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March 26, 1956


Appeal, No. 17, March T., 1956, from order of the Pennsylvania Public Utility Commission, August 8, 1955, at Investigation Docket No. 16, in case of York Telephone & Telegraph Company v. Pennsylvania Public Utility Commission. Order reversed in part and otherwise affirmed.


John C. Kelley, with him William S. Eisenhart, Jr., Arthur H. Hull and Hull, Leiby & Metzger, for appellant.

John E. Fullerton, Assistant Counsel, with him Edward Munce, Assistant Counsel, and Thomas M. Kerrigan, Acting Counsel, for Public Utility Commission, appellee.

David Dunlap, for Pennsylvania Independent Telephone Association, under Rule 46.

Before Rhodes, P.j., Hirt, Ross, Gunther, Wright, Woodside, and Ervin, JJ.

Author: Hirt

[ 181 Pa. Super. Page 14]


York Telephone & Telegraph Company, an independent telephone company incorporated in 1907, renders service through 13 exchanges for the most part in York County but to some extent also in Adams County in this State. The service or franchise area, of the Company as we shall refer to it, comprises 687 square miles with a population of upwards of 167,000. Impelled by numerous complaints lodged with it, the Public Utility Commission on October 30, 1950, instituted an investigation and inquiry, of its own motion,

[ 181 Pa. Super. Page 15]

    to determine whether the Company was providing adequate, efficient and reasonable service and facilities in compliance with the mandate of § 401, art. IV. of the Public Utility Law of May 28, 1937, P.L. 1053, 66 PS § 1171.*fn1 Numerous hearings were held and the testimony of 61 witnesses disclosed a widespread dissatisfaction with the inadequate telephone service provided by the Company; the evidence indicated a large accumulation of unsatisfied service demands. The record of the investigation was closed on November 20, 1951. In its order of October 6, 1952, the Commission, in commenting on the testimony, stated: "The record shows that, during the period January 1, 1946 to August 31, 1951, respondent received a total of 19,529 applications for service and during the same period its installation and cancellations totaled 15,161 or about 78 per cent of the applications received. There were 13,694 new customers served during this period and the net gain in telephones amounted to 10,748." A statement submitted by the Company at the request of the Commission disclosed that as of January 1, 1951, the Company had a backlog of 4,128 unfilled applications for telephone service. In the 1952 order the Commission found: "1. Following World War II and continuing to the present time, there has been a large demand for more and better telephone service in the area

[ 181 Pa. Super. Page 16]

    served by respondent. 2. Six years after the end of those hostilities respondent is yet struggling to consume its back-log of service requests. 3. Respondent has plans, largely in process of execution to alleviate its service difficulties. 4. This construction program was unduly late in getting under way. 5. Respondent failed to solve the construction manpower problem." Based on these findings, and the supporting testimony, the Commission, in respects material to this appeal, ordered and directed: "2. That ... respondent, shall, within 30 days of service of this order, augment its cable and installation craftsmen in accordance with the recommendation of its consulting engineer. (All emphasis throughout this opinion will be ours). 3. That ... respondent, shall, within 30 days of service of this order, submit to this Commission a comprehensive statement of the results of its construction and improvement program to date that has or will, in the near future, eliminate the inadequate, inefficient and unreasonable service found to have existed at the time this investigation was instituted. 4. That, following the submission of the report required by (3) above, York Telephone and Telegraph Company, respondent, shall submit monthly reports to this Commission, showing such progress as may have been made in the construction and improvement program during the next preceding month. 5. That, upon completion of the construction and improvement program, ... respondent shall submit to the Commission a final report, indicated as such."

