Opinion ID: 1721338
Heading Depth: 1
Heading Rank: 2

Heading: Must a Land Line Telephone Company Seek Certification under the Statute?

Text: Southern Message maintains that the district court was correct both in finding the certification under R.S. 45:1503(C) applicable and in finding that that standard had not been met. Cameron argues that because it is a land line telephone company it is exempt from any certification requirement under the radio common carrier statute. The Commission apparently also takes the position that certification is not necessary under that statute, and claims that it retains the power to regulate Cameron under its general authority over the activities of telephone companies. [2] We must delineate the proper scope of the exemption contained in La.R.S. 45:1501 to determine whether the Commission properly granted the certificate. Considering the history and purpose of the statute, we hold that the exemption applies only to land line telephone companies operating within their geographical territory. Consequently, telephone companies wishing to offer radio common carrier service outside their land line service areas in an area where another radio common carrier already provides such service must make the regular showing required by La.R.S. 45:1503(C). La.R.S. 45:1501 provides in pertinent part: C. The term radio common carriers when used in this Chapter includes every corporation, company, association, partnership and persons and lessees, trustees, or receivers, appointed by any court whatsoever owning, operating or managing a radio common carrier or public for hire radio service engaged in the business of providing a service of radio communications between mobile and base stations, between mobile and land stations, including land line telephones, between mobile stations or between land stations, but not engaged in the business of providing a public land line message telephone service or a public message telegraph service. D. Notwithstanding any provisions of R.S. 45:781 through 45:790 inclusive, or any provision of this Chapter, the term radio common carrier as used in this Chapter shall not be construed to mean a company operating under the provisions of Title 45, Chapter 8, of the Louisiana Revised Statutes, and no such radio common carrier shall have any of the powers, rights or duties provided for and prescribed by said Title 45, Chapter 8. The radio common carrier statute was enacted in 1968. At approximately the same time, similar statutes were enacted in other states. See, e.g., Fla.Stat.Annot. § 364.41 (1968) (repealed by § 3, ch. 76-168, Laws of Florida (1976)); Ga.Code §§ 46-6-1 to 46-6-16 (1982 & Supp.1989); Kans.Stat.Annot. §§ 66-1,143 to 66-1,145a (1985 & Supp.1989); N.C.Stat. §§ 62-119 to 62-124 (1982); 17 Okla.Stat.Annot. §§ 201-205 (1986) (amended and partially repealed by 1987 Okla.Laws c. 16); S.C.Code §§ 58-11-10 to XX-XX-XXX (1977). Although the origins of these statutes are obscure, their purposes can be inferred from the development of the radio common carrier industry and the regulatory reaction to that development. Radio common carriers offer two primary services, mobile radio telephone service (two-way service) and pager service (one-way service). As radio technology developed in the 1960s, the radio common carrier business began to grow. The Federal Communications Commission traditionally awarded licenses to transmit on radio channels, and it thus controlled access to the radio channels used by radio common carriers. The FCC left regulation of market entry and rates to the individual states, however, because of the primarily intrastate nature of the vast majority of the communications transmitted by radio common carriers. Perceiving a need for regulation of rates and entries in the radio common carrier industry, state utility commissions began to regulate these companies under general statutes empowering them to regulate either public utilities or telephone companies. By asserting jurisdiction over these companies, the utility commissions were able to regulate not only market entry and rates, but also interconnection with land line telephone companies. See American Bar Ass'n, Annual Report of Section of Public Utility Law 174-75 (1965); American Bar Ass'n, Annual Report of Section of Public Utility Law 169-70 (1964). Despite these initial moves to assert regulatory jurisdiction over radio common carriers, there continued to be some concern among utilities commissioners over whether these companies were public utilities or telephone companies within the meaning of their respective state statutes. As a result of this concern, the National Association of Railroad & Utilities Commissioners proposed a model act for the regulation of radio common carriers. [3] See American Bar Ass'n, Annual Report of Section of Public Utility Law 177 (1966); see also Mobilfone of Northeastern Pa. v. Pennsylvania Pub. Util. Comm'n, 40 Pa. Cmwlth. 181, 397 A.2d 35 (1979) (noting the uncertainty concerning the regulatory status of radio common carriers during the 1960s and 1970s). The commissioners' concerns proved to be well-founded. In some states where these companies were regulated as public utilities, state courts ultimately held that radio common carriers were not public utilities. This deprived the utility commissions of regulatory jurisdiction over these companies. See, e.g., Illinois Consol. Tel. Co. v. Illinois Commerce Comm'n, 95 Ill.2d 142, 69 Ill.Dec. 78, 447 N.E.2d 295 (1983); Appeal of Omni Communications, Inc., 122 N.H. 860, 451 A.2d 1289 (1982); but see In re Williams, 626 P.2d 564 (Wyo.), cert. denied, 454 U.S. 896, 102 S.Ct. 394, 70 L.Ed.2d 211 (1981). In other states, the utility commissions proceeded under the theory that radio common carriers were telephone companies; this met with varying degrees of success as well. Compare Radio Tel. Comm. v. Southeastern Tel. Co., 170 So.2d 577 (Fla.1965); RAM Broadcasting of Michigan, Inc. v. Michigan Pub. Serv. Comm'n, 113 Mich.App. 79, 317 N.W.2d 295 (1982); and Radio Relay Corp. v. Public Utils. Comm'n, 45 Ohio St.2d 121, 341 N.E.2d 826 (1976) (all finding radio common carriers not telephone companies) with In re Digital Paging Systems, Inc. v. Public Serv. Comm'n, 46 A.D.2d 92, 360 N.Y.S.2d 931 (1974) (radio common carrier company a telephone