Prof. William Jones: The Common Carrier Concept as Applied to Telecommunications: A Historical Perspective

[Submitted to the Federal Communications Commission as Appendix to the Reply Comments of International Business Machines Corporation in Competitive Carriers Rulemaking CC Docket No. 79-252 (filed April 4, 1980).]

This paper is being lodged with the Clerk of the court for the convenience of the Court. It is referred to in the Brief for Intervenor International Business Machine Corporation in Computer & Communications Industry Association v. Federal Communications Commission, No. 80-1478 and consolidated cases (filed January 11, 1982).

[Reprinted with permission of the author granted July 2006. Summary omitted. NB: Accuracy of transcription is not guaranteed - indeed we can guarantee that we made mistakes - please let us know if you find any]

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INTRODUCTION

The Communications Act of 1934, in Title II pertaining to common carrier, confers extensive authority on the FCC to regulate the rates and business practices of communications entities classified as common carrier.[1] The Act defines a "common carrier" as "any person engaged as a common carrier for hire, in interstate or foreign communications by wire or radio or in interstate or foreign radio transmission of energy… " [2] The only legislative history bearing directly on this definition asserts that it was not intended to include "any person if not a common carrier in the ordinary sense of the term." [3] Thus, both the language and the legislative history of the 1934 enactment make necessary an inquiry into the antecedent understanding of the scope of the common carrier concept as applied to telecommunications.

This inquiry is more sharply focused by another aspect of the 1934 legislation. In its common carrier provisions the statute was in large measure a reenactment of earlier federal legislation regulation telecommunications common carrier – the Mann-Elkins Act of 1910. [4] In the [Jones A-8] absence of Congressional intent to expand the general scope of common carrier regulation in 1934, it is particularly pertinent to consider the understanding of the common carrier concept as it had developed prior to 1910.

Recent telecommunications decisions have defined a common carrier as one that holds itself out to serve members of the public indiscriminately. [5] In the context of telecommunications, this approach does not adequately identify important aspects of the common carrier concept. A review of the common law precedents, and of the extensive state and federal legislation that antedated the Mann-Elkins Act of 1910 and the Communications Act of 1934, reveals that another factor was of controlling significance. The basis for regulating telecommunications entities as common carrier was their possession of special franchises or monopoly positions. There is no basis for extending the common carrier concept to encompass communications entities that do not possess special franchise or monopoly power. [Jones A-9]

I THE COMMON LAW BACKGROUND

Common law doctrines applicable to common carrier have two distinct sources. The first is an aspect of the law of bailments and is concerned with the responsibilities of carriers for goods in their possession. The second is an aspect of the law of franchises and is concerned with government control of enterprises exercising exclusive privileges. There are some features in common, but the underlying policy considerations are quite different. In determining the responsibility of a carrier for goods in its possession, the critical question is the nature of the carrier's undertaking: did it hold itself out as a general carrier of such goods? In determining the proper scope of government regulation of a carrier, the important question is whether the carrier is in a position to control the flow of traffic because of special privileges or monopoly power. [Jones A-10]

A. COMMON CARRIER AND THE LAW OF BAILMENTS

Beginning at least as early as the decision in Morse v. Slue,[6] the English courts imposed upon common carrier distinctive responsibilities for goods in their possession. They were held to be insurers, responsible for the safe delivery of goods entrusted to them, absent intervention by act of God or the King's enemies. The doctrine was designed to protect shippers against breaches of trust on the part of carriers. As stated in the leading case of Coggs v. Bernard,[7] the rule is

contrived by the policy of the law, for the safety of all persons, the necessity of the whose affairs oblige them to trust these sorts of persons, that they may be safe in their ways of dealing; for else the carriers might have an opportunity of undoing all persons that had any dealings with them, by comtiving with thieves, etc., yet doing it in such a clandestine manner, as would not be possible to be discovered.

A similar thesis was articulated in Foward v. Pittard [8] where a common carrier by wagon was held responsible, in the absence of negligence, for the loss of goods in a fire.

[T]o prevent litigation, collusion, and the necessity of going into circumstances impossible to be unraveled, the law presumes against the carrier, unless he shows it was done by the King's enemies or by such act as could not happen by the intervention of man, as storm, lightening, and tempests. . . [The carrier is not excused in the event of robbery] for fear it may give room for collusion, that the [carrier] may contrive to be robbed on purpose, and share the spoil.

It also was asserted that the rule of strict liability had a tendency to make carriers more careful.[9]

These peculiar responsibilities of common carrier appear not to be related to any concept of monopoly. Neither the facts nor the reasoning of the leading cases suggest that common carrier generally, or the particular carriers before the courts, possessed monopoly power. Indeed, there is a strong indication to the contrary, for as early as Morese v. Slue, [10] and consistently thereafter, [11] the English courts permitted common carriers to revise the terms of their responsibilities by special contracts with shippers. If monopoly were the basis of the carrier's special responsibilities, it would be inconsistent with the policy of the law to allow the carrier to avoid its responsibilities in this manner, at least in the absence of close scrutiny.

Furthermore, this branch of the law of common carrier was concerned almost exclusively with bailments (the custody of goods). While there is dicta concerning the common carrier's duty to serve, and to charge a reasonable price, these almost invariably were steps in judicial reasoning designed to establish a consideration for the carrier's responsibility (the chipper's duty to pay) [12] or a justification for contracts providing exemptions from strict liability (the shipper's right to obtain service free of the contractual exemption on demand). [13] The reported cases disclose no instances of litigation concerned with the reasonableness of a carrier's rates, and only one instance of a suit for refusal to serve. [14] Writing in 1879 on common carrier and the Common Law, Oliver Wendell Holmes considered the sole issue to be the responsibilities of carriers for the safe deliver of goods in their possession. [15] [Jones A-13]

B. COMMON CARRIER AND THE LAW OF FRANCHISES

The second source of the law of common carrier originates in the writings of Sir Matthew Hale . In De Portibus Maris, written about 1670 and published in 1887, Lord Hale distinguished between private and public wharves and cranes: [16]

A man for his own private advantage may in a port town set up a wharf or crane, and take what rates he or his customers can agree for cranage, wharfage, [etc.;] for he doth no more than is lawful for any man to do, viz, make the most of his own... but such wharfs cannot receive customable goods against the provision of the statute of 1 Eliz. cap. II.

If the king or a subject have a publick wharf, unto which all persons that come and unlade or lade their goods for the purpose, because they are wharfs only licensed by the queen, according to the statute of 1 El. Cap II, or because there is no other wharf in that port, as it may fall out where a port is newly erected; in that case there cannot be taken arbitrary and excessive duties for cranage, wharfage, [etc.,] neither can they be enhanced to an immoderate rate, but the duties must be reasonable and moderate, though settled by the king's license or charter. For now the wharf and crane and other conveniences are affected with a publick interest, and they cease to be juris privati only...

But in that case the king may limit by his charter and license him to take reasonable tolls, though it be a new port or wharf, and make publick; because he is to be at [Jones A-14] the charge to maintain and repair it, and find those conveniences that are fit for it, as cranes and weights.

The position of Lord Hale found support in ancient common law doctrines recognizing the special status responsibilities of ferriers,[17] and was applied by the English courts in two cases involving port facilities. In Bolt v. Stennet (1800), [18] the licensed owner of a crane in a port sued defendant for using the crane without permission. Defendant's justification -- that the crane was necessary to land goods and that he had a right to use it on payment of reasonable compensation -- was accepted as proper. In Allnut v. Inglis (1810),[19] defendant had the only warehouse in London in which plaintiff's wine could be stored free of duty. Plaintiff refused to pay defendant's storage fee and, as a consequence, was compelled to pay duty. In a suit to recover damages, plaintiff prevailed when defendant declined to contest plaintiff's claim that it had tended reasonable compensation for the storage requested. Because defendant had a monopoly, it was limited to a reasonable rate: [Jones A-15]

If for a particular purpose, the public have a right to resort to [the warehouseman's] premises and make use of them, and he have a monopoly in them for that purpose, if he will take the benefit of that monopoly, he must as an equivalent perform the duty attached to it on reasonable terms. [According to Lord Hale,] whenever the accident of time casts upon a party the benefit of having a legal monopoly of landing goods in a public port... he is confined to take reasonable compensation only for the use of the wharf[20]

That there were two separate sources of common carrier responsibilities is supported by the separate attention given to each by the leading treatise writers of the 19th century. James Kent, in his Commentaries on American Law (1848), [21] discussed separately the rights and obligations of holders of franchises [22] and the responsibilities of common carrier for goods in their possession. [23] The source of subsequent confusion is suggested by Kent's Commentaries, for the railroads -- the most important business enterprises of the 19th century - were discussed under both headings. [Jones A-16]

II EARLY TELEGRAPH LEGISLATION IN THE STATES: 1845-1879

Principles of telecommunications regulation were first expressed in state statutes passed in response to invention of the telegraph. The structure and timing of the early statutes leave little doubt that they were premised on the franchise theory of regulation articulated by Lord Hale.

