The Paducah sun. [volume] (Paducah, Ky.) 1898-1906, 1905-09-14

proportionately large cost. This Is
illustrated by the case of Baltimore.
In that city the local Bell Telephone
Company has somewhat more Than
$4,000 stations, the independent
company between 5000 ana COCO
An examination of the lists Of the
Two companies shows that more than
half the Independent company's sub
scribers are also subscribers to the
Bell company An Independent in
quiry was made by a member of this
committee in the city of Baltimore
on this phase of the question. A
leading merchant stated that practi-
cally for each 500 per year paid for
the service of the local Bell company
with the ability to reach through its
system more than $4,000 other tele-
phone users, he was required to pay
for the service of the Independent
company an additional $50 per year
for the ability to reach less than
5000 additional telephone users. In
this instance, the effect of competi-
ton is to increase the aggregate ex-
pense about so per cent, while the
facilities are increased but about II
per cent. If the new facilities were
combined with those of the original
company. instead of being isolated,
they would be far more effective and
could be supplied at much less than
cost.
1T is thus shown that the indie
pendent service, which purports to
be the cheaper. is not so in reality.
but, on the contrary, is the more ex-
pensive. both absolutely and rela-
lively, as it involves an equal or
greater outlay for much inferior
degree of utility.
The effect of two rival telephone
systems in one city is to divide the
population into two parts without
means of telephone communication
with each other. except at excessive
cost. While a single system pro-
notes general REORGANIZATION
two systems make II impracticable.
Two systems therefore greatly re-
strict the utility of the telephone,
seriously impair its value, and inn
pede its commercial development.
In the opinion of this committee,
competition in telephone service is
not a public benefit. and not a useful
means of regulating telephone
charges AS shown above, little or
no benefit accrues to any part of the
public in the way of reduced rates.
many consumers are compelled to
increase their aggregate outlay, the
utility of the service is cut in halt,
expansion made difficult, and the
efficiency Of the service threatened
Competition in telephone service
does not offer choice of benefits,
but compels a choice of evils-either
a half-service or double price.
While this committee contends
that telephone companies, in com
mon with all other public service
corporations, should be subject to
regulation by law in case the neces-
sity arises. such regulation should
be resorted TO only when the unrea-
sonableness and arrogant attitude
of a corporation and its refusal to
justify its rates leaves no alterna-
tive.
1t is obviously impracticable for
any legislature to deal with all of
the factors upon which equitable
charges must be based. Therefore,
the adoption by a legislature of any
basis of charge must be in a large
degree arbitrary, and If a mistake
is made It cannot be easily correct
ed.
The great expansion in the use of
the telephone has been due in very
large part to the fact that the reduc-
ton of rates voluntarily made by the
telephone company through ZEN
lightened self-interest" has created
very extensive new classes of small
users, who. under the fiat rate pro-
posed to be fixed by law in 1897 and
1898, would have been debarred
from the use of the telephone.
1t is the belief of this committee
that the regulation of telephone
rates by law or Intervention in the
affairs of telephone companies is un-
desirable so long as telephone COM
panies afford convincing evidence of
The reasonableness of their rates and
show that the latter bear a proper
relation TO the cost of the service
provided.
Inquiry in all American cities hav-
ing a population of more than So
600 shows a wide variation in the
rates charged for telephone service
A superficial view of the question of
telephone rates is that a comparison