New-York tribune., 1921-11-11
Phone Inquiry
To Adjust State
Rates Ordered
Public Service Commission
Hearing to Open Nov. go
in Albany Will Cover
Every Phase of Business
blow Seen at Home Rule
Move to Make Charges on a
Con,pany-Wide Basis Held
Prejudicial TO the City

ICj jAu1SkSak ~ tAC LILY
The Public Service Commission de-
c;ded yesterday to begin comprehen-
sive inquiry in Albany on November 30
10 the purpose of establishing tele-
rhone rates throughout the state on q
5 se or "company-wide basis.' instead
on the "local area basis,s as here
..~s. This means that rates will be
sserrained from the condition of the
anspany's plants and property through
out the state, and not fixed for any par
sicuiar city or community on the basis
os the appraisal OF the local plant.
The local authorities contend that
t1is plan will result in discrimination
agsinst New York City. and Is another
infringement Of home rule by the state.
Il vas pointed out that the telephone
c. npanies had been trying for several
ars to get q law through the Legis-
!, are providing for this very thing
tate-wide basis instead of the local
~ basis.
he contention is made that rates in
New York City. which Is a profitable
area, will be raised TO meet deficits of
the subsidiary companies up state that
ar net making money. Many of the
co lpanies up state controlled by the
Nc v York Telephone Company, it was
sail, we're not on a paying basis, be-
cause they had absorbed other local
companies and were carrying them as &
liability.
Through Inquiry To Be Made
The New York Telephone Company's
Affairs, according to the opinion of
che commission, prepared by Commits
sionsr Charles G.. Blakeslee, of Bing-
h7uton, are TO be investigated with
thproughness never before attempted
The entire investment OF the company
in this state. together with its rela
tions with the American Telephone and
Telegraph Company and The Western
Electric Company, is to be considered
anc appraised with view to determin-
ing telephone charges in every COM
r1unity in the state.
In the opinion Of the commission
this method Of determining equitable
ystes will be far more prompt and
economical than the present method
which was adopted by the previous
commission. Under the present local
@4Sd A4rthcd, IdtSS III SdIi4
!. we're based upon the company's in
vestmert in that community.
In practice, it was found that the
focal plant was dependent in some re-
spects upon plants in other cities also
and 1t was necessary to determine the
value OF these other plants and the per-
centage OF that value which was to be
applied to the local plant. So far as
individual municipalities were con-
- 49, ~~ll I'LL <,
determine the local value of the ar
-sngenents made by the telephone
company with the American Telephone
AMI Telegraph Company and the West
ern Electric Company and those in
yoived relationships never have been
aseertained exactly.
More than 135 municipalities have
complained to the Public Service Com
mission concerning telephone rates.
One hundred and thirty-hve complaints
are still awaiting adjustment. Al
though the first of these complaints
was filed April 80. 1918. only two cases
have been decided. Evidence has been
taken in another.
The Buffalo and Syracuse cases are
the only ones that have been settled.
The New York City case is partly in.
Heavy Cost in Two Inquiries
"This commission has decided the
Suffalo and Syracuse telephone cases,
which occupied more than two years
their presentation" said Commits
oner Blakeslee, "and have I'M
aoubtedly cost the communities, the
telephone company and the state or
New York large sums OF money. me
facts found and results attained after
ali this expenditure of time and money
are Of comparatively little value in so
far as thew affect the disposition Of the
a5 pending cases.
at is apparent, therefore, If these
ases are heard separately, it will be
everai years before they are finally
asposed Of. This will not answer; re-
ief, SO long delayed, is not only un-
.rary to the spirit OF the law under
shich this commission was established.
II order to determine these pending
eases and to provide against the re-
1rrence Of such an impossible state
affairs, . comprehensive plan for
10 equitable and prompt disposition
these cases and final decision OF
lie disputed facts which underlis all
them must be had
Better Service Predicted
After discussing some of the obscure
OK disputed points, including the rela-
sionship between the telephone com
pany and the American Telephone and
Telegraph Company and the Western
Electric Company, which he described
rs mot clearly explained or under
Stood" Commissioner Blakeslee ex-
pressed the belief that better service
would result from an investigation on
q company-wide basis.
"f return be based solely on local
Investment" he said, mo Company can
develop Improbable territory or ex.
tend service to smaller communities
The measure of value of telephone ser.
Vice to subscriber is based upon ths
most complete extension of telephone
service. Under the company wide
theory, however, it would seem that al
these difficulties are obviated. Every
Fact relative to the conduct of the
company's entire business is to be in
yestigated, including the determination
once and for all, Of the value of ths
crmpany's entire property. as well a:
penses required TOR the operation
AID maintenance Of proper service"
Among the subjects for specific in.
rliry in the investigation are men
i,ned the value of the company's
ysical property, investment costs, in
rest payments, taxes and operating
come and expenses. The investiga-
on will include the issuance of secu.
ties by the company, the sumo real.
ed by their sale, interest and divi-
dsnds paid on them, and amortization
charges. The program for investiga-
tion of the relationship to the Ameri-
can Telephone and Telegraph Company