American Radio-Telephone Service, Inc. v. Public Service Commission

Liss, J., delivered the opinion of the Court. It was the Bard of Avon who first suggested, “It is a wise father that knows his own child.” 1 In this case, the Public Service Commission of Maryland has had greater difficulty in determining the lineage of a “grandfather.” This appeal was noted by American Radio-Telephone Service, Inc. (American) from an order of the Circuit Court for Prince George’s County affirming a decision of the Public Service Commission of Maryland (the “Commission”), granting certain “grandfather” operating rights in the mobile radio communications business to Radio Communications, Inc. (“RCI”), a radio common carrier. Appellant was one of several competing radio common carriers who were granted permission to intervene in the proceedings before the Commission. 2 The source of this controversy was the enactment in 1971 by the Maryland General Assembly of a new section of the Public Service Commission Law — designated as Maryland Code (1957, 1975 Repl. Vol.) Art. 78, § 55A.

The new section established the first statutory basis for the comprehensive regulation of radio common carriers in Maryland. 3 Because ⁴²⁵ several companies were already doing business as radio common carriers in Maryland, the General Assembly provided a “grandfather” clause, codified as subsection (b) of Section 55A, which states: “Any company not presently franchised or certificated by the Commission as a radio common carrier but engaged in the operation of any radio common carrier system licensed by the Federal Communications Commission on July 1,1971, shall, upon qualification as a public service company, receive a certificate of convenience and necessity from the Commission authorizing the company to continue the operation of the radio common carrier in the territory professed to be served by that company on July 1, 1971, if, within ninety days after July 1, 1971, that company shall file with the Commission an application for the certificate, including copies of any license or licenses issued by the Federal Communications Commission to that company, showing the area professed to be served by that company.” In September of 1971, RCI filed an application with the Commission for a certificate of convenience and necessity, under subsection (b), which would authorize its operation of a radio common carrier system in an area that included Baltimore City and all Maryland counties except Allegany, Garrett and Worcester. Hearings were held before the Commission; and in February, 1972, the Commission by Order No. 59659 granted RCI a certificate of convenience and necessity authorizing it to engage in the radio communications business in Montgomery, Calvert, Prince George’s and St. Mary’s Counties in addition to portions of seven other counties. In determining the area which RCI might serve, the Commission used as its guide a plotted contour line known as the 37 dbu (decibel units) line plus 5 miles, and from this line, they determined the “reliable service area” of RCI. 4 ⁴²⁶ RCI appealed to the Circuit Court for Prince George’s County which affirmed the Commission. An appeal was noted to the Maryland Court of Appeals, Radio Communications Inc. v. Public Service Commission of Maryland, 271 Md. 82 , 314 A. 2d 118 (1974), raising the issue of what the legislature intended as the standard for carriers seeking “grandfather” rights under Sec. 55A.

Judge Levine, speaking for that Court, said at page 95-96: “We read subsection (b) to say that those who assert ‘grandfather’ status cannot obtain certification by merely ‘professing to serve’ a given area or county. Subsection (b) provides for certification of a radio common carrier ‘engaged in the operation of. any radio common carrier system .. ..’ By obtaining certification, a carrier is expected '... to continue the operation ... in the territory professed to be served ... .’ Thus, when the application of a subsection (b) radio common carrier professing to have served an area is challenged, that carrier must then prove that, in fact, it did serve that area, i.e., that on July 1,1971, it was ‘engaged in the operation’ of a radio common carrier system in each subdivision for which certification is sought. As we have already held, that requirement may not be embellished with any other standard not found in the language of subsection (b) itself.” (emphasis in original). At page 96, the Court remanded the case to the Commission: “ ... for further proceedings, including the introduction of such additional evidence as the Commission may require, in order that RCI may be afforded the opportunity of establishing in what areas it did actually provide service, and for which it seeks certification under subsection (b) [of § 55A of the PSC Law]; and so that intervenors may have the opportunity to present contrary evidence.” On remand, the Commission assigned its Chief Hearing Examiner, Wilson B. Stringer, to hold hearings on any ⁴²⁷ additional evidence which might be offered.

A pre-hearing conference was held in May of 1974, and the parties agreed that the record of the 1971 hearings “would be considered in making a recommended report to the Commission.” The Examiner also issued a ruling in which he determined: “ ... that additional evidence is to be presented by the Applicant [RCI] to show that operations were established for a representative period prior to and including July 1, 1971 in the areas that it professed to serve prior to July 1, 1971. Such additional evidence should include, but need not be limited, to: 1) the number of customers served in each area; 2) the frequency of service for such customers; and 3) the geographical scope of such operations by customers within such areas. In this regard, an area should be considered a county or a geographically defined portion of a county. “The guidelines for furnishing additional evidence do not preclude the Applicant from putting on such other additional evidence as it believes is necessary to support its application.” At the 1971 hearing, the only witness for RCI was its president, Boyd King (King), who testified that the company operated five base stations on July 1, 1971: two at Bethesda, and one each at Prince Frederick, Upper Marlboro and Annapolis. Maps were introduced with circles indicating the area in which RCI transmitted and received communications signals to and from mobile units.

