The foregoing principle appears in various forms in different cases. It is sometimes said that a certificate for a new service will not be granted unless a public need for the service appears. In other cases it is said that where there is an outstanding certificate for a service another certificate will not be granted unless it is shown that the existing service is inadequate. This principle, if applicable to the present controversy, would mean that, unless there is a public need for another service, or unless the service being rendered by Atwood is inadequate, another certificate to another carrier for service between Lexington Park and Washington should not be granted. If the traffic between those points is enough to preserve the financial stability of only one carrier, the presence of two carriers and the competition between them would inevitably result in the deterioration of service, to the injury of the public.
The second basic principle involved in this controversy is that if economies in operation are possible the public interest requires such economies. The public interest is not only in efficient service but is also in reasonable rates for that service. So, if the carrier is operating over an established route, but it appears that it can render the same service or a better service by a shorter or cheaper route, the public interest requires the more economical operation.
In the practical administration of regulatory measures the two foregoing principles must frequently be adjusted one to the other. Thus the distinguishing terms 'new service' and 'alternate route' have been developed. It is said, in cases, that to obtain a certificate for a new service public need must be established; and it is said that in applying for a certificate for an alternate route it is sufficient to establish operating economies. But these short forms of expression do not eliminate the full applicability of the general principles. Thus, in Interstate Commerce Commission v. Parker,
upon which the opinion and decision in American Trucking Associations v. United States, supra, were based, the Court pointed out that the Commission made these findings: 'The motor-carrier service proposed by applicant, operated in close coordination with the railroad's service, will effectuate a reduction in cost, and will result in an increase in efficiency in the transportation over the routes herein considered, which will inure to the benefit of the general public. Furthermore, it does not appear that the restricted service would be directly competitive or unduly prejudicial to the operations of any other motor carrier. . .' The Court emphasized the latter phase of the situation; for example, it said:
'The public is entitled to the benefits of improved transportation. Where that improvement depends in the Commission's judgment upon a unified and limited rail-truck operation which is found not 'unduly prejudicial' to motor carrier operations, the Commission may authorize the certificate even though the existing carriers might arrange to furnish successfully the projected service. (Italics supplied.) This feature of the Commission's determination is one of the underlying factors in the doctrine of that case, as the later decision in American Trucking Associations makes clear.
The Commission has applied this doctrine many times. In Greyhound Corp. Extension of Operations- Bangor, Maine,
the Commission had before it an application by Greyhound for a certificate to operate between Belfast and Bangor over a shore route, it already having a certificate to operate between the same two points over an inland route. Other carriers, principally the Maine Central, operated over the shore route. It was conceded that the operations of the existing carriers over the shore route were adequate. Greyhound urged that the proposed operation would effect substantial operating economies. To that contention Maine Central replied that operating economies for the applicant do not, alone, show a public need for the proposed service, and it emphasized that the applicant had failed to show that the proposed operation would not have an adverse effect upon its (Maine Central's) revenues. The Commission referred to the Dixie Ohio Exp. Co. case
and said: 'Following the principle in this case, we are of the opinion that there is sufficient evidence of public convenience and necessity to warrant a grant of authority to operate over the proposed routed, providing such operations will not impair the revenues of the existing motor carriers.'
Examining the evidence the Commission found that during the summer months an extension of applicant's service over the shore route would not impair the revenues of Maine Central, but that during the balance of the year the applicant's operation would so intensify the competition for such little traffic as existed as to deprive Maine Central of traffic needed to sustain its then-present operations. Accordingly the Commission authorized a certificate to Greyhound for operation during the summer months only.
In Schultz Common Carrier Application,
the Commission said: 'Generally, we have held that where the authorization of an alternate route not involving service to additional points, will enable a carrier to render a more expeditious and economical service without adversely affecting the rights of any competing carrier, and thus more adequately serve the public, such authority should be granted.' In Axley Extension of Operations- Murphy, N.C.,
the Commission specifically found that 'There is no showing that the granting of the application would be likely to jeopardize in any degree the quality of existing services * * *.' In Motor Exp., Inc., Extension- U.S. Highway 71,
the Commission had before it an application by an existing carrier for the use of an alternate route, and it summarized the rule thus: 'Where the granting of an alternate route, not involving service to additional points, will enable a carrier to render a more expeditious and economical service, and thus more adequately serve the public, without adversely affecting the rights of any competing carrier, such authority should be granted.'