In the absence of an appeal we may take it that the Company concedes the validity of the above findings in the order of October 6, 1952. Cf. § 1112 of the Public Utility Law, 66 PS § 1442. In partial compliance with the 1952 order the Company thereafter submitted monthly progress reports, as directed, but did not file

[ 181 Pa. Super. Page 17]

    a final report, for the obvious reason that deficiencies in the service have never been corrected. From an analysis of the successive monthly reports, the Commission was not satisfied with the Company's performance of its construction program. Accordingly, on February 14, 1955 the Commission entered a rule on the Company to show cause "why its authority to serve in York and Adams Counties should not be amended, modified, revised, or other penalties imposed,... for failure to comply with the order of the Commission dated October 6, 1952, ... and for failure to render reasonable and adequate service in violation ... of the Public Utility Law." With the rule, as served, the Commission gave the Company notice of its reasons for reviving the investigation in this language: "An analysis of respondent's January 1, 1955, progress report shows the following: 1. The net station gain for 1954 was 30% less than for 1953; 2. The net station gain for 1954 was the lowest for the last three years; 3. The number of deferred applications was considerably higher at the end of 1954 than at the beginning of 1954; 4. The number of deferred applications as of January 1, 1955 was almost as high as of January 1, 1951, viz., 3,750 v. 4,128. Furthermore, the number of informal complaints is abnormally high, and formal proceedings continue to allege inadequate service." The Company filed an answer to the rule, averring in detail the progress made by it in enlarging its telephone system "toward the goal of providing service to all applicants." Many hearings were held on the rule at which, under § 420 of the Public Utility Law, 66 PS § 1190, "the burden of proof to show that the service and facilities involved are adequate, efficient, safe, and reasonable ..." was upon the Company. Based upon specific findings from the voluminous testimony developed at the hearings on the rule, the Commission

[ 181 Pa. Super. Page 18]

    in its order of August 8, 1955, stated: "In the prior proceedings in this investigation, respondent promised much for the future. The testimony ... indicates how inadequate its performance has been, notwithstanding the time and opportunity that were granted respondent by the Commission to correct the inadequacies found to have existed in our 1952 order ... The record is replete with evidence that respondent has been disdainful and contemptuous of the public, ... and has deliberately chosen to refrain from expenditures for manpower which would have provided timely service, contrary to the express mandate of the Commission's order of 1952."

Upon the initiation of the proceeding of October 30, 1950, the Company engaged the services of the engineering firm of Day and Zimmermann. The engineers made a comprehensive survey of the facilities of the Company; thorough studies were also made of the probable future service demands and the reasons for the existing numbers of unfilled applications. The survey culminated in a detailed report proposing a comprehensive program designed to meet the Company's existing and anticipated service requirements. The evidence in all of the hearings before the Commission emphasized the importance of manpower and particularly the necessity for additional "cable crews" to fill the existing deferred applications for service and to meet current and future demands. At the time of the 1950 investigation the Company had but five cable crews. The report of the engineers, as submitted, was later amended by Theodore E. Seelye, vice president of Day and Zimmermann, to contain the recommendation that three additional cable crews be employed increasing the total number of such crews to eight. The order of October 6, 1952, recited: "The record in this case is replete with disclosures ... of insufficient construction

[ 181 Pa. Super. Page 19655]

days ..." Section 1301 of the Code, 66 PS § 1491 provides: "(a) If any public utility shall ... fail, omit, neglect, or refuse to perform any duty enjoined upon it by this act; or shall fail, omit, neglect or refuse to obey, observe, and comply with any regulation or final direction, requirement, determination or order made by the commission, ... such public utility, for such violation, omission, failure, neglect, or refusal, shall forfeit and pay to the Commonwealth of Pennsylvania the sum of fifty dollars ..." And § 1301(b) provides: "Each and every day's continuance in the violation of any regulation or final direction, requirement, determination, or order of the commission ... shall be a separate and distinct offense ..." On the authority of § 1301 the Commission imposed a penalty of$50 for each of 655 days of the Company's default or a total fine of $32,750 to be paid by the Company to the Commonwealth for its failure to comply with the direction of the Commission as to additional cable crews in the 1952 order.

The Company did not assign findings II and V as error in this appeal. In effect the Company concedes that it failed to comply with the order of October 6, 1952, and the controlling question raised by this appellant on this phase of the appeal, therefore, is whether the imposition of the above penalty under § 1301 of the ...

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