corporation) and State ex rel. Util. Comm'n v. Two Way Radio Serv., 272 N.C. 591, 158 S.E.2d 855, 863 (1968) (radio common carrier service was telephone service). Even in those states where courts upheld the exercise of jurisdiction by the commissions, the classification of radio common carriers as telephone companies was perceived to have several detrimental effects. The most important of these was that regulated competition was felt to be in the public interest in the radio common carrier industry, while most statutes governing telephone companies were premised upon a policy of regulated monopoly. This could result in the existence of a land line company in a particular area precluding the certification of a radio common carrier company, even though the commission might feel that regulated competition would serve the public necessity and convenience more appropriately than a regulated monopoly. See State ex rel. Utilities Comm'n v. Two Way Radio Service, supra; see also In re Mobile Radiotelephone Corp., 68 P.U.R.3d 57 (N.C. Util. Comm'n 1967). In New York, a conclusion that radio common carrier companies were telephone corportions resulted in the necessity of Public Service Commission approval of changes in ownership of the companies. In re Digital Paging Systems, Inc. v. Public Serv. Comm'n, supra. Finally, there was some concern that by equating radio common carrier companies with telephone companies, the radio common carriers would be entitled to other rights of telephone companies such as the power to condemn private property, as was the case in Williams v. Hyrum Gibbons & Sons Co., 602 P.2d 684 (Utah 1981). In the meantime, some land line telephone companies had begun offering radio common carrier services, primarily mobile telephone service, to their existing customers as part of an attempt to provide a full range of communications services to their customers. This development raised the question of whether additional certification was necessary for a land line company to offer this service to its existing customers. Some courts approved the conclusion that a land line company's existing certificate of public convenience and necessity implicitly included the authority to furnish mobile telephone service within its land line service area. See, e.g., Radio Relay Corp. v. Illinois Comm. Comm'n, 69 Ill.2d 95, 12 Ill.Dec. 724, 370 N.E.2d 528 (1977); State ex rel. Util. Comm'n v. Two Way Radio Serv., supra. One court concluded that a land line company may offer such service within its certificated area, but it must first have its rates approved like any other radio common carrier. See Able Communications v. South Car. Pub. Serv. Comm'n, 290 S.C. 409, 351 S.E.2d 151 (1986). The offering of these services could be regulated under existing statutes providing for the regulation of telephone companies, so there was no need for these companies to be considered radio common carriers. If radio common carriers were considered telephone companies, however, there existed the possibility that a land line company would be unable to offer full range service to its customers if there were a previously certificated radio common carrier operating in its geographical service area. This situation arose in at least one case. See Industrial Communications Systems v. Public Utils. Comm'n, 22 Cal.3d 572, 150 Cal. Rptr. 13, 585 P.2d 863 (1978). Considering the potential difficulties, it benefited neither land line companies nor radio common carriers to be equated with one another within the land line company's service area. Thus the perceived ideal situation was for land line telephone companies to offer radio common carrier services within their geographical service areas pursuant to their certificates of public convenience and necessity as telephone companies. In addition to these services offered by telephone companies, one or more radio common carriers could be certificated to compete in the area. A telephone company could not qualify as a radio common carrier for the purposes of preventing entry by a qualified radio common carrier, and likewise a radio common carrier could not prevent a telephone company from offering such services within its geographical service area. See, e.g., RCC of Virginia v. Roanoke & Botetourt Tel. Co., 223 Va. 342, 288 S.E.2d 478 (1982). We conclude that the statutes cited above, including Louisiana's, were enacted to ensure this result and to forestall some of the jurisdictional and regulatory problems presented where no explicit regulatory authority existed. The Public Service Commission previously followed an interpretation consistent with this purpose. In Cameron Telephone, supra, a telephone company wished to construct a transmitter within its geographical area, but at a location that would allow it to reach customers outside its area. In discussing the regulatory background of the radio common carrier industry, we noted: Because land line telephone companies are specifically excluded from the provisions of the radio common carrier statute, the commission has not required land line telephone companies to request a certificate of public convenience and necessity to construct or operate land mobile communication facilities within their geographical area. However, the commission has indicated that where a land line telephone company seeks to operate land mobile communications equipment outside of its geographical area (for example, a south Louisiana telephone company intending to offer radio services in north Louisiana), a certificate from the commission would be required. 