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EXECUTONE PHILADELPHIA v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (06/06/80)

decided: June 6, 1980.

EXECUTONE OF PHILADELPHIA, INC., PETITIONER
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT



Appeal from the Order of the Pennsylvania Public Utility Commission in case of Pennsylvania Public Utility Commission v. Bell Telephone Company of Pennsylvania, Nos. R.I.D. 289, R.I.D. 401 and C.21401.

COUNSEL

William R. Deasey, Deasey, Scanlon & Bender, Ltd., with him James H. Johnston, Cohn and Marks, for petitioner.

Bohdan R. Pankiw, Assistant Counsel, with him Steven A. McClaren, Deputy Chief Counsel and George M. Kashi, Chief Counsel, for respondent.

Gerald J. St. John, with him Irving R. Segal, Schnader, Harrison, Segal & Lewis, Donald F. Clarke and Raymond F. Scully, for Intervenor, Bell Telephone Company of Pennsylvania.

President Judge Crumlish and Judges Blatt and Craig, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 52 Pa. Commw. Page 75]

Executone of Philadelphia, Inc. (Executone) petitions for review of the order of the Pennsylvania Public Utility Commission (PUC) which terminated the PUC's own investigation of tariffs filed by the Bell Telephone Company of Pennsylvania (Bell) and dismissed Executone's complaint which alleged the rates set forth in those tariffs to be below cost, and thus in violation of law.

The subject tariffs proposed rates for three telephone service installations denominated COM-KEY 718, 734, and 1434. These systems are packaged key telephone systems having various line and station capacities and offering basic service along with features such as intercom and conference calls without assistance from an attendant.

Initially, the PUC challenges Executone's standing to appeal, citing Pennsylvania Petroleum Assoc. v. Pennsylvania Power & Light Co., 32 Pa. Commonwealth Ct. 19, 377 A.2d 1270 (1977), where we quashed the appeal, from a PUC rate order, of a non-profit statewide trade association of petroleum dealers, which asserted its interest only as a competitor of the utility in the energy industry, but did not allege that it or any of its members were customers of the utility. That case is inapposite because here Executone is admittedly a customer of Bell and presented evidence of its customer status. Customers of a regulated utility may clearly be aggrieved by an order of the PUC, and

[ 52 Pa. Commw. Page 76]

    therefore Executone has standing, on that basis, to bring this appeal. We therefore will deny the P.U.C.'s motion to quash. We do not address Executone's standing or lack thereof in relation to its status as a competitor of Bell in the terminal equipment market.

Executone has limited its appeal here to the rates applicable to the COM-KEY 1434 system, alleging that the PUC erred in approving those rates because "substantial evidence of record, as well as the weight of authority, established that the rates were below marginal cost [,] anticompetitive, and so unlawful."

Executone asserts that the rates approved by the PUC are unlawful because they constitute predatory pricing, under the Sherman Antitrust Act, 15 U.S.C. 2, and decisions thereunder. We are not compelled to address the legal basis or consequences of this argument, for Executone has in the first instance failed to demonstrate that the rates as approved are non-compensatory, i.e., below marginal cost.

The rationale upon which the PUC approved the subject rates as reasonable, and to which Executone takes exception, was predominantly the conclusion, from Bell's Long Run Incremental Analysis (LRIA) that the rates are in fact more than compensatory, i.e., the rates are expected to cover costs incurred and provide a contribution to the common ...


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