line telephone service; that on November 17, 1943, it entered into an agreement with Chillicothe covering the furnishing of such service but such agreement was cancelled at the request of Chillicothe as of August 4, 1952; that there is a segment of the public whose needs for intercity telephone communication are not fully met by message telephone service; that private-line telephone service meets the needs of the public in some phases of business; that neither message toll service nor conference toll service is a substitute for private-line telephone service, and neither satisfies the needs of customers who require private-line telephone service; that the specific service requested by Commercial is the connection of its offices located at Chillicothe and Portsmouth with its existing private-line telephone service among Columbus, Newark, Zanesville and Lancaster; that interchange circuits among the cities would be furnished by Bell; that Chillicothe would be required to furnish only the local channel and facilities connecting Commercial's premises in Chillicothe with Bell's interchange channel which terminates in Chillicothe's central office; that the furnishing of private-line telephone service by a telephone company does not have any appreciable adverse effect on message toll business; that Chillicothe now provides such service jointly with Bell, providing three private-line channels to a radio station in Chillicothe for radio program transmission; and that the facilities used to furnish this service are identical with the facilities to furnish private-line telephone service to Commercial.
Chillicothe's application for rehearing was denied by the commission.
Other facts are stated in the opinion.
Messrs. Dunbar, Dunbar Kienzle and Mr. Richard R. Murphey, Jr., for appellant.
Mr. C. William O'Neill, attorney general, Mr. Ralph N. Mahaffey and Mr. Everett H. Krueger, Jr., for appellee.
The ultimate question is whether the order of the Public Utilities Commission, which requires Chillicothe, as soon as required facilities are available, to join with two other telephone companies in furnishing full-period private-line telephone service connecting Commercial's offices in Chillicothe and Portsmouth with Commercial's existing private-line telephone service among Columbus, Newark, Lancaster and Zanesville, is unreasonable or unlawful.
The answer to this question requires the determination of the following three elemental questions: (1) Is the furnishing of full-period private-line telephone service to a person or corporation having a legitimate business need therefor a public utility service?; (2) does the existence of a public necessity for private-line telephone service require telephone companies, having proper location and adequate facilities, to furnish a continuous line of communication for the purpose of providing such service?; and (3) under the facts and circumstances of this case, as shown by the record, may Chillicothe be required to co-operate in furnishing private-line telephone service to Commercial?
Chillicothe claims that the furnishing of full-period private-line telephone service is not a public utility service; that an order to furnish such service constitutes a taking of its property in violation of Section 19, Article I of the Ohio Constitution; and that the commission's order is not responsive to a public need.
The authority under which the commission acts in regulation of public utility service is predicated upon a finding that public necessity requires the regulation demanded. See Section 614-63, General Code (Section 4905.50, Revised Code). Such a question was determined at an early date when the question came before this court as to whether the commission could, where certain conditions exist, require two or more telephone companies to establish and maintain through telephone lines within the state between two or more localities. See Shafor v. Public Utilities Commission, 94 Ohio St. 230, 236, 113 N.E. 809, L.R.A. 1917E, 1080.
The crucial question is whether such type of telephone service constitutes a public utility service so as to give the commission jurisdiction over subject matter such as that in its order in the instant case. It is clear that the Public Utilities Commission within the limits of its constitutional power may not require a public utility, against its will, to turn over to private persons for their private use and benefit the exclusive control and use of a portion of the utility private property. Missouri Pacific Ry. Co. v. Nebraska, 164 U.S. 403, 41 L. Ed., 498, 17 S. Ct., 130. But the record in the instant case discloses that there is a public demand for this type of service and that various persons are using it. Public carriers of freight and the shipping public are especially served in the expediting and tracing of shipments. Such service is also demanded by radio broadcasting companies which use private-line channels for several hours at a time in broadcasting their programs, especially their sports programs. The record discloses that at the present time Chillicothe participates with Bell in furnishing three private-line channels for radio program transmission channels to the Shawnee Broadcasting Company Radio Station WBEX in Chillicothe, Ohio. In this connection, it should be stated that Chillicothe claims that these are furnished because of the requirements of the Federal Communications Commission to whose supervision it is subject.