440 So.2d at 697. The commission in that case resolved the conflict by requiring the land line companies to construct their transmission facilities adjacent to the location of their telephone exchanges in order to avoid certification as radio common carriers. This ensured that most of the potential customers within range of the transmitters would be their own telephone customers. We went on to state: The statute on its face deals only with radio common carriers. It does not limit in any way the operations of land line telephone companies. However, the commission has not accepted the statute as completely exempting land line telephone companies. Rather, the commission has interpreted the statute as exempeing land line telephone companies from the certification requirements only when the company is dealing essentially with its own customers, that is, when operating facilities within its geographical boundaries. This view has been consistently held by the commission, as conceded by all parties to this litigation. This interpretation is a reasonable one, since where a land line telephone company seeks to operate outside its boundaries, it is no longer advancing the public policy of providing a full range of communications services to its customers. Therefore, the public policy evident in the radio common carrier statute against unnecessary competition and duplication of services supersedes the literal exemption granted to land line telephone companies. For this same reason, the commission has required that land line companies' transmitting towers may not be located at the edge of the land line boundary without certification. By limiting the location of uncertified towers, the commission has sought to provide adequate protection for a radio common carrier serving the area outside that land line company's boundaries. 440 So.2d at 702. In Order No. U-16526 the commission reversed this long-standing interpretation of the statute. In so doing, the commission erred. The purpose of the radio common carrier statute, as indicated above, was to limit the number of radio common carriers within each particular service area. The assumption of the statute was that each land line telephone company could, if it saw fit, offer such services to its customers as part of a full range of communications services. Therefore, there would normally be one radio common carrier and one telephone company in each area offering paging and mobile telephone service. This is not the case in the present situation, where a land line company seeks to extend its pager service completely outside its geographical area. The effect here would be to have two businesses offering only radio common carrier service. There are no mystical qualities attached to a company's status as a land line company. Outside its geographical service area, a land line company seeking to offer radio common carrier service is practically indistinguishable from any other corporation seeking to offer the same service. Cameron Telephone cannot offer customers in Lake Charles a full range of communications services; insofar as it operates outside its geographical land line area it is not a land line telephone company. Cameron can offer its new customers nothing more than pager service. The statute contemplates such one-dimensional competition only when the party seeking to establish a new service has met the statutory requirements for certification. Our conclusion that the statute requires land line companies seeking to build transmitter facilities outside their geographical service areas to seek certification is also supported by the commission's own previous interpretation of the statute. The interpretation placed upon an ambiguous statute by the agency charged with its enforcement, when adopted soon after the enactment of the statute and adhered to over a long period of time, can be persuasive as to the proper interpretation of the statute. Traigle v. PPG Industries, 332 So.2d 777 (1976); Roberts v. City of Baton Rouge, 236 La. 521, 108 So.2d 111 (1958) (on rehearing); see also 2A N. Singer, Sutherland Statutory Construction § 49.03 (4th ed. 1984). The agency's interpretation is even more persuasive where, as here, it represents that agency's initial attempt at interpreting and regulating a new statutory concept. 2A Sutherland Stat. Constr. § 49.05, at 362. The legislature is presumed to know of the construction adopted, and the long continuance of the interpretation without any sign of legislative disapproval warrants the adoption of that construction by the courts. Washington v. St. Charles Par. Sch. Bd., 288 So.2d 321 (La.1974); Dominion Land Co. v. Stark, 156 La. 124, 100 So. 244 (1924). As noted in Cameron Telephone, supra, the commission has always interpreted the exclusion of land line companies from certification requirements as being limited to those situations in which the land line company seeks to serve primarily its own customers. Since the commission was at least somewhat familiar with the radio common carrier industry, both at the time the statute was enacted and thereafter, its interpretation was presumably based upon a combination of its understanding of the needs of the public and of the legislative intent. This contemporaneous construction, adopted shortly after the statute was enacted and adhered to ever since, is more persuasive than the new construction placed on the statute by the commission, some twenty years later. The commission argues that it has changed its interpretation of the statute to reflect changes in the radio common carrier industry, and that it is now pursuing a policy of greater competition in the industry. This argument, however, does not provide a persuasive reason for allowing uncertificated market entry by land line telephone companies alone. If greater competition is required, then why must such competition come solely from the land line telephone companies? Further, and more importantly, while the commission has some policy-making powers, it must first and foremost enforce the policy decisions made by the legislature. In this area, as with other common carriers, the legislature has consciously chosen a policy favoring regulated monopolies, because it believes that the public interest is better served by avoiding the costs of unrestrained competition and that public convenience and necessity requires that there be no wasteful duplication of services. Southern Message Service v. Louisiana Pub. Serv. Comm'n, 370 So.2d 874 (La. 1979). The commission may well be correct in its assertion that Louisiana's consumers would be better served by more competition in the radio common carrier industry; we note that at least one other state has deregulated radio common carriers. See 17 Okla.Stat.Annot. § 200 (Supp.1989). In the face of clear legislative direction to the contrary, however, that decision is for neither the commission nor this court to make. If the industry is to be deregulated, then such deregulation must come from the legislature. Until this occurs, we and the commission are bound to enforce the statutes as written.