Title: Western Radio Communications, Inc. v. Two-Way Radio Service, Inc.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Western Radio Communications, Inc. v. Two-Way Radio Service, Inc.1986 WY 96718 P.2d 15Case Number: 84-231Decided: 04/24/1986Supreme Court of Wyoming
WESTERN RADIO 
COMMUNICATIONS, INC., Petitioner,

v.

TWO-WAY RADIO SERVICE, 
INC., and Public Service Commission of Wyoming, Respondents.

Appeal from District 
Court, NatronaCounty, Dan Spangler, 
J.

Ronald P. 
Jurovich and Charles K. Moss, Thermopolis, for petitioner.

L. Craig 
Clayton, Donald R. Winship & Associates, Casper, for respondent Two-Way Radio 
Service.

A.G. McClintock, 
Atty. Gen., Steven R. Shanahan, Sr. Asst. Atty. Gen., and Michael L. Hubbard, 
Asst. Atty. Gen., Cheyenne, for 
respondent Public Service Com'n.

Before THOMAS, C.J., and ROSE,* ROONEY,[fn**] BROWN and CARDINE, 
JJ.

* Retired November 1, 
1985.

[fn**] Retired 
November 30, 1985.

THOMAS, Chief 
Justice.

[¶1.]     The major issue 
presented in this case which was certified for review pursuant to Rule 12.09, 
W.R.A.P., is whether the applicant for a certificate of public convenience and 
necessity demonstrated by substantial evidence its financial ability and good 
faith and the necessity of additional service in the community. There are 
additional issues raised concerning the propriety of issuing a certificate of 
public convenience and necessity based upon a contingent event and the filing of 
exhibits subsequent to the hearing held by the Public Service Commission 
(hereafter the PSC). We conclude that the applicant met its burden of proof with 
substantial evidence and that there was no error in the proceedings before the 
PSC. We affirm the order of the PSC.

[¶2.]     Two-Way Radio Service, 
Inc. (hereafter Two-Way) applied to the PSC for a certificate of public 
convenience and necessity authorizing it to operate a direct dial automated 
radio paging system in Casper and in Douglas. A Notice of Application was 
published in a Casper and a Douglas newspaper, and Custom Radio, Inc. and Western 
Radio Communications, Inc. (hereafter Western) moved to intervene in the 
proceedings. These two firms were providing similar paging services in the 
Casper and Douglas areas, and their respective motions to intervene 
were granted by the PSC. A public hearing was held on the application, and the 
PSC then issued to Two-Way a certificate of public convenience and necessity. 
Western filed a petition for rehearing which was denied by the PSC. Western then 
filed a Petition for Judicial Review in the district court. After ordering that 
briefs be filed, the district court ordered that the case be certified to this 
court pursuant to Rule 12.09, W.R.A.P.

[¶3.]     In its brief in this 
court Western states the following issues:

"1. Did the Public 
Service Commission err in issuing its decision based upon a subsequent 
happening.

"2. Whether the Public 
Service Commission denied Appellant/Petitioner due process when the Public 
Service Commission allowed the submission of late 
exhibits.

"3. Whether the Public 
Service Commission erred in finding that it was not necessary for an Applicant 
to prove the public interest or Public Convenience necessity in order for the 
Public Service Commission to issue a Certificate of Public Convenience and 
necessity."

The respondent, 
Two-Way Radio Service, Inc., states substantially the same issues in this 
way:

"ISSUE I. WHETHER THE PSC ERRED IN MAKING ITS ORDER EFFECTIVE 
UPON RECEIPT OF THE FCC EXTENSION.

"ISSUE II. WHETHER 
ALLOWANCE OF LATE-FILED EXHIBITS BY THE PSC CONSTITUTES REVERSIBLE 
ERROR.

"ISSUE III. WHETHER 
SUBSTANTIAL EVIDENCE SUPPORTS THE PSC'S DETERMINATION."

