Amicus Brief — Rosner v. United States

IN THE

Supreme Court of the United States

OCTOBER TERM, 1977

Nos. 77-420, 77-421, 77-436

Unitep States INDEPENDENT TELEPHONE ASSOCIATION,

AMERICAN TELEPHONE AND TELEGRAPH COMPANY,

and FepERAL COMMUNICATIONS COMMISSION,

Petitioners,

v.

MCI TELECOMMUNICATIONS CORPORATION. MICROWAVE

ComMUNICATIONS. INc.. and N-Tripte-C Inc.

DaTA TRANSMISSION ComPANY (DaTRAN),

and SouTHERN Paciric COMMUNICATIONS COMPANY.

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

MOTION FOR LEAVE TO FILE

BRIEF AMICUS CURIAE AND

BRIEF OF THE STATE OF MICHIGAN AND THE

MICHIGAN PUBLIC SERVICE COMMISSION IN

SUPPORT OF PETITIONS FOR

WRIT OF CERTIORARI

RONALD D. EASTMAN, Special

Attorney General for the

Of Counsel: State of Michigan

VERNER, LIIPFERT. BERNHARD THOMASJ. KELLER

and McPHERSON 1660 L Street, N.W.

1660 L Street. N.W. Washington, D.C. 20036

Washington, D.C. 20036 Attorneys for the State of Michigan

(202) 452-7400 and the Michigan Public Service

Commission

IN THE

Supreme Court of the United States

OCTOBER TERM, 1977

Nos. 77-420, 77-421, 77-436

UNitep STATES INDEPENDENT TELEPHONE ASSOCIATION.

AMERICAN TELEPHONE AND 1 ELEGRAPH COMPANY.

and FEDERAL COMMUNICATIONS COMMISSION.

Petitioners,

We

MCI TELECOMMUNICATIONS CORPORATION, MICROWAVE

COMMUNICATIONS. INc.. and N-Tripte-C Inc.

Data TRANSMISSION COMPANY (DaTRAN),

and SouTHERN PaciFic COMMUNICATIONS COMPANY.

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

MOTION FOR LEAVE TO FILE

BRIEF AMICUS CURIAE

The State of Michigan and the Michigan Public Service

Commission (hereafter ‘‘Michigan’’) hereby respectfully

move this Court for leave to file the attached brief amicus

curiae in support of the petitions for certiorari in the above-

captioned case.

2

At the outset, Michigan wishes to point out that the at-

tached brief is sponsored by the undersigned Special At-

torney General for the State of Michigan and has been ex-

plicitly authorized by the Attorney General for the state. In

this regard, Supreme Court Rule 42(4), 28 U.S.C., exempts

amicus curiae briefs filed by “‘a state . . . sponsored by its

attorney general’’ from the consent requirements of

Supreme Court Rule 42(2). Accordingly, Michigan believes

that its brief falls within the ambit of this exemption, and

that it would be appropriate for the Court to permit the

filing of the brief pursuant to Rule 42(4) without consent

having been obtained from the parties to the proceedings

below. Nevertheless, out of an abundance of caution and in

the event the Court may construe its rule narrowly so as to

exclude the brief from the exemption, Michigan is filing the

instant motion for leave to file.'

The Michigan Public Service Commission (MPSC) is an

agency of the State of Michigan charged by statute with

responsibilities, inter alia, to protect the people of the State

of Michigan in matters relating to the cost and quality of

telephone service. MPSC has jurisdiction “to regulate all

public utilities in the state’’ with respect to ‘‘all rates, fares,

fees, charges, services, rules, conditions of service and all

other matters’ pertaining to such utilities, including all

regulatory matters pertaining to telephone companies.’

MPSC is empowered to fix rates for intrastate telephone

service that are ‘‘reasonable and just,’’ and is responsible

' Michigan has sought consent to the filing of its brief from the par-

ties to the proceedings below. Consent has been obtained from counsel

for petitioners, Federal Communications Commission, American

Telephone and Telegraph Company. and United States Independent

Telephone Association. Consent was not obtained from the respon-

dents.

* Mich. Comp. Laws §460.6 (Mich. Stat. Ann. §22.1Xb) (Callaghan

1970)).

