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decided: April 11, 1983.


Appeal from the Order of the Pennsylvania Public Utility Commission in the case of Application of Hazle-Tone Communication, Inc., for approval of the right to begin to offer, render of furnish one-way and two-way radio telephone common carrier service to the public within the reliable service area of a transmitter located approximately one mile northeast of the city of Hazleton, Luzerne County, No. A. 100457, Folder 3.


Robert E. Yetter, Metzger, Wickersham, Knauss & Erb, for petitioner.

Eric A. Rohrbaugh, Assistant Counsel, with him, Alfred N. Lowenstein, Deputy Chief Counsel, and Joseph J. Malatesta, Jr., Chief Counsel, for respondent.

Sharon R. Bitzel, for intervenor.

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

Author: Craig

[ 73 Pa. Commw. Page 341]

Mobilfone of Northeastern Pennsylvania, Inc. appeals an order of the Pennsylvania Public Utility Commission (PUC), adopting the decision of an administrative law judge (ALJ) to grant the application of Hazle-Tone Communication, Inc. for a certificate of public convenience to provide one-way and two-way radio common carrier service*fn1 to the public within the reliable service area of a transmitter located approximately one mile northeast of the City of Hazleton.

[ 73 Pa. Commw. Page 342]

Mobilfone, Lehigh Valley Mobile Telephone Co., and Schuylkill Mobilfone, Inc. filed protests to Hazle-Tone's application; Lehigh and Schuylkill subsequently withdrew their protests.*fn2

The ALJ held hearings on October 9, November 19 and 20, 1979, January 28, 29, March 26, 27 and May 1, 1980. On May 9, 1980, in a separate application by Hazle-Tone to transfer certificate rights owned by Charles B. Shafer t/a Radio Paging of Northeastern Pennsylvania, the PUC entered an order granting Mobilfone's petition for rehearing, reconsideration and rescission, and remanded that case to the presiding ALJ for further hearings on the issue of Hazle-Tone's financial fitness. Because that May 9, 1980 remand order involved matters relevant to this case, the ALJ also reopened the record in Hazle-Tone's application that is now before us, consolidating the transfer application and this application in one hearing, because the testimony regarding the financial fitness of Hazle-Tone was equally relevant to both applications.*fn3

ALJ Cohen issued an initial decision in this certificate of public convenience application, recommending approval of Hazle-Tone's application on April 23, 1981, and on June 19, 1981, Judge Cohen issued his final opinion, again recommending approval of Hazle-Tone's

[ 73 Pa. Commw. Page 343]

    application. On August 21, 1981, the PUC adopted that decision, and on September 15, 1981, Mobilfone filed this petition of review.*fn4

Under the Public Utility Code, 66 Pa. C.S. ยง 1103, the PUC may grant a certificate of public convenience only if the "granting of such certificate is necessary or proper for the service, accommodation, convenience, or safety of the public," and the applicant bears the burden of demonstrating: (1) a public need for the proposed service, (2) the inadequacy of existing service, and (3) the financial and technical capacity to meet the need in a satisfactory fashion. Mobilfone of Northeastern Pennsylvania, Inc. v. Pennsylvania Public Utility Commission, 40 Pa. Commonwealth Ct. 181, 397 A.2d 35 (1979).

Our court, in Gettysburg Tours, Inc. v. Pennsylvania Public Utility Commission, 42 Pa. Commonwealth Ct. 399, 400 A.2d 945 (1979), reconciled the split of judicial authority concerning whether an applicant must always show that the existing service is inadequate. We held there that where the proposed service is different than the existing service, the applicant need not establish inadequacy of existing service in order to secure a certificate of public convenience, and that proof of public necessity for the service alone may support the certificate. However, where the proposed service is identical to existing service, a showing of inadequacy is required.

[ 73 Pa. Commw. Page 344]

Mobilfone alleges that the PUC should have required Hazle-Tone to prove that the existing service was inadequate. Mobilfone contends that the ALJ, whose final opinion said that Mobilfone did not provide two-way service in the applicant's proposed area, thereby contradicted the finding in his initial opinion that Mobilfone did engage in two-way service in a small portion of Hazle-Tone's proposed area.*fn5 Mobilfone contends that this discrepancy, and the ALJ's failure to consider that Bell Telephone, although not a protestant, provides two-way service in Hazle-Tone's proposed area, constitutes an error of law.

Hazle-Tone, in its brief, acknowledges that:

The two-way overlap [of Mobilfone's service in Hazle-Tone's proposed service area] is a small ellipse shaped area at the northernmost end of Hazle-Tone contours. The one-way overlap is a small area, again on the northern contour, including a few small towns surrounding the City of Hazleton.

