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In the Matter of AMERICAN TELEPHONE & TELEGRAPH CO. AND THE ASSOCIATED BELL SYSTEM COMPANIES Charges for Interstate and Foreign Communication Service; In the Matter of AMERICAN TELEPHONE & TELEGRAPH CO. Charges, Practices, Classifications,

and Regulations for and in Connection With Teletypewriter Exchange Service


Docket No. 16258; Docket No. 15011




11 F.C.C.2d 279




January 17, 1968 Adopted













    [*279] 1. On December 7, 1967, William L. Higgs (hereinafter referred to as Petitioner) filed a petition in this proceeding seeking reconsideration of the Commission's Orders of July 5 and September 13, 1967, in this proceeding, and for leave to intervene. The Bell System Respondents oppose the petition.


   2. Petitioner states that he filed this petition "on his own behalf and on behalf of his class of all (1) subscribers to A.T. & T.'s local and long distance telephone services, and (2) consumers thereof," believing this class "to number over 40 million as subscribers to, and a considerable majority of the U.S. population as consumers of, A.T.&T.'s services." He further alleges and believes that "the interests of himself and his class have not been effectively represented in these proceedings, particularly at present"; that it became evident during the subject proceeding that A.T. & T. for many years pursued policies resulting in the imposition of unreasonable and unfair rates upon Petitioner and his class; * * * and that, although aware of A.T. & T.'s policies, the Commission failed to order A.T. & T. to take the proper corrective action.


   3. Petitioner failed to request intervention on or prior to December 2, 1965, n1 although he alleges he has been a user of the affected services for over 4 years, and, thus, the petition in this respect is untimely.


Further, Petitioner does not show how his participation would assist the Commission in the determination of the issues or why it was not possible to file a timely petition as required by section 1.223 of our [*280] rules (47 CFR 1.223). Accordingly, the petition for intervention must be dismissed. Compare our order of July 15, 1966, denying the intervention of Telephone Users Association (FCC 66-648, 31 F.R. 9888).


   n1 The hearing issues in this proceeding were published in the Federal Register on Nov. 2, 1965 (30 F.R. 13885).


   4. Petitioner's request for reconsideration and for other proposed relief is also untimely filed in view of the fact that the Orders attacked by Petitioner were issued July 5 and September 13, 1967, respectively, n2 and the present petition was filed considerably in excess of the 30-day period provided in section 405 of the Communications Act and section 1.106(f) of our rules (47 CFR 1.106(f)).


   n2 Public notices for the two Orders were issued on July 5 and Sept. 14, 1967, respectively.


   5. Should Petitioner desire to offer testimony at future proceedings where the matters mentioned in his petition are appropriately under consideration, he may do so under the provisions of section 1.225 of the Commission's Rules and Regulations, which provides as follows:


    1.225. (a) Any person who wishes to appear and give evidence on any matter, and who so advises the Secretary, will be notified by the Secretary if that matter is designated for hearing. In the case of requests bearing more than one signature, notice of hearing will be given to the person first signing unless the request indicates that such notice should be sent to someone other than such person.


   (b) No person shall be precluded from giving any relevant, material, and competent testimony at a hearing because he lacks a sufficient interest to justify his intervention as a party in the matter.


   Accordingly, It is ordered, That the petition by William L. Higgs Is dismissed.













   One of the most fundamental rights of American citizens is representation of his interests in governmental proceedings which affect him. The Federal Communications Commission is today denying an individual the opportunity formally to intervene in the ATT rate proceeding. The Commission also refuses to consider the arguments that the would-be intervener has presented as the basis for asking that its decision in the first phase of the proceeding be reconsidered. William L. Higgs petitioned the Commission on December 7, 1967, seeking reconsideration of the Commission's previous substantive orders in the ATT case, and seeking leave to intervene in further aspects of the proceeding.


The petition as filed is not timely either as to intervention or reconsideration according to the Commission's rules, and the Commission is dismissing it essentially for that reason. The majority also states that "Petitioner does not show how his participation would assist the Commission," and the majority seems equally unable to think of reasons why his participation would be helpful. I concur in the denial of reconsideration but dissent to the refusal to permit intervention.


   I concur in the denial of reconsideration because, although the issues the petitioner raises are potentially important, at this date the Commission [*281] cannot begin to reexamine the issues decided for better or worse in phase I-A of this proceeding. The problems of timeliness and maintaining orderly functioning of the Commission are apparent.


   But I dissent to the refusal of the Commission to permit petitioner to intervene in subsequent phases of the proceeding. The Commission's rules allow informal offering of testimony and this is what the majority suggests to the petitioner -- who sought to proceed in forma paupers and to be allowed full intervention rights such as cross-examination. It is not my position that any member of the public who seeks formal intervention in a matter before an administrative agency should automatically be granted that privilege. The agency has an obligation to make a judgment that such intervention would be useful to the agency's task. But it seems to me that where there is substantial likelihood that intervention will serve a useful purpose it should be granted. In this case petitioner has demonstrated understanding of two rather subtle issues in the ATT proceeding and has made concrete suggestions as to how to deal with those issues. He is committed to supporting the consumer of telephone service -- whose voice has yet to reach the level of a whisper in our chambers. Whether or not the Commission is legally obligated to grant the petitioner leave to intervene, it might gain a great deal from his participation; it can lose but little.


   I believe that petitioner has raised serious questions both as to the Commission's procedures in this case and as to the result it has reached. I have previously expressed my concern that the public has not been adequately represented in this proceeding. (A.T. & T., 9 F.C.C.2d 30, 143 (1967).) The Commission's staff, normally expected in a rate case to take a vigorous position of advocacy, has been limited to the role of "insuring a complete record" and then serving as advisers to the Commission. Especially since the Commission has not so much as tried to provide even an internal advocate for the consumer, we have no business brushing off a conscientious effort to speak for the hundreds of thousands of other nameless users of telephone service.