3

for protecting consumers against charges that are “unjust

and unreasonable.’” Public utilities in Michigan, including

telephone companies, are entitled by law to earn a

reasonable return on the value of their investment.*

The outcome of this case will significantly affect the

manner in which MPSC discharges its statutory respon-

sibilities to the public. The decision below will have a sub-

stantial impact on the utilities regulated by MPSC and on

customers of telephone service in Michigan whose interest

MPSC is charged with protecting. In Michigan and in other

states, common facilities are used in the provision of both

interstate and intrastate telephone service. Common plant

and service costs must be allocated between intrastate and

interstate services to reflect the relative use of the common

facilities in providing one service or the other. Under the

jurisdiction conferred by Section 410 of the Com-

m inications Act of 1934, 47 U.S.C. §410, the FCC and

representatives of state regulatory commissions have adopt-

ed jurisdictional formulas for the allocation of costs be-

tween intrastate and interstate services as a function of the

relative usage of such services by telephone subscribers.*

In this regard, revenues from interstate long distance

telephone service are used to defray costs of local service.

Permitting carriers other than telephone companies to offer

interstate long distance telephone service in competition

with telephone companies would significantly reduce the

contribution to the cost of local telephone service now

* Mich. Comp. Laws §§484.103. 11702, 6691 (Mich. Stat. Ann.

§22.1443 (Callaghan 1970)).

* Mich. Bell Telephone Co. v. Michigan Public Service Comm., 332

Mich. 7, S50 N.W.2d 826 (1952).

* In the Matter of Prescription of Procedures for Separating and

Allocating Plant Investment. Operating Expenses. Taxes and Reserves

Between the Intrastate and the Interstate Operations of Telephone

Companies, 26 F.C.C. 2d 248 (1970). See also Smith v. Illinois Bell

Telephone Co.. 282 U.S. 133. $1 S. Ct. 65. 75 L.Ed. 255 (1930).

4

provided by long distance revenues. This, in turn, will result

nog INDEX

in the need for substantial increases in rates for local

telephone service. Page

Given the essential and intimate relationship between in-

terstate and intrastate telephone services and between i i teed eas eb eeredereeseaveweds 2

Federal and State regulatory procedures pursuant to 47 _ ;

U.S.C. §410, Michigan respectfully submits that its par- JURISDICT errr erry se Cee Te ee OE RUC RRA

ticipation in these proceedings is necessary to insure proper QUESTION PRESENTED ..........0.cccceccceeeseeeuee: 3

representation of the interests of both the utilities and the

public in the State of Michigan. I oe ccs vn ce veesccsdssssicscecsees 3

WHEREFORE, it is respectfully requested that this STATEMENT OP THECASE ...............cccccccceness 3

Court grant leave for the filing of the attached brief amicus

curiae by the State of Michigan and the Michigan Public A. The PCC’s Execumet Decisto® .. wc ccc ccc ccc cence verees 3

Service Commission in this case.

B. The Opinion Below ... 1.6.1... eee eee eee eee e eens 5

INTEREST OF AMICUS CURIAE ...... 0. cc ccc enc cceeeeee 5

Dated this 19th day of October, 1977 ’

PE vic ck 204 004so8 bob oeewebsceesestuoknes oes

ini sth

RONALD D. EASTMAN, Special A. The Opinion Below Improperly Construes the ,

. Communications Act of 1934 .......... ccc eee eee eens

orc } Attorney General for the

dutiupeuny State of Michigan B. The Opinion Below Will Disrupt the Federal/State Regulatory

VERNER, LIIPFERT, BERNHARD Bice ,

THOMAS J. KELLER OS SEES EPCS TST CET CET ETT TTT SET TL TT RT 10

AND MCPHERSON 1660 L Street. N.W

1660 L Street. N.W. Washington. D.C. 20036 I oo ssh pece tana ene sun pannus ceri i

Washington. D.C. 20036

(202) 452-7400 Attorneys for the State of

Michigan and the Michigan

Public Service Commission

(ii)

CITATIONS

CASES AND ADMINISTRATIVE PROCEEDINGS

Bell Tel. Co. of Penn. v. FCC. 503 F.2d 1250

(3d Cir. 1974), cert. denied, 422 U.S. 1026

PEPER ET TE ET TC CETL CULE PEPE ET OPEC TT TTT 8

Federal Communications Commission v. RCA Communi-

cations Inc.. 346 U.S. 86, 73 S.Ct. 998, 97 L. Ed.

6 S655 64455548 i00 TS RNS 85 69995. 045804 858 9

ge PELE COE C TEER ETTORE TERE TT ET UCT TC TET CT CTC 9

In the Matter of Prescription of Procedures for Separating Allocating

Plant Investment. Operating Expenses. Taxes and Reserves Between

the Intrastate and Interstate Operations

of Telephone Companies, 26 F.C.C. 2d 248 (1970). .........0045. 6

Michigan Bell Telephone Co. v. Michigan Public Service Comm.

