Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-05
UTILITY
PROBE IS STARTED
State Commission Begins In
quiry Into Operation Of
Bell System.
BIZ GEORGE y. DoYrNG.

An Investigation Of great interest
throughout the country has just been
announced by the Wisconsin public
Service Commission. which has Initiated
an inquiry into the relationships ex-
isting between the American Telephons
a. Telegraph Co., Its Subsidiary, the
western Electric Co.. and the teie-
phone operating subsidiaries known %
the Bel System. The proceeding, be-
ing conducted by O State commission.
win deal primarily with the Wiscon-
son Telephone Co., the Ben subsidiary
In that state.
The investigation, according 70 the
commission, win be "the most extensive
rate case In the history Of regulation In
Wisconsin during nearly Is years has
been leader In the regulation Of
public utilities.
The A. T. a. IT'S license contracts
with the Bell operating companies,
through which the former collects IL
per cent lsone years ago It was per
cent? Of the gross revenues of each OF
the subsidiaries, have long been an OBJ
ject Of attacks by State commissions.
Similarly. the method Of prorating the
revenues from lon9-distance service be-
tween the a. 7. q r, which owns an
the toll lines, and the local companies.
which own the city lines. has been o
source Of dispute. Furthermore, the
business Of the Western Electric Co,
which makes telephone apparatus
principally for the Bel System. and
whose stock is owned by the A. T. q r.,
has been the subject OF inquiry from
time TO time.
The relationship between these
various corporations, with particular
emphasis upon its effect on local tele-
49, wn2 fl.at,s -
thorough airing. The matter was even
considered BY the Supreme Court Of the
United States, which last December
remanded case from Illinois with
instructions 10 the lower court TO aScer-
tain the facts with reference to the
division OF toll revenues.
The Wisconsin Commission admits
that the scientific researches and activi-
ties Of the general stan Of the A. r. a.
+, are valuable, but wants to know
whether they produce economies IN all
the kinds Of service rendered and
whether these economies are passed on
20 subscribers IN the Bell system The
commission likewise suggests that the
A. r. a r. and Western Electric ACTIVE
ties in developing movietones, teietype
and telephoto services and radio broad.
casting facilities ARE essentially by
products Of the telephone business.
I0c present. RECORD, says the COM
mission "iends color to the conclusion
that the entire charge Of the Develop
ment Of the Investigations by the Amer
lean company prior to the time when
these by-prodrcts became practical for
manufacture and sale has been charged
to Bell System subsidiaries, the WIS.,
consin company among them, and
hence to wisconsin telephone users
II this be true, the commission de-
sires to know Show the profits made by
the A. T.. u +. and Western Electric
from these "by-productsr should be
considered In determining the reason-
ableness Of existing arrangements with
the Wisconsin Telephone 90. Similar
". the commission is undertaking to
find out something concerning the
prices paid to Western Electric for
equipment.
Practically every one Of the 4s State
commissions having Jurisdiction over
telephone companies has &c some time
given confederation to the A. Z. a. rs
license contract, which has almost in-
variHhly been approved 60 affording
adequate value to the operating COM
panies for the fees paid. The revenues
Of the parent company from this source
during 1880 amounted to 1851. fSo.
while II claims that the total cost Of
rendering the services was 42T,I4o,26S.
(copyrisht. 1917