No. 81-512
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
INTERMOUNTAIN TELEPHONE AND
POWER COMPANY
Petitioner and Appellant,
DEPARTMENT OF PUBLIC SERVICE REGULATION,
MONTANA PUBLIC SERVICE COMMISSION,
Respondent and Respondent.
.1 from: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone
Honorable Robert Wilson, Judge presiding.
Counsel of Record:
For Appellant:
Peterson, Schofield & Leckie, Billinqs, Montana
Kenneth D. Peterson argued, Billings, Montana
For Respondent:
Calvin K. Simshaw argued, Helena, Montana
Crowley Law Firm, Billings, Montana
Submitted: September 10, 1982
Decided: October 7, 1982
Mr. Frank 5. Morrison, Jr., delivered the Opinion of the
Court.
On April 2, 1980, the Public Service Commission (PSC)
conducted a public hearing in Custer, Montana, concerning
the quality of telephone service being provided to the area
by Intermountain Telephone and Power Company (Intermountain).
The PSC issued a final order October 27, 1980, stating that
the service was not "reasonably adequate." Intermountain
petitioned the District Court of the Thirteenth Judicial
District for judicial review of that order. The District
Court affirmed the order of the PSC August 12, 1981, and
issued a final judgment to that effect September 15, 1981.
Intermountain now appeals that judgment. The District Court
issued a stay of its judgment pending this appeal.
For a number of years, the PSC received complaints from
the Custer area residents concerning the poor quality of
telephone service provided by Intermountain. These complaints
were communicated by PSC to Intermountain's management.
Service did not improve. The complaints continued.
The PSC began a formal investigation, resulting in a
public hearing in Custer on April 2, 1980. More than twenty
Custer residents testified, along with Norman ??ills, Intermountain's
spokesman and a representative of Mountain Bell.
Testimony by the residents indicated that there were
numerous problems with the telephone service. ~scertaining
whether a phone worked or not was described as similar to
playing Russian roulette. The weather affected the clarity
of the connection. Incoming calls often did not ring.
Wrong connections occurred. Long-distance service was
sometimes non-existent for extended periods of time. ~elephone
lines were draped over posts and on the ground in several
instances. Repairs often took several days as there was no
resident repairman in Custer.
In respcnse, Norman Mills, owner of Intermountain, --
testified that fifty-seven miles of long-distance wire was
the responsibility of Mountain Bell, not Intermountain and
that Mountain Bell failed to relay messages concerning
telephone problems until several days after they were received.
His personal efforts, and those of Bell operators, to duplicate
the problem of incoming calls not ringing through to subscribers,
were unsuccessful. Some telephone wire was in need of
replacement; however, no funds existed with which to replace
it. The switchboard had been updated and was now capable of
handling one hundred more calls than before. Further improve-
ments would have to await more funds. He was nonconnittal
on the desire of the Custer residents to have a full-time
serviceman located in Custer.
Mountain Bell representatives acknowledged joint
responsibility for the fifty-seven miles of long-distance
telephone wire. They testified that propositions to replace
the wire had been conveyed to Intermountain, but that Inter-
mountain refused to contribute its share of money to finance
the repairs.
Following the hearing and prior to issuing its order,
the PSC sent an engineer to Custer to test the phones. In
his report, the engineer stated he "drove to the last
subscriber's house on most of the rural lines and found the
quality to be normal, and got a dial tone immediately and
talked to the operator in Billings." Individuals reported
to him that although their phone service was presently okay,
it had been inadequate in the past. Two phone lines which
were "bad" were being repaired that day. Phone wires
lying on the ground were being replaced by underground
cable. The inside of the exchange was "not as neat as I
have normally seen elsewhere; however, with further install-
ations and rewiring in progress and in evidence, I would
wish to inspect the premises at a later date after all
reconstruction is complete."
On the basis of the above-discussed facts, the PSC
issued its final order, which the District Court affirmed.
In its appeal, Intermountain presents the following issues
for review:
(1) Whether the order of the PSC was issued within the
authority of the PSC?
(2) Whether the order was supported by the evidence on
the record?
Section 69-3-102, MCA, gives the PSC supervision over
and regulation of public utilities. Section 69-3-201, MCA,
mandates that every public utility provide "reasonably
adequate service and facilities." If the PSC is to super-
vise utilities adequately, it must be able to ascertain
whether or not a utility is providing "reasonably adequate
service." Therefore, the PSC was within its authority when
it issued the October 27, 1980, order stating that Intermountain
was not providing "reasonably adequate service."
Twenty area residents testified regarding the poor
quality of telephone service provided to them. One PSC
engineer testified that he found good telephone service to
exist the one day he was in the area. Clearly, the findings
of the PSC regarding the quality of telephone service were
supported by substantial credible evidence, as required by
section 2-4-704 (2)(e), MCA.
Plontana has no statute providing for the licensing,
franchising or certifying of telephone companies wherein
those companies are granted an exclusive right to serve a
certain area. There is also no exclusive property right
under the Territorial Integrity Act of 1971, as that Act
applies to suppliers of electrical service, not telephone
service. Section 69-5-103, MCA.
Telephone service competition is basically free and
open in Montana, except so far as telephone cooperatives are
concerned. Section 35-18-105(2), MCA, prohibits telephone
cooperatives from duplicating "reasonably adequate service"
already in existence. But, if no "reasonably adequate
service" is being provided, telephone cooperatives may
provide service to that area.
The language in the order of the PSC stating "there
exists no provision of Montana law that would prohibit
another telephone company, whether private or cooperative,
from providing telephone service to residents of the Custer
area, . . " is merely dictum. Private telephone companies
are free to compete at any time. Telephone cooperatives may
compete when no "reasonably adequate service" is available.
The order of the PSC is affirmed. *
We Concur:
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Chief Justice
Justice Daniel J. Shea did not participate in this decision.