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Private Tele-communications v. Commerce Com.





APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding.


Plaintiffs appeal from an order affirming an Illinois Commerce Commission's (Commission) order effectuating a tariff relating to Illinois Bell Telephone's (Bell) Loudspeaker Paging Systems-Type 2. They contend that: (1) the trial court erred in finding that the Commission had regulatory jurisdiction over this activity; (2) the trial court and the Commission improperly interpreted and refused to enforce a 1956 Bell system consent decree; and (3) the Commission's determination that this activity is an integral part of common carrier tele-communication services provided by Bell is not supported by the evidence.

Type 2 paging is an intraoffice loudspeaker paging system which is an optional feature provided to Bell customers. It is not a self-contained unit. Although it has amplifiers and loudspeakers, it has no separate transmitting equipment. Instead, telephone equipment performs the transmitting function. Type 2 paging cannot operate independently of the telephone system.

To activate Type 2 paging, the customer dials a specific number from his telephone station or depresses a button on a key telephone set and then speaks into the telephone handset. His voice is converted into electrical impulses by the receiver, amplified, and transmitted along telephone wires to loudspeakers located throughout his premises. Any telephone handset within the communications system may be used to gain access to the paging feature. It is intended primarily for use in summoning people to the telephone, but it may also be used for transmitting instructions, announcements or other incidental messages.

A customer is not required to obtain Type 2 paging from Bell, but may obtain paging equipment from other suppliers such as plaintiffs, for direct interconnection with the Bell system. Bell fears that unless it offers comparable service, customers would use other suppliers for all their tele-communications needs, not just for loudspeaker paging services.

Bell's first tariff for a Loudspeaker Paging System was filed with the Commission in 1949. This service, now designated as Type 1 paging, to distinguish it from the new tariff, was designed to function either as a self-contained unit or as a part of a telephone system, using the telephone as the transmitting equipment. Although Bell ceased offering Type 1 paging to new customers in May, 1971, it continued to provide it to customers who obtained the service prior to May 18, 1961.

On September 17, 1974, Bell filed a Type 2 paging tariff with the Commission. Pursuant to section 36 of the Public Utilities Act (Ill. Rev. Stat. 1973, ch. 111 2/3, par. 36) the Commission suspended the tariff and ordered hearings on the propriety of the proposed rates and conditions for the service.

Plaintiffs, many of which are engaged in the sale and leasing of paging systems, intervened in the case. They moved to strike the tariff, arguing that the Commission lacked jurisdiction; however, the Commission denied their motion.

Following the hearings, the Commission issued an order on February 13, 1975, lifting the suspension and approving the tariff. The order stated that the Commission had jurisdiction over Bell and the subject matter, and that the regulation of this activity did not violate a Federal antitrust consent decree.

Plaintiffs, together with a third intervenor, the Electrical Contractors Association, filed a petition for rehearing arguing that "The Illinois Commerce Commission is without jurisdiction to consider, approve or regulate the subject matter of the subject tariff." When the Commission denied their petition plaintiffs sought administrative review in the circuit court.

After considering briefs and arguments, the circuit court reversed the Commission's order approving the tariff. Initially, the court found that the Commission had jurisdiction to hear the matter, but held that its finding that this activity was subject to regulation was against the manifest weight of the evidence. Defendants petitioned for rehearing, and on January 8, 1976, the circuit court vacated its previous order and affirmed the Commission's order approving the tariff.

At the time of the Commission hearings eight telephone companies in Illinois, besides Bell, provided loudspeaker paging service to their customers pursuant to published tariffs and regulations of the Commission.


Plaintiffs first contend that the Commission erred in finding that it had regulatory jurisdiction over this activity. They argue that Type 2 paging is not a telephone service, but rather a private business whose charges ...

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