Title: Harrisonville Telephone Co. v. Illinois Commerce Comm'n

State: illinois

Issuer: Illinois Supreme Court

Document:

Docket No. 97172-Agenda 18-May 2004.
HARRISONVILLE TELEPHONE COMPANY et al., Appellees, v. 							
THE ILLINOIS COMMERCE COMMISSION, Appellant.
Opinion filed September 23, 2004. 
	JUSTICE FITZGERALD delivered the opinion of the court:
	The Illinois Commerce Commission (ICC) appeals the decision
of the appellate court in favor of the Illinois Independent Telephone
Association and six rural telephone companies or local exchange
carriers (LECs).(1) The central issue here is what the Illinois General
Assembly meant when it ordered the ICC to establish a "universal
service support fund" (USF) in section 13-301(d) of the Public
Utilities Act (220 ILCS 5/13-301(d) (West 2002)). Did the legislature
intend for the fund to support all rural telephone lines, or only a single
line for each residence or business? We agree with the appellate court
that universal means universal and that the legislature intended the
fund to support all lines. We affirm.

BACKGROUND
	In 1997, the Federal Communications Commission (FCC)
established a federal universal service fund (USF) to help rural
telephone companies defray the high costs of providing public
telephone service to sparsely populated areas. Because the federal
USF covered only part of these costs, the General Assembly amended
section 13-301(d) of the Public Utilities Act in 1999, ordering the
ICC to investigate and, if need be, establish a state USF. 220 ILCS
5/13-301(d) (West 2002). The source of the state USF would be "all
local exchange and interexchange telecommunications carriers
certificated in Illinois on a competitively neutral and nondiscriminatory
basis." 220 ILCS 5/13-301(d) (West 2002). In short, the fund would
be repaid by telephone customers throughout Illinois in surcharges
tacked onto their telephone bills. The General Assembly further
instructed the ICC to define which telecommunications services
constitute "universal service," noting that the state definition should
be at least as broad as the federal definition promulgated by the FCC.
220 ILCS 5/13-301(e)(1) (West 2002). The FCC has listed nine
"services designated for support," including "voice grade access to the
public switched network." 47 C.F.R. §54.101(a)(1) (1998).
	In 2001, the ICC decided to establish a state USF and concluded
that the Illinois list of supported services should mirror the FCC list
of supported services. Contrary to the position advocated by its staff,
however, the ICC found:
		"With respect to the element of the 'voice grade access to the
network,' *** it shall be limited to a primary residence line
and a single business line. The basis for this conclusion is that
discretionary services would not be supported by the section
13-301(d) fund. As Ameritech Illinois appropriately argues,
to do otherwise might create the unintended result of low-income end user customers in one area of the state
subsidizing discretionary services of high-income end user
customers in another area of the state whose service is
supported by the fund."
	The LECs petitioned for, and the ICC granted, rehearing on four
issues: two issues concerning alleged mathematical errors in
determining the size of the USF and the monthly affordable rate for
each rural telephone customer, one issue concerning a transition plan
to reach the affordable rate, and one issue concerning the services
supported by the USF. In its order on rehearing, the ICC corrected its
mathematical errors and approved a transition plan. But, again
contrary to the position advocated by its staff, the ICC refused to alter
its decision that the state USF would support only primary or single
residential and business lines:
		"At the time we reached the single line determination ***, we
were cognizant of the fact that basing the size of the USF
fund on support for a single line would reduce the fund size.
We were also cognizant of the fact that the qualifying
companies would, in all likelihood, seek to recoup the
reduction in the fund size from their customers.
			Despite the fact that our decision here may bring rate
increases to the customers of the qualifying companies, the
policy issue is more far reaching. The policy issue facing the
Commission is whether the families and agencies, and, in the
case of public agencies, the taxing agencies that support