The case of Cooper's Exp., Inc., Extension- Alternate Route
contains a carefully stated summary of the applicable rules. The Commission said: 'We have consistently recognized a distinction between the measure of proof required to sustain the granting of an application seeking authority to improve an existing and competitively effective service and one seeking authority to institute a new service. In determining these so-called alternate route applications, the essential issue presented is whether applicant is actually engaged in the transportation of traffic, in substantial volume, between the termini of the proposed alternate or direct route and is at present in a position effectively to compete with other carriers for such traffic, or whether the new route will enable applicant either to institute a new service not theretofore conducted, or to institute a service so different from that theretofore provided as materially to alter the competitive situation to the injury of existing carriers. In the case of the former, we are justified in granting the authority sought solely upon proof that the proposed operation would result in operating economies, which, although primarily a benefit to the applicant, result in an indirect benefit to the public through the medium of more efficient service. In the latter case, however, where the use of the alleged alternate route would amount to the institution of a new service, or would provide applicant with a substantial competitive advantage not theretofore enjoyed, we must insist upon definite proof of a need for the proposed new service.'
The applicant in that case had for a number of years been transporting freight between Boston and New York through Lawrence, Massachusetts. It applied for authority to operate over a direct route from Boston to Worcester and thence to New York. The Commission found that the applicant could not be considered a new carrier, that the volume of traffic which it transported between New York and Boston had been substantial, and that the reduction in running time afforded by the proposed new route would not materially change the competitive situation to its advantage. Upon that basis it granted the application.
Upon all the foregoing it seems quite clear to us that where applications are made for alleged alternate routes the effect of the proposed operation upon existing carriers already using the proposed route is a material factor for consideration.
The Commission is the final arbiter of the public interest, and the function of a reviewing court is limited.
At the same time, as the Supreme Court said in Interstate Commerce Commission v. Parker,
the ultimate finding of public convenience and necessity must be based upon the proper statutory criteria and must have had the necessary factual findings to support it. 'Public convenience and necessity is not defined by the statute. The nouns in the phrase possess connotations which have evolved from the half-century experience of government in the regulation of transportation. When Congress in 1935 amended the Interstate Commerce Act by adding the Motor Carrier Act, it chose the same words to state the condition for new motor lines which had been employed for similar purposes for railroads in the same act since the Transportation Act of 1920, Sec. 402(18) and (20), 41 Stat. 477 (49 U.S.C.A. § 1(18, 20). Such use indicated a continuation of the administrative and judicial interpretation of the language.'
As the Supreme Court has said many times, we cannot exercise even our limited power of review unless the findings of fact are adequate to indicate that the Commission did consider those criteria which the law requires.
In the record before us there are repeated references which indicate that there is not enough traffic over the routes here involved to maintain efficiently two carriers. But the Commission made no finding one way or the other on that point. Several witnesses expressed the fear that if the application were granted to Greyhound the result would be disaster for Atwood, but we do not have a finding upon that point. The examiner who presided at the second hearing found in his report: 'The loss of any substantial number of these passengers would undoubtedly have a detrimental effect on Atwood's service which likely would result in the reduction of the number of schedules operated.' The Commission made no finding in that regard.
Reference was made hereinabove to a clause in a sentence in the second report of Division 5 upon reconsideration to the effect that the grant of Greyhound's application would 'place the competitive situation on a more normal and sound basis.' The quoted statement is too cryptic to satisfy us that the Commission meant by it to find that there would be no adverse effects upon Atwood should the application be granted to Greyhound. Moreover, the expression comes at the end of a long discussion of the situation entirely from Greyhound's viewpoint, and in its context seems to refer to the effect of the application upon Greyhound rather than to possible effects upon Atwood.
Upon the foregoing considerations we are impelled to remand the case to the Commission for findings of fact as to the probable effect upon Atwood of the grant of the application to Greyhound, and for a redetermination of the ultimate question of public convenience and necessity in the light of the additional finding.
Some question arises as to the burden of proof in respect to the effect of an application upon a protestant in a case such as the one before us. We think that, since the point is by way of opposition to the application, and also since the evidence is peculiarly within the control of the protestant, the burden of proving an alleged adverse effect should be upon the protestant. It follows that in the ordinary case the damage done by lack of such evidence would fall upon the protestant. In the present case, however, as we have pointed out, the original application of Greyhound was for a new service, and so the controversy originally concerned public need vel non. It was not until the record had been closed that the application was limited to an alternate route without pick-up service, and it was not until the change in the proposal that the issue of the effect on Atwood became critical. Under these circumstances, therefore, we think that the record should be reopened to permit Atwood to present such evidence as it may have to demonstrate the adverse effect, if any there be, upon it by reason of the grant of the application. Of course, as the Supreme Court pointed out in American Trucking Associations v. United States,
'The applicant (Greyhound in this case) will * * * be required to furnish needed statistical evidence which is reasonably available to it and will have opportunity to submit evidence upon its own part.'
Remanded for further proceedings.
KIRKLAND, J., concurs.