To function effectively, telegraph companies needed legislative authorization to use public thoroughfares. In many instances the right to traverse private property also was important. Finally, the power to proceed as a corporation was of value to facilitating the aggregation of necessary capital. The early state legislation granted one or more of these privileges and, in recognition of the favored position conferred, exacted obligations in return. Even when the statutes were silent on the responsibilities of telegraph companies, the courts often implied obligations on the basis of the special privileges conferred. State legislation also was influenced by the patent monopoly granted to Morse. The most general pattern was the grant of special privileges (use of public roads, eminent domain, incorporation) joined with the requirement that the company serve all customers, including other telegraph lines, without discrimination -- a mode of regulation appropriate to guard against monopoly abuse. [Jones A-17]

A. NEW YORK

As an important commercial center, New York exerted a substantial influence on early patters of state legislation. In 1845, New York enacted that

The proprietors of the pentent rights of Morse's electromagnetic telegraph may be and hereby are authorized to construct lines of said telegraph from point to point and across any of the waters within the limits of this state, by the erection of posts, piers or butments for sustaining the wires of the same: Provided that the same shall not in any instance be so constructed as to endanger or injuriously interrupt the navigation of such waters; and provided also, that the private right of individuals shall be in no wise impaired by the provision of this act.[24]

Three years later, in 1948, New York adopted the first comprehensive telegraph legislation: "An act to provide for the incorporation and regulation of telegraph companies."[25] The first three sections of the act were concerned with the prerequisites for incorporation, requiring among other things a description of the "general routs of the line of telegraph, designating the points to be connected." Section 4 conferred the normal legal powers on the corporation, including the power to "make such prudential rules, regulations [Jones A-18] and by-laws, as may be necessary in the transaction of their business, not inconsistent with the laws of this state or of the United States."

Section 5 permitted construction of the telegraph line "along and upon any of the public roads and highways, or across any of the waters within the limits of this state, by the erection of the necessary fixtures . . . provided the same shall not be so constructed as to incommode the public use of said roads or highways, or injuriously interrupt the navigation of said waters..." Section 6 prescribed procedures by which landowners would be compensated for the use of their lands by the telegraph company, implicitly conferring the equivalent of the power of eminent domain.

The regulatory provisions of the statute were included in sections 11 and 12. They required service to all customers, including other telegraph companies, on a nondiscriminatory basis:

s 11. It shall be the duty of the owner or the association owning any telegraph line, doing business within this state, to receive dispatches from and for other telegraph lines and associations, and from and for any individual, and on payment of their usual charges for individuals for transmitting dispatches, as established by the rules and regulations of such telegraph line, to transmit the same with impartiality and good faith, under penalty of one hundred dollars for every neglect or refusal to do so... [26] [Jones-A19]

s 12. It shall likewise be the duty of every such owner or association, to transmit all dispatches in the order in which they are received, under the like penalty of one hundred dollars . . . provided, however, that arrangements may be made . . . for the transmission of [newspaper dispatches] out of [their] regular order.

An 1850 statute added the provision:

Any person connected with a telegraph company... who shall willfully divulge the contents, or the nature of the contents, of any private communication entrusted to him for transmission or delivery, or who shall willfully refuse or neglect to transmit or deliver the same, [shall be adjudged guilty of a misdemeanor.] [27]

In 1951, telegraph companies were authorized to extend their lines, to construct branch lines, and to united with other incorporated telegraph companies. [28] [Jones-A20]

B. REPLICATION OF THE NEW YORK MODEL

In 1847, Virginia provided that any person, satisfying the board of public works of its right to use the invention, could construct telegraph lines along public roads with the consent of local authorities. A penalty was imposed on any telegraph agent "who may, from corrupt or improper motives, withhold or delay the transmission of messages or intelligence, for which the customary charges have been paid or tendered." [29] An 1849 codification of prior legislation referred to the power of telegraph companies to "make reasonable charges on [telegraph] messages." [30] A more [Jones-A31] comprehensive statute, similar to that of New York, was enacted in 1852. [31] The reference to reasonable charges was carried forward in subsequent codifications. [32]

Michigan in 1847 authorized persons and companies to construct telegraph lines on public roads, but permitted intrusions on private lands only with the consent of the property owner. It was further provided that at each telegraph office "communications received … shall have precedence in the order in which they are received, and may be communicated accordingly. [33] In 1851, a comprehensive telegraph statute was enacted, authorizing the incorporation of telegraph companies, the use of public thoroughfares for telegraph lines, and the use of private lands for the same purpose on payment of compensation to the owners. The regulatory features of the New York legislation of 1848 and 1850 were included. [34]

Connecticut in 1848 enacted legislation almost identical to the New York statute of the same year. [35] Illinois adopted similar legislation in 1849, [36] California in 1850, [37] and Maryland in 1852. [38]. Missouri adopted substantially similar legislation in 1851, but did not provide for the general incorporation of telegraph companies.

C. Other Legislation with a Franchise Orientation

In 1847, Kentucky authorized persons possessing the necessary patent rights to construct telegraph lines on public highways; the next year construction was authorized across private lands upon payment of compensation to the owners. [40] The legislature expressly reserved the right to regulate telegraph rates in the future, and stipulated that all messages shall be sent in the regular order in which they are presented to the office or agent." An 1852 statute imposed a penalty if a telegraph agent, "from corrupt or improper motives or willful negligence, shall withhold the transmission of messages … for which the customary charges have been paid." [41]

Louisiana in 1848 authorized persons to construct telegraph lines on public roads, and over private lands upon payment of compensation; [42] a separate enactment made it unlawful for telegraph personnel to:

Refuse or omit to send or deliver any dispatch or message on which the charges or fees have been paid [or tendered;] or cause or direct to be detained or delayed, such dispatch or message, In order to give precedence to a message or dispatch subsequently brought to the office; …. Or … in any way [to] give precedence of time in sending or delivering any dispatch or message … over any dispatch or message previously offered for transmission… [43]

Legislation in 1853 and 1855 continued the authorization to use public and private lands and required telegraph companies "to transmit all communications, which are not immoral or contrary to law or public policy… in the order in which" they are presented. [44]

In 1848 the Wisconsin Territory authorized persons with the necessary patent rights to construct telegraph lines along public roads and private lands with the consent of the owners. Transmissions were to "have precedence in the order in which they are received." [45] The territorial legislation was retained when Wisconsin became a state, and in 1851 incorporation of telegraph companies under general legislation was authorized. [46]

Massachusetts in 1949 authorized telegraph companies to use public roads subject to local regulation and payment of damages to owners of adjacent properties. It also adopted a provisional patterned of section 11 of the 1949 New York legislation, requiring telegraph companies to transmit messages faithfully and impartially," upon payment of their usual charges, from and for both individuals and other telegraph lines. [47]

The same year Pennsylvania required telegraph companies "to forward and receive over their own lines, all messages that may be offered for transmission, by individuals or incorporated companies," upon tender of the usual fee. [48] Other regulatory provisions were included in specific legislation incorporating particular telegraph companies, which, in addition, conferred authorizations to use public and private lands. [49]

Iowa in 1851 authorized telegraph operations on public and private lands and imposed the obligation to receive dispatches from other telegraph lines and "transmit same with fidelity and without unreasonable delay." In addition, erroneous transmissions were made actionable and telegraph entities were made liable "for all damages resulting from failure to perform any other duties required by law." [50]

New Jersey in 1853 authorized the general incorporation of telegraph companies and the use of public roads with local consent. The statute included provisions requiring the free transmission of messages for public officials, at least one for every 40 miles of line; and the transmission of messages of private persons at or below rates stipulated in the statute. [51] This was the only early statute of general applicability explicitly regulating telegraph rates.

D. Additional Early Telegraph Legislation

A number of states passed legislation intended to facilitate telegraph construction without currently imposing responsibilities of a regulatory nature. Georgia in 1847 authorized telegraph companies to use public roads. [52] Florida granted similar authorization in 1849 provided that the companies answer in damages to affected landowners. [53] In the decades that followed, Alabama authorized use of public roads by telegraph companies (1855), Mississippi provided for general incorporation, use of public roads and compensation to private land owners (1957), [55] Kansas Territory provided for general incorporation and use of public roads (1859), [56] Minnesota authorized use of public roads (1860), [57] Wyoming Territory provided for general incorporation, eminent domain and use of public roads (1869), [58] Montana Territory (1872) [59] and Texas (1871) [60] enacted similar legislation, and North Carolina authorized use of public roads and conferred the power of eminent domain (1875). [61] Regulatory legislation ultimately was adopted in all of these states but not within this time frame. Contemporaneous regulatory provisions often were included in specific incorporation laws.

In several additional states, regulatory legislation was delayed but regulator provisions were enacted during this early period. Ohio in 1847 authorized use of public roads and provided for damages to adversely affected landowners; the next year incorporation of telegraph companies under a general statute was authorized. [62] In 1865, Ohio enacted detailed regulatory provisions requiring telegraph companies to transmit messages from and for individuals and other telegraph companies; to forward telegrams on other lines when requested to do so; to inform customers of any delays in transmission; to transmit and deliver messages in the order of receipt; and to make deliveries of telegrams within the zones prescribed by the regulations of the company. [63]

Tennessee provided in 1848 that lawful owners of any system of telegraphing had the right to us public roads and private lands provided that the system did not conflict with any private right secured by patent; and the board of internal improvement was authorized to license a right-of-way if satisfied that there was no patent infringement. [64] In 1858, Tennessee imposed a duty on telegraph companies to transmit all "messages, including those from other telegraph companies, … in the order of their delivery, correctly, and without unreasonable delay…" [65]

Vermont in 1847 accorded telegraph companies the right to use public roads subject to local regulation, and in [UNDECIFERABLE] established procedures for assessing damages sustained by private landowners. [66] In 1863, Vermont passed an "Act to Provide Against Extortion by Telegraph … Commission," requiring that the companies post schedules of rates in their offices and abide by such published rates. [67]

Colorado, while still a territory, authorized telegraph companies to incorporate under a general statute, to use public roads, and to exercise the power of eminent domain (1862 and 1864). [68] In 1876, telegraph companies were required to transmit messages in the order received and to transmit messages from other telegraph lines "in good faith and without partiality." [69]

West Virginia conferred the power of eminent domain on telegraph companies in 1870 [70] and provided for their general incorporation in 1873. [71] In 1879, it was provided that such companies "shall be deemed public companies and common carrier." [72]