them, should bear the brunt of increased rates relating to
second lines, or whether the burden should be shifted to all
citizens of the state, including low income citizens in our
inner cities that cannot afford a single line. On balance,
reasoned public policy supports imposing the burden on the
parties who use the services and the localities where they are
used rather than allowing parties to purchase second lines on
the backs of the poor."
	According to the ICC, section 13-301(d) did not indicate that the
General Assembly intended the ICC to "walk in lock step with the
FCC in determining whether or not to support all access lines in the
USF." The ICC asserted that the statute simply indicated that the
Illinois list of supported services should be no smaller than the federal
list of supported services. The ICC insisted that it had done just that:
		"The fact that the FCC computes the level of support based
upon support for all access lines does not change the fact that
our order supports the same services. There is no indication
anywhere in section 13-301 that the number of lines entitled
to support may not be limited, as long as individuals and
businesses are guaranteed access to the network and that the
fund recognize that access is at an affordable rate."
The ICC ordered that "[t]he services defined by the FCC as supported
services shall be the state supported universal services for purposes of
the Fund, with the exception that the fund shall be based upon support
for a single residential or business line." (Emphasis added.) The LECs
appealed.
	On May 23, 2003, the appellate court filed an opinion, and the
LECs filed a petition for clarification under Supreme Court Rule 367.
See 155 Ill. 2d R. 367. On September 11, 2003, the appellate court
denied that petition, but vacated its earlier opinion and filed a new
one. The appellate court affirmed the ICC on several issues, but
reversed the ICC on the primary lines issue. The appellate court
stated:
		"In reaching its decision that it would only include residential
primary telephone lines in counting the number of access lines
eligible for support, the Commission essentially expressed its
belief that the federal government had not intended for
business or secondary residential lines to be included. We do
not find the federal government's list of services eligible for
support to be so restrictive.
			Simply stated, universal support means universal support.
More specifically, the FCC identified 'voice grade access to
the public switched network' as a service eligible for support.
The Commission determined that the Illinois-supported
access line list should mirror that of the FCC. We agree." 343
Ill. App. 3d 517, 530.
The appellate court noted that the FCC's definition of "voice grade
access" refers to a "basic telephone line" that allows a person to place
and accept calls; this definition contains no primary lines limitation.
343 Ill. App. 3d at 530-31.
	The appellate court continued:
			"To the extent that the Commission was concerned that
urban residents should not be required to pay for
'discretionary services' enjoyed by their rural counterparts,
we ask, Why should access to phone lines-even
'discretionary' phone lines-cost much more in a rural setting
than in an urban setting? Furthermore, the assumption that all
'secondary' lines are 'discretionary' lines dismisses entities
like schools and public libraries, which require affordable
access on all their lines. The point of providing universal fund
support service is to level the playing field. Theoretically,
lower prices, competitive with what is offered in urban
settings, will allow greater access to telephonic services. Our
state and federal governments have established this greater
access as a worthy goal. These extra access lines, whether or
not they can be labeled 'discretionary,' should not be
inordinately more expensive than identical services in an
urban setting. We find no legal justification for limiting the
number of access lines eligible for this support." 343 Ill. App.
3d at 531.
The appellate court also reversed the ICC's order reducing the
amount of the state USF by the percentage of multiple lines and made
its decision retroactive to March 13, 2002, the date of the ICC's order
on rehearing. 343 Ill. App. 3d at 531. We granted the ICC's petition
for leave to appeal. 177 Ill. 2d R. 315(a).

