Evening star., 1922-02-15
ORDERSCONT|NU|NG
TELEPHONE RATES
District Utilities Commission
Decides to ProIong Same
Charge Indefinitely.

EAlSllHB rates OF tne chesapeake
and Potomac Telephone Company
were continued indefinitely blythe
utilities commission today. as pre-
dicted in The Star several days ago.
After discussing in detail the va
rious- issues raised at the hearing, the
commission closed it's order with this
paragraph:
I'm view Of the circumstances and
the evidence in this case, the COM
mission is of the opinion that it will
be fair and just alike to the public
and the company if the present rates
are continued. since under these rates
the compAHY will earn only a rea-
sonable return on the value of its
property devoted to the service Of
the public. The company makes
monthly reports to the commission of
all its operations. and the commits
sion. therefore. can ascertain at any
time II these rates are bringing a
rate of return higher than that which
1t believes is fair and reasonable.
More Inquiries Promised.
after the question of its jurisdic-.
tion in the matter of the depreciation
Of the various utilities in the District
has been determined. the commission
will consider and determine the rules
and regulations for the proper ac-
counting for depreciation. and II it
then appears that a revision of the
rates for service should be made. a
further investigation will be held"
The commission failed to settle
definitely the question OF whether the
Az per cent of gross earnings paid
annually by the local company to the
American Telephone and Telegraph
Company is excessive. The testimony
showed that last year this payment
amounted to $21S.4S1.s3.
View OF Commission.
Discussing this matter, the COM
mission states:
"The item Of service rendered by
the American Telephone and Tele-
graph Company under this agreement,
most susceptible of a definite money
valuation, is that of the rental charge
for the telephone instruments. the
patent rights to-which are controlled
by the American Telephone and Tele-
graph Company. The testimony in
this case shows that at the present
market price for these instruments.
the Chesapeake and Potomac Tele-
phone Company is. saving approxf-
mately 81 per annum per station by
renting them from the parent COM
pany instead of purchasing them out
right. This rate, applied to the 94.373
subscribers stations shown by Clark
son exhibit No. 2 to be in service in
1921, would account for $94,373 of the
amount paid to the American Tele-
phone and Telegraph Company during
1921. To this figure should be added
the saving through the rental of in
struments used by the company's
operators and linemen and those Tar
ried in stock. which, it may be as
sumed. would bring the amount of
the payment to approximately $780,
900 annually. This would leave. In
paid for the other services rendered
by the American Telephone and Tele-
graph Company during the year
under review. This amount undoubt-
edly represents payment for services
or privileges of substantial value to
the public. though it is difficult to
state positively in precise terms what
the services and privileges are, and
equally difficult to determine what
would be more than fair payment
for them. In view. however, of the
recent financial history of the local
company ana OF It's past ana present
earnings. the extent to which this re-
naming amount, $116,000, is, If at all.
an overpayment remains of compara-
lively little Importance in its effect
on the rate schedule"
Contract an Advantage.
The commission finds that the con-
tract which the company has with
the Western Electric Company for
the purchaseio Of equipment and sup
haies, is a distinct advantage.
Testimony at the hearing was to
the effect that the company had 3s1
untitled applications for service pend
ing at the end OF the year. The cdkn-
mission states in Its decision that
nearly all Of these orders will be pro-
vided for during the year Discussing
this. the commission says:
The commission believes the COM
pany. is making every reasonable ef-
fort to furnish. service to these ap-
plicants, and that 1t 10 inadvisable
to require the company to extend Its
lines to those sections where, az
shown by the testimony. the cost
a