In a few states, the order was reversed, with initial emphasis placed on the regulation of telegraph companies. Indiana in 1852 imposed a duty on telegraph companies to receive dispatches from individuals and other telegraph companies and, on payment or tender of the usual charge, to "transmit the same with impartiality and good faith, and in the order of time in which they were received." In addition, telegraph companies were to be liable for special damages for failure or negligence in operations and were required to deliver messages to any person within the town in which the station was located or within one mile of the station. [73] Legislation in 1853 legalized defects in previously organized corporations, [74] and in 1867 provision was made for the incorporation or telegraph companies and for their exercise of the power of eminent domain . [75]

In 1852, Maine enacted legislation narrowly restricting the liability of telegraph companies, but requiring a refund of charge if a dispatch was improperly or unnecessarily delayed. [76] Early specific incorporation laws provided for the use of public roads and required the transmission of messages from and for individuals and other telegraph lines "with impartiality and good faith." [77] In 1867, provision was made for compensation to private landowners, [78] and in 1868 telegraph companies were required "to transmit all dispatches in the order in which they are received." [79]

Washington territory in 1866 required that telegraph messages be transmitted in the order received, and imposed penalties for "unreasonably and willfully" refusing or neglecting to transmit or deliver telegraph messages or for postponing them out of turn. [80] General legislation explicitly authorizing eminent domain and the use of public roads did not follow until later. [81]

In 1877, the Civil Code of Dakota Territory set forth comprehensive provisions governing common carrier of messages, specifying a duty to serve, a prohibition on preferential treatment, a general standard of reasonable compensation, and restrictions on contracts limiting liability. As to telegraph companies in particular, the statute required the use of "utmost diligence" and the transmission of messages immediately if practicable, and otherwise generally in the order received. [82] General laws granting the right to use public roads and to exercise the power of eminent domain were enacted later. [83]

Toward the end of this early period, additional states enacted comprehensive legislation patterned after the early franchise models. Arkansas in 1861 authorized telegraph companies to use public roads, required that communications be transmitted in the order received, and required that telegraph companies with offices in the same locality transmit message for one another in the order received. [84] Oregon in 1862 authorized construction of telegraph lines on public roads and private property, established a general duty to transmit dispatches in the order received. [85] Utah Territory in 1863 imposed a penalty for unreasonable and willful refusal or neglect to send or deliver any telegraph messages or for postponing it out of order; transmission in the order received was required. [86] The following year provision was made for the general incorporation of telegraph companies, use of public roads and intrusions on private property. [87] In 1866, Nevada provided for incorporation of telegraph companies, use of public roads and exercise of the power of eminent domain; it also required impartial dispatch of telegraph messages , adherence to posted rates, and maintenance of telegraph lines in good condition. [88] Arizona Territory in 1871 authorized telegraph companies to us public roads and required transmission of messages in the order received. [89]

E. An Appraisal of the Early Telegraph Legislation

As might be anticipated, there was significant diversity in matters of detail in the early state legislation applicable to the telegraph industry. There were, however, a number of common features. Most of the statues were interested in facilitating development of the new means of communication, and took affirmative measures to enable telegraph companies to use public streets, to condemn private property, and to adopt the corporate mode of doing business. At or about the same time, most states imposed obligations on telegraph companies to deal with customers and with other telegraph companies in a reasonable and nondiscriminatory manner. Such measures were appropriate as a means of preventing telegraph companies from improperly exploiting monopoly positions, derived in part from patent rights and in part from use of the special privileges obtained under state legislation.

There were a few states – such as Indiana – that imposed obligations without concurrently providing special privileges. There were others – somewhat more numerous – that conferred special privileges without concurrently imposing obligations. These aberrations are more apparent than real. In many cases, complementary legislation was passed within a few years or complementary provisions were included in special legislation – ie., the power of eminent domain and the us of public roads were conferred by general statute while the duty to serve was included in specific corporate chargers, or the duty to serve was articulated in general legislation with the power of eminent domain and use of public roads were encompassed in corporate charters or other legislation. In the few instances where this did not occur, it is a fair conclusion that both rights and obligations were implicit in the apparently incomplete state legislation. As a practical matter telegraph lines could not be built without use of public thoroughfares and without impinging to some extent on private property interests. And, in accordance with legal doctrines prevailing at the time, use of public thoroughfares or the exercise of the power of eminent domain imposed upon a [Jones A-40] telegraph company a duty to provide access to all members of the public on nondiscriminatory terms. [90]

III The Telegraph in Congress 1860 – 1888

In a series of enactments, Congress sought to facilitate the development of the telegraph industry, while at the same time curbing abuses of monopoly position. The legislation responses were two-pronged. First, there was an effort to achieve greater competition in the telegraph industry by encouraging additional lines. Second, in view of existing monopoly conditions, Congress imposed on telegraph companies obligations to provide access on reasonable and nondiscriminatory terms. The two efforts were complementary in part, since one of the means by which telegraph monopoly was extended was by denying independent telegraph companies, operating over competitive segments, access to monopoly segments.

In 1860, Congress authorized the submission of bids to construct to telegraph line from Missouri to the Pacific. The successful bidder was to receive a ten-year contract providing for an annual monetary stipend, a grant of public lands, and right-of-way over other public lands. The Government was to receive a priority in the use of the line, but the interests of the general public also were recognized. It was provided: [91]

That the [line shall be open to the use of all citizens . . . during the term of the … contract, on payment of the regular charges for the transmission of dispatches: [and] such charges shall not exceed three dollars for a single dispatch of ten words, with the usual proportionate deductions upon dispatches of greater length…

That messages received from any individual, company, or corporation, or from any telegraph line connecting with this line at either of its termini, shall be impartially transmitted in the order of their reception . . . .

The legislation further provided that it was not to confer "any exclusive right to construct a telegraph to the Pacific, or debar the government of the United States from granting, from time to time, similar franchise and privileges to other parties." The legislation debates preceding enactment manifested Congressional concern about the monopoly achieved by Western Union in substantial segment of the telegraph industry and the potential for augmentation of that monopoly under this legislation. [92]

Similar concerns were manifested by Congress in subsequent legislation. In the Pacific Railroad Act of 1862, provision was made for the construction of telegraph as well as railroad lines to the Pacific, again with provision for government support and government priority. There was a further provision authorizing a Congressionally directed rate reduction if realized earnings of railroad and telegraph operations exceeded ten percent of cost. [93] The legislation was influenced in part by the monopoly characteristics of the telegraph industry. [94]

In 1864, this legislation was amended to provide:

That the several railroad companies . . . are hereby required to operate and use [their] roads and telegraph for all purposes of communication, travel, and transportation, so far as the public and the Government are concerned, as one continuous line; and in such operation and use to afford and secure to each equal advantages and facilities as to rates, time and transportation, without any discrimination of any kind in favor of the road or business of any or either of said companies, or adverse to the road or business of any or either of said companies, or adverse to the road or business of any or either of the others, and it shall not be lawful for [telegraph proprietors] authorized by this act . . . to refuse, or fail to convey for all persons requiring the transmission of news or messages of like character . . . [95]

The Telegraph Lines Act of 1866 provided that any telegraph companies

Shall have the right to construct, maintain, and operate lines of telegraph through and over any portion of the public domain of the United States, over and along any of the military or post roads of the United States . . . , and over, under, or across the navigable streams or waters of the United States.

Provision was made for priority for government transmissions and the Postmaster-General was empowered to fix the rates on such messages. [96] Again the Congress was motivated by hostility toward the monopoly position of Western Union in the telegraph industry. [97]

Finally, in the Telegraph Lines Act of 1888, all telegraph and railroad companies that had received any form of government support, and were required in their enabling legislation to construct, maintain or operate telegraph lines, were directed to maintain and operate, through their own personnel, telegraph lines "for railroad, Governmental, commercial, and all other purposes, … and exercise by themselves along all the telegraph franchises conferred upon them and obligations assumed by them under the acts making the [Jones A-41] grants as aforesaid." Provision also was made for the interconnection of telegraph lines

For the prompt and convenient interchange of telegraph business between said companies; and such railroad and telegraph companies .. . shall so operate their respective telegraph lines as to afford equal facilities to all, without discrimination in favor of or against any person, company, or corporation whatever, and shall receive, deliver, and exchange business with connecting telegraph lines on equal terms, and affording equal facilities, and without discrimination for or against any such lines; and such exchange of business shall be on terms just and equitable.

The ICC was authorized to enforce these requirements. The Attorney-General was directed to challenge any contracts purporting to grant exclusive right-of-way to telegraph companies on railroad properties. [98] The monopoly position of Western Union was the dominant concern of Congress. [99]

IV The Advent of the Telephone and Further State Legislation

The enactment of state legislation continued unabated after the introduction of the telephone in 1878. There were a number of different patterns. In virtually all states, existing telegraph legislation was made applicable to telephone companies, either by statutory revision or judicial interpretation. Thus telephone companies generally were able to incorporate under a general statute, to use public thoroughfares, and to exercise the power of eminent domain. They also were subject to the statutory responsibilities of telegraph companies, although some of these – such as the duty to transmit in order – were not relevant to more telephone operations.

A spate of new legislation emerged to make applicable to telephone companies regulations analogous to those in effect for telegraph companies. In some instances the new legislation imposed duties on telegraph and telephone alike. The telegraph industry also attracted additional legislation attention wholly apart from the telephone. In some instances the legislation simply imported old statutory formulations into new states. In others, new statutory approaches were adopted. Finally, there were a number of state constitutional provisions adopted pertaining to the telecommunications industry.