Be Ss Fe UE OT ee PONOUED << Scns cn been esbeesscceeen 6

Microwave Communications. Inc.. 18 FCC 2d 953

ee a a a ald oa e@ad 60 eee 4

Smith v. Illinois Bell Telephone Co., 282 U.S. 133.

Pe NEED 6 5 6 Ob eee cccb new dense suesus 6

Specialized Common Carrier Services. 24 FCC 2d 318

SE SOSGNEGEGEMROEENORESESEDSEGSONOMECK ERO ESR W 8 4

Specialized Common Carrier Services. 29 FCC 2d 870,

31 FCC 2d 1106 (1971), aff'd sub nom. Washington

Util. & Transp. Comm. vy. FCC. 513 F.2d 1142 (9th

Cir.), cert. denied. 423 U.S. 836 (1975)... 26... eee eee ees 4.5.8

Washington Util. & Transp. Comm. vy. FCC. $13 F.2d

1142 (9th Cir.). cert. denied. 423 U.S. 836(1975) ........... 4.7.8

(iii)

STATUTES AND REGULATIONS

Federal Statutes

SESE OE TE TEES

Communications Act of 1934:

SF Ge IED vc conseectccenescesss

I SF NED ccc ccccceccccsccccese

Michigan Statutes

Mich. Comp. Laws §460.6 (Mich. Stat. Ann. §22.1Xb)

PEED occ cee ntvvkscncesseccecccesecs

Mich. Comp. Laws §484. 103, 11702, 6691

(Mich. Stat. Ann. §22.1443 (Callaghan 1970))........

Regulations

FCC Rules and Regulations 47 C.F.R. §21.2(1976) ......

IN THE

Supreme Court of the United States

OCTOBER TERM, 1977

Nos. 77-420, 77-421, 77, 436

Unitep STATES INDEPENDENT TELEPHONE ASSOCIATION,

AMERICAN IT ELEPHONE AND T ELEGRAPH COMPANY.

and FepERAL COMMUNICATIONS COMMISSION,

Petitioners,

Vv.

MCI TELECOMMUNICATIONS CORPORATION. MICROWAVE

ComMMUNICATIONS. INc.. and N-Tripte-C Inc..

DaTA TRANSMISSION COMPANY (DATRAN),

and SouTHERN PaciFic COMMUNICATIONS COMPANY.

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF AMICUS CURIAE OF THE STATE OF

MICHIGAN AND THE MICHIGAN PUBLIC SER-

VICE COMMISSION IN SUPPORT OF PETITIONS

FOR WRIT OF CERTIORARI

The State of Michigan and the Michigan Public Service

Commission (hereafter ““Michigan’’) hereby submit, in ac-

cordance with Rule 42 of the Rules of this Court, the

following brief amicus curiae in support of the Petitions for

2

Writ of Certiorari filed by the Federal Communications

Commission (FCC), American Telephone and Telegraph

Company (AT&T), and the United States Independent

Telephone Association (USITA). This brief is sponsored by

the undersigned Special Attorney General for the State of

Michigan and has been explicitly authorized by the At-

torney General of the State.

Michigan believes that the Petitions filed earlier in this

case and the brief amicus curiae filed by National

Association of Regulatory Utility Commissioners (NARUC),

which Michigan generally supports, set forth compelling

reasons why a writ of certiorari should issue. Accordingly,

Michigan will not repeat all the reasons that might be ad-

vanced in support of a writ, but rather will focus on those

which are of particular interest to the State and which it

believes are most compelling.

OPINIONS BELOW

The opinion in the Court of Appeals is not yet reported;

the decision of the Federal Communications Commission is

reported at 60 F.C.C.2d 25. Appendices A and B to the

Petition for Writ of Certiorari filed by the Federal Com-

munications Commission (No. 77-436) set out each

opinion.’

JURISDICTION

The Court of Appeals entered its decision on July 28,

1977. This Court has jurisdiction by virtue of 28 U.S.C.

§12S4(1).

' Michigan will refer to portions of those opinions by citing to the

Appendices filed by the Federal Communications Commission (FCC

App.).

3

QUESTION PRESENTED

The question presented to the Court is: Whether the

Court of Appeals for the District of Columbia Circuit erred

when it held that specialized common carriers such as MCI

have authority to provide ordinary long distance telephone

service notwithstanding that (1) the FCC had never made

the requisite finding that the public interest would be

fostered by allowing specialized carriers to provide ordinary

long distance telephone service, and (2) the specialized

carriers had never requested authority pursuant to 47

U.S.C. §214 to provide ordinary long distance telephone

service.

