I concur in the judgment of reversal, but do not agree with the reasoning *128advanced by the majority, nor do I feel that a judgment should be rendered in conformity with such views.
It is my considered opinion that the majority view is a departure from the rule established in the Dinuba case (County of Tulare v. City of Dinuba, 188 Cal. 664 [206 P. 983]), in that it seeks to employ the capital investment method of apportionment beyond its limitations.
The same general principles which I enunciated in my dissent in the Southern Counties Gas case (County of Los Angeles v. Southern Counties Gas Co., post, p. 129 [266 P.2d 27]) should be applicable to the instant ease, since in both cases the municipality granting the franchise is entitled to 2 per cent of the gross annual receipts arising from the “use, operation, or possession” of the franchise. There are, however, a few problems in regard to telephone revenues which are not present in cases involving gas and electric companies. One such problem has to do with the apportionment of toll receipts. It is true that part of the tolls collected in an area are for communication services rendered in other areas, where the message is transmitted and received; however, inasmuch as messages are also sent into and received in the local area without any revenues being collected there it would seem that the factors would balance each other out. Thus, by attributing all local tolls collected in an area to the gross receipts of that area, we are giving credit for some services rendered elsewhere; but this is counterbalanced by the fact that an equal proportion of toll calls are probably transmitted or received by the local area without any increase to its gross receipts.
In the case at bar the gross receipts (including toll receipts) collected by the telephone company within the extended area should be used as the starting point in our formula. These gross receipts should be apportioned between the distribution system and other systems (such as production facilities) so as to ascertain the proportion of gross receipts- attributable to the entire distribution system. These gross 'receipts of the entire distribution system should then be apportioned between the public and private franchises on a mileage basis. Since 43.15 per cent of the mileage in the extended area is on public property within the Old City, 43.15 per cent of the entire distribution receipts should be allocated to the fund from which the 2 per cent is to be taken.
For these reasons, and those given in my dissent in the Southern Counties Gas case, post, p. 129 [266 P.2d 27], *129I feel it would be a grave error to follow the formula established by the majority. Such a formula is not consistent with the Dinuba case nor with the best interests of the general public.
Plaintiff and appellant’s petition for a rehearing was denied February 17, 1954. Carter, J., was of the opinion that the petition should be granted.