ANALYSIS
	In this appeal, the ICC raises four issues: (1) whether the
appellate court erred in deciding that the LECs need not file second
rehearing petitions after the ICC granted in part and denied in part
their first rehearing petitions; (2) whether the appellate court erred in
reviewing de novo the ICC's decision to limit the state USF to
primary residential and business lines; (3) whether the appellate court
erred in rejecting the ICC's primary lines limitation and instead
deciding the legislature intended the USF to support all lines; and (4)
whether the appellate court erred in making its decision retroactive.
We address these issues in turn.

The Second Rehearing Petition Requirement
	The ICC argues that the appellate court undermined case law
from this court requiring a putative appellant to file a second rehearing
petition in order to preserve an issue on appeal where the ICC has
granted rehearing and considered additional evidence.(2) The LECs
respond that, as the appellate court noted, these cases predate the
1986 amendments to the Public Utility Act and consequently no
longer control. According to the LECs, an ICC order is final and
appealable after the Commission has decided a putative appellant's
first rehearing petition, whether or not the Commission considered
additional evidence.
	Section 10-113(a) of the Act addresses rehearing petitions. The
ICC may rescind, alter, or amend an order, and any party to such an
order may file an application for rehearing within 30 days of its
service, but "[n]o appeal shall be allowed from any rule, regulation,
order or decision of the Commission unless and until an application
for a rehearing thereof shall first have been filed with and finally
disposed of by the Commission." 220 ILCS 5/10-113(a) (West 2002).
Section 10-113(a) further provides, "Only one rehearing shall be
granted by the Commission ***." 220 ILCS 5/10-113(a) (West
2000). The appellate court here correctly observed that neither the
Act nor its accompanying regulations contain a second rehearing
petition requirement. 343 Ill. App. 3d at 529. That requirement is a
gloss placed upon the Act by decades-old cases from this court.
	In Alton R.R. Co. v. Illinois Commerce Comm'n, 407 Ill. 2d 202
(1950), we addressed whether a putative appellant must file a second
rehearing petition where the ICC has considered new evidence upon
rehearing. We noted that the Act implies such a requirement by
providing that an appellant may not raise any issues that were not
included in a rehearing petition. Alton R.R., 407 Ill. 2d  at 207.
Because the ICC considered new evidence upon rehearing, we held
that the putative appellant should have filed a second rehearing
petition discussing that evidence "as a condition precedent to its right
to appeal." Alton R.R., 407 Ill.  at 208. Accord City of Edwardsville
v. Illinois Commerce Comm'n, 412 Ill. 34, 36-37 (1952).
	Again, in Scherer Freight Lines, Inc. v. Illinois Commerce
Comm'n, 24 Ill. 2d 359 (1962), we revisited the second rehearing
petition requirement and focused on the purpose of the relevant
statutory provisions: "The requirement of an application for rehearing
as a condition to an appeal and the limitation that no person on appeal
shall rely on any ground not set forth in such application for rehearing
clearly disclose the underlying policy that any person aggrieved by a
decision of the Commission must first give the Commission an
opportunity to correct its alleged errors before resorting to the
courts." Scherer Freight, 24 Ill. 2d  at 363-64. Although the order
upon rehearing was labeled a "reaffirming" order, and its substance
was similar to the Commission's initial order, it still recited that it was
"based upon the entire record, including evidence not before the
Commission when the first order was entered." Scherer Freight, 24 Ill. 2d  at 364. The appellants' initial rehearing petition argued that the
ICC's decision was against the manifest weight of the evidence, but
because they did not give the ICC an opportunity to reevaluate the
manifest weight of the new evidence when they neglected to file a
second rehearing petition, we held that the trial court properly
dismissed their appeals. Scherer Freight, 24 Ill. 2d  at 364.
	In Continental Air Transport Co. v. Illinois Commerce Comm'n,
38 Ill. 2d 563 (1967), we carved out an exception to the second
rehearing petition requirement, which was plainly implied by our
language in Scherer Freight. "[I]f an order entered after rehearing
does not substantially modify the first one and is not based upon any
additional evidence, an appeal therefrom may be taken without a
second petition for rehearing." Continental Air, 38 Ill. 2d  at 566. We
broadened this exception in DuPage Utility Co. v. Illinois Commerce
Comm'n, 47 Ill. 2d 550 (1971). Even if the ICC considers new
evidence upon rehearing, an appellant need not file a second rehearing
petition where the order upon rehearing is substantially the same as
the initial order. DuPage Utility, 47 Ill. 2d  at 553.
	The exception now nearly swallows the rule. Unless the new
evidence upon rehearing prompts the ICC to make major changes to
its order, the party seeking an appeal need not seek a second
rehearing. Here, under this exception, the LECs properly appealed the
ICC's order on rehearing. As the ICC acknowledged in that order, on
the primary lines issue, "no party has presented any matter that was
not previously before the Commission at the time of the entry of the
Second Interim Order." More importantly, its order on rehearing
reaches the same conclusion on this issue as its initial order-namely,
that the Illinois USF supports only primary residential and business
lines.
	Having decided that subsequent cases have drained the potency
from the Alton R.R.'s second rehearing petition requirement, we also
note that that requirement sprang from an interpretation of the pre-1986 version of the Act. Before 1986, a litigant appealed an ICC
decision to the trial court. Ill. Rev. Stat. 1983, ch. 111, par. 72. In
1986, the General Assembly exercised its constitutional authority (see
Ill. Const. 1970, art. VI, §6) and directed appeals from ICC decisions
to the appellate court. Now, a litigant can appeal either an ICC order
refusing an application for rehearing or an ICC order "upon and after
a rehearing" immediately to the appellate court "for the purpose of
having the reasonableness or lawfulness of the rule, regulation, order
or decision inquired into and determined." 220 ILCS 5/10-201(a)
(West 2002). "[R]ules governing other civil cases," i.e. supreme court
rules, govern such an appeal. 220 ILCS 5/10-201(b) (West 2002); see
also 155 Ill. 2d R. 335 ("Insofar as appropriate," supreme court rules
on appellate procedure are applicable to proceedings for direct
appellate court review of administrative agency orders). Under
Supreme Court Rule 303(a)(2), "No request for reconsideration of a
ruling on a post-judgment motion will toll the running of the time
within which a notice of appeal must be filed under this rule." 155 Ill.
2d R. 303(a)(2).
	When the legislature redirected judicial review of an ICC order
from the trial court to the appellate court, it ensured that after one
rehearing petition was decided, the order was final and appealable. If
we were now to revitalize Alton R.R. and its second rehearing petition
requirement, we would create great havoc for ICC appeals. A putative
appellant would be at the mercy of the ICC, watching the clock tick
on its appeal while waiting for the Commission to rule on its second
rehearing petition. Here, the ICC closed its order on rehearing by
noting that "subject to the provisions of Section 10-113 of the Public
Utilities Act ***, this Order is final as to all matters determined
herein." As a final order "upon and after a rehearing," it was
appealable under section 10-201(a). See 220 ILCS 5/10-201(a)
(West 2002). The appellate court correctly rejected the ICC's
argument.