STATUTES INVOLVED

The pertinent provisions of the Communications Act of

1934, as amended, 47 U.S.C. §§151-609, appear in Ap-

pendix D of the Petition for Certiorari filed by the Federal

Communications Commission.

STATEMENT OF THE CASE

A. The FCC’s Execunet Decision

For purposes of this case, the interstate services provided

by communications common carriers can be divided into

two categories: (1) ordinary long distance telephone service

(MTS) and (2) private line service. Although MTS

historically has been provided on a de facto monopoly basis

by telephone companies, both telephone companies and

specialized common carriers have provided private line ser-

vice on a competitive basis with FCC and judicial ap-

proval.?

? A “private line service’ is one “whereby facilities for com-

munication between two or more designated points are set aside for the

exclusive use or availability for use of a particular customer and

authorized users during stated periods of time.” 47 C.F.R. §21.2 (1976).

4

The FCC granted the first specialized carrier certificate

in 1969 to MCI authorizing the provision of private line ser-

vices between Chicago and St. Louis. Microwave Com-

munications, Inc., 18 F.C.C.2d 953 (1969), 21 F.C.C.2d 190

(1970). Confronted with a host of similar applications from

MCI and other potential specialized carriers, the Com-

mission inaugurated a rulemaking proceeding to address

general policy questions common to ail applicants, rather

than holding a separate hearing on each application.

Specialized Common Carrier Services (Docket No. 18920).

24 F.C.C.2d 318 (1970). In proposing the rulemaking, the

FCC noted that the applicants proposed to provide only

‘specialized private line services,’ 24 F.C.C.2d at 324, and

thus limited its inquiry to the public interest ramifications

of competition in those services, id. at 335-38. The FCC

ultimately concluded that competition in the limited

market for private line services would benefit the public

and would have negligible adverse impact on the telephone

company carriers. Specialized Common Carrier Services.

29 F.C.C.2d 870, 31 F.C.C.2d 1106 (1971). In affirming that

decision, the Ninth Circuit interpreted the FCC's policy as

sanctioning competition in thé field of private line services,

but not MTS, Washington Utilities & Transp. Comm. v.

FCC. 513 F.2d 1142, 1155 (9th Cir. 1975), cert. denied. 423

U.S. 826 (1975). -

On September 11. 1974, MCI filed tariff revisions with

the FCC which contemplated the provision of **metered use

service’ as an additional part of its private line service of-

fering. AT&T challenged the tariff on the grounds that the

proposed service, known as “‘Execunet.”’ was in-

distinguishable from ordinary long distance telephone ser-

vice, and hence was beyond the scope of MCI’s limited

authorization in the Specialized Carrier decision.’

* FCC App. B at 99a-104a.

5

Following an investigation of the Execunet tariff, the

FCC released its decision on July 13, 1976, confirming its

Specialized Carrier decision and reiterating that MCI and

other specialized carriers had been authorized only to

provide private line service.* On the basis of unchallenged

descriptions of the service, the Commission found that

Execunet had “‘all the essential characteristics of MTS”

and ‘‘does not have the essential characteristics of private

line service * * *’** The FCC held unanimously that the

proposed service was beyond MCI’s limited authority.

B. The Opinion Below

The Court of Appeals reversed, holding that MCI had

been authorized to provide not only MTS service, but also

any services except those precluded by restrictions the FCC

had affirmatively decided were required by ‘‘the public con-

venience and necessity.’”® In its opinion, the court below did

not deny that Execunet was a form of MTS service, and it

conceded that the FCC had never determined that the

provision of MTS service by specialized carriers would

benefit the public interest.’

INTEREST OF AMICUS CURIAE

The Michigan Public Service Commission (MPSC) is an

agency of the State of Michigan charged by statute with

responsibilities, inter alia, to protect the people of

Michigan in matters relating to the cost and quality of

telephone service. MPSC has jurisdiction “‘to regulate all

public utilities in the state” with respect to “‘all rates, fares,

* Id. at Sia.

* Id. at 64a.

* FCC App. A at 24a.

” FCC App. A at 29a. 3la.

