The New York herald., 1921-11-11
TO BASE Phone Rate
ON MASS VALUATION.
Service Commission VIII
Give Up Old Plan of Local
Area Estimates.
WILL SPEED 135 CASES
Present Method Is Called
Costly and a Deterrent 1
to Extensions.
WILL SPEED 135 CASES
N. Y. CITY SAID TO SUFFER
Inquiry to Be Held Nov. 30,
When Supply Company''s
Status Will Be Looked Up.

The Public Service Commission an
nounced yesterday it's determination
20 decide pending and future telephone
rate cases upon a comranywde valua-
ton basis instead of according to the
local area system, which heretofore
has been used.
To arrive at such a valuation the
commission announced a statewide in
vestigation OF the New York Tele-
phone Company, which controls 90 per
cent. of the telephones in this State.
The inquiry will begin November 20
with hearings in Albany, and, accord
ing to the commissions announcement.
will be sweeping in character" Rep
resentatives of every municipality in
the State that has cases pending be-
attend
The commissions purpose in adopting
The company's basis is set forth as fol-
lows:
THE action OF the commission was
taken in order to facilitate the settle
ment of some 1876 cases representing
compla ints TO the former Public Service
Commission, Second district, by various
municipalities in the State against the
New York Telephone Company, and to
relieve the taxpayers and subscribers of
the company from the enormous expense
NJ ha va lt1a do of q
pany's property in each local area. In
other words, the commission will take
into consideration the investment of the
telephone company in the State. as q
basis for fixing the rates instead OF the
investment IN each municipality"
Plan Urged for Many Years.
The companywide basis has been urged
for many years by the telephone COM
pany. and several unsuccessful efforts
rave been made to obtain at Albany
legislation which would require such
tasis. Opponents of the plan declared
that it was for the purpose of unloading
the cost of operating weak lines upon
the subscribers of the New York city
system.
The announcement of the commissions
decision was accompanied by an opinion
by Commissioner Charles G. Blakeslee of
Binghanton, which declared that unless
the companyw!de basis were adopted it
would take several years to determine
the pending cases and at an enormous
expense.
The opinion pointed out further that
the New York Telephone Company op-
crates under Statewide franchise. and
that all OF its services in all parts of
the State are carried on through the
medium of the same property and the
same appliances and the same general
executive, auditing and operating heads.
It's capital and various reserve funds,
the opinion stated, are made I'D or
divided with regard to local areas but
are maintained as a single fund for the
operation of the company's service
throughout the State.
The system of trying to fix different
rates in different localities was described
as almost hopeless" and it was set
forth that "if return be based solely on
local investment no company can de-
velop Improbable territory or extend
telephone service to smaller commun-
flies"
Scope of the Investigation.
The commission proposes that it's in
vestigation shall include relationships be-
tween the New York Telephone Company
and the American Telegraph and Tele-
phone Company. since the latter controls
the former ito the extent that its rev.
enues and expenses are increased or
diminished by moneys received from or
paid to the American Telegraph and
Telephone Company under contracts and
agreements not clearly explained or un-
derstood and because of which telephone
rates may be affected" The commission
Will look into relationships between the
New York company and the Western
Electric Company, which manufactures
and supplies telephone equipment.
The commission purposes to fix the
valuation of the compsny's holdings
throughout the State and to establish
thereon a uniform Statewide rate.
Once the basis is fixed, says the COM
mission, any community feeling itself
subjected TO unreasonable or discrimina-
tory rates will be enabled "at COM
paratively little cost" to present its evil
dence to the commission.
This Is not a novel or untried idea. -
said Commissioner Blakeslee's opinion.
'It has been successfully adopted and
followed By New Jersey. Pennsylvania,
Maryland. Georgia, Wisconsin, Colorado
and other States
No statement was forthcoming last
night from the Hylan administration,
but it was understood at City Hall that
the new plan would be the cue for an
other onslaught against the utility COM
missions created by Gov. Miller and the
Republican Legislature.
Attached to the announcement was a
list OF twenty-three subjects, covering
every phase Of the company's financial.
operating and contract methods and re-
iationships bearing on valuation or rate
making.