U S West Communications, Inc. v. Wyoming Public Service Commission , 988 P.2d 1061 ( 1999 )

THOMAS, Justice,

dissenting, with whom GOLDEN, Justice, joins.

I can support completely the well-reasoned opinion of the majority except for that part that is found under the subtitle “Unreasonable Discrimination.” At that juncture, it seems to me that the majority opinion creates a fish with feathers or perhaps a bird with scales. In the initial ruling, under the subtitle “Competitive and Noncompetitive Services,” the majority correctly construes the statutory scheme to the end that Centrex Plus is “not an essential service as defined by statute and, therefore, is not subject to regulation as a noncompetitive-service.” Op. at 1067. The majority, however, then proceeds to hold that Centrex Plus is subject to regulation because the plan of U S West to discontinue offering that service to potential customers while honoring the terms of its existing contracts amounted to “unreasonable discrimination” contrary to the provisions of Wyo. Stat. Ann. § 37-15-404(a) (Lexis 1999), and for that reason became subject to the regulatory power of the Public Service Commission. As I understand the majority opinion, so long as there is a customer for the service, the Public Service Commission can regulate pursuant to Wyo. Stat. Ann. § 37-15-404(a).

In a different context, we have spoken of limitations upon the regulatory authority of the Public Service Commission in this way:

“An administrative board has no power or authority other than that particularly conferred upon it by statute or by construction necessary to accomplish the aims of the statute.” Tri-County Electric Association, Inc. v. City of Gillette [Wyo.], 525 P.2d [3] at 9 [ (1974) ].

See also 1 A. Priest, Principles of Public Utility Regulation, at 9-10 (1969).

We then look to the statutes to decide whether the legislature granted to PSC the authority it purported to exercise in issuing its order to Mountain Bell. Section 37-2-112, W.S.1977, grants to PSC the “general and exclusive power to regulate and supervise every public utility” within this state in accordance with the statutes. Section 37-2-127, W.S.1977, further provides:

“In addition to the powers herein specifically granted, the commission shall have such implied or incidental powers as may be necessary and proper, effectually to carry out, perform and execute all the power so granted.”

These broad powers can be exercised only over a public utility, however. Public Service Commission v. Formal Complaint of WWZ Company [Wyo., 641 P.2d 183 (1982) ], supra; § 37-2-112, W.S.1977. The definition of telephone service as a “public utility” is:

“Any plant, property or facility for the transmission to or for the public of telephone messages, for the conveyance or transmission to or for the public of telegraph messages, or for the furnishing of facilities to or for the public for the transmission of intelligence by electricity; * * § 37-l-101(a)(vi)(B), W.S. 1977.

The rule of strict construction dictates that any jurisdiction in PSC is limited to those functions of Mountain Bell that are “to or for the public,”

The conclusion that the legislature did not intend to extend to PSC jurisdiction over services which are not furnished to or for the public is consistent with generally accepted jurisdictional limits on regulatory bodies. We have espoused the general proposition that a utility service may have both public and private functions, and while it is subject to regulation in matters of public function, it is not when it operates in its private mode. State Board of Equalization v. Stanolind Oil and Gas Company, 54 Wyo. 521, 94 P.2d 147 (1939). See also Southern Pacific Company v. Arizona Corporation Commission, Ariz., [98 Ariz. 339] 404 P.2d 692 (1965); City of Phoenix v. Kasun, 54 Ariz. 470, 97 P.2d 210 (1939); Associated Mechanical Contractors of Arkansas v. Arkansas Louisiana Gas Co., 225 Ark. 424, 283 S.W.2d 123 (1955); University Hills Beauty Academy, Inc. v. Mountain States Telephone and Telegraph Company, 38 Colo.App. 194, 554 P.2d 723 (1976); Oklahoma Gas and Electric Company v. Corporation Commission, Okla., 543 P.2d 546 (1975); 64 Am.Jur.2d Public Utilities § 1, at 550 (1972); 73B C.J.S. Public Utilities § 66, at 314-315 (1983).

Matter of Mountain States Tel. and Tel. Co., 745 P.2d 563, 569 (Wyo.1987).

In this instance, the majority clearly articulates a legislative intention to withdraw Centrex Plus from the regulatory authority of the Public Service Commission. Applying the rule of strict construction, a service that is withdrawn from regulatory authority is no different for jurisdictional purposes from a service that is not furnished to or for the public. In either instance, the legislative intent to foreclose regulation must be recognized. I would rule that the legislature, in this situation, clearly intended to place Cen-trex Plus beyond the pale of regulation by the Public Service Commission.

I am confounded (in the fullest meaning of that word), as will be the legislature and the vast majority of the public, other than the intervenors, by the notion that the legislature clearly intended to remove a particular service from the realm of regulation, but also intended that it should be subject to regulation by the Public Service Commission. We should recognize that the intervenors in this case are different from the existing customers because they are not consumers in the classic sense. They are simply brokers who desire to purchase for resale rather than use Centrex Plus for themselves.

I have a clear grasp of the motivation of the intervenors. They want to be able to resell the Centrex Plus service to their customers without assuming the burden of investing capital or development into creating the service. Their vision of competitive opportunity is that they are entitled to rely upon U S West’s capital investment and its development effort to lure U S West customers away and into the customer base of the intervenors without having to devote the effort and capital that are the usual concomitants of competition. We are forcing U S West into exactly the subsidization of competitors that we appear to criticize in the majority opinion. Op. at 1067. Any theory of a free market economy must eschew this concept of competitive enterprise.

The only alternative available to U S West is breach of its existing contracts with its customers. This causes me to believe that the Public Service Commission is engaging in the kind of meddling in contractual affairs that we criticized in Union Telephone Co., Inc. v. Wyoming Public Service Com’n, 910 P.2d 1362 (Wyo.1996). Certainly, under the majority opinion, U S West must either provide a service to its potential competitors for resale at more favorable terms than U S West can offer the service for, or it must breach existing contracts. The legislature could not have intended to impose that choice.

I close with a reminder of the legislative purpose of the Wyoming Telecommunications Act of 1995. Wyo. Stat. Ann. § 37-15-101— 37-15-501 (Lexis 1999). The statute provides:

It is the intent of this act to ensure essential telecommunications services are universally available to the citizens of this state while encouraging the development of new infrastructure, facilities, products and services. The provision of telecommunications services has been developed and regulated under a monopolistic environment. This act recognizes the increasingly competitive nature of the telecommunications industry and the benefits of competition. It is the intent of this act to provide a transition from rate of return regulation of a monopolistic telecommunications industry to competitive markets and to maintain affordable essential telecommunications services through the transition period, and the provisions of this act shall be construed to achieve those goals.

Wyo. Stat. Ann. § 37-15-102. I see little in the Public Service Commission order that will encourage “development of new infrastructure, facilities, products and services.” Centrex Plus has been removed from the “monopolistic environment.” Instead, the effect of permitting the regulation under the guise of Wyo. Stat. Ann. § 37-15-404(a) is to afford an unfair advantage to the interve-nors, which ultimately must have a deleterious effect on competition. The contradiction encompassed in the majority opinion is bad public policy in light of the purpose of the Wyoming Telecommunications Act of 1995.

I would reverse the aspect of the Public Service Commission order that it justifies by a finding of unreasonable discrimination in violation of Wyo. Stat. Ann. § 37-15^104(a). I would hold that since the service is not subject to regulation as a noncompetitive service, it was withdrawn from any regulatory jurisdiction of the Public Service Commission.