In re New Jersey Bell Telephone Co.

676 A.2d 1133, 291 N.J. Super. 77, 1996 N.J. Super. LEXIS 244
CourtNew Jersey Superior Court Appellate Division
DecidedJune 13, 1996
StatusPublished
Cited by9 cases

This text of 676 A.2d 1133 (In re New Jersey Bell Telephone Co.) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re New Jersey Bell Telephone Co., 676 A.2d 1133, 291 N.J. Super. 77, 1996 N.J. Super. LEXIS 244 (N.J. Ct. App. 1996).

Opinion

The opinion of the court was delivered by

KESTIN, J.A.D.

In the Telecommunications Act of 1992 (the Act), N.J.S.A. 48:2-21.16 to -21.21, the Legislature found and declared, inter alia, that

(1) In a competitive marketplace, traditional utility regulation is not necessary to protect the public interest and that competition will promote efficiency, reduce regulatory delay, and foster productivity and innovation.
* *
(5) It is in the public interest to relieve interexchange telecommunications carriers 1 from traditional utility regulation.
[N.J.S.A. 48:2-21.16b (footnote added).]

[83]*83Accordingly, the Legislature conferred upon the Board of Regulatory Commissioners (the Board)

the authority to approve alternative forms of regulation in order to address changes in technology and the structure of the telecommunications industry; to modify the regulation of competitive services; and to promote economic development.
[N.J.S.A. 48:2-21.16a(5).]

The Board is empowered to approve a plan for an alternative form of regulation if it finds that the plan

(1) will ensure the affordability of protected telephone services;
(2) will produce just and reasonable rates for telecommunications services;
(3) will not unduly or unreasonably prejudice or disadvantage a customer class or providers of competitive services;
(4) will reduce regulatory delay and costs;
(5) is in the public interest;
(6) will enhance economic development in the State while maintaining affordable rates;
(7) contains a comprehensive program of service quality standards, with procedures for board monitoring and review; and
(8) specifically identifies the benefits to be derived from the alternative form of regulation.
[N.J.S.A. 48:2-21.18a.]

Several months after the January 17, 1992 effective date of the Act, New Jersey Bell Telephone Company, now Bell Atlantic-New Jersey (petitioner), filed a petition for approval of a new system of regulation. Pursuant to N.J.S.A. 52:14F-8b, the Board heard the matter directly, and on an accelerated schedule. It approved a modified plan in a decision and order dated May 6,1993. Further modifications were approved at a June 11 meeting and confirmed in an order entered on July 23, 1993. The Division of Rate Counsel, now the Division of Ratepayer Advocate (Rate Counsel), and the New Jersey Cable Television Association (NJCTA) filed separate appeals from the Board’s decision, which we consolidated. AT & T Communications of New Jersey, Inc. (AT & T/NJ) filed a cross-appeal. MCI Telecommunications Corporation (MCI), having been accorded the status of intervenor before the Board, is a nominal respondent.

[84]*84Rate Counsel and NJCTA argue that the Board’s determinations finding the approved plan to provide for just and reasonable rates and to meet statutory criteria were not supported by substantial credible evidence in the record. NJCTA also argues that the Board’s approval of the plan before completion of the current regulatory regime (specifically, a rate stability plan experiment) was arbitrary; and, further, that the appearance of bias required the Board, in the circumstances, to refer the matter to the Office of Administrative Law for a hearing as a contested case, pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-9 and -10. The arguments of AT & T/NJ and MCI are, in one respect, variations on a common theme: that the plan as approved violated the Act in that the determinations to delete the plan’s “attribution” safeguard and not to lower access rates rendered inadequate the plan’s provisions for preventing discrimination against competitors. MCI, additionally, echoes Rate Counsel’s argument that the Board failed in its duty to determine that petitioner’s rates, especially its access rates, were currently just and reasonable.

The issues before us place in question the adequacy and permissibility under prevailing law of petitioner’s modified plan as approved by the Board (the plan). There is no dispute, however, as to the elements of the approved plan as outlined in the Board’s decision and orders of May 6 and July 23,1993.

Intended to be effective until December 31, 1999, the plan provides for the replacement of traditional rate-base/rate-of-return regulation with an alternative system designed to provide petitioner with economic incentives and the wherewithal to apply advanced technologies to its communications system so as to achieve a state-of-the-art telecommunications network at the earliest possible time. Most particularly, petitioner seeks through the plan to accelerate completion of a fiber optic telecommunications network it refers to as “Opportunity New Jersey”.

[85]*85In general under the plan, in keeping with the design of the Act, petitioner’s non-competitive protected telephone services2 are to be regulated differently, and more intensely especially with regard to rates, than its competitive services.3 In respect of the latter, the Board may not “regulate, fix or prescribe the rates, tolls, charges, rate structures, terms and conditions of service, rate base, rate of return, and cost of service[.]” N.J.S.A. 48:2-21.19a. Among its other features and details, the plan makes specific provision for

• Board regulation of increases in tariffed rates for rate regulated services, including maintenance of rates for some;
• review and approval of rate structures and restructures;
• monitoring of rates of return (including distributions of excessive returns on equity), rate restructuring, and depreciation rates and methods;
• regulating the provision of intraLATA 4 services;
[86]*86• establishing standards and procedures for defining and identifying competitive and non-competitive services, and governing their relationship, including criteria and means for unbundling them where appropriate, see N.J.S.A. 48:2-21.19(e)(l), with an express requirement that the rates charged for petitioner’s “own competitive service shall exceed the rates charged to others for the noncompetitive services on which the competitive service depends”, see N.J.S.A. 48:2-21.19(e)(2);
• general systems of continuing oversight and review by the Board with particular reference to preventing cross-subsidization of competitive services by rate regulated services; and
• methods for properly reattributing revenues from access charges paid by interexchange telecommunications carriers insofar as they have been attributed to the cost of local exchange or other non-competitive services.

In keeping with the tenor of the Act and its more recently enacted federal counterpart, the Telecommunications Act of 1996,

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Bluebook (online)
676 A.2d 1133, 291 N.J. Super. 77, 1996 N.J. Super. LEXIS 244, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-new-jersey-bell-telephone-co-njsuperctappdiv-1996.