Therefore, assuming that Mobilfone provides both one-way and two-way service in at least a small part of Hazle-Tone's proposed area, and ALJ should have required Hazle-Tone to prove inadequacy of existing service.

However, in determining inadequacy of existing service, Pennsylvania case law is unclear as to whether service provided by a non-protestant should be considered. Hazle-Tone and the PUC assert that our dictum in Gettysburg is controlling:

While we believe that the adequacy of existing service is generally one factor to be considered with reference to such a determination, we are satisfied that where as here, an applicant's proposed service is of a different nature than that

[ 73 Pa. Commw. Page 345]

    being presently performed by a protestant, a finding that the present service is inadequate is unnecessary. (Emphasis added.)*fn6

42 Pa. Commonwealth Ct. at 403, 400 A.2d at 948.

In contrast, however, in Railway Express Agency, Inc. v. Pennsylvania Public Utility Commission, 195 Pa. Superior Ct. 394, 401, 171 A.2d 860, 863 (1961), in considering an appeal by one of at least eighty-two carriers in the proposed area, our Superior Court said:

The [PUC] properly concluded that there was a public need for the service proposed that was not being met by [protestant] or any other existing common carrier. (Emphasis added.)*fn7

In resolving this disparity we are persuaded by the analysis of Judge Cohen, expressed in the final opinion below:

[ 73 Pa. Commw. Page 346]

The requirement of proving inadequacy of existing service is not statutory [ see Morgan Page 346} Drive Away, Inc. v. Pennsylvania Public Utility Commission, 16 Pa. Commonwealth Ct. 293, 328 A.2d 194 (1974)] but one means, in certain cases, to be used in deciding whether statutory standards will be met. The requirement should be judiciously applied to avoid erecting an artificial non-statutory barrier to entry. The legislature in enacting the Public Utility Code did not intend to benefit established carriers by erecting artificial barriers to the entry of new competitors. It is the public interest and convenience which the law seeks to protect. Pennsylvania P.U.C. v. Purolator Corp., supra, 355 A.2d at 853.

Inadequacy of existing service is a factor indicating public necessity for the proposed service. Pennsylvania Railroad Company v. Pennsylvania P.U.C., 199 Pa. Super. 158, 184 A.2d 111, 115-116 (1962). In certain cases the use of this factor can serve to assure the preservation of the economic health of the public utility industry involved, and has been invoked in those cases where it has not otherwise been established that the proposed service is reasonably necessary for the accommodation or convenience of the public. Application of L. P. Transportation, Inc., 25 Pa. Commonwealth Ct. 412, 359 A.2d 848 (1976). In the present case whether the reason be potential antitrust law violations, lack of interest or corporate economic suitability on the part of Bell to provide the type of service proposed, or for any other reason, Bell has not protested the instant application. When an existing carrier fails to protest an application, there is no reason in public policy or law to require the applicant to demonstrate that the existing service of the non-protesting

[ 73 Pa. Commw. Page 347]

    carrier is inadequate, since the failure to protest negates the conceivable reasons for use of the inadequacy of existing service factor. For example, if a public utility itself feels no need to protest because it sees no potential harm to its economic position from additional competition, preserving the economic health of the utility industry in the relevant market is not an available basis to support this requirement.

We agree, and we therefore decide that the PUC should have required Hazle-Tone only to establish that the existing one-way and two-way radio communication service of Mobilfone was inadequate. There was no requirement to prove the same regarding Bell or other non-protesting carriers.

Although the PUC did not consider whether Mobilfone's service was inadequate for the population demands of Hazle-Tone's proposed area, we need not remand to the PUC for more findings because the absence of numerous formal findings will not necessarily preclude review. Philboro Coach Corp. v. Pennsylvania Public Utility Commission, 67 Pa. Commonwealth Ct. 176, 446 A.2d 725 (1982). Rather, the findings of fact are sufficient for us to review as long as they are detailed and specific enough to enable this court to determine the controverted question presented on the appeal to ensure that the conclusions follow from the facts. In this case, the ALJ's general discussion of this matter contains sufficiently detailed findings to allow us to review its decision; therefore, further remand is unnecessary. Id.