The legislation and constitutional developments during this period placed great emphasis on regulation, but the general pattern was unchanged. The legislation continued to be concerned about abuses of monopoly position and imposed the obligation of non-discriminatory access as the principal remedy.

A. State Responses to the Telephone

In 1881, New Hampshire made its existing telegraph legislation applicable to telephone and added the requirement that telephone and telegraph systems "shall open and maintain, at some convenient point or points, offices or places where users may communicate to all points reached by such line or its connections, on payment of a reasonable fee for such use." [100] The 1891 codification provided for offices at points [unreadable] will reasonably accommodate users"; empowered the judiciary to require the opening of offices "if the public convenience requires it"; and required telephone and telegraph companies to reasonably accommodate [users] without discrimination and at reasonable rates." [101]

In 1882, Wisconsin enacted a comprehensive prohibition against discrimination by telephone companies. They were required

To receive and transmit messages from and for any other company, person or persons, upon payment or tender of the usual or customary charges therefore; and upon payment of the usual or customary rental sum… to furnish, without unreasonable delay, without discrimination and without any further or additional charge to the [customer,] including all telegraph companies, a telephone or telephones with all necessary fixtures, as well as connection with the central office or telephone exchange if desired, and shall connect the telephone of such [customer] with the telephone of any other . . . having a connection with the same, or a connection exchange or central office, whenever requested to do so, without regard to the character of the messages to be transmitted, provided they are not [obscene] or profane . . . [102]

The prevention of discrimination was the dominant theme of similar legislation enacted in Michigan (1883), [103] Arkansas (1885), [104] Indiana (1885), [105] Maine (1885), [106] Massachusetts (1885), [107] Tennessee (1885), [108] Vermont (1888), [109] Washington (1890), [110] Maryland (1892), [111] Iowa (1897), [112] Texas (1907), [113] and Oklahoma (1908). [114] Discrimination against connecting lines was prohibited in Connecticut (1889), [115] Kentucky (1891), [116] and New York. [117] Undue discrimination among cities of different size was prohibited in South Carolina (1898) [118] and Wisconsin (1905). [119]

Telephone rates were limited by statute in Arkansas (1885), [120] Indiana (1885), [121] Maryland (1892), [122] and the District of Columbia (1898). [123] The authority to regulate telephone rates were delegated to municipalities in Nebraska (1887), [124] Iowa (1888), [125] Kansas (1903), [126] and Missouri (1907), [127] and to the courts in Texas (1905). [128]

Limitations on the establishment of competitive telephone service were enacted in Rhode Island (1891), [129] Maine (1895), [130] and Connecticut (1899). [131] These foreshadowed subsequent legislation that would establish monopoly as the de jure as well as the de facto bases for telephone and telegraph service. [132]

B. Additional Telegraph Legislation

In 1883, Nebraska enacted a comprehensive statute prohibiting discrimination by telegraph companies (and also by press associations). In addition to the usual provisions requiring equal treatment for those similarly situated, the statute prohibited greater charges for short distances than for long distances. [133] Florida in 1885 enacted a statutory ceiling on telegraph and cable charges, the limit varying with the number of words, distance, and other factors. [134] Also in [Jones A-50] 1885, Minnesota adopted a statute regulating telegraph lines, declaring them "to be common carrier, and as such [required to] serve the public without discrimination or preference, at reasonable rates of compensation." Exemptions from liability were declared void; deliver of telegrams within city limits was mandated; and transmission of messages was required to be in the order received and within a reasonable time. [135]

Mississippi in 1886 imposed a penalty on a telegraph company if it should "neglect, fail or refuse to transmit and deliver, within a reasonable time, without good and sufficient excuse," and telegraph message. [136] In 1887, Georgia imposed on telegraph companies, "telegraphing for the public," a duty to transmit and deliver messages "with impartiality and good faith, and with due diligence," and to make deliveries to persons within one mail of the station." [137] The same year Idaho, while still a territory, enacted a conventional telegraph law, authorizing incorporation and use of public and private [Jones A-51] lands and imposing a penalty for willful refusal or neglect to transmit or deliver telegrams and for willful postponement of telegram messages. [138]

North Carolina in 1889 made it unlawful for telegraph operations to refuse or neglect "duly to transmit or deliver" telegraph messages. [139] In 1893, the Oklahoma Territory enacted a statute governing common carrier of messages, with some provisions directed to telegraph companies in particular, pattered after the legislation of the Dakota Territory. [140] Montana in 1895 enacted comprehensive legislation applicable to telephone and telegraph. The terms of the legislation were principally relevant to telephone operations, concerning deliveries, order of transmission, errors, and relations among connecting lines. [141]

The same year South Dakota provided for incorporation of telegraph companies, their use of public roads and their exercise of the power of eminent domain . Such companies were required to exercise "utmost care and diligence in the transmission and delivery of messages." Immediate transmission of messages was required if practicable; if not, transmission generally was to be in the order messages were received. [142] Arkansas in 1897 pass "An act to prohibit extortion by agents of . . . . Telegraph Companies . . .," requiring that telegraph companies post their regular charges and adhere to them. [143] In 1899, Kansas enacted complex legislation imposing statutory limits on telegraph charges. [144]

Virginia in 1904 enacted substantial new legislation, applicable to telephone and telegraph, that largely followed earlier patters but dealt with problems of discrimination and service in greater detail and in a manner bearing principally in telegraph operations. [145] In 1907, Maine required telegraph [Jones A-53] companies to observe office hours in towns over 12,000 population and required free delivery of telegrams within one mile of the office. [146] The same year North Dakota required that telegraph companies have sufficient equipment to give prompt service; that they deliver message promptly; and that they transmit message within 30 minutes barring injury to the line. [147]

C. State Constitutional Provisions

At about the same time, a number of states adopted constitutional provisions bearing on telecommunications. Washington's Constitution of 1889 provided that telephone and telegraph companies had the right to construct and maintain lines in the state, "and said companies shall receive and transmit each other's message without delay or discrimination, and all such companies are hereby declared to be common carrier and subject to legislative control." Telephone and telegraph [Jones A-54] companies were accorded the right of eminent domain and the right to use railroad right-of-way; the railroad were required to treat all such companies with impartiality. [148]

Wyoming's Constitution of 1890 declared telephone and telegraph corporations to be common carrier. Telegraph companies were given the right to construct and maintain lines in the state and to connect with other lines; they were directed "to extend the same equality and impartiality to all who use them." [149] The Mississippi Constitution of 1890 declared telegraph and telephone companies to be "common carrier in their respective lines of business, and subject to liability as such." The legislation was directed to pass laws to prevent "abuses, unjust discrimination and extortion in all charges" of telegraph and telephone companies. [150]

Kentucky's Constitution on 1891 provided that telegraph companies had the right to maintain lines in the state and to connect with other lines, "and said companies shall receive and transmit each other's messages without unreasonable delay or discrimination, and all such companies [Jones A-55] are hereby declared to be common carrier and subject to legislation control." Telephone companies also were directed to "receive and transmit each other's messages without unreasonable delay or discrimination." Mergers of competing telegraph and telephone companies were prohibited. [151] The South Carolina Constitution of 1895 declared that "all telegraph and other corporations engaged in the business of transmitting intelligence for hire are common carrier in their respective lines of business, and are subject to liability . . . as such." Discrimination in charges or facilities for the transmission of intelligence were prohibited. Consolidations of competing lines were barred. [152] Louisiana's Constitution of 1898 prohibited rebates and various forms of discrimination by telegraph and telephone companies. [153]

The Oklahoma Constitution of 1907 provided that telephone and telegraph lines shall receive and transmit each other's messages without delay or discrimination, and make physical connections with each other's lines. Mergers of competing companies required legislation approval. Various types of discrimination were prohibited. [154] The Arizona [Jones A-56] Constitution of 1912 declared telegraph and telephone companies"to be common carrier and subject to the control by law." Interconnection and interchange of messages were required, and discrimination of various types were prohibited. [155] The New Mexico Constitution of the same year prohibited certain types of discrimination, [156] and the California Constitution, as amended in 1911, declared telephone and telegraph to be public utilities. [157]

The constitutions of six additional states contained a provision authorizing telegraph companies to construct line in the state and to connect them with other lines, while prohibiting the merger of competing lines: Pennsylvania (1874), [158] Nebraska (1875), [159] Alabama (1875), [160] Colorado (1876), [161] Montana (1889), [162] and South Dakota (1889). [163] [Jones A-57]

As will be considered hereafter, the Constitutions of Arizona, California, Louisiana, New Mexico, Oklahoma, and South Carolina established regulatory Commissions with authority over telecommunications.

D. An Appraisal of Statutory and Constitutional Developments

Beginning in the 1870s, at about the time of the introduction of the telephone, there was a shift in emphasis in state legislation. The necessary facilitating legislation – authorizing use of roads, eminent domain, and incorporation – was largely in place. Telephone companies generally found the legislation authorizations they needed in existing telegraph legislation, in minor modifications of that legislation, or in more general legislation on incorporation, use of public roads and eminent domain. The emphasis shifted to regulation, and the types of regulations adopted were those employed in controlling monopoly abuse: prohibition against discrimination, requirements of access, and occasional limitations on rates and specifications of service standards. For the first time, there was extensive reference to telephone and telegraph as "common carrier" and greater emphasis on the liability of telecommunications entities to their customers.

But the franchise element was not excluded. The state constitutions on the whole were concerned with enabling [Jones A-58] telephone and telegraph construction as well as with issues of control. And, as will be seen in the sect section, the application of controls was premised largely on the monopoly-franchise theory of common carrier status first espoused by Lord Hale.

