Opinion ID: 1256320
Heading Depth: 1
Heading Rank: 2

Heading: The Competitive Rate Authorization of AT & T of Va.

Text: AT & T of Va. filed its petition under Code § 56-481.1 (Supp.1985) for authority to set its rates competitively. The Commission conducted a hearing on this petition at the conclusion of the hearing on the applications of MCI, GTE Sprint, and others for certificates of public convenience and necessity, considering the criteria of Code § 56-481.1. MCI moved to continue the hearing on the application of AT & T of Va. The Commission denied the motion on July 20 and again on July 27. MCI never requested permission to file at a later date testimony of witnesses; GTE Sprint did so file, with permission of the Commission, the testimony of two witnesses. On appeal, MCI and GTE Sprint first contend that they were denied procedural due process because the hearing was held too soon to enable them to make adequate preparation. We disagree. The granting or denial of a motion for continuance is within the discretion of the Commission. The Commission could reasonably decide that all six applications for competitive rate-setting should be heard at or about the same time because the same parties could be expected to be interested. The nature of the criteria to be reviewed logically compelled that the six potential competitors be heard in a single proceeding or in related proceedings. MCI and GTE Sprint were pressing for expedited treatment of their applications and the Commission decided that expedited treatment of all the applications was justified. All interested parties were given the opportunity to present evidence and to cross-examine witnesses who testified for AT & T of Va. There has been no showing that the expedited hearing resulted in omission of material evidence from the record. See Lacks v. Commonwealth, 182 Va. 318, 324, 28 S.E.2d 713, 715 (1944); Anthony v. Commonwealth, 179 Va. 303, 307-10, 18 S.E.2d 897, 899-900 (1942). We hold that the record shows that MCI and GTE Sprint were not prejudiced by the expedited hearing and that the Commission did not abuse its discretion in denying the motion for a continuance and conducting the hearing as scheduled. MCI and GTE Sprint further contend that, in granting the petition of AT & T of Va. to set its rates competitively, the Commission misconstrued the applicable law and made an error of fact. MCI and GTE Sprint say that the Commission applied a presumption of automatic deregulation not authorized by Code § 56-481.1. The intent of the General Assembly, according to the appellants, was to deregulate AT & T of Va. on a gradual, step-by-step basis, but the Commission has shifted the burden of proof to those opposing the petition for immediate deregulation. Appellants complain that the result reached by the Commission, therefore, is different from the gradual deregulation approved in other cases by the Federal Communications Commission and the regulatory agencies of other states. This complaint is unpersuasive. The Commission considered and rejected the dominant carrier characterization of AT & T adopted in other jurisdictions, noting that there is no Virginia statutory authorization of such classification, and proceeded under the authority of Code § 56-481.1. The Commission made the determination that the services of AT & T of Va. will be provided on a competitive basis as required by Code § 56-481.1 before granting the petition to set rates competitively. There was no requirement in the statute that equal access had to be afforded appellants before the Commission could make the crucial determination. The Code requires not a determination that competition exists but a determination that rates will be set competitively. The Commission recognized that AT & T of Va. would be the only carrier providing service in some parts of Virginia. The Commission reasoned, however, that even in those areas AT & T of Va. must price competitively because of the threat of competition, the requirement of the Commission that AT & T of Va. not set rates higher in one area than another (deaverage), and the power of the Commission to reimpose full regulation. We perceive no error of law in the rationale of the Commission. Finally, appellants contend that the Commission made an error of fact in determining that the level playing field concept of fair competition exists before the equal access conversion is complete. Appellants stress their inferior access, which requires their customers to use many more dial numbers than customers of AT & T of Va., requires their customers with rotary dial telephones to use a tone generator, results in poorer transmission quality, and does not allow the carrier to offer special services, such as operator services and toll-free 800 dialing. [12] The Commission decision is entitled to the strong presumption of correctness and will not be set aside as unfair or unjust unless there appears to have been a clear abuse of legislative discretion. See Old Dominion Inc. v. Corp. Comm., 228 Va. 528, 532, 323 S.E.2d 123, 125 (1984); Commonwealth v. Portsmouth, 213 Va. 239, 241, 191 S.E.2d 220, 222 (1972). The Commission applied to the evidence the criteria suggested by Code § 56-481.1 and mandated by Rule 9. There was ample evidence to support the Commission's decision. Dr. Frank J. Alessio, an economic consultant, testified as an expert witness for AT & T of Va. In his opinion, the interLATA markets were sufficiently competitive to justify abandonment of the traditional regulation. Markets are contestable, he testified, if there is opportunity for open entry and exit. The threat of competition in areas served only by AT & T of Va. is sufficient to cause that carrier to act as a competitor. He noted the rapid growth in Virginia of MCI and GTE Sprint in spite of unequal access and was of opinion that some customers were willing to accept resulting inconvenience in dialing to obtain long distance service at a lower price. He acknowledged that if its petition were granted unconditionally AT & T of Va. could deaverage its rates in rural areas where it was the only carrier. The Commission ruled that effective competition did not require that more than one firm serve a market or that all companies provide identical service. The Commission was of opinion that to continue traditional regulation of AT & T of Va. while not regulating other intrastate carriers would maintain rates at unnecessarily high levels. Accordingly, the Commission found that the public interest would be served by removing the rates and tariffs of AT & T of Va. from regulatory control subject to the condition that AT & T of Va. not deaverage its rates geographically and subject to close monitoring by the Commission's Division of Communications. Appellants complain that the threat of competition, which influenced the Commission ruling, is not a factor authorized to be considered under Code § 56-481.1. The threat of competition, however, could be considered as another factor under the fourth criterion of the statute. Moreover, the crucial determination to be made by the Commission is whether rates will be competitively set. There was evidence in the record from which the Commission could determine that rates will be competitively set because of the reasonable likelihood of competition. With the reasonable conditions imposed upon AT & T of Va. by the Commission and the power of the Commission to reimpose strict regulation, we hold that the Commission's findings and ruling were not contrary to the evidence, did not constitute an abuse of legislative discretion, and will be affirmed. Record No. 841881  Affirmed. Record No. 841882  Affirmed.