Evening star., 1952-01-03
Virginia Rate
Board Gets Free
Phone Service
Practice Revealed
AS Members Hear
Request for Increase
By the Assoeiafed Press

BY the Associated Press
RICHMOND, Jan. 3.-Members
Of the State Corporation Commits
sion who are to pass on a requested
telephone rate increase for Vir-
ginians have been receiving free
personal phone service for years.
This situation came to light yes
terday as the sec resumed its
hearing on the bid for new round
of rate raises by the Chesapeake &
Potomac Telephone Co.
j. Rhodes Mitchell, C. & P. vice
president and general manager,
said it is perfectly normal and
proper business practice" for the
utility to provide free or partially
discounted service to members of
the commission and about 10000
other Virginians.
He added that free service to
members of the sec is provided
for by the State Constitution, and
that discounts have been author
lied "for years" to clergymen,
employees of the company and
charitable institutions engaged in
the relief of human suffering.
Commission member w. Mar
shall King said the free service
applied only to private calls and
that official sec business was
paid for at the regular commercial
rate.
I'm Washington, the Public
Utilities Commission said no
such favors are received from
the company. At Baltimore,
Charles D. Harris, general coun-
sci to the Maryland Public Serv-
ice Commission said State law
specifically prohibits the tele-
phone company from giving a
preferential rate or any ad-
vantage to any person or organ
ization.)
Other Companies Involved.
The senior member of the COM
mission in point of service said
members of the commission had
been afforded free private tele-
phone service in the State for as
long as he could recall.
Mr.. King referred to the prac-
tice as a business courtesy on the
part Of the phone company and
the transportation and telegraph
companies.
He noted in this connection
that none of the commission
members owned any stocks or
other securities in companies or
corporations subject to commits
sion control.
Commission Counsel Norman S.
Elliott asked the C&P vice presi-
dent if the company was includ-
ing in it's rate increase request "a
return on the investment required
to furnish this (reduced rate or
free) service"
Considered Proper Practice.
Mr.. Mitchell replied that it was
and that he considered it a Gus
tomary and proper business prac-
tice.
Company attorneys explained
later that the majority of those
favored are company employees
(about 10000 who get a so per
cent reduction on ther billings.
Clergymen are given 25 per cent
reduction and charities devoted
solely to the relief of human suf-
fering get a discount of 1919 per
cent. In addition, certain munich
palities who turned over phone
franchises or made other conces-
sions to the company get a reduc-
ton in rates.
The section of the State Con-
stitution, Section 161, which COM
mission members cited as authori-
Zation for accepting the free
private phone service says:
mo transportation of transmits
sion company doing business
in this State shall grant to any
member of the General Assembly
or to any State. county, district
or municipal officer, except to
members and officers of the State
Corporation Commission for their
personal use while in Office, any
frank, free pass, free transporta-
tion, or any rebate or reduction
in the rates charged by such COM
pany to the general public for
like services
New Request Trimmed.
AS the hearing resumed-it has
been in recess since October-fo1
croSs-examination of company
witnesses by a number Of inter-
venors in opposition to the rate
increase the phone company an
nounced it was trimming its new
request for a gross increase OF
$500, 900 to $5,066. 900 yearly.
This would mean an increase
in the current telephone bill OF
individuals of about 8.6 per cent
rather than the 10 per cent in
crease in overall billing envisioneo
in the original petition.
Company Counsel T. Justir
Moore said the request was being
modified under a new formuls
which separates intrastate anc
interstate plant investments anc
earnings. The revised request i!
designed to give the company
$2,307, 900 rather than the origina
$2,640, 900 net after taxes it asked
at first.
Maryland c. & p. Plans
s. Million Expansions
BALTIMORE, Jan. 2 (P.-Th,
Chesapeake g. Potomac Telephon,
Co. plans to spend 1888 900 in ,
new improvement and expansion
program. This brings the au
thorized olltlay during the pas