The PSC in its 
brief articulated the issues as:

"I. DID THE COMMISSION 
ERR IN PROVIDING THAT THE CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY WOULD 
BE EFFECTIVE UPON RECEIPT OF THE FCC EXTENSIONS OF TIME ON THE CONSTRUCTION 
PERMITS?

"II. WAS WESTERN RADIO 
DENIED DUE PROCESS WHEN THE COMMISSION ALLOWED WESTERN RADIO'S REQUEST TO HAVE 
THE APPLICANT'S RULES AND REGULATIONS SUBMITTED AS A LATE-FILED 
EXHIBIT?

"III. WAS THE 
COMMISSION'S ORDER ISSUING THE CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY 
SUPPORTED BY SUBSTANTIAL EVIDENCE?

The material 
facts relating to these issues will be set forth in connection with the 
discussion of each issue.

[¶4.]     We address first the 
issue of whether there was a failure to establish the financial ability and good 
faith of Two-Way and the necessity of additional service in the community by 
substantial evidence at the hearing. The essence of Western's argument is that 
the evidence submitted by Two-Way and upon which the PSC relied is insufficient 
to demonstrate those statutory criteria; that the PSC indicates in a portion of 
its findings that Western had a burden of establishing the absence of the 
statutory criteria; and that the decision of the PSC is arbitrary, capricious or 
characterized by an abuse of discretion because it is not a rational decision 
based upon a consideration of relevant factors. Two-Way and the PSC contend that 
under the usual standards for appellate review there is substantial evidence 
supporting the findings of fact made by the PSC, and for this reason under the 
precedents extant in Wyoming the decision of the PSC must be 
affirmed.

[¶5.]     In addressing the 
statutory criteria found in § 37-2-205(c), W.S. 1977, as 
follows:

"* * * The commission 
shall have power, after hearing involving the financial ability and good faith 
of the applicant and the necessity of additional service in the community, to 
issue said certificate, as prayed for, * * *"

the PSC made the 
following findings of fact:

"12. The Commission finds 
that Two-Way Radio has shown by substantial evidence that it has the technical, 
organizational and financial ability to provide paging service as proposed. 
Applicant has shown that it has a skilled operation of many years' duration with 
solid financial backing. The Commission recognizes that Applicant may be 
optimistic in its projections, however, these projections are merely educated 
guesses as to the course of future events. The Commission does not find these 
matters fatal to Two-Way's application. The more important 
factor, which was amply demonstrated at the hearing, is the overall financial 
condition of the operation and the commitment of its principals to its success. 
Therefore, the Commission finds Two-Way Radio to have the financial ability 
necessary to implement paging operations.

"13. The issue of whether 
there exists a public need for another paging service in Casper and Douglas was 
perhaps the most contested issue in the hearing and the briefs. This issue has 
several aspects: (a) whether there is a need for a fifth paging service in the 
Casper area and a second in the Douglas area; (b) 
whether the respective Casper and Douglas markets can support another carrier; and (c) the 
extent to which the Commission must or should seek to protect the market 
integrity of the existing carriers. "The question of whether there is a need for 
a fifth paging service in the Casper area and a 
second one in the Douglas area is closely 
related to the question of whether the respective markets can support another 
system. Two-Way Radio produced a market survey indicating that out of a small 
percentage of potential customers included in the survey, 45% of them would be 
interested in their service. The survey also showed that 70% of the persons 
surveyed had not been solicited by other paging services.

"The Intervenors offered 
numerous criticisms of the design of the survey and objections to its admission, 
but they had no evidence to rebut its results. The survey itself did not pretend 
to be a scientific survey with statistical validity, but was clearly conducted 
for the purpose of aiding the Applicant in deciding whether to undertake the 
paging business. Moreover, the fact that both Intervenors testified to having 
substantial advertising budgets suggests that they too believe there is an 
untapped market. "The issue here is not so much the validity of the market 
survey, however, but whether this Commission has an obligation to protect 
existing carriers. In keeping with this Commission's firmly established policy 
of regulated competition, it is clear that this Commission will not deny an 
application for certification absent a showing that certification would be 
unjustified. Mere assertions, without evidence in support, that there is no 
additional market and that harm to existing carriers will result, are 
insufficient.