6

fees, charges, services, rules, conditions of service and all

other matters pertaining to such utilities,” including all

regulatory matters pertaining to telephone companies.°

MPSC is empowered to fix rates for intrastate telephone

service that are ‘‘reasonable and just,’’ and is responsible

for protecting consumers against charges that are ‘unjust

and unreasonable.’” Public utilities in Michigan, including

telephone companies, are entitled by law to earn a

reasonable return on the value of their investment."°

In Michigan as in other states, common facilities are

used in providing both interstate and intrastate telephone

service, and common plant and service costs are allocated

between the two types of service. Under the jurisdiction

conferred by Section 410 of the Communications Act of

1934, 47 U.S.C. §410, the FCC and representatives of state

regulatory commissions have adopted jurisdictional for-

mulas for the allocation of costs between intrastate and in-

terstate services as a function of the relative usage of such

services by telephone subscribers.'' Pursuant to these for-

mulas, interstate MTS revenues defray the costs of local

telephone service; accordingly, a reduction in the relative

quantity of interstate service offered by telephone com-

panies would decrease the amount of common costs

* Mich. Comp. Laws §460.6 (Mich. Stat. Ann. §22.1(b) (Callaghan

1970)).

* Mich. Comp. Laws §§484.103, 11702, 6691 (Mich. Stat. Ann.

§22.1443 (Callaghan 1970)).

‘© Mich. Bell Telephone Co. v. Michigan Public Service Comm., 332

Mich. 7, SO N.W.2d 826 (1952).

'' In the Matter of Prescription of Procedures for Separating

Allocating Plant Investment, Operating Expenses. Taxes and Reserves

Between the Intrastate and the Interstate Operations of Telephone

Companies. 26 F.C.C.3d 248 (1970). See also Smith v. Illinois Bell

Telephone Co., 282 U.S. 133, 51 S.Ct. 65, 75 L.Ed. 255 (1930).

recouped in interstate rates and increase costs which

would have to be recouped in intrastate rates.'? Opening

the field of MTS service to competition would have the ef-

fect of significantly reducing the contribution to the cost of

local telephone service that MTS revenues historically have

provided. This, in turn, would result in the need for sub-

stantial increases in rates for local telephone service.

Michigan believes the decision below, if allowed to stand,

will have precisely this effect.

Michigan emphasizes that it takes no position at this

time on the question whether, on a nationwide basis, the

provision of interstate MTS service by specialized common

carriers is in the public interest. That determination is

properly to be made by the FCC or the Congress, taking in-

to account the views of all interested parties, including state

regulatory commissions. Michigan’s present concern is that

the decision below, i.e., that specialized carriers are

authorized to provide interstate MTS service without the

FCC having made the proper public interest determination

to that effect. will have far-reaching and possibly unin-

tended consequences — consequences that ought to be ad-

dressed in a considered fashion before, not after, they oc-

cur.

ARGUMENT

There are two reasons why a writ of certiorari is warrant-

ed: (1) the decision below raises important questions of

statutory construction in that it ignores the plain meaning

of 47 U.S.C. §214c) and is contrary to this Court’s in-

terpretation of the Communications Act with respect to the

authorization of competitive services in the com-

munications field; and (2) if allowed to stand, the decision

"? See. e.g.. Washington Utilities and Transp. Comm. v. FCC. supra.

8

will seriously disrupt the Federal/State regulatory

framework governing communications services.'?

A. The Opinion Below Improperly Construes

The Communications Act of 1934

The court below has construed Section 214 of the Com-

munications Act of 1934, 47 U.S.C. §214, to mean that

every FCC authorization under that section is open-ended

and unlimited, irrespective of the scope of authority

requested by the carrier, unless the FCC makes an “‘af-

firmative determination” that restrictions on the

authorization are in the public interest.'* In so holding, the

court ignored the plain language of Section 214(c) of the

Communications Act.

Section 214c) sets forth various powers of the Com-

mission with respect to applications for certificates.

Specifically, it empowers the Commission to “issue such

certificate as applied for. or to refuse to issue it, or to issue

it for a portion or portions of a line... .”’ and further

provides that the Commission *‘may attach to the issuance

of the certificate such terms and conditions as in its

judgment the public convenience and necessity may

require.’"'* Focusing on the last quoted portion, the court

below held that the Commission “‘cannot impose any

restrictions unless it has affirmatively determined that ‘the

'* Michigan recognizes that there are other reasons why a writ

should issue as set forth fully in the Petitions filed earlier in this case.

particularly the conflict between the opinion below and decisions of the

Ninth and Third Circuits in Washington Utilities & Transp. Comm. v.