V Telecommunications in the Courts in the Pre Commission Era

The adjudication of telecommunications issues in the courts, prior to the establishment of regulatory Commissions, was strongly influenced by the monopoly-franchise theory of Lord Hale. The theory was brought to bear principally in two ways. First, many cases were decided in the context of statutory provisions that, expressly or by implication, embodied the monopoly-franchise approach. Second, the leading constitutional precedent on the scope of state regulatory authority – Munn v. Illinois [164] – relied on the writing of Lord Hale.

In Munn, the United States Supreme Court sustained as constitutional state regulation of the rates of Chicago warehouses. The Court commented on the importance of the warehouses in the shipment of grain from the Midwest to the East and quoted from Lord Hale on the common law applicable to [Jones A-59] businesses "affected with a public interested." It then observed that the warehouse owners jointly fixed their rates for storage of grain:

Thus, it is apparent that all the elevating facilities through which these vast productions [of grain] must pass on the way [to market] may be a 'virtual' monopoly . . . Every bushel of grain for its passage 'pays a toll, which is a common charge,' and, therefore, according to Lord Hale, every such warehousemen 'ought to be under public regulation, viz., that he … take but reasonable toll.' Certainly, if any business can be clothed 'with a public interest, and cease to be juris private only,' this has been… "[165]

While Munn subsequently generated significant controversy as a decision delimiting the scope of state regulatory power under the Constitution, there was no dispute, during the period under consideration, as to the soundness of Munn in its application to telecommunications. Telephone and telegraph consistently were held to be "public" businesses, subject to government regulation and subject to common law limitations in the absence of statutory controls.

In the period prior to Commission regulation of telecommunications, two classes of cases were particularly prominent: (1) those involving claims of discriminatory or exclusionary treatments, and (2) those seeking damages for failures, errors or delays in the transmission of telegraph messages. In the discrimination and exclusion cases, the courts consistently imposed a duty of impartial treatment, relying either on common law principles or statutory standards. By contract, the results in the damage liability cases were conflicting and inconsistent, reflecting no clear consensus. Underlying these disparate patterns were the two sources of common carrier status. The franchise-monopoly theory of Lord Hale provided a firm basis for resolving the discrimination and exclusion cases. But the custodial theory of common law liability, having its roots in the law of bailments, tended to confuse rather than clarify the responsibility of telegraph companies for failures, errors and delays. Indeed, the resolution of many cases in this second category ultimately turned on abandonment of the custodial theory in favor of the franchise-monopoly theory.

A. The Discrimination and Exclusion Cases

The earliest discrimination cases concerned the refusal of telegraph companies to forward the messages of other telegraph companies. The New York statute requiring such [Jones A-61] forwarding was intended "to enable new companies to compete with established lines, thus preventing the evils of monopolies and of combinations of companies. [166] The duty to transmit for all without discrimination was said to "arise from the nature of their business even if there were not statute on the subject." [167] Absent such a requirement, control over a monopoly line would lead to control over the business of connecting lines seeking to have their messages forwarded over the monopoly lines. [168]

Similar considerations led to invalidation of contracts between Western Union and the railroads excluding other telegraph companies from the railroads' right-of-ways. The contracts were held to be contrary to both statutory and common law principles because they tended to create and maintain a monopoly. [169] [Jones A-62]

Perhaps the most dramatic series of cases were those in which the courts compelled telephone companies to provide impartial service to telegraph companies even though the patent licenses under which the telephone companies were operating restricted such service to Western Union. For the most part, the decisions were premised on common law principles and emphasized the importance of the telephone service, the special privileges (such as eminent domain) accorded to telephone companies, and the monopoly positions enjoyed by some telephone companies. [170]

Discriminations also were held unlawful where the applicants or customers were not other communications companies. In some cases, enforcement of telegraph anti discrimination statutes was involved, the courts commenting on the essentiality of the service and the special privileges grated telegraph companies. [171] In others, state statutes were considered to be inapplicable and decisions were based on common law principles. Particularly significant was Western Union Tel. Co. v. Call Publishing Co., [172] where the Supreme Court held that unjustified discrimination by a telegraph company, in rates charged to competing publishers, was actionable at common law. Absent such common law regulation

Persons dealing with common carrier … are absolutely at the mercy of the [Jones A-64] carriers … if there be no law to restrain, the necessary result is that there is no limit to the charges they may make and enforce … [173]

Common carrier … are performing a public service. They are endowed by the State with some of its sovereign powers, such as the right of eminent domain, and so endowed by reason of the public service they render . . . [174]

The leading case prohibiting discrimination by telephone companies was State ex rel Webster v. Nebraska Telephone Co. [175] The telephone companies was required to provide service to Webster notwithstanding a dispute as to prior indebtedness:

While there is no law giving [the company] a monopoly of the business in the territory covered by its wires, yet it must be apparent to all that the mere fact of this territory being covered by the 'plant' of respondent, from the very nature and character of its business, gives it a monopoly of the business which it transacts . . . the demands of the commerce of the present day make the telephone a necessity . . . The realtor [Webster] never can be supplied with this new element of commerce so necessary in the prosecution of all kinds of business, unless supplied by the respondent. [176]

The court cited the English decision in Allnut v. Inglis [177] for the proposition that "where private property is, by consent [Jones A-65] of the owner, invested with public interest or privilege for the benefit of the public, the owner can no longer deal with it as private property only, but must hold it subject to the rights of the public, in the exercise of that public interest conferred for their benefit." [178]

The franchise – monopoly theory of Lord Hale received further recognition in the later decision in Gardner v. Providence Telephone Co., [179] where the court upheld a company ban on customer attachments to the telephone system, but required that the company's regulations be reasonable:

By municipal action . . . the complainant is forced to deal with the defendant if he desires telephone service. [Defendant was the only telephone company authorized to operate in Providence.] Undoubtedly, it is a condition of such a grant that the grantee shall furnish to such of the public as desire it complete service of the kind in which it deals [and to provide reasonable service at reasonable rates.] [180]

Similar decisions were reached under both common law [181] and statutory prohibitions against discriminations. [182]

Apart from prohibitions against discrimination government regulation of telecommunications charges were infrequent in the pre – Commission era. But where such regulation was attempted, it was sustained because of the public character of the business and its importance and indispensability. [183] It was held in one case that the thrust [Jones A-67] of such legislation could not be avoided by a company's refusal to "hold out" to serve the public generally and its adoption of a program to convert its telephone system to one providing public toll booths exclusively. The legislature had limited telephone rental charges to three dollars and the intention was

That where a telephone company was doing a general telephone business in this State, any person within the local limits of its business in a town or city should have the right to demand and receive a telephone and telephonic connections, facilities and service, the best in use by such company and should only be liable to be charged and to pay three dollars per month therefore. [184]

That the company sought to withdraw from any such offering was held to be without effect

B. The Telegraph Liability Cases

The status of telegraph companies as common carrier also was litigated in cases in which the companies sought to avoid liability for errors, delays, and omissions by relying on contractual limitations on liability. An early California case rejected the defense on the ground that the telegraph companies, as a common carrier, could not limit its liability, at least where there was a finding of gross neglect. "There is no difference in the general nature of the legal obligation of the [Jones A-68] contract between carrying a message along a wire and carrying goods or a package along a route." [185]

To other courts, however, the difference was obvious. A carrier in physical possession of merchandise was held to high standards because control accompanied possession and the shipper, having parted with possession, was in no position to protect his interests. By contrast, the transmission of a telegraph message conferred no custody over property and was subject to interference by forces beyond the control of the telegraph company. To these courts a limitation on liability appeared to be appropriate. In Primrose v. Western Union Tel. Co., [186] the Supreme Court upheld a limitation on liability with these observations:

Telegraph companies resemble railroad companies and other common carrier, in that they are instruments of commerce, and in that they exercise a public employment, and are therefore bound to serve all customers alike, without discrimination. They have, doubtless, a duty to the public, to receive, to the extent of their capacity, all messages clearly and intelligibly written, and to transmit them upon reasonable terms. But they are not [Jones A-69] common carriers; their duties are different, and are performed in different ways; and they are not subject to the same liabilities…

The rules of common law, by which common carrier of goods are held liable for loss or injury by any cause whatever except the act of God, or of public enemies . . [extends to those who] have peculiar opportunities for embezzling the goods or for collusion with thieves…

But telegraph companies are not bailees, in any sense. They are entrusted with nothing but an order or message, which … is to be translated and transmitted through different symbols by means of electricity, and is peculiarly liable to mistakes. The message cannot be the subject of embezzlement; it is of not intrinsic value; its importance cannot be estimated, except by the sender … and the measure of damages, for failure to transit or deliver it, has no relation to any value of the message itself, except as such value may be disclosed by the message, or be agreed between the sender and the company.

The validity of telegraph limitations on liability remain a subject of continuing uncertainty as long as the courts attempted to resolve the issue by reference to the common law of bailments. [187] A more satisfactory basis for decision was reached when the courts shifted the focus of inquiry to the [Jones A-70] question of whether the telegraph company was misusing its power as a firm enjoying the advantages of special franchise and a monopoly position. [188] Implicit in this shift in emphasis was a recognition that the proper basis for telegraph company regulation was not the law governing common carrier custody of goods, but rather the law governing business enterprises in possession of franchise monopolies. In one such case, the court reasoned:

Telegraph companies are public agents, and exercise a public employment. They are vested with the power of eminent domain, which they cannot lawfully exercise if they are not public agents. By virtue of their public employment, it is their duty, for a reasonable consideration, to receive and transmit all messages over their wires with the integrity, skill, and diligence which appertain to their business. They are a commercial necessity. Business [can] be transacted without them only at a great disadvantage. In most places there is no choice as to lines, and, where there is, it is so limited that a virtual monopoly exists. On the other hand, the occasion for sending a message often comes suddenly, or with so short a notice, as to compel the sending of the message by telegraph without delay, or the sufferance of pecuniary loss by the failure to do so. Often the customer cannot afford to wait, and must [Jones A-71] submit to the terms of the telegraph company. They do not stand upon an equality. The public compelled to accept the services of the telegraph company, and to rely upon its discharging its duty. [189]

After the passage of the Mann-Elkins Act of 1910, [190] the validity of imitations of liability ceased to be governed by state law. Such limitations were included in federal tariffs and these were held to be binding on the states. [191]

VI The Rise of the Regulatory Commission

Statutory and judicial remedies proved to be inadequate in dealing with the burgeoning telephone and telegraph industries. Near the end of the 19th century the states began to turn to specialized regulatory commissions to control telecommunications enterprises exercising monopoly power. The transition began in the South. Near the end of the 19th century several railroad commissions were vested with authority over telecommunications.