The Primary Lines Limitation
	The central issue in this appeal is the ICC's construction of
section 13-301(d), which incorporates section 13-301(e)(1), of the
Act. This issue is one of statutory interpretation and involves nothing
more than determining what the General Assembly meant when it
ordered the ICC to define the services that constitute "universal
service" in accord with the FCC's list of supported services. On this
issue, our review proceeds de novo. See Archer-Daniels-Midland Co.
v. Illinois Commerce Comm'n, 184 Ill. 2d 391, 397 (1998) ("the
Commission's interpretation of a question of law is not binding on a
court of review"), citing United Cities Gas Co. v. Illinois Commerce
Comm'n, 163 Ill. 2d 1, 12 (1994); accord Citizens Utility Board v.
Illinois Commerce Comm'n, 166 Ill. 2d 111, 121 (1995) ("we are not
bound by the Commission's interpretation of law"); see also 220 ILCS
5/10-201(e)(iv)(C) (West 2002) (providing that a reviewing court
must reverse an ICC order if it violates state or federal law). Though
we owe deference to the ICC's interpretation of the Act where there
is a reasonable debate about its meaning (see Illinois Consolidated
Telephone Co. v. Illinois Commerce Comm'n, 95 Ill. 2d 142, 152
(1983); Bloom Township High School v. Illinois Commerce Comm'n,
309 Ill. App. 3d 163, 174 (1999), citing Abrahamson v. Illinois
Department of Professional Regulation, 153 Ill. 2d 76, 97-98 (1992);
Board of Education of Plainfield Community Consolidated School
District No. 202 v. Illinois Educational Labor Relations Board, 143
Ill. App. 3d 898, 907 (1986)), the provisions at issue here are quite
clear.
	In section 13-102(a) of the Public Utilities Act, the General
Assembly found that "universally available and widely affordable
telecommunications services are essential to the health, welfare and
prosperity of all Illinois citizens." 220 ILCS 5/13-102(a) (West 2002).
Accordingly, in section 13-103(a), the General Assembly announced
a state policy that "telecommunications services should be available to
all Illinois citizens at just, reasonable, and affordable rates and that
such services should be provided as widely and economically as
possible in sufficient variety, quality, quantity and reliability to satisfy
the public interest." 220 ILCS 5/13-103(a) (West 2002). In section
13-301(d), the legislature referred specifically to the findings and
policy in sections 13-102 and 13-103, and then ordered the ICC to
			"investigate the necessity of and, if appropriate, establish
a universal service support fund from which local exchange
telecommunications carriers who pursuant to [Commission
orders] received funding and whose economic costs of
providing services for which universal service support may be
made available exceed the affordable rate established by the
Commission for such services may be eligible to receive
support, less any federal universal support received for the
same or similar costs of providing the supported services;
provided, however, that if a universal service support fund is
established, the Commission shall require that all costs of the
fund be recovered from all local exchange and interexchange
telecommunications carriers certificated in Illinois on a
competitively neutral and nondiscriminatory basis. In
establishing any such universal service support fund, the
Commission shall, in addition to the determination of costs
for supported services, consider and make findings pursuant
to paragraphs (1), (2), and (4) of item (e) of this Section."
220 ILCS 5/13-301(d) (West 2002).
Under section 13-301(e)(1), the Commission shall "[d]efine the group
of services to be declared 'supported telecommunications services'
that constitute 'universal service'. This group of services shall, at a
minimum, include those services as defined by the Federal
Communications Commission and as from time to time amended."
(Emphasis added.) 220 ILCS 5/13-301(e)(1) (West 2002). "Service,"
in the Act, "is used in its broadest and most inclusive sense." 220
ILCS 5/3-115 (West 2002).
	The FCC has identified nine services as eligible for support
through the federal USF, including "voice grade access to the public
switched network," which it defines as "a functionality that enables a
user of telecommunications services to transmit voice
communications, including signalling [sic] the network that the caller
wishes to place a call, and to receive voice communications, including
receiving a signal indicating there is an incoming call." 47 C.F.R.
§54.101(a)(1) (1998); see 343 Ill. App. 3d at 530-31 (stating that a
voice grade access line is a basic telephone line). In its order
establishing the federal USF, the FCC found that voice grade access
"is an essential element of telephone service, *** essential to
education, public health, and public safety because it allows
consumers to contact essential services such as schools, health care