FCC. supra. and Bell Telephone Co. of Pa. v. FCC. 303 F.2d 1250 (3rd

Cir. 1974), cert. denied. 422 U.S. 1026 (1975S). Michigan supports the

position that this conflict in the cir ‘its warrants review.

‘* FCC App. A at 20a. 21a.

'S 47 U.S.C. §214c), emphasis added.

9

public convenience and necessity [so] require.’ *"® The

court thus ignored the statute’s prescription that the FCC

grant certificates ‘‘as applied for’’ and erroneously con-

verted the authority to condition those certificates into a

definition of the scope of authority granted — a definition

that is inconsistent with the requirements of the first clause.

Even though it acknowledged that a service like

Execunet was not before the FCC in the Specialized

Carrier case, the court below held that the Specialized

Carrier decision authorized Execunet service because of the

absence of explicit restrictions against providing MTS ser-

vice. It ignored the fact that the certificates ‘‘applied for” in

the Specialized Carrier case covered only private line ser-

vices. The court could come to its conclusion that the

specialized carriers’ facility authorizations are open-ended

and unrestricted'’ only by disregarding the plain meaning

of the first clause of Section 214Xc).

Further, the holding below does not comport with this

Court’s construction of the Communications Act in FCC v.

RCA Communications, Inc., 346 U.S. 86, 73 S. Ct. 998, 97

L. Ed. 1470 (1953), to the effect that the Act requires the

FCC to consider, prior to authorizing a carrier to provide a

new service, whether competition in that service will have a

beneficial effect on the public interest. '* The court below

admitted that it had not itself considered ‘whether com-

petition like that posed by Execunet is in the public in-

terest,” and conceded that this was a question yet to be

decided by the FCC." Yet notwithstanding the conceded

‘© FCC App. A at 26a.

'? Id. at 3la.

'* The principle of FCC v. RCA Communications. Inc. was held to

apply to carrier applications filed pursuant to Section 214 in Hawaiian

Telephone Co. v. FCC. 498 F.2d 771 (D.C. Cir. 1974).

'* FCC App. A at 33a.

10

absence of the required analysis of public benefit, the court

nevertheless found that MCI had authority to offer

Execunet service in competition with MTS.

The improper construction of Section 214(c) by the court

below and its disregard of the principles of FCC v. RCA

Communications, supra, warrant the issuance of a writ of

certiorari.

B. The Opinion Below Will Disrupt the

Federal/State Regulatory Framework

The decision below will undermine the foundation of

Federal and State telephone rate regulation by disrupting

the long-established and carefully considered cost

allocation mechanisms for interstate and intrastate ser-

vices.”® It is virtually certain that MCI and other specialized

carriers, which previously were thought to be limited by the

FCC to private line services, will seek to capitalize on the

decision below. The consequent diversion of MTS traffic

from telephone companies to the specialized carriers will

result in the loss of revenues that now help defray the costs

11

In this regard, MPSC notes again that it takes no

position here on the question whether or not, on a nation-

wide basis, the public interest would be served by com-

petition in long distance telephone service. It may be that

the public interest would be advanced by such a change.

But if so, Congress or the FCC should make that deter-

mination in a considered and deliberate manner, one that

affords Federal and State regulators an opportunity to

fashion in advance appropriate regulatory procedures for

dealing with its impact.

Such a fundamental and far-reaching change should not

occur solely as a result of a single decision of one circuit

that is at odds with the plain meaning of the Com-

munications Act and contrary to principles established by

this Court.

CONCLUSION

For the foregoing reasons, the State of Michigan and the

Michigan Public Service Commission respectfully urge this

Court to grant the Petitions for Writ of Certiorari.

of local telephone service. This loss will in turn create a Respectfully submitted,

need for corresponding increases in local telephone rates in

Michigan and other states. RONALD D. EASTMAN, Special

‘ , a Attorney General for the

To say that the FCC may, in accordance with the opinion Of Counse!: State of Michigan

below, initiate further proceedings and impose restrictions VERNER. LIIPFERT. BERNHARD THOMASJ. KELLER

on the specialized carriers’ authorizations is not adequate. and McPHERSON 1660 L Street. N.W.

Such proceedings would take years to complete, and in the 1660 L Street. N.W. Washington. D.C. 20036

interim specialized carriers would be free to inaugurate any Washington, D.C. 20036 Attorneys for the State of Michigan

and all manner of services pursuant to the open-ended | (202) 452-7400 and the Michigan Public Service

authority conferred by the court below with no assessment Commision

of the public interest consequences having been made by

the FCC.

© See n. 11, supra.