"It is the conclusion of 
this Commission that there is sufficient evidence to support a finding that: (a) 
there is a need for a fifth carrier in the Casper area and a second carrier in 
the Douglas area; (b) the communications markets in both areas are capable of 
supporting an additional carrier; and (c) the Commission is not obligated to 
protect the market integrity of the existing carriers."

[¶6.]     At the hearing the PSC 
received financial statements prepared by Two-Way's accountants. Those documents as 
explained by testimony disclose substantial net profits before taxes for the two 
years prior to the application. They show substantial retained earnings as of 
the end of the most recent fiscal year, and reflect total assets of more than 
$200,000 including more than $50,000 cash as of the end of the preceding fiscal 
year. Total liabilities were a little more than $100,000 with a net worth of 
more than $113,000. In addition, since its inception as a business in 1965, 
Two-Way has shown a net profit for every prior year.

[¶7.]     Through its officers 
and employees, Two-Way had considered the cost of the radio paging service 
operations and had anticipated income. It had planned a method for financing the 
purchase of equipment necessary for the radio paging service, and the principal 
shareholder, who also is an officer of the corporation, testified that he was 
prepared to commit additional personal assets to the operation of the venture if 
that were necessary. He testified that he did not perceive that the commitment 
of his personal assets would be required. 

[¶8.]     The PSC recognized that 
the projection of Two-Way of attracting 100 paging service customers in the 
first year was optimistic. Western contends that it is unrealistic. Western's 
position, however, simply is an expression of concern that certain events which 
were relied upon might not occur. It is well established that a mere expression 
of fear is not enough to defeat a certificate. Matter of Rule Radiophone 
Service, Inc., Wyo., 621 P.2d 241 
(1980).

[¶9.]     In arriving at its 
decision as to whether it should embark upon the radio paging service business, 
Two-Way did a rather informal market survey. A brief form of questionnaire was 
sent to approximately 280 potential clients in the Casper and Douglas areas. 
The mailing list was taken from the Casper Chamber of Commerce Directory and the 
yellow pages of the phone book for the Casper - 
Douglas area. Forty-nine or 50 of the 
questionnaire forms were returned. Included with the questionnaire utilized by 
Two-Way was a description of the service it proposed to offer and the 
questionnaire addressed subjects such as utilization of paging services; 
interest in utilizing paging services; satisfaction with present service; 
understanding of the system proposed by Two-Way; the number of pagers that might 
be used; preference for purchase or rentals; approval of anticipated rates; 
solicitation previously to utilize a paging service; hours of utilization; and 
whether service would be needed in both the Casper and Douglas areas. Two-Way 
did rely upon the response to its questionnaire in concluding to submit its 
application for a certificate of public convenience and 
necessity.

[¶10.]  Western urges here that there is not 
substantial evidence in the record to support the findings quoted above upon 
which PSC premised its decision to grant the certificate of public convenience 
and necessity. Western contends that instead the decision by the PSC was 
arbitrary and therefore an abuse of discretion. With greater specificity Western 
contends that the PSC finding of a necessity for another paging service system 
in both Douglas and Casper was erroneous because it relied upon 
Two-Way's survey which was not a scientific 
approach to market sampling.

[¶11.]  Western argues that the order of the PSC 
must be reversed because of the insufficiency of the evidence to meet the 
statutory standards found in § 37-2-205(c), W.S. 1977. The premise of Western's 
argument is the authority afforded in § 16-3-114(c), W.S. 1977, with respect to 
judicial review. The statute provides:

[¶12.]  "* * * The reviewing court 
shall:

* * * * * 
*

"(ii) Hold unlawful and 
set aside agency action, findings and conclusions found to 
be:

(A) Arbitrary, 
capricious, an abuse of discretion or otherwise not in accord with 
law;

* * * * * 
*

(E) Unsupported by 
substantial evidence in a case reviewed on the record of an agency hearing 
provided by statute."

