Case Title: In re Waitsfield-Fayston Telephone Co., Inc.

Citation: 

Docket Number: 5960

State: vermont

Court: Vermont Supreme Court

Date: 2007-06-29T00:00:00Z

Document:
In re Petition of Waitsfield-Fayston Telephone Co., Inc. (2005-498)

2007 VT 55

[Filed 29-Jun-2007]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2007 VT 55

                                No. 2005-498


  In re Petition of Waitsfield-Fayston           Supreme Court
  TelephoneCompany, Inc., d/b/a Waitsfield 
  Telecom, d/b/a Waitsfield Cable and            On Appeal from 
  d/b/a Champlain Valley Telecom, 
  to Establish a Rate for Rental of Space
  on Poles Owned by Green Mountain Power         
  Corporation                                    Public Service Board

                                                 September Term, 2006


  Michael H. Dworkin, Chair

  Harriet Ann King of King & King, Waitsfield, for Appellant Green Mountain
    Power Corporation

  Paul J. Phillips of Primmer Piper Eggleston & Cramer PC, St. Johnsbury, for
    Appellee Waitsfield-Fayston Telephone Company, Inc.

  John J. Cotter, Montpelier, for Appellee Department of Public Service.


  PRESENT:  Reiber, C.J., Dooley, Skoglund and Burgess, JJ., and 
            Crawford, Supr. J.,  Specially Assigned

        
       ¶  1.  DOOLEY, J.  Appellant Green Mountain Power Corporation (GMP)
  appeals a Public Service Board order requiring GMP to refund to appellee
  Waitsfield-Fayston Telephone Company, Inc. (WFTC) "make-ready" charges paid
  by WFTC over a period of years.  The charges, which were separate from
  annual rental charges, were for making ready poles owned by GMP to accept
  telephone lines in addition to the electric lines already on them.  GMP
  raises a host of arguments against the make-ready refund, including that it
  was time-barred and that GMP lacked sufficient notice that the make-ready
  charge issue was in the case before the Board.  We agree that no claim for
  the refund of make-ready charges was properly in the case and therefore
  reverse.
        
       ¶  2.  WFTC is a Vermont corporation that provides telephone and cable
  television services that are regulated by the Board.  GMP is an electric
  utility provider whose services are also regulated by the Board.  GMP owns
  electricity distribution poles to which WFTC sought to attach its telephone
  and cable television lines; thus, in 1983 the parties entered into a
  contract setting the annual rent WFTC would pay to share thousands of GMP
  poles. (FN1)  The contract, by its terms, summarized the parties' agreement
  as to charges for poles.  Apart from the contract price, GMP billed WFTC
  for make-ready charges for approximately twenty years.   
                
       ¶  3.  Years after the parties' contract, in 2001, the Board adopted
  revised Rule 3.7 governing pole attachment rates that a "pole-owning
  utility," such as GMP, may charge to an "attaching entity" such as WFTC. 
  Public Service Board Rule 3.702(B), (F).  In light of the lower rates
  generally provided for in the rule, WFTC terminated the contract with GMP
  in February 2003 and, in December 2003, petitioned the Board to set new
  rates pursuant to Rule 3.7.  At the time of WFTC's petition, GMP charged
  WFTC $35.19 per pole in annual rent for approximately 3900 poles, and
  $25.13 per pole for approximately 4300 poles. (FN2)  The $35.19 rate was
  the highest pole rental rate GMP charged to any "attaching entity" in the
  state.
    
       ¶  4.  WFTC's 2003 petition was not the first time the parties brought
  a rate dispute to the Board.  In 1997, CVT, which subsequently merged into
  WFTC, similarly challenged GMP's pole attachment charges in Board Docket
  No. 5960.  The parties to Docket No. 5960 entered into a stipulation for
  pole attachment rates for 1994 through 1997.  Ultimately, due to
  uncertainty while the Board developed its rule on pole attachments, the
  parties continued the effectiveness of the stipulation indefinitely pending
  adoption of the new rule.

       ¶  5.  The 2003 WFTC petition asked the Board to set annual pole
  rental rates pursuant to Rule 3.7, and to order a refund of WFTC's
  overpayment since January 1, 2002 - the effective date of rates set by the
  new rule.  Public Service Board Rule 3.711.  As to the refund specifically,
  WFTC asked the Board to order a reimbursement of its "overpayment of pole
  rental charges" from January 1, 2002 to December 30, 2003.  The petition
  never mentioned make-ready charges and sought no relief with respect to
  them, apparently because the new rule specifically provided for make-ready
  charges and established the basis for calculating them.  See Public Service
  Board Rule 3.708(G).  
   
       ¶  6.  Following prefiled testimony and an evidentiary hearing, the
  hearing officer granted WFTC's request and recommended an annual rate of
  $16.00 per pole, but generally rejected WFTC's request for overpayments
  going back to 2002. (FN3)  He also found that because the parties' contract
  was "intended to include all the costs of pole attachments, including
  make-ready costs," GMP should return to WFTC all make-ready payments
  pre-dating January 1, 2002, and he gave WFTC an opportunity to make an
  additional filing showing that amount.
   
       ¶  7.  WFTC made the additional filing to capture the make-ready
  charge refund, but it could find records of these payments only going back
  to 1992.  It proposed a make-ready reimbursement figure of $386,984.10,
  which the hearing officer adopted.  The Board affirmed the hearing
  officer's recommendations and ordered the refund, including the refund of
  the make-ready costs. 

       ¶  8.  On appeal, GMP contests only the make-ready charge refund
  order, raising ten separate arguments against this part of the Board's
  order.  Because one of GMP's claims resolves this appeal, we address it
  alone. 

       ¶  9.  GMP's ninth and most troubling argument is that the Board did
  not provide GMP sufficient notice of the make-ready refund.  Here, GMP
  claims that the Board's order violated its constitutional right to
  procedural due process, as well as its right against governmental takings,
  and violated a provision of Vermont's Administrative Procedure Act, which
  requires parties to a contested case to be given the opportunity "to
  respond and present evidence and argument on all issues."  3 V.S.A. §
  809(c).  We look to the statutory argument first.  Ashwander v. Tennessee
  Valley Auth.,