[ 73 Pa. Commw. Page 348]

In considering the adequacy of service provided by Mobilfone, we note that an applicant need not establish a present demand for his service in every square mile of the territory to be certificated; proof of necessity within the area generally is sufficient. Reeder v. Pennsylvania Page 348} Public Utility Commission, 192 Pa. Superior Ct. 298, 162 A.2d 231 (1960). See also Pennsylvania Public Utility Commission v. Purolator Courier Corp., 24 Pa. Commonwealth Ct. 301, 355 A.2d 850, 852 (1976). Likewise, the corollary should be true that an applicant need not establish that service is inadequate in every square mile of the proposed territory; proof of inadequacy within the area generally should be sufficient. Because Mobilfone provides one-way and two-way radio service in only a small portion of Hazle-Tone's proposed area, the record supports the conclusion that Mobilfone's service in the proposed area is inadequate.

Mobilfone also challenges the ALJ's reliance on collateral estoppel, which resulted from the consolidation of the certificate of public convenience application and the transfer application for the purpose of conducting a hearing concerning the financial fitness of Hazle-Tone. That hearing involved testimony relative to the financial solvency of Hazle-Tone and its sole shareholder, John P. Gabriale.

By its order of March 13, 1981, the PUC held that Hazle-Tone was financially fit and solvent. Our court affirmed that determination in our recent decision, Mobilfone of Northeastern Pennsylvania v. Pennsylvania Public Utility Commission, 67 Pa. Commonwealth Ct. 219, 446 A.2d 1001 (1982) (Hazle-Tone Communication, Inc. was intervenor), where we said:

Our careful review of the record discloses, however that Hazle-Tone's balance sheet in the auditor's opinion show it to be solvent. Furthermore, Mr. Robert E. Cavalari, a certified public accountant, testified that, based upon his review of Hazle-Tone's financial records, it is in solid financial condition, is extremely liquid, and is adequately capitalized to provide common carrier service.

Id. at 223, 446 A.2d at 1003.

[ 73 Pa. Commw. Page 349]

The ALJ, in this application proceeding, relied on testimony from the same consolidated hearing, and held, in his final opinion, that the PUC's finding of financial fitness made on March 13, 1981, was applicable to the present case because of the doctrine of collateral estoppel. We agree.

In McCarthy v. Township of McCandless, 7 Pa. Commonwealth Ct. 611, 617, 300 A.2d 815, 820-21 (1973), we described the principles of collateral estoppel:

Where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel in the second action only as to those matters in issue that (1) are identical; (2) were actually litigated; (3) were essential to the judgment (or decree, as the case may be); and (4) were "material" to the adjudication.

Following our reasoning in Philadelphia Electric Co. v. Pennsylvania Public Utility Commission, 61 Pa. Commonwealth Ct. 325, 433 A.2d 620 (1980), where we applied res judicata to PUC proceedings,*fn8 we find that

[ 73 Pa. Commw. Page 350]

    collateral estoppel has an appropriate role in PUC hearings.

Mobilfone, however, asserts that the doctrine of collateral estoppel is inapplicable here because the records of both cases were being formed simultaneously. However, there is no reason that an administrative agency should have to relitigate identical issues especially where, as here, different cases were consolidated for a hearing to determine the same issue -- that is, the financial fitness of Hazle-Tone. In fact, under the doctrine of collateral estoppel, the PUC would have been precluded from adopting a finding in conflict with their March 13, 1981 order.

Lastly, Mobilfone alleges that the PUC acted arbitrarily in granting Hazle-Tone a certificate for public convenience where Hazle-Tone, a new entrant in the radio carrier service, will use the only available radio frequency in Hazle-Tone's proposed serviceable area. Mobilefone asserts that because too many carriers will be in the market, each company cannot benefit from economics of scale, and, accordingly, the public interest will suffer.*fn9

Although we recognize that radio-carrier service differs from other utilities because of the finite limitation on available frequencies, we also recognize that

[ 73 Pa. Commw. Page 351]

    all utilities involve markets in which only a limited number of providers may enter without adversely affecting each other. Thus, in both situations, we must adhere to the narrow scope of review of PUC orders as expressed in Reeder :

Protestant also contends that the commission substituted for substantial evidence of public necessity and inadequacy of existing service such elements is a desire to further competition. . . . It is for the commission to determine whether the available equipment and facilities are sufficient to meet the public demand; the propriety of permitting competition in a particular field in a specific locality is largely an administrative question to be decided by the commission in the exercise of its discretion. . . . No carrier has a right to be guaranteed freedom from competition. (Emphasis added.)

192 Pa. Superior Ct. at 303, 162 A.2d at 233.

Accordingly, we affirm the decision of the PUC.*fn10

[ 73 Pa. Commw. Page 352]


Now, April 11, 1983, the order of the Pennsylvania Public Utility Commission, dated August 14, 1981, at Application Docket No. A-100457, Folder 3, is affirmed.



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