[¶13.]  Western takes out of context the phrase 
"merely educated guesses" in the finding of the PSC with respect to the 
financial ability of Two-Way, and argues that the PSC confessed a lack of 
substantial evidence to support the finding of Two-Way's financial ability. 
Western contends with respect to the finding of the PSC relating to a need for 
additional services that not only was there a lack of substantial evidence but 
that the PSC in effect shifted the burden of proof to Western when it commented 
that there was no evidence to rebut the results of Two-Way's survey and that it 
would not deny an application for certification absent a showing that 
certification would be unjustified. Western further argues that because of these 
defects with respect to substantial evidence the decision of the PSC is 
arbitrary. We have defined substantial evidence as relevant evidence which 
reasonable minds would accept as adequate to support the finding. Mountain Fuel 
Supply Co. v. Public Service Commission of Wyoming, Wyo., 662 P.2d 878 (1983); 
McCulloch Gas Transmission Co. v. Public Service Commission of Wyoming, Wyo., 
627 P.2d 173 (1981); Board of Trustees, Laramie County School District No. 1 v. 
Spiegel, Wyo., 549 P.2d 1161 (1976), quoting Consolo v. Federal Maritime 
Commission, 383 U.S. 607, 86 S. Ct. 1018, 16 L. Ed. 2d 131 (1966). We do examine 
the entire record before the administrative agency in arriving at a 
determination as to whether substantial evidence is present. Atchison v. Career 
Services Council of State of Wyoming, Wyo., 664 P.2d 18, cert. denied, 464 U.S. 982, 104 S. Ct. 424, 78 L. Ed. 2d 359 (1983); Mountain Fuel Supply Co. v. Public 
Service Commission of Wyoming, supra; Gilmore v. Oil & Gas Conservation 
Commission, Wyo., 642 P.2d 773 (1982). In an appellate review proceeding the 
burden of establishing the lack of substantial evidence is on the party 
challenging the existence of substantial evidence. Mountain Fuel Supply Co. v. 
Public Service Commission of Wyoming, supra.

[¶14.]  In a related attack upon the PSC order 
Western also insists that the PSC failed to set forth the basic facts upon which 
its findings are based, and for this reason the findings are contrary to law. 
There is no question that we have required administrative agencies to include 
the appropriate findings with respect to basic facts. Tri-State Generation & 
Transmission Association, Inc. v. Environmental Quality Council, Wyo., 590 P.2d 1324 (1979); Pan American Petroleum Corp. 
v. Wyoming Oil & Gas Conservation 
Commission, Wyo., 446 P.2d 550 (1968). In this instance 
the PSC has sufficiently articulated the basic facts upon which it acted so that 
we can determine whether substantial evidence is present to support them. The 
administrative agency is not required to detail the evidence submitted in order 
to meet its duty to set forth basic facts.

[¶15.]  The judicial function which then must be 
accomplished on review is to determine whether the reviewing court can discover 
from the evidence a rational view for the decision of the agency. Holding's 
Little America v. Board of CountyCommissioners, Laramie County, Wyo., 670 P.2d 699 (1983). In this instance we 
can. Stated another way this means that the PSC decision is not arbitrary 
because it is supported by evidence in the record which demonstrates the basic 
facts found by the PSC. Holding's Little America v. Board of County 
Commissioners of Laramie County, supra; Monahan v. Board of Trustees of 
Elementary School District No. 9, County of Fremont, Wyo., 486 P.2d 235 (1971). 
We accept findings of fact by an agency when they are supported by substantial 
evidence. McCulloch Gas Transmission Co. v. Public Service Commission of 
Wyoming, supra; First National Bank of Worland v. Financial Institutions Board, 
Wyo., 616 P.2d 787 (1980).