Georgia in 1891 subjected telegraph companies to railroad commission control, at least with respect to rates and discrimination practices. [192] Subsequent legislation extended the commission jurisdiction to telephone companies and broadened the scope of its powers. [193] North Carolina subjected telegraph operations to railroad commission control in 1891 and telephone operations to like control in 1893. [194] In 1892, Mississippi provided for commission regulation of telephone and telegraph, requiring filed tariffs and applying provisions against extortion and discrimination. [195] South Carolina placed telegraph operations under commission control in 1898, and extended commission authority to telephone operations in 1904. [196] The Louisiana Constitution of 1898 created a commission with authority over all public utilities, including telephone and telegraph. [197] [Jones A-73]

In the Midwest, Nebraska provided for commission control telephone and telegraph in 1897. [198] Thereafter, between 1900 and 1920, commission control over telecommunications was vested in regulatory commissions in every remaining state except Delaware, Iowa, and Texas. [199] [Jones A-74]

This deluge reflected a widely held consensus that competition was impracticable in the rendition of telephone and telegraph [Jones A-75] service, and that the interests of firms and users would best be served by a regime of regulated monopoly. This [Jones A-76] consideration – as were being implemented contemporaneously in the states. In each case, the primary emphasis was on the monopoly characteristics of the telecommunications industries.

In the Mann-Elkins Act of 1910, Congress classified interstate telephone and telegraph operations as common carrier activities and empowered the ICC to regulate their rates. [202] The basis for the legislation, clearly reflected in the legislation history, was Congressional concern about the monopoly characteristics of these telecommunications industries. [203] The advocates of the legislation states:

Now the telegraph line and the telephone line are becoming rapidly as much a part of the instruments of commerce and as much a necessity of commercial life as the railroad. One of the greatest monopolies in this country today is a system of telephone and telegraph lines; and if it is right and proper to regulate the great railroad systems of this country in the interest of commerce, it is equally right to limit the telegraph and telephone companies. [204]

Why should not these necessary instrumentalities which the citizens have to use, which are monopolies in their particular lines of business, be required to make reasonable charges; and if they are [Jones A-78] unreasonable, why should not the citizen be permitted to appeal to the Interstate Commerce Commission to have it determined whether the charges are or are not reasonable? [205]

The Telephone Companies Consolidation Act of 1921 permitted the merger of telephone companies following ICC approval. [206] The statute was premised on the conviction that the telephone industry was a "natural monopoly." [207]

Finally, the common carrier provisions of the Communications Act of 1934, making applicable to telephone and telegraph many of the substantive provisions of the Interstate Commerce Act, [208] reflected continuing Congressional concern with monopoly conditions in the telecommunications industries and a desire for more effective regulation. [209] [Jones A-79]

Under the existing provisions of the Interstate Commerce Act the regulation of the telephone monopoly has been practically nil. This vast monopoly which so immediately serves the needs of the people in their daily and social life must be effectively regulated. [210]

The purpose of the proposed legislation is to make effective the power now written into the Interstate Commerce Act of control of telephone and telegraph business in this country. The Interstate Commerce Commission have (sic) been so busy regulating the railroad that they have not had time to give real consideration to the problems in connection with rate regulation of telephone and telegraph … [211]

The competition in the industry will run about as follows:

Telephone: American Telephone and Telegraph, Co., 95 percent of the business; 100 independent companies, 5 percent of the business.

In the telegraph field: The Western Union, 75 percent; the Postal, 24 percent; and the independents, 1 percent.

In telephone service the American Telephone and Telegraph is practically a monopoly … [212]

The principal source of information for the Congress was a series of reports by Walter MW Splawn, Special Counsel to the House Committee on Interstate and Foreign Commerce. These showed that, for the year 1932, Bell Accounted for 94.3% of the operating revenues of all substantial telephone companies; that competition with Bell in long distance services was virtually non existent; and that competition among telephone companies at the local level was very limited and in the process of being eliminated entirely. [213] See also Hearings before Sen. Comm. On Interstate Commerce on Commission on Communications, 71st Cong., 2d Sess., pp. 1086-88, 1582-83, 2116-37 (1930); Hearings before Sen. Comm. On Interstate Commerce on Federal Communications Commission, 73rd Cong., 2d Sess, p. 100, 137-38 (1934); Hearings before House Comm. On Interstate and Foreign Commerce on Federal Communications Commission, 73d Cong., 2d Sess, p. 10 (1934). It also showed [Jones A-81] that Bell possessed a monopoly in international telephone services. [214] In the case of telegraph including international cable, Western Union accounted for over 75% of operating revenues and Postal Telegraph accounted for almost all of the remained. [215] Moreover, Postal Telegraph was incurring deficits and was said to be interested in a merger with Western Union. [216] The operations of other domestic telegraph companies were negligible and continued competition in the industry was questioned. [217] In international wireless there were additional companies, but Western Union was using the facilities of RCA and the only other substantial competitor was International Telephone & Telegraph, affiliated with Postal Telegraph. [218]

In sum, with respect to common carrier regulation, the attention of Congress was focused on the monopolized segments of the industry and the primary objective of Congress was to achieve effective regulation on monopoly telecommunications enterprises.

Conclusion

The Communications Act of 1934 was the culmination of regulatory developments stretching back almost ninety years. The policies it articulated had their roots in a pattern of legislative and judicial responses to telephone and telegraph monopoly. The scope of the legislation should be construed in the light of the historical development of which it was a part.

In the case of carriers of goods, common law doctrines of common carriage were concerned primarily with establishing the fiduciary responsibilities of carriers. For this purpose it was not critical that the carriers posses monopoly power or special franchise. Prior to the railroads, it was not usual for such carriers to require or possess any special franchises from the state, and monopoly conditions, if present at all, were not stressed by the courts or the commentators. [Jones A-83]

ENDNOTES

[1] 48 Stat. 1064, 1070 (1934), as amended, 47 USC s 201 et seq.

[2] 47 USC s 153(h)

[3] HR Conf Rep No 1918, 73d Cong., 2d Sess 46 (1934).

[4] Act of June 18, 1910, 36 Stat 539. On the intention [illegible] modification, see Sen Rep No 781, 73d Cong., 2d Sess 2 (1934); House Rep No 1850, 73d cong., 2d Sess 5 (1934).

[5] See NARUC v FCC, 535 F2d 630, 641 (DC Cir), cert denied 425 US 992 (1976); NARUC v FCC, 533 F2d 601, 608 (DC Cir 1976); AT&T v FCC, 572 F2d 17, 24 (2d Cir), cert denied 439 US 875 (1978). See also FCC v Midwest Video Corp, 440 US 689 (1979).

[6] Morse v. Slue, 1 Vent 190, 238, 86 Eng. Rep. 129, 159 (24 and 25 Car. II 1672) . There are earlier decisions supporting the concept of special responsibility, but they do not provide so unambiguous an articulation. See eg, Rich v Kneeland, Cro. Jac. 330, 79 Eng Rep 282 (11 Jac 1, 1613)

[7] Morse v. Slue, 1 Vent 190, 238, 86 Eng. Rep. 129, 159 (24 and 25 Car. II 1672)

[8] Foward v. Pittard 1 TR 27, 33, 99 Eng. Rep. 953, 956-57 (1785). See also Dale v. Hall, (1750); Hyde v. Navigation Co., (1793).

[9] Proprietors of Trent Navigation v. Ward, 3 Esp. 127, 131, 170 Eng. Rep. 562, 563 (1785).

[10] The court noted that "if the [carrier] would, he might have made a caution for himself, which he omitting and taking in the goods generally, he shall answer for what happens." Morse v. Slue, 1 Vent 190, 238, 86 Eng. Rep. 129, 159 (24 and 25 Car. II 1672) .

[11] See, eg., Riley v Horne, 5 Bing 217, 130 Eng Rep 1044 (1828).

[12] Bastard v. Bastard, 2 Show. K.B. 81, 89 Eng. Rep. 807 (31 Chas. II, 1679).

[13] Harris v. Packwood, 3 Taunt. 264, 128 Eng. Rep. 105 (1810).

[14] Jackson v. Rogers, 2 Show KB 327, 89 Eng Rep 968 (35 Chas II, 1685).

[15] OW Holmes, common carrier and the Common Law, 13 Am L Rev 40 (1879). Substantially the same discussion is included in OW Holmes, The Common Law 180-205 (1881). See also Burdick, The Origin of the Peculiar Duties of Public Service Corporations, 11 Colum L Rev 515, 616, 743 (1911).

[16] Hargrave Law Tracts 77-78 (1787). See McCallister, Lord Hale and Business Affected with a Public Internet, 43 Harv. L. Rev. 759 (1930).

[17] 3 W Blackstone, Commentaries on the Law of England 219 (3d ed. 1770).

[18] Bolt v. Stennet, 8 TR 606, 101 Eng Rep 1572 (1800).

