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07/12/71 the Associated Press, v. Federal Communications

July 12, 1971

THE ASSOCIATED PRESS, PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS, THE WESTERN UNION TELEGRAPH CO., AMERICAN TELEPHONE AND TELEGRAPH CO., INTERVENORS.

AEROSPACE INDUSTRIES ASSOCIATION OF AMERICA, INC., PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS, THE WESTERN UNION TELEGRAPH

TRANSPORT ASSOCIATION OF AMERICA ET AL., PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS, THE WESTERN UNION TELEGRAPH CO., BETHLEHEM STEEL CORPORATION, ET AL., AMERICAN TELEPHONE AND TELEGRAPH CO., INTERVENORS. AMERICAN TRUCKING ASSOCIATIONS, INC., PETITIONER,

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS, THE WESTERN UNION

TELEGRAPH CO., AMERICAN TELEPHONE AND TELEGRAPH CO., INTERVENORS. AERONAUTICAL RADIO, INC., PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF



Robinson, MacKinnon and Robb, Circuit Judges.

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Co., American Telephone and Telegraph Co., Intervenors. AIR

America, Respondents, The Western Union Telegraph Co.,

American Telephone and Telegraph Co., Intervenors. NATIONAL

ASSOCIATION OF MOTOR BUS OWNERS, Petitioner, v. FEDERAL

COMMUNICATIONS COMMISSION and United States of America, Respondents, The Western Union Telegraph Co., American

Telephone and Telegraph Co., Intervenors

Nos. 23833, 23836, 23839, 23841, 23842, 23843 1971.CDC.168

Date Decided: July 12, 1971; As Amended July 15, 1971.

APPELLATE PANEL:

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE ROBB

The petitioners challenge two orders *fn1 of the Federal Communications Commission, designating for hearing and investigation a revised tariff submitted by the American Telephone and Telegraph Company on October 1, 1969. The tariff, filed pursuant to Sec. 203 of the Communications Act of 1934, *fn2 proposed increased rates for a private line service known as TELPAK. The petitioners are users of the TELPAK service. AT&T and The Western Union Telegraph Company, a competitor of AT&T, have intervened in support of the orders.

By the two orders the Commission, pursuant to Sec. 204 of the Act, *fn3 (1) ordered an investigation and hearing as to the lawfulness of the proposed tariff; (2) suspended the effective date of the tariff for three months and (3) provided that AT&T must keep accurate account of all amounts received by reason of the increased rates pending completion of the hearing. Attacking the orders on several grounds the petitioners contend that the Commission was required to reject the proposed tariff. We think the orders must be sustained.

The challenged tariff proposed increased rates for TELPAK C and D. TELPAK is a private line service offered to large-volume users such as the petitioners in this case. When first offered by AT&T in 1961, TELPAK consisted of four distinct categories of service: TELPAK A, B, C, and D, respectively offering 12, 24, 60 and 240 equivalent voice circuits. A Commission investigation of the rates resulted in a decision in 1964 holding (1) that the TELPAK A and B rates were discriminatory and not justified by competitive necessity and (2) that the TELPAK C and D rates were apparently justified by competitive necessity but that a further investigation should be made to determine whether these rates were compensatory. 38 F.C.C. 370 (1964); 37 F.C.C. 1111 (1964); 38 F.C.C. 761 (1965). On review this court sustained the Commission's decision. American Trucking Associations, Inc. v. FCC, 126 U.S.App.D.C. 236, 377 F.2d 121 (1966), cert. denied, 386 U.S. 943, 87 S. Ct. 973, 17 L. Ed. 2d 874 (1967).

After this court decided the American Trucking Associations case the Commission in 1966 incorporated the issue whether the existing TELPAK C and D rates were lawful into the AT&T General Rate Investigation, Docket No. 16258. 7 F.C.C.2d 30; A. 7. The Commission pointed out that the purpose of that investigation was "among other things, to deal with variations in the level of earnings of different classes of service and not with individual rate components within rate classifications." 7 F.C.C.2d at 31; A. 8. However, the Commission ordered AT&T to submit additional cost data as to TELPAK C and D; and the Commission recognized that such data "may be accompanied by proposed changes in those rates". Continuing, the Commission said "We do not wish such specific rate issues to become part of the more general issues of Docket No. 16258. Accordingly, when such tariff filings are made, if need therefor arises, it is expected that those issues will be examined in a separate docket." 7 F.C.C.2d at 31; A. 8.

On January 9, 1967 AT&T submitted to the Commission and distributed to all parties in Docket No. 16258 cost data and new rate proposals for TELPAK C and D. The proposed rates were at the levels now challenged by the petitioners. In submitting these rates AT&T stated:

we propose that these rate changes for TELPAK C and D should not become effective until the latter part of 1967. It is expected that additional supporting detail will be furnished at the time revised tariff schedules are filed.

Respondents [AT&T and the Associated Bell System Companies] recognize, of course, the difficulties that present TELPAK customers will encounter in evaluating their communications requirements and in restructuring their communications networks, in light of the rate increases proposed in this statement and of the elimination of TELPAK A and B. These customers should be afforded adequate time to make the necessary rearrangements. A. 22, 24-25.

Thirteen months later, on February 1, 1968, AT&T filed tariff revisions embodying the rates proposed on January 9, 1967. These rates were to become effective April 1, 1968, but on March 13, 1968 AT&T asked special permission from the Commission to ...


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