[¶16.]  We conclude that the PSC properly found 
that the essential factors set forth in § 37-2-205(c), W.S. 1977, for the 
issuance of a certificate of public convenience and necessity were present. With 
respect to the finding of financial ability, we have recited the evidence 
demonstrating Two-Way's financial ability. The finding of 
the PSC is reasonably based upon the evidence, and Western has not met its 
burden on review of demonstrating a lack of substantial evidence to support this 
statutory criterion.

[¶17.]  With respect to the necessity for 
additional service in both the Douglas and Casper area the complaint of Western that the 
survey was not scientific does not carry Western's burden. A careful reading of 
finding number 13 of the PSC demonstrates that it did not rely solely upon the 
market survey in its finding that there was a public need for additional 
service. Also, it is well established that the weight and credibility of 
evidence is for the administrative agency to determine based on its expertise 
and experience. Mountain Fuel Supply Co. v. Public Service Commission of 
Wyoming, supra; Matter of Rule Radiophone Service, Inc., supra; Pan American 
Petroleum Corp. v. Wyoming Oil & Gas Conservation Commission, supra; Appeal 
of Williams, Wyo., 626 P.2d 564, cert. denied, 454 U.S. 896, 102 S. Ct. 394, 70 L. Ed. 2d 211 (1981).

[¶18.]  The thrust of Western's objection in the 
proceeding before the PSC was that the market was completely served and would 
not support another carrier. This position explains some of the language 
contained in the finding by the PSC. The effect of that language was to reject 
the claim by Western that there was no need for another carrier in the Casper and Douglas areas. 
In this respect the case is quite similar to Matter of Rule Radiophone Service, 
Inc., supra, in which the court explained that the petitioner on review had 
failed to make any firm showing that the additional service would be 
destructive. In that case we said:

"The public interest is 
to be given paramount consideration; desires of a utility are secondary. Big 
Horn Rural Electric Company v. Pacific Power & Light Company, Wyo., 1964, 397 P.2d 455. 
The fact that a new service may have some effect on an existing service does not 
preclude the creation of additional facilities. Incidental disadvantages are 
simply weighed in balance against ultimate public advantages. Hohorst v. 
Greenville Bus Company, 1954, 17 N.J. 131, 110 A.2d 122." Matter of Rule 
Radiophone Service, Inc., supra, at p. 246.

Like the 
position of the petitioner in the prior case, Western's contention here is "no 
more than an expression of fear," and it has produced "no hard evidence to 
support what was no more than speculation." Matter of Rule Radiophone Service, 
Inc., supra, at 246.

[¶19.]  Applying the appropriate standards of 
review, we find that there is substantial evidence to support the finding of the 
PSC that there does exist a public need for another paging service in Casper and Douglas. In 
addition to the market survey information furnished by Two-Way, both Western and 
another objector, Custom Radio, acknowledged a further market for paging 
services, at least implicitly, in evidence which they produced. In any event the 
PSC is not required to protect existing markets in considering applications for 
a certificate of public convenience and necessity. Matter of Rule Radiophone 
Service, Inc., supra. The burden is upon the party claiming interference with 
existing services to demonstrate that such interference in fact would occur. 
Dubois Telephone Exchange v. Mountain States Telephone & Telegraph Co., 
Wyo., 429 P.2d 812 (1967).

[¶20.]  From an examination of the whole record 
we conclude that substantial evidence does support the basic findings of fact 
made by the PSC in this case. It follows that such findings are not arbitrary, 
and under the circumstances the claim that the burden of proof was shifted to 
Western is not well founded.

[¶21.]  Turning then to Western's concern on the 
part of the PSC in issuing a decision which is based upon a subsequent 
happening, Western's concern is that the certificate of public convenience and 
necessity was conditioned upon an extension of time by the FCC within which 
Two-Way could commence transmitting. Western concedes that under the statute it 
is proper for the PSC to attach conditions to certificates of public convenience 
and necessity. In Appeal of Williams, supra, this court said that the PSC has 
broad discretion in delineating appropriate conditions, and in that case the 
condition was that the applicant would apply for an FCC permit. In this case the 
requisite FCC applications already had been made and granted; the only thing 
that was not available was an extension of time in which to commence 
transmissions. The application for the extension had been made, and the 
extension was necessitated by the fact that Two-Way had not been issued a 
certificate of public convenience and necessity which was a prerequisite to 
construction, and certainly transmission, under the terms of § 37-2-205(a), W.S. 
1977. We cannot discern any error or impropriety in the order entered by the PSC 
which had the effect of delaying its effective date until the filing of an 
extension granted by the FCC. The argument of Western that this form of order 
inhibited its finality does not merit discussion. 