[19] Allnut v. Inglis, 12 East 527, 104 Eng Rep. 206 (1810).

[20] 12 East. at 538-39, 104 Eng Rep at 210-11 (Lord Ellenborough).

[21] This was the 16th edition, the last one edited by Kent. See Dorfman, Chancellor Kent and the Developing American Economy, 61 Colum L Rev 1290 (1961)

[22] Vol 3 at 458-59.

[23] Vol 2 at 597-99.

[24] Act of May 13, 1845 NY Laws, c. 243, p. 264

[25] Act of April 12, 1848, NY Laws, c. 265, p. 392.

[26] Section 11 was amended in 1955 to add the following: [undecipherable]

[27] Act of April 10, 1950, NY Laws, c. 340, p. 739.

[28] Act of April 22, 1851, NY Laws c. 98, p. 178. Other amendments were made by Act of June 29, 1853, NY Laws, c. 471, p. 931 (various aspects, including eminent domain); Act of April 22, 1862, NY Laws c. 425, p. 761 (broadening authority to extend lines and acquire other companies); Act of May 9, 1867, NY Laws, c. 871, p. 2186 (concerned with improper access to telegrams); Act of May 2, 1970 (sic?), NY Laws, c. 568, p. 1327 (concerned with transfers of telegraph franchises and properties); Act of May 14, 1875, NY Laws, c. 319 (concerned with changes in routes); Act of May 27, 1879, NY Laws, c. 377, p. 444 (reiterating duty to transmit in terms similar to sec. 11 of the 1848 statute); Act of May 28, 1879, NY Laws, c. 397, p. 460 (concerned with underground construction of telegraph lines).

[29] Act of Mar. 20, 1847, Va. Laws, 1846, c. 92, p. 79 ss 3, 4. The act authorized telegraph operations by specific companies, specifying "reasonable charges" on messages transmitted. ss 1, 2. Other acts of specific incorporation include Act of Mar. 6, 1847, Va. Laws, 1846, c. 99, p. 85 (no rate standard); Act of Mar. 17, 1849, Va. Laws, 1849, c. 197, p. 138 (specified rate standard); Act of Mar. 12, 1849, Va. Laws, 1848-49, c. 200, p. 142 (referenced to reasonable rates). See Also the Act of Mar. 31, 1848, Va. Laws, 1847-48, c. 123, p. 1677, requiring telegraph companies to make annual reports to the board of public works, giving financial data and "regulations adopted to ensure the faithful discharge of the duties undertaken..."

[30] Va. code, ch. 65, sec. 1 (1849).

[31] Act of May 26, 1852, Va. Laws, c. 149, p. 121, amended in minor respects, Va. Laws, 1853-54, c. 45, p 32. The Act of Feb 21, 1866, Va Laws, 1865-66, c 43, p 218, reiterated the duty to transmit and to deliver with emphasis on promptness.

[32] Va. Code, ch. 65, sec 1 (1860); Va Code, ch. 65, sec. 1 (1873).

[33] Act of Jan 28, 1847, Mich Laws, No 4, p. 4, and Act of Mar. 5, 1947, Mich Laws, 1847, p. 41, as amended by Act of Jan 24, 1849, Mich Laws, No 10, p 7.

[34] Act of Mar. 26, 1851, Mich Laws, No 59, p. 61, supplemented by Act of Feb 12, 1853, No 68, p. 112. Subsequent amendments or limited significance: Act of Mar 20, 1863, Mich Laws, No 240, p. 421, Act of Feb 23, 1873, Mich LAws, No 13, p. 11; Act of Reb 20, 1873, Mich LAws, No 14, p. 12; Act of Mar 14, 1873, Mich Laws, No 28, 0. 27; Act of Apr. 27, 1875, Mich Laws, No 129, p. 157, Act of Apr. 28, 1875, Mich Laws, No 149, p. 180.

[Endnotes 34-90 have been omitted. If you desire a particular endnote, met me know and I will add it.]

[43] Act of Dec. 20, 1848, La. Laws, No. 74, p. 49 (extra session).

[90] See State, Trenton & NB Turnpike Co. v. American & European Com. News. Co., 43 NJL 381 (1881), and authorities cited. See also notes 170-84, infra and H Schreiber, "The Road to Munn; eminent domain and the Concept of Public Purpose in the State Courts," in D. Fleming & B. Bailyn (ed.), Law in American History 329 (1971).

[91] Act of June 16, 1860, 12 Stat. 41.

[92] Cong. Globe, 36 th Cong., 1 st Sess. 1692-97, 2249 – 52, 2279-81, 3032 (1860).

[93] Act of July 1, 1862, 12 Stat. 489.

[94] Cong. Globe, 37 th Cong., 2d Sess. 2760-61 (1862).

[95] Act of July 2, 1864, 13 Stat. 356.

[96] Act of July 24, 1866, 14 Stat. 221.

[97] Cong. Globe, 39 th Cong., 1 st Sess. 3427-29, 3480-86, 3489, 3744-46 (1866).

[98] Act of Aug. 7, 1888, 25 Stat. 382.

[99] 19 Cong. Rec. 1100-09, 1294-1305, 1703-15 (1888).

[100] Act of Aug 9, 1881, NH Laws, c. 54, p. 472. The prior law consisted of a limitation on certain aspects of telegraph pole construction, Act of July 18, 1877, NH Laws, c. 50, p. 37, and a requirement that telegraph companies maintain offices at railroad passenger stations in towns of 1500 or more population, Act of July 18, 1879, NH Laws, c. 40, p. 356. The 1881 legislation provided for use of public streets, subject to local regulation, and damages to adversely affected property owners.

[101] NH Public Stat. c. 81 (1891). The provisions were amended in minor respects in NH Laws, 1897, c. 16, p. 17; c. 81, p. 78; c. 92, p. 88. An enactment in 1909 established standards for seasonal telephone rates. Act of Apr. 9, 1909, NH Laws, C 141, p. 511.

[102] Act of Mar. 23, 1882, Wis. Laws, c. 196, p. 647. Minor amendments were made by Act of Apr. 17, 1893, c. 236, p. 289.

[103] Act of May 3, 1883, Mich. Laws, No. 72, p. 56. Minor amendments were made by Act of June 2, 1909, Mich. Laws, No. 301, p. 734.

[104] Act of Mar. 31, 1885, Arl. Laws, No. 52, p. 176, ss 10, 11. Minor amendments were made by Act of Feb. 25, 1913, Ark. Laws, No. 95, p. 346.

[105] Act of Apr. 8, 1885, Ind. Laws, C. 48, p. 151.

[106] Act of Mar. 6, 1885, Me. Laws, c. 378, p. 318. The major emphasis was on requiring interconnection among lines, but discrimination among subscribers was also prohibited.

[107] Act of May 27, 1885, Mass. Laws, c. 268, p. 703.

[108] Act of Mar. 25, 1885, Tenn. Laws, c. 66, p. 120.

[109] Act of Nov. 26, 1888, Vt. Laws, No. 124, p. 132. Minor amendments were made by Act of Nov. 22, 1892, Vt. Laws, No. 73, p. 73.

[110] Act of Mar. 28, 1890, Wash. Laws, 1889-90, p. 292.

[111] Act of Apr. 7, 1892, Md. Laws, c. 387, p. 535, supplemented by Act of Apr. 3, 1894, Md. Laws, c. 207, p. 260.

[112] Iowa Code s 2161 (1897).

[113] Act of May 16, 1907, Texas Laws, c. 12, p. 462; Act of Mar. 26, 1907, Texas Laws, p. 93. The statutes applied to telegraph as well as telephone.

[114] Act of May 26, 1908, Okla. Laws, 1907-08, c. 13, p. 198. Use of public roads and the power of ed. Were authorized in Okla. Terr. Stat. s 1054 (1893). See Also Okla. Rev. Laws. S 1445 (1910).

[115] Act of May 27, 1889, Conn. Laws, c. 160, p. 57 (telephone discrimination against telegraph companies prohibited).

[116] Ky. Const. s 199 (1891), supplemented by Act of Mar. 19, 1912, Ky Laws, c. 143, p. 649. The Act of Mar. 15, 1912, Ky. Lws, c. 99, p. 285, regulated telephone company mergers.

[117] This was one effected of the Transportation Corporation Laws, Act of June 9, 1980, NY Laws, c. 566, p. 1136, which required telephone and telegraph companies to "receive dispatches from and for other telephone or telegraph lines" as well as from and for individuals.

[118] Act of Feb. 21, 1898, SC Laws, No. 485, p. 779. Use by Act of Feb. 23, 1899, SC Laws, No. 40, p. 61. See Also Act of Feb. 19, 1880, SC Laws, No. 204, p. 236.

[119] Act of June 17, 1905, Wis. Laws, c. 289, p. 628.

[120] Act of Mar. 31, 1885, Ark. Laws, No. 120, p. 208.

[121] Act of Apr. 13, 1885, Ind. Laws, c. 92, p. 227, repealed, Act of Apr. 2, 1892, c. 139, p. 229.

[122] Act of Apr. 7, 1892, Md. Laws, c. 387, p. 535, as amended by Act of Apr. 2, 1896, c. 139, p. 229. A limited rate restriction was imposed by Delaware in 1913. Act of Mar. 26, 1913, 27 Del. Laws, c. 289, p. 826. Use of public roads by telephone and telegraph was authorized by Act of May 10, 1899, 21 De. Laws, c. 273, p. 487, and the power of eminent domain was conferred by Act of Mar. 19, 1913, 27 Del. Laws, c. 189, p. 470.

[123] 30 Stat. 525, 538 (1898).

[124] Act of Mar. 30, 1887, Neb. Laws, c. 10, p. 103.