providers, and public safety providers. For this reason, it is also
consistent with the public interest, convenience, and necessity." In re
Federal-State Joint Board on Universal Service, 12 F.C.C.R. 8776,
8810-11, par. 63 (1997); see also Illinois Consolidated Telephone Co.
v. Illinois Commerce Comm'n, 95 Ill. 2d 142, 148 (1983) (describing
"the capacity for two-way communication by voice" as the "essential
of the concept of the telephone"), citing People v. Gervasi, 89 Ill. 2d 522 (1982).
	The FCC further observed that the Federal-State Joint Board on
Universal Service
		"recommended that support be provided (1) for designated
services carried on a single connection to a subscriber's
primary residence, and (2) for designated services carried to
businesses located in rural, insular and other high cost areas
and with only single connections. The Joint Board concluded
that single-connection residences and single-connection
businesses both require access for health, safety, and
employment reasons. The Joint Board found that support for
a second connection is not necessary for a household to have
'access' to telecommunications and information services ***.
			The Joint Board recommended that support for designated
services be limited to those carried on a single connection to
a subscriber's primary residence and to businesses with only
a single connection." In re Federal-State Joint Board on
Universal Service, 12 F.C.C.R. at 8828-29, pars. 94 through
95 (1997).
	The FCC conceded that it shared the Joint Board's concerns that
providing universal service support for multiple lines may be
inconsistent with the goals of universal service. In re Federal-State
Joint Board on Universal Service, 12 F.C.C.R. at 8829, par. 95
(1997). Presumably, individuals and businesses with multiple lines
could afford to pay higher rates that shadow their carriers' higher
costs. In re Federal-State Joint Board on Universal Service, 12
F.C.C.R. at 8829, par. 95 (1997). The FCC still chose to support all
lines:
			"In light of our determination ***, to adopt a modified
version of the existing universal service support system for
high cost areas, we conclude, consistent with the proposal of
the state Joint Board members, that all residential and
business connections in high cost areas that currently receive
high cost support should continue to be supported ***. For
rural telephone companies this means that both multiple
business connections and multiple residential connections will
continue to receive universal service support at least until
January 1, 2001." In re Federal-State Joint Board on
Universal Service, 12 F.C.C.R. at 8829, par. 96 (1997).
Since then, the FCC has not changed its stance. The federal USF
supports all lines.
	Our primary rule of statutory interpretation is to ascertain and
effectuate the legislature's intent. See In re D.D., 196 Ill. 2d 405, 418
(2001); Kraft, Inc. v. Edgar, 138 Ill. 2d 178, 189 (1990). The
language of the statute remains the best indication of this intent, and
we must give the statutory terms their ordinary meaning. See People
v. Alexander, 204 Ill. 2d 472, 485 (2003), citing Opyt's Amoco, Inc.
v. Village of South Holland, 149 Ill. 2d 265, 277 (1992). Where the
language of a statute is clear, we may not read into it exceptions that
the legislature did not express. See In re D.L., 191 Ill. 2d 1, 9 (2000),
quoting Garza v. Navistar International Transportation Corp., 172 Ill. 2d 373, 378 (1996).
	The Act provides that the ICC should track the FCC definition of
supported services, and the FCC has stated that voice grade access is
a supported service. Further, the FCC has decided that all lines with
voice grade access should receive federal USF support. It is
incongruous to suggest that the legislature wanted the ICC to follow
the FCC's words but not its deeds and to provide purportedly
"universal service" support with limitations. The FCC does not
describe a voice grade access line as a voice grade access line which
receives support only if it is also a primary residential or business line.
Universal service means universal service.
	Though the ICC refers us to testimony and statements by various
witnesses who represent companies opposed to support for multiple
lines and advance their opinions to that effect, these opinions have no
bearing on our determination of legislative intent. In fact, these
witnesses do little more than parrot the position of the ICC before the
FCC in the Federal-State Joint Board case.(3) When the ICC ordered
that "[t]he services defined by the FCC as supported services shall be
the state supported universal services for purposes of the Fund, with
the exception that the fund shall be based upon support for a single
residential or business line" (emphasis added), it violated the Act. The
appellate court correctly reversed the ICC.

