Opinion ID: 397828
Heading Depth: 2
Heading Rank: 1

Heading: The Origin: PMS

Text: 11 On June 23, 1977, Graphnet Systems, Inc., filed a section 214 application, requesting Commission approval of its proposal to convey inbound international messages from the gateway locations of the IRCs to recipients located in the hinterland. 1 The Commission's initial consideration of Graphnet's application did not address the merits of that proposal. Instead, noting that the application raises a significant number of policy issues, 2 Graphnet Systems, Inc., 67 F.C.C.2d 1059, 1061 (1978) (Memorandum Opinion and Order and Notice of Inquiry and Proposed Rulemaking) (PMS Notice), the Commission set for investigation and resolution four questions, including whether the domestic telegraph market should be opened to competition and what regulatory changes, if any, should follow the adoption of such a policy. Id. at 1070. The Commission also designated Graphnet's application for hearing but decided that its further consideration must await the Commission's conclusions in its proposed inquiry. 12 At the termination of this proceeding, the Commission issued its order of March 28, 1979. Graphnet Systems, Inc., 71 F.C.C.2d 471 (1979) (hereinafter PMS ). In that order the Commission determined that the public interest did not require the retention of WU as the sole source supplier of public message telegraph service (PMTS or PMS). 3 It recognized, however, that the operation of a competitive market would necessitate concomitant adjustment in the regulatory requirements imposed upon potential entrants in the PMTS market and in the regulation of those entrants subsequent to entry. Since its finding that multiple entry was in the public interest obviated any need for information pertaining to the public's need for new service, the Commission indicated that for PMTS applicants it would waive compliance with those portions of section 63.01 of its rules requiring the carrier's demonstration of public need for its facility, economic justification, and inadequacy of existing facilities. Id. at 522. Similarly, because competition might well eliminate the potential for cross-subsidization, the Commission found no compelling reason to discriminate against Western Union in its ability to provide service or to modify existing service. Id. at 524. Instead, it concluded, WU should be relieved of the requirements which were especially imposed upon it solely by virtue of its offering of PMTS. Accordingly, it promised to address these and similar questions in the near future. Id. 13 Following its adoption of an open-entry policy in the PMTS market, the Commission renewed its consideration of Graphnet's application. The Commission first determined that its new policy eliminated previously perceived policy barriers to Graphnet's entry. 4 It then determined that Graphnet's proposed service would enhance the nature and quality of international telegrams and telegraph message service, and that Graphnet's entry could help check (through competitive pressure and cost saving innovation) the rising costs of inbound message delivery. Id. at 528. For these reasons, the Commission concluded that an immediate grant of Graphnet's section 214 application was in the public interest. Id.