[125] Act of Apr. 10, 1888, Iowa Laws, c. 16, p. 19.

[126] Act of Mar. 13, 1903, Kans. Laws, c. 122, p. 178.

[127] Act of Mar. 8, 1907, Mo. Laws, p. 119.

[128] Act of Apr. 17, 1905, Texas Laws, c. 145, p. 348. See also Act of Apr. 7, 1913, c. 147, p. 307 (municipal regulation of telephone rates authorized in home rule cities).

[129] Act of May 29, 1891, IR Laws, c. 975, p. 1 (authorizing towns to grant exclusive franchises). See also RI Pub Stat c. 38 & 20 (1882).

[130] Act of Mar. 18, 1895, Me. Laws, c. 103, p. 114, s 3, repealed, Act of Mar. 24, 1903, Me. Laws, c. 141, p. 108.

[131] Act of Jan. 7, 1899, Conn. Laws, c. 158, p. 1078.

[132] See WK Jones, Origins of the Certification of Public Convenience and Necessity: Developments in the States, 1870-1920, 79 Colum L Rev 426, 450-51, 476-82 (1979).

[133] Act of Feb. 24, 1883, Neb. Laws, c. 80, p. 321. Use of public roads was authorized by Act of Mar. 30, 1887, Neb. Laws, c. 87, p. 634.

[134] Act of Feb. 11, 1885, Fla. Laws, c. 3609, p. 52, as modified by Fla. Rev Stat s 2258 (1892).

[135] Act of Mar 7, 1885, Minn. Laws, c 208, p 278. See also Act of Apr. 19, 1893, Minn Laws, c 74, p 189; Minn Penal Code s 482 (1886).

[136] Act of Mar 18, 1886, Miss Laws, c 34, p 91.

[137] Act of Oct 22, 1887, Ga Laws, No 365, p 111, amended in minor respects, Act of Dec 20, 1892, Ga Laws, No 93, p 96, repealed, Act of Dec 17, 1894, Ga Laws, No 96, p. 79. A more comprehensive statute, following conventional lines, was enacted as Act of Nov 12, 1889, Ga LAws, No 672, p. 175.

[138] Idaho Ter Stat s 2580, 2582, 2700, 7205 (1887) (also conferring right of use public roads and power of eminent domain). A minor amendment was made by Act of Mar. 14, 1907, Idaho Laws, p. 472, and significant amendment by Act of Mar. 11, 1911, Idaho Laws, c. 222, p. 704. The latter directed physical interconnection and transfer of messages between and among telephone and telegraph companies.

[139] Act of Jan. 31, 1889, NC Laws, c. 41, p. 61.

[140] Okla. Terr Stat ss 484-514 (1893). See also Okla Rev. Laws ss 786-97, 855-59 (1910). On the Dakota Territory legislation see note 82 supra.

[141] Mont. Civil Code ss 1001, 2860, 2861, 2930 (1895). See also Mont Penal Code s 1150 (1895)

[142] Act of Mar. 13, 1895, SD Laws, 1895, c. 41, p. 43.

[143] Act of Mar. 16, 1897, Ark Laws, No. 53, p. 72. See also Ark. Laws, 1911, No. 332, p. 965, and No. 384, p. 1064, requiring Western Union to keep operators on duty at specific places for specified times.

[144] Act of Jan 6, 1899, Kans. Laws, 1898, c. 38, p. 117. The legislation provided for a court of visitation to further regulate telegraph service and may be viewed as a precursor to commission regulation of telecommunications. See also Act of Mar. 13, 1893, Kans. Laws, c. 152, p. 236, and Act of Mar. 2, 1903, c. 514, p. 759, regulating telegraph office availability and hours.

[145] Act of Jan. 18, 1904, Va. Laws, 1902-04, c. 609, p. 968, ch. VIII, amended, Act of Mar. 17, 1906, c. 310, p. 545. The 1904 legislation was related to creation of state corporation commission in 1903, but conferred no substantive regulatory authority on the Commission. See also Act of Mar. 6, 1900, Va Laws, c. 898, p 996.

[146] Act of Mar. 28, 1907, Me. Laws, c. 180, p. 196.

[147] Act of Mar. 13, 1907, ND Laws, c 246, p 385. A subsequent statute required that telegraph message traversing different routes be transferred at the point affording the lowest combined rate. Act of Mar. 13, 1913, ND Laws, c. 282, p. 441.

[148] Wash Const Art. XII, sec. 19 (1889).

[149] Wyom. Const. Art. IV, Sec. 7; Art. X, Sec. 2, 7 (1890).

[150] Miss. Const. Art. 7, sec. 186, 195 (1890).

[151] Ky. Const Sec. 199, 201 (1891)

[152] SC Const Art 9, sec 3, 5, 7 (1895)

[153] La Const Art 284, 286, 287 (1898).

[154] Okla Const Art IX, sec. 5, 8, 13, 30 (1907)

[155] Ariz Const Art XV, sec 9, 10, 12 (1912).

[156] NM Const Art 11, sec 7, 10 (1912).

[157] Cal Const Art XII, sec 23 (1911)

[158] Pa Const Art XVI, sec 12 (1874)

[159] Neb Const Art XI, sec. 3 (1875) (limited to prohibition of mergers).

[160] Ala Const Art XIV, sec. 11 (1875)

[161] Colo Const. Art. XV, sec 13 (1876).

[162] Mont Const. Art. XV, sec 14 (1889)

[163] SD Const. Art. XVII, sec 11 (1889).

[164] 94 US 113 (1877). See E Kitch and C Bowler, the Facts of Munn v. Illinois, 1978 Sup Ct Rev 313 (1979).

[165] Id. at 131-32. That monopoly was not considered to be the sole basis for legislation regulation of rates is indicated by the Court's references to regulations affecting common carriers, millers, ferrymen, innkeepers, wharfingers, bakers, cartmen, hackney-coachmen, chimney sweeps, and auctioneers. Id. at 125, 131-32. But monopoly was the basis emphasized in the opinion and the one relevant here.

[166] Derutte v. New York, Albany & Buffalo electric Magnetic Telegraph co., 1 Daly 547, 553 (NY 1866).

[167] Id. at 588.

[168] United States Tel. Co. v. Western Union Tel. co., 56 Barb. 46 (NY 1865); Atlantic & Pacific Tel. Co. v. Western Union Tel. Co., 4 Daly 527 (NY 1873). To the same effect, see Western Union Tel. Co. v. Commercial Pacific Cable co., 177 Cal. 577, 171 P 317 (1918).

[169] Western Union Tel. Co. v. American Union Tel. Co., 65 Ga. 160 (1880) (common law); Western Union Tel. Co. v. Burlington & SRR, 11 Fed 1 (D Iowa 1882) (common law and Act of July 24, 1866); Western Union Tel. Co. v Baltimore & Ohio Tel. Co., 19 Fed. 660 (SDNY 1884) (Act of July 24, 1866); Western Union Tel. Co. v Baltimore & Ohio Tel Co., 22 Fed 133 (ED Tex 1884) ( Texas statute); Union Trust Co. v. Atchison T & SFT Cp., 8 NM 327, 43 P 701 (1895) (Act of July 24, 1866 and common law); St Louis & CRR v. Postal Tel Co, 173 Ill 508 (1898) (common law); United States v. Union Pacific Ry., 160 US 1 (1895) (Act of Aug 7, 1888 and prior legislation). See Also Pensacola Tel Co. v. Western Union Tel. Co., 96 US 1 (1877) striking down exclusionary state legislation in reliance on Act of July 24, 1866).

[170] State ex rel American Union Tel. Co. v. Bell Tel Co., 22 Alb LJ 363, 10 Cent LJ 438, 11 Cent. LJ 359 (Mo 1880); State ex rel American Union Tel Co. v Bell Tel Co., 36 Ohio St. 296 (1880) (Ohio statute); State ex rel Baltimore & Ohio Tel. Co. v. Bell Tel. Co., 23 Fed. 539 (ED Mo. 1885) appeal dismissed, 127 US 780 (1888); Bell Tel. co. v. Commonwealth 3 Atl 825 (Pa 1886) ( Pennsylvania statute); Chesapeake & Potomac Tel co v Baltimore & Ohio Tel Co, 66 Md 399, 7 Atl 809 (1887) ( Maryland statute); Commercial Union Tel. Co. v. New England Tel & Tel Co., 61 Vt 241 (1888); State ex rel Postal Tel Co v. Delaware & Atlantic Tel & Tel. Co., 47 Fed 633 (D Del 1891) affirmed, 50 Fed 677 (3d Cir. 1892). Accord, People ex rel Postal Cable Tel Co v Hudson Rover Tel Co., 19 Abb NC 466 (NY 1887); Postal Cable Tel Co v Cumberland Tel & Tel Co., 177 Fed 726 (Md Tenn 1910) Contra American Rapid Tel Co v. Connecticut Tel Co., 49 Conn 352 (1881). The results in these cases were reflected in a number of telephone anti discrimination statutes adopted in the 1880s.

[173] 181 US at 94-95.

[174] Id at 99-100.

[175] 17 Neb. 126 (1885).

[176] Id at 133.

[177] [missing]

[178] 17 Neb. At 136.

[179] 23 RI 262, 312 (1901).

[180] Id at 267.

[181] Louisville Transfer co. v American Dist Tel Co., 24 AlbLJ (Ky 1881); State ex rel Payne v. Kinloch Tel Co., 93 Mo App 349, 67 SW 687 (1902); cf Central New York Tel & Tel Co v Averill, 199 NY 128 (1910) (emphasis on franchise). See also Williams v. Maysville Tel. Co, 119 Ky 33, 82 SW 995 (1904); Huffman v. Marcy Mut Tel