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July 18, 1978


Suffolk. Civil action commenced in the Supreme Judicial Court for the county of Suffolk on May 10, 1977. The case was reported by Kaplan, J.

Hennessey, C.j., Braucher, Kaplan, Wilkins, & Liacos, JJ.


Public Utilities. Telephone Company. Practice, Civil, Review of order of department of public utilities. Words, "May."

The opinion of the court was delivered by: Kaplan

Statute 1973, c. 816, § 1, amending § 20 of G. L. c. 159, was not designed to alter the basic coverage of § 20 of describing a procedure directed to modifications proposed by a telephone company of its existing tariff. [31-32]

Upon the filing with the Department of Public Utilities by a telephone company of certain proposed revisions of its tariff, and suspension of the revisions and investigation by the department and public hearings as to the propriety of the proposed rates and charges, the department, on the date the maximum period of suspension expired, was authorized under G. L. c. 159, § 20, as amended by St. 1973, c. 816, § 1, to disallow the proposed revisions [32-33]; the department did not itself then fix a tariff such as would be proper in a proceeding under c. 159 § 14, as authorized by § 20, and was not obligated to do so. [33]

New England Telephone and Telegraph Company appeals pursuant to G. L. c. 25, § 5, from a decision of the Department of Public Utilities disallowing certain modifications of tariff proposed by the company. Upon agreement of the parties, a single Justice of this court reserved and reported the matter to the full court.

We turn to the facts as far as necessary. On April 14, 1976, the company filed with the department certain revisions of the part of its tariff entitled "Announcement Services" (MDPU No. 10). The effect of the revisions would be to modify the terms of an existing service called "Automatic Announcement Service" (AAS) and to introduce a variant service to be called "Public Announcement Service" (PAS).

Briefly, a subscriber to AAS under the existing tariff obtained a rather simple, light duty system by which persons calling the subscriber's number were enabled to hear announcements regarding such things as road conditions or stock market quotations which would be accompanied by the subscriber's advertising message. Rates for AAS comprised monthly charges for announcement equipment and a flat monthly rate for each line connecting the equipment to the telephone network. The company proposed by the April filing to substitute a minimum service period of six months for the existing three-month minimum in order to discourage demands for installation of the equipment for short intervals, and it proposed, further, to discontinue AAS when the equipment on hand was exhausted. PAS, as described in the filing, would be a light through heavy duty system that could handle without difficulty rapidly changing announcements such as time or time-and-temperature, and would offer a number of sophisticated features including "synchronous entry" (the caller, no matter when he calls, hears the beginning of the announcement as he comes on the line) and "traffic load protection" (there is automatic shortening of the announcement -- information and advertising -- when the number of calls at a particular time is so large as to crowd the lines). Rates proposed for PAS would consist of a nonrecurring charge for installation of service, monthly rates varying with the kind of announcement and type of duty, and a termination charge if the subscriber terminated service before expiration of the minimum period applicable to the particular service. As to the relation of AAS (while it continued to be provided) to PAS, it appeared *fn1 that a customer could select either, if his estimated requirements were within twenty lines, he confined his announcements to certain types, and did not choose to avail himself of any of the sophisticated features; otherwise he would have to subscribe to PAS.

The proposed changes of tariff were stated to go into effect in a month's time, on May 14, 1976, *fn2 but on May 13 the department inaugurated DPU Docket No. 18713, entitled "Investigation by the Department on its own motion as to the propriety of the rates and charges set forth in the following: MDPU No. 10 . . . filed with the Department . . .," and at the same time suspended the operation of the proposed rates and charges until September 14, 1976. Subsequently, by further orders, the department continued the suspension for the maximum period of ten months allowed under G. L. c. 159, § 20, that is, until March 14, 1977.

In June, 1976, the company filed its prepared testimony and exhibits to support its proposals, and in February, 1977, it filed responses to requests for information addressed to it by the department in January. On February 18 and 25, 1977, hearings were held in DPU 18713 presided over by a hearing officer with a departmental telecommunications specialist questioning rather minutely the witnesses offered on the part of the company. Further requests for information were made and answers filed. On March 14 the department rendered a decision concluding thus: " Ordered : That MDPU No. 10 of the Company filed on April 14, 1976 be and hereby is disallowed." The company moved for reconsideration which was denied on April 29, 1977, "without prejudice to the filing of a new tariff supported by any evidence available to the Company."

The department's decision expressed the concern that the rates should be based on "fully allocated costs," and, characterizing the services involved as noncompetitive or "monopolistic," insisted that the rates should be reasonably, not excessively, compensatory. Analyzing the facts adduced in the proceeding, the department sought to show that the company's proposals did not satisfy the criteria mentioned.

In its petition of appeal the company alleged as grounds that (1) the department's decision was not supported by substantial evidence; (2) under the controlling statutes the company's proposed tariffs must go into effect unless the department should find them unreasonable and unlawful and itself determine and fix lawful rates, which the department had not done; (3) the company had been deprived of significant procedural rights in the course of the proceedings.

The company has not briefed the first point about a claimed lack of substantial evidence to support the department's decision, and it is ...

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