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CLASSIFIED DIRECTORY SUBSCRIBERS ASSN. v. PSC OF T

November 29, 1966

The CLASSIFIED DIRECTORY SUBSCRIBERS ASSOCIATION et al., Plaintiffs,
v.
PUBLIC SERVICE COMMISSION OF the DISTRICT OF COLUMBIA, Defendant



The opinion of the court was delivered by: WALSH

 LEONARD P. WALSH, District Judge.

 This cause came before the Court on cross-motions for summary judgment in order to determine whether, as a matter of law, the Public Service Commission has jurisdiction to regulate the classified advertising rates in the "Yellow Pages". The issue here involved is whether or not classified advertising comes within the statutory definition of "service" of a public utility. At the outset it must be noted that the Classified Telephone Directory contains listings of business firms and professional persons separated into categories generally descriptive of their business or profession. There are four basic listings which constitute the "Yellow Pages": (1) Alphabetical lightfaced type listings for which there is no additional charge; (2) Alphabetical bold-faced type listings; (3) Alphabetical in-column business card listings; and (4) Display advertising. Regulation of rates for categories (2) through (4) are the subject matter of this suit.

 The plaintiffs herein filed this action pursuant to Title 43, Section 705, of the District of Columbia Code, seeking to vacate and set aside orders of the Public Service Commission of the District of Columbia. *fn1" In those orders the Commission held as a matter of law, and from long standing administrative practice, that the Commission had no jurisdiction to regulate the advertising rates as established by the Chesapeake and Potomac Telephone Company regarding the "Yellow Pages." It is agreed by all parties and the Public Service Commission, that the Commission does have statutory jurisdiction to regulate the rates charged by the Telephone Company for alphabetical light-faced type listings.

 This Court takes cognizance of the fact that the Reuben H. Donnelley Co. is retained by the Telephone Company to solicit advertising for the "Yellow Pages". There is no allegation that the rates, as established by the Telephone Company and solicited by the Donnelley Company, are discriminatory in any manner, and in fact all parties agree that the Public Service Commission has statutory jurisdiction where discrimination is in issue. Furthermore, the receipts obtained from present advertising sales are included for the purpose of determination of the fair return due the Telephone Company for its property investment. Theoretically then, reduced advertising rates via Public Service Commission regulation would spread the resulting economic void to the average telephone user and the light-faced listing subscribers, presumably causing an increase in the base telephone rate to insure the Telephone Company the same fair return. In effect, the general public would pay a portion of the advertisers' present cost.

 Plaintiffs contend that jurisdiction is placed in the Commission by Title 43 of the District of Columbia Code, and the sections contained therein. Specifically, they argue that classified advertising should be regulated by the Commission because of a statutory interpretation given to Sections 43-104 and 43-1003. These Sections of the Code state that the term "service" is to be "used * * * in its broadest and most inclusive sense" and that all provisions of this law "shall be interpreted and construed liberally in order to accomplish the purposes thereof."

 In support of their argument that classified advertising is a "service" within the meaning of the regulatory statute, plaintiffs allude to District of Columbia v. Chesapeake and Potomac Telephone Co., 86 U.S.App.D.C. 124, 179 F.2d 814 (1950). In that case the Board of Tax Appeals found that classified advertising was not essential to the use of the telephone system. On appeal, the Court of Appeals reversed the Board because essentiality of service was not the proper standard for the determination of taxability under the statute there involved. The finding by the Court of Appeals that classified advertising was within the mean of "service" for the purposes of taxation does not mean that classified advertising comes within the meaning of "service" for the purposes of the Public Service Commission regulations. Prerequisites for tax jurisdiction evoke substantially different considerations.

 Pursuant to Title 43, Section 414, of the District of Columbia Code, an independent investigation was made of the Chesapeake and Potomac Telephone Company. This Task Force Report considered specifically whether or not the Public Service Commission had statutory authority to regulate the "Yellow Pages" advertising rates. *fn2" The conclusion of this investigation was that the Commission did have the necessary statutory authority for regulation and moreover had "a clear legal duty" to do so. *fn3"

 This conclusion of the Task Force was in direct conflict with the advisory opinions of the Corporation Counsel. *fn4" The Corporation Counsel has held consistently from 1940 to 1965, its latest opinion, that the Public Service Commission has no statutory jurisdiction to regulate advertising rates in the "Yellow Pages" since advertising was not and is not a "service" within the meaning of the statute. *fn5"

 A detailed perusal of these advisors' opinions, the Task Force Report, the briefs and points and authorities filed, and the applicable legal principles involved, leads this Court to make the following findings of facts and conclusions of law:

 Findings of Fact

 1. The Chesapeake and Potomac Telephone Company is a public utility monopoly sanctioned by the Public Service Commission of the District of Columbia to furnish telephone and related services within the District of Columbia.

 2. The Telephone Company from time to time compiles, publishes, and distributes to all telephone subscribers in the Washington Metropolitan Area the Washington Yellow Pages Classified Telephone Directory, which is the subject of these proceedings.

 3. The Classified Telephone Directory is published by the Telephone Company to assist users ...


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