State Ex Rel. Utilities Commission v. Southern Bell Telephone & Telegraph Co.

Justice Exum

dissenting in part and concurring in part.

I dissent from so much of the majority opinion which holds that the Utilities Commission correctly concluded that yellow page advertising was an integral part of providing adequate telephone service so that revenues from this advertising are properly considered in setting rates for the utility. Even if such a conclusion now constitutes good rate making policy because, as the Commission found, Southern Bell presently has a monopoly on such advertising, the monopoly, if it exists, is de facto and not de jure. This Court, concededly in a different context, nevertheless held that “the business of carrying advertisements in the yellow *551pages of its directory is not a part of a telephone company’s public utility business.” Gas House, Inc. v. Southern Bell Tel. Co., 289 N.C. 175, 184, 221 S.E. 2d 499, 505 (1976). This statement is not dictum as I read the case; it is a necessary conclusion to the decision in the case sustaining Southern Bell’s limitation of liability clause in a contract for yellow page advertising. To “overrule” this language in Gas House is, in effect, to overrule the decision in that case. I cannot subscribe to the majority’s rather cavalier attitude to precedents of this Court with which it now disagrees. If such advertising is not a part of the company’s public utility business, as we held in Gas House, then it is not subject to regulation and revenues derived from it are not properly considered in setting rates for the public utility services which the company provides. G.S. 62-3(23)d.

I also disagree with the majority’s conclusion that the question whether the utility’s rate of return allowed by the Commission was so low as to be confiscatory is not moot. Because our ruling in its favor on this question could provide no relief for the utility in this proceeding, I think it is moot under Utilities Commission v. Southern Bell Tel. Co., 289 N.C. 286, 221 S.E. 2d 322 (1976). Even if moot, this Court may, if it chooses, consider the question on the basis that it is a question of general importance, likely to recur in future rate making cases, and deserving of prompt resolution. Leak v. High Point City Council, 25 N.C. App. 394, 213 S.E. 2d 386 (1975); Matthews v. Dep’t of Transportation, 35 N.C. App. 768, 242 S.E. 2d 653 (1978); see also Netherton v. Davis, 234 Ark. 936, 355 S.W. 2d 609 (1962); Walker v. Pendarvis, 132 So. 2d 186 (Fla. 1961); Payne v. Jones, 193 Okla. 609, 146 P. 2d 113 (1944); 5 CJS, Appeal and Error, § 1354(1) (1958).

The utility argues that because the rate of return allowed on its equity is less than that which it earns on its bonds, the equity rate of return is confiscatory. This kind of question is one properly addressable by this Court even if our answer to it can provide no relief to the utility in this proceeding. I agree with the majority’s decision to take up the question and with the majority’s conclusion that the rate of return on equity was not confiscatory simply because the rate was lower than the yield on the utility’s bonds. I further agree there was ample evidence in the record to support the rate of return allowed by the Commission.