decided: November 15, 1983.
MOBILFONE OF NORTHEASTERN PENNSYLVANIA, INC., PETITIONER
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT. COMMONWEALTH TELEPHONE COMPANY, INTERVENOR
Appeal from the Order of the Pennsylvania Public Utility Commission in the case of Mobilfone of Northeastern Pennsylvania v. Commonwealth Telephone Company, No. C-22065.
Robert D. Mariani, Mariani and Greco, for petitioner.
Robert A. Christianson, Assistant Counsel, with him Daniel P. Delaney, Deputy Chief Counsel, and Charles F. Hoffman, Chief Counsel, for respondent.
Bernard A. Ryan, Jr., Dechert, Price & Rhoads, for intervenor.
President Judge Crumlish, Jr. and Judges Rogers, Blatt, Craig and MacPhail. Opinion by President Judge Crumlish, Jr.
[ 78 Pa. Commw. Page 337]
Mobilfone of Northeastern Pennsylvania petitions for review of a Public Utility Commission order which dismissed its complaint against the Commonwealth Telephone Company. We affirm.*fn1
Mobilfone filed a complaint against a tariff filed by Commonwealth Telephone, a competing radio-telephone business. The complaint alleged that the rates in Commonwealth Telephone's Supplement No. 60 to Tariff Telephone -- Pa. P.U.C. No. 19 were non-compensatory, non-competitive, unreasonable and subsidized by all customers of Commonwealth Telephone's landline operation. The Commission allowed the tariff and, following a hearing, the Administrative Law Judge issued a decision finding the rates properly set and recommending that the complaint be dismissed. Exceptions were filed and oral argument was held.
The issue before the Commission was whether Commonwealth Telephone's rates were compensatory
[ 78 Pa. Commw. Page 338]
and whether Commonwealth Telephone's monopoly service ratepayers were cross-subsidizing the competitive radio-telephone service. The Commission adopted the Administrative Law Judge's decision.*fn2
The question of reasonableness of rates is an administrative question for the Commission to decide and this Court's scope of review is limited.*fn3 Peoples Natural Gas Co. v. Pennsylvania Public Utility Commission, 47 Pa. Commonwealth Ct. 512, 409 A.2d 446 (1979). "[T]he establishment of a rate structure is an administrative function peculiarly within the expertise of the Commission. . . . [Q]uestions . . . concerning the reasonableness of rates . . . are factual questions for the Commission whose findings must be upheld if supported by competent evidence." United States Steel Corp. v. Pennsylvania Public Utility Commission, 37 Pa. Commonwealth Ct. 195, 211, 390 A.2d 849, 857 (1978) (citations omitted).
In support of its argument that Commonwealth Telephone's rates are too low, Mobilfone alleges that the Commission erred in accepting the method employed by Commonwealth Telephone to determine its costs of providing radio paging service. Mobilfone contends that Commonwealth Telephone's methodology utilizes cost factors determined wholly on the basis of its monopoly landline telephone experience. According to Mobilfone, the result is cross-subsidization
[ 78 Pa. Commw. Page 339]
between Commonwealth Telephone's monopoly ratepayers and the paging service subscribers. Mobilfone argues that its own experienced costs are more representative of costs which Commonwealth Telephone might incur and thus show a need for further inquiry into Commonwealth Telephone's cost allocations. The Commission properly rejected this argument.
There is no single correct cost methodology. Executone of Philadelphia, Inc. v. Pennsylvania Public Utility Commission, 52 Pa. Commonwealth Ct. 74, 415 A.2d 445 (1980). The Commission has fully detailed the methodology Commonwealth Telephone used, and the evidence fully supports the Commission's approval of this methodology. Commonwealth Telephone's paging rates were established on the basis of feasibility and cost-of-service studies.*fn4
[ 78 Pa. Commw. Page 340]
The resulting rates charged by Commonwealth Telephone are virtually identical to Mobilfone's for comparable service.*fn5 Under these rates, the cost-of-service studies*fn6 prepared by Commonwealth reveal a rate of return of 10.8% compared with a 6.5% rate of return on its landline telephone plant. This higher rate further quells any contention of cross-subsidization.
Being mindful of the Commission's discretionary power and considering our limited scope of review, we conclude that there is substantial evidence showing that the rates attacked by Mobilfone are fully cost-justified. They are almost identical to Mobilfone's own rates and in line with rates charged by other companies offering similar services.*fn7
That part of the order of the Pennsylvania Public Utility Commission entered May 17, 1982, at C-22065 dismissing the complaint of Mobilfone of Northeastern Pennsylvania, Inc., is affirmed.