[¶22.]  Western goes on to contend that there did 
occur an error which caused the decision of the PSC not to be in accordance with 
law because it permitted the late filing of exhibits. This argument more 
appropriately is treated as one under § 16-3-114(c)(ii)(D), W.S. 1977, which 
requires this court to set aside agency action taken without observance of the 
procedure required by law. Specifically Western argues that § 16-3-108(c), W.S. 
1977, permits cross-examination and that it was denied that opportunity because 
the exhibits were filed subsequent to the hearing. It further claims that Rule 
104(e), Rules of the Public Service Commission, allows late exhibits only when 
all parties agree, all parties waive the right of cross-examination, and all 
parties are given the opportunity to respond in writing. Western insists that 
this procedure was not followed. In this case two items were admitted as 
late-filed exhibits. The first of these was a copy of Two-Way's rules and 
regulations. These rules had been filed with the PSC prior to the hearing, but 
they had not been included as an exhibit. Western requested that a copy of the 
rules and regulations be filed as a late exhibit.

[¶23.]  The other late-filed exhibit was a 
corrected copy of Two-Way's rates and tariffs. There was 
testimony about these rates at the hearing and Western was given every 
opportunity to cross-examine about the rates. During Western's cross-examination 
it became apparent that there was a typographical error in the exhibit, but even 
so Western lodged no objection to it at the hearing. The late-filed exhibit to 
which Western objects was a copy of the rates and tariffs which had the 
typographical error corrected. Western also argues that it had no opportunity to 
respond in writing to the late-filed exhibit because it did not receive its copy 
until just before its brief was due and that its failure to move for a 
continuance in order to exercise that right should be forgiven because Rule 11, 
Rules of the Public Service Commission, provides that a continuance is 
discretionary with the PSC. We do not address these latter arguments because it 
is clear that under the facts and circumstances of this case Western had ample 
notice of the corrected copy of the rates and tariffs; and if there had been a 
reason to do so it could have responded to that exhibit in writing its 
brief.

[¶24.]  While it is true that an agency is 
required to follow its own procedure, Tri-State Generation & Transmission 
Association, Inc. v. Environmental Quality Council, supra; United States Steel 
Corporation v. Wyoming Environmental Quality Council, Wyo., 575 P.2d 749 (1978), 
still the doctrine of invited error may intervene. We have held that when a 
party induces action by a court or agency he will not be heard to complain on 
appeal of any error based upon the party's own conduct. Appeal of Williams, 
supra, citing Weber v. Johnston Fuel Liners, Inc., Wyo., 519 P.2d 972 
(1974). It follows that if there were any error on the part of the PSC in 
allowing Two-Way's rules and regulations as a late 
exhibit Western cannot be heard to complain because it demanded that the exhibit 
be filed. With respect to the late-filed rates and tariffs that correction of a 
simple typographical error did not in any way prejudice the rights of Western. 
In fact, with respect to these two contentions, if they had stood alone as the 
basis for this appeal, we would have been hard pressed to find a reasonable 
cause for the appeal.

[¶25.]  We hold that there was no error with 
respect to the admission of late-filed exhibits nor with respect to the 
contention that the order was improper because based upon the granting of an 
extension of time to commence broadcasting by the FCC. The evidence was 
sufficient to support the findings of fact entered by the PSC, and those 
findings sufficiently set forth the basic facts.

[¶26.]  The order of the PSC granting the 
certificate of public convenience and necessity is affirmed.