The Ohio statutes do not define the term, "telephone service," but the term, "telephone company," is defined.
Section 614-2 a, General Code (Section 4905.02, Revised Code), defines the term, "public utility," as including, with certain exceptions not herein involved, every corporation, including all telephone companies, defined in Section 614-2, General Code (Section 4905.03, Revised Code).
Section 614-2, General Code (Section 4905.03, Revised Code), provides in part:
"The following words and phrases used in this chapter unless the same is inconsistent with the text, shall be construed as follows:
"* * *
"Any person or persons, firm or firms, copartnership or voluntary association, joint stock association, company or corporation, wherever organized or incorporated;
"* * *
"When engaged in the business of transmitting to, from, through or in this state, telephonic messages, is a telephone company, and as such is declared to be a common carrier."
In this connection the Attorney General, in his brief herein, appropriately says:
"Both private line telephone service and message toll telephone service are telephone services; and both afford private telephone services in that they both enable parties to carry on a private call. The only difference in this respect is that in message toll telephone service the parties have a private line during the period of the call, during which period nobody else may use that line, while in private line telephone service the parties have a private line 24 hours a day. If the furnishing of private line telephone service is a taking of the appellant's private property for private use, the appellant's property is likewise taken every time it connects its lines with the residence or place of business of a person as the means of affording him telephone service."
We find no reported cases wherein is discussed or decided the exact question of whether private-line telephone service, if furnished to all persons similarly situated and requesting it, is a public utility service. However, in a proceeding before the Interstate Commerce Commission, relating to a complaint concerning contracts for private-line telegraph and telephone service, that commission, in 50 I.C.C. Reports, 731, 756, 757, said:
"Some question is raised regarding our jurisdiction on the ground that respondents are subject to the act (I.C.C.) only in so far as they are engaged in `the transmission of messages,' and that in rendering the private-wire service they merely lease facilities, the messages being transmitted by the lessees. With this refinement we can not agree. It is true that by providing his own operators the private-wire lessee receives a service that differs in some respects from that rendered to the general public. The fallacy of the argument is, however, clearly shown when it is remembered that the service rendered to the private-wire lessee corresponds very closely with that furnished by telephone companies to their subscribers. We do not understand that the jurisdictional point is seriously urged. It seems clear that respondents are common carriers engaged in the transmission of intelligence."
This type of service is growing in volume. Bell has furnished private-line telephone service for several years. It now has contracts with 87 telephone companies in Ohio to furnish this type of service. In our opinion, it would be unreasonable to hold that these contracts are void and that the Public Utilities Commission has no jurisdiction to recognize or supervise them. It is a relatively new type of service but that does not prevent it from being in fact a public utility service. In this connection, it is stated, as follows, in 73 Corpus Juris Secundum, 992, Section 2:
"The public or private character of the enterprise does not depend, however, on the number of persons by whom it is used, but on whether or not it is open to the use and service of all members of the public who may require it, to the extent of its capacity; and the fact that only a limited number of persons may have occasion to use it does not make of it a private undertaking if the public generally has a right to such use. It has been stated that the true criterion by which to determine whether a plant or system is a public utility is whether or not the public may enjoy it of right or by permission only. It is the duty which the purveyor or producer of the service or commodity has undertaken to perform in behalf of the public generally, or of any defined portion of it, which stamps it as a public utility, and not the use which the consumer makes of the service or commodity furnished."
This court concludes that, although both message toll telephone service and private-line telephone service are services to private parties, both services constitute public utility service.
The court finds from the record in the instant case also that there does exist a public necessity and demand for private-line telephone service as described in the application of Commercial; and that the commission had jurisdiction to make the order in question and was justified in directing Chillicothe to provide such service as soon as the necessary facilities are available for that purpose.
The order of the Public Utilities Commission is affirmed.
Order affirmed.
WEYGANDT, C.J., MATTHIAS, ZIMMERMAN, BELL and TAFT, JJ., concur.
In my opinion, although a telephone company is within its rights in furnishing exclusively private service by contract, as the Bell company has done in so many instances, it should not be within the power of the Public Utilities Commission to order such a company to furnish a glorified intercommunication system for one business.