The circles were drawn on the basis of where RCI could “put” a signal and could communicate with mobile units from that particular base station. It was in this manner, King claimed, that RCI transmitted and received signals in the 21 subdivisions for which it sought certification under the “grandfather” clause. He further stated that expansion of RCI from its original seven service areas was the result of a change from low to high power transmitters and significant increases in antenna height. The intervenors at the 1971 hearing presented the ⁴²⁸ testimony of a radio engineer, John E. Dettra, Jr. (Dettra), whose evidence consisted of an explanation of the “reliable service area” of a radio common carrier and the technical determination of the plotted contour line known as 37 dbu.

He produced maps to support his contention that RCI could not render “reasonably adequate” service in the 21 subdivisions for which it requested certification but conceded that it could do so in parts of the counties of Dorchester, Frederick, Kent, Queen Anne’s, Talbot, and Wicomico, in addition to the seven counties it had served since its original entry into the radio communications business in 1963. Three witnesses testified for RCI at the evidentiary hearings before the Examiner in early 1975: Mrs. Margaret King (Mrs. King), Boyd King, and Paul Woofter (Woofter), a customer of RCI. Mrs. King stated that she was the secretary of RCI as well as its principal radio operator during the year preceding July 1, 1971, and that her testimony was based on the records she kept as well as her actual experience with customers during that period. She stated that calls were logged by telephone number, mobile number, and the time of the beginning and end of each call; and that during the period in question, some 30,000 call tickets had been retained which she had reviewed and compiled; that in those instances where she did not know where the mobile unit or caller was located at the time of the transmission, she included the call amongst those from the area of that unit’s regular operation — which was known to her because of her experience as principal operator; that her review of the call tickets covered approximately three-quarters of each month’s tickets and that the tickets listed only completed calls or calls where messages were left.

Using this information, she compiled an exhibit listing the calls by the counties where they occurred; this compilation was introduced as Petitioner’s Exhibit 1. A second exhibit, Petitioner’s Exhibit 2, gave the total of calls handled for the years 1969 (15,290 calls), 1970 (21,083 calls), and 1971 (42,593 calls). Exhibit 3 listed RCI’s subscribers by billing address, base of operations, and scope of operations. The first two ⁴²⁹ items in this exhibit were developed from RCI’s records; the last was determined by Mrs. King from her knowledge of the customer’s business operations.

She gave as a specific example RCI’s experience with the Baltimore Gas and Electric Company: that corporation’s billing address was Baltimore City, but it used RCI’s service in connection with the erection of the Calvert Cliffs nuclear plant, which required calls not only in Calvert County and Baltimore City but in all the counties where the employee’s duties required him to go. To the same effect was her testimony regarding a tree trimming company doing business in Calvert, Prince George’s, and Anne Arundel counties, as well as an engineering company whose employees used RCI’s service from Laurel, Maryland to the Pennsylvania line during the 1970-71 period, when the company was constructing a transmission line. Her testimony included statements as to service in Frederick and Hagerstown. She said she was able to be specific about the location of her customers because in many instances they would advise her in advance where they would be so that she would know the proper channel to use in order to reach them.

King, in his testimony, reiterated the statements he made at the 1971 hearings, and he submitted again the exhibits he had offered at that hearing. Woofter made affidavit as to certain facts within his personal knowledge, which was admitted into evidence. On cross-examination, he substantiated service by RCI in Baltimore, Harford, Howard, Anne Arundel, Montgomery, Prince George’s, Calvert, Frederick, and Queen Anne’s Counties, as well as in Baltimore City. Over objection, the Examiner admitted into evidence affidavits of two customers of RCI who were not made available for cross examination.

One was made by an employee of the Gas and Electric Company, who stated that in the period between July 1, 1970, and June 30, 1971, he utilized RCI’s services in connection with his employment in Calvert, Anne Arundel, Prince George’s, and Baltimore County, as well as in Baltimore City, Queen Anne’s, Talbot, ⁴³⁰ Dorchester, St. Mary’s, Charles and Howard Counties. The other affidavit, made by Morgan Wayson, Jr., stated that his company had used RCI’s service while engaged in /construction activities in St. Mary’s, Calvert, Charles, Prince George’s, Anne Arundel, Montgomery, Howard and Baltimore Counties and in Baltimore City, Frederick, Queen Anne’s and Talbot Counties. Appellant offered as its principal witness Graham Randolph (Randolph), vice president of American, whose testimony was based on a presentation of certain map overlays which he had prepared depicting the territorial scope of RCI’s operation in 1971: One overlay outlined the seven counties RCI had been authorized to serve by the original order of the Commission in 1963 (Howard, Montgomery, Anne Arundel, Prince George’s, Charles, Calvert and St. Mary’s). The second overlay, based on the information presented in Applicant’s Exhibit 3 about the “base of operations” of RCI’s customers, indicated that 94.6 per