Retroactivity
	The ICC contends that the appellate court erred in making its
decision on the primary lines issue retroactive to the date of the ICC
order on rehearing. The ICC refers to Independent Voters of Illinois
v. Illinois Commerce Comm'n, 117 Ill. 2d 90, 97 (1987), which held
that a rate order remains in effect during the pendency of an appeal.
According to the ICC, though the present case involves a subsidy, not
a rate, the appellate court essentially ordered a retroactive surcharge
for telephone customers across Illinois because local exchange and
interexchange carriers will pass onto their customers the USF charges
which accrued while the ICC's order was in effect.
	The LECs respond that the appellate court was correct. They
assert that because March 13, 2002, was the date when the ICC's
order first reduced funding for multiple lines, the appellate court
simply placed the parties in the same positions they occupied before
the ICC limited the USF to single lines and reduced funding. The
LECs further assert that a rate case is inapposite because the USF is
a surcharge levied against contributing carriers, not a rate charged to
utility customers.
	The appellate court reversed the ICC on the primary lines issue,
as well as "that portion of the Commission's orders reducing the
amount of funding by the percentage of secondary lines." The
appellate court made its reversals retroactive to March 13, 2002, the
date of the Commission order on rehearing. Though, as the ICC
correctly notes, the appellate court offered no reason why its decision
should operate retroactively, the appellate court sought to place the
parties in the position they would have held without the primary lines
limitation and consequent reduction in the fund size. The appellate
court simply ensured that the effect of its ruling on the primary lines
issue would not be defeated by a gap in funds. See 155 Ill. 2d R.
366(a)(5) (a reviewing court may, in its discretion, "make any other
and further orders and grant any relief *** that the case may require").
The appellate court did not err.

CONCLUSION
	For these reasons, the judgment of the appellate court is affirmed.
Affirmed.
 
 
 
1.                  
       
       
         
   
The six LECs before us in this case are Leaf River Telephone Company, Montrose Mutual Telephone Company, New Windsor 
Telephone Company, Oneida Telephone Exchange, Viola Home Telephone Company, and Woodhull Telephone Company. We will refer to the appellees 
here collectively as the LECs.
2.               The ICC, in its supplemental brief, states that 
it "has not claimed that the petitions for review were untimely, so that the appeals should be dismissed for lack of jurisdiction."
3.               
Merwin Sands, a witness for MCI Worldcom, Inc., testified, "[I]n comments filed at the FCC ***, the Illinois Commerce 
Commission *** proposed that the federal universal service fund should provide support to services provided only over primary residential 
access lines."