Evening star., 1944-02-20
III Hotels Here
Sued in Phone
Surcharge Fight
Injunction Sought
To Stop Collections
On Distant Calls


On Distant Calls
Alleging illegal collection of sur
charges on long distance telephone
call. the Department of Justice on
behalf Of the Federal Communica-
tions Commission yesterday asked
District Court for an Injunction
against 81 District hotels. the
American Telephone and Telegraph
Co. and the Chesapeake and Poto-
mac Telephone Co, to prohibit such
extra expense to the public. A pre-
limipsry restraining order also was
asked, effective Immediately.
The suit was filed through the
once OF the United States Attorney
Edward M. Curran. and signed bv
wendell Berge, Assistant Attorney
General
The case was brought under tho
communications Act of 1894, and
alleges violation of tariffs of the
telephone companies on file with
the FEC forbidding such extra
charges effective February Is
Seek TO Stop Collections.
The Government asks the court
10 order the hotels to cease collect
Ing such extra charges on long.
distance calls, and to enjoin the tele.
pnone companies from rendering
long distance service to these hotels
so long as they continue the
a.legediy illegal practice.
The hotels named in the suit are.
Ambassador Annapolis, Blackstone.
Carlton, Carroll Arms, Commodore.
Continental, Dodge, Fairfax, Hamil-
ton. Harrington, Hay-Adams, Lafav-
cite, Lee Sheraton, Martinique. Nav
flower, New Colonial, PENNSYLVANIA.
Plaza, Raleigh, Roger Smith. Shore
nam, Statler, Twenty-four Hundred,
Wardman Park. Washington and
Willard. all members of the Hotel
Association of Washington.
The suit refers only to extra
charges on interstate, and foreign
long distance calls, but has no refer.
ence to local calls. The Public Util-
tiles Commission, however. recently
issued an order, effective March l,
barring all such surcharges made
from hotels, apartment houses and
clubs in the Washington Metropoli.
tan Exchange area.
Jurisdiction Challenged.
The Hotel Association of WASH
lngton, through Counsel Joseph S.
IMcGarraghy, has filed two suits in
court challenging the jurisdiction of
both the FEC and the PUG over
hotels.
Asked for comment on the iniunc-
ton suit, Mr.. McGarraghy said last
night: I'VE filed suit last Monday
to set aside the order of the FEC.
Today they filed suit to enforce the
order, thereby making an issue,
which the court will pass on. We
have taktA the position all along
that the court should decide the
issue whether the FEC had right
to issue the order" The FEC order,
effective last Tuesday was issued
January % when the tariffs were
filed with the FEC, forbidding sur
charges.
In explaining its latest action. yes
terday the FEC in a statement ex-
planned that restraining order was
asked to prohibit Immediately the
collection of surcharges because
persons now illegally compelled to
pay them to the hotels would other
wise have difficulty in recovering
their money
Hotels Get Commissions.
Since the telephone companies
have offered to pay the hotels a
Is per cent commission on inter-
state and foreign long distance calls
II they stop collecting the sur
charges, the motion states, an i'm
mediate restraining order would not
result in any material injury to the
hotels. The FEC said many hotels
in the District and elsewhere have
accepted the Is per cent commits
sion arrangement.
The surcharge dispute dates back
to last year and ran through ex-
tensive hearings. The FEC issued
a decision December 10 that sur
charges on such calls at hotels.
apartment houses or clubs came
under its jurisdiction, and ordered
the A. T. & T. and the C. e. p. to
hle appropriate tariffs. This order
resulted in arrangements whereby
all Bell System telephone companies
flled tariffs with the commission
prohibiting the collection of sur
charges on long distance calls on
and after February Is, 1914. The
elimination of these charges. it was
estimated by the FEC. would mean
an estimated savings of Sl.7O0 600
to the telephone using public at
hotels.
Investigators of the FEC staff
went into hotels here last Tuesday
when the tariff went into effect.
and found, the FEC said. that sew
eral hotels in the District of Colun1.
bia were continuing to collect these
additional charges A statement
to this effect was made public
Wednesday pointing out that such
extra charges were a violation OF
law. Later Investigations it was
announced, disclosed that the hotels
} were still collecting the charges