The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1912-01-06
ADJUSTING THE TELEPHONE
CHARGES TO CONDITIONS,


Because the telephone service of
Baltimore is conducted by the same in
terest that operates the same facility in
Washington, and because conditions in
the two cities are VIGOROUSLY very
similar, especial interest must attach
to the recent decision of the Maryland
public service commission ordering
readjustment of telephone charges in
the Maryland metropolis.
The Baltimore plant was appraised
with great care, and although q de.
tailed physical valuation was not deem
ed necessary, the careful checking Of
items, allowance for depreciation, and
wise of all conclusions by one of the
worlds foremost telephone engineers,
seemed to justify the conclusion that
very accurate valuation had been
determined. All intangible values were
excluded, and the valuation fixed by
the company on its property was S.
667 ,642.lO. The commissions expert
reached the conclusion that this should
be $685., 729.74. The difference is SO
small as to make the conclusions sub
stantially identical.
On this property it was found the
company's annual operating revenue
was 81 ,5O7 $50; operating expenses,
$845,96O. Further deducting rentals,
taxes, and depreciation at per cent,
the net income was placed at $4OO, l69,
which was less than per cent. The
commission accepted the view of the
New York and Wisconsin public serv-
ice commissions that 8 per cent is a
proper return for this business.
1t became, therefore, not a question
of revising rates so as to lower the
company's total net income, but Of
making readjustments that would
more equitably distribute the burden OF
service. 1t was found that some sub
scribers were getting service at rates
which were exceedingly low compared
to those paid by others. The dis
ordinations indeed were startling,
just as they would be found in Wash
ington if a like detailed study. were
made here.
It is explained that these discrep.
ancies in Baltimore result from in
herited conditions dating back to early
times. People who got low and sd-
vantageous rates many years ago have
been allowed to. retain them; others
coming in later, have had to pay rates
based on modern conditions of the
traffic; and inevitably these later sub.
scribers must pay for the deficit &C.
casioned by giving service to some OF
the older patrons at less than its
actual cost.
Complaints of many subscribers in
Washington warrant the belief that
this exact condition will be found du.
plicated here, sometimes in aggravated
| form.
In Baltimore, for instance, the com
mission found one case in which "ont
subscriber now has six unlimited tele
phones and for one of them pays 6
fiat rate of 1925 year, while over the
other lines the service is not only un
limited but absolutely free" Records
were kept for test periods of this sub
scribers' business, which showed tina
he was actually getting 10000 mes
sages year for $l25! In other words
this favored subscriber was paying les
than one-tenth of cent per message
while the general public must drop I
nickel in the slot for single message
and the ordinary subscriber paid from
4 to cents per message!
The Baltimore analysis conclude
that the flat-rate business is conducte,
at loss of $4,000 to $4,000 year
and this of course must be made up b.
the charging of excessive rates t,
people who pay by the message. There
fore the commission orders that rate
shall be SO readjusted that thes
special favors shall stop, and the SINAI
users charges shall be reduced, Will
those of fiat-rate favorites shall b
raised. In the new schedule based O
these considerations the changes ar
indicated by these figures:
The present rate for 6OO-messag
J. annual minimum is $4s, with 5 cent
, for each additional message. This
reduced to SAP per year and the 5-cen
additional message rate is retained.
j The present rate of $57 for an 500
message minimum is reduced to So
, while the charge of cents for eac
additional message is unchanged.
r These are the charges for the loves
amount of service. up at the otht
end, for subscribers using the maximul