   The problems with timeliness, the request to proceed in forma paupers, and the difficulty in dealing with the complex issues in this case all demonstrate the substantial barriers to effective public representation by an individual before administrative agencies. Once the staff of an agency was expected to perform that representational function. But it is no criticism of the Commission's staff to say that the Commission is disinclined to have its staff constantly and effectively questioning, challenging, and opposing the clientele whom the agency regulates. Everything we know about regulatory agencies militates against their effective public-interest advocacy over a sustained period of time. And although the staff devoted to this case is very capable and hardworking, the Commission has chosen to employ them in ways which dilute their effectiveness in challenging other interests in this hearing. Thus, if the staff were to take a strong position in this proceeding on the public record, they then become liable to the charge that their expert advice to the Commission is prejudicial to other parties. In fact, ATT made precisely that argument in its briefs.


   In fact, the Commission's ability to represent the public has been subject to serious challenge in recent times by the executive branch, the [*282] courts, and the academic community. The thrust of the appearance by the Department of Justice before the Commission in the ABC-ITT case was that the public interest had not been upheld by the Commission. The Court of Appeals for the District of Columbia has said in a broadcast license case: "The theory that the Commission can always effectively represent the listener interest * * * is one of those assumptions we collectively try to work with so long as they are reasonably adequate. When it becomes clear, as it does to us now, that it is no longer a valid assumption which stands up under the realities of actual experience, neither we nor the Commission can continue to rely on it. * * *" (Office of Communication of United Church of Christ v. F.C.C., 359 F. 2d 994, 1003-1004 (1966).) The late Prof. Edmund Cahn (quoted by the court in that case) has written: "Some consumers need bread; others need Shakespeare; others need their rightful place in national society. What they all need is processors of law who will consider the people's needs more significant than administrative convenience." ("Law in the Consumer Perspective," 112 U. Pa. L.R. 1, 13 (1963).)


   It is difficult to suggest remedies. The intervention of an executive agency in the ABC-ITT case provided a salutary influence on the Commission's process -- even if it did not change the Commission's decision. Perhaps intervention by executive agencies in the ATT case could work to further the representation of the small user, if those executive agencies did not simply appear as large communications users (like the General Services Administration), but, in fact, viewed their constituency as the general public. Perhaps special private organizations designed specifically to intervene in important administrative cases could be helpful. Often the creation of a new, enthusiastic governmental entity can have a beneficial influence, and when it decays a new entity must be constituted.


   Commissioner Loevinger has made several thoughtful comments on the procedures used in this case. (See the opinions cited by Commissioner Loevinger in his opinion concurring in the Commission's Interim Order, 9 F.C.C. 2d 30, 117 (1967).) And in the only other case to come before the full Commission on the question of who was to be allowed to intervene in this proceeding, Commissioner Loevinger concurred in denying the Telephone Users Association, Inc., participation, but noted: "It appears to me that the household users of telephones are not, in fact, represented in this proceeding and that they should be represented. In concur in this order only because the showing of petitioner gives no indication that petitioner could or would competently represent the household users of telephones." (A.T. & T. Co., 7 P&F Radio Reg. 2d 758, 760 (1966).) It seems to me that many of the same considerations are present in this instance.


   Finally, the questions raised by the petitioner deserve some response by the Commission. Petitioner says that ATT followed an unnecessarily conservative policy with regard to financing and that the added costs of this conservative policy were imposed on petitioner and those he represents. He seeks compensatory action for these overcharges -- action to be ordered by the Commission. Of course, ATT never admitted during the rate proceeding that its policy with regard [*283] to financing had been unwise, but recent reports seem to indicate that Bell is now trying to achieve a higher debt ratio. And the Commission obliquely criticized Bell's past policies by saying: "Since the record justifies the conclusion that respondents are no more risky than the electrics, it follows that respondents can support a capital structure with a debt ratio much closer to the electrics than at present." (A.T. & T., 9 F.C.C. 2d 30, 87 (1967).) The question as to whether consumers are entitled to rebates because Bell followed the policies it did is on to which the Commission could give its attention. It has not, and I do not know what my views on the question might be. The point is that the Commission never confronted a significant question which it might have had there been a vigorous, committed advocate for the consumer of telephone service.


   Petitioner also suggests that Bell's refusal to use accelerated depreciation with flow-through, and the Commission's refusal to impute rate savings even though Bell chose not to use accelerated depreciation, also constitutes violation of the congressional mandate to set fair and reasonable rates. He believes this course likewise entitles consumers to refunds. The Commission in its decision recognized that not taking accelerated depreciation with flow-through reduced ATT's risk vis--vis businesses who did, but decided to consider the merits of accelerated depreciation in the next phase of the proceeding. A.T. & T. 9 F.C.C. 2d 30, 86 (1967).)


   One of the problems in utility regulation is "regulatory lag." A regulatory agency necessarily takes time to order rate decreases or changes in utility practices even when some remedy is obviously needed. The result is a windfall to the regulated company during the hearing, which has an interest in postponing action as long as it can. It is a windfall to the company because the consumer has no way to recapture the excess rates he has paid. Petitioner has proposed a way to remedy that situation.


   I have said before that the public has not been as well represented as it might have been in this Case. And I question whether a single individual proceeding in forma paupers, with an interest obviously generated long after the Commission has made major determinations in the case, can provide the public all the representation to which it is entitled. And I would be more inclined to dismiss this petition entirely if I thought that someone with the resources to do the job of representing the public were likely to come forward and that the Commission would be pleased by his appearance. That appearing unlikely, I concur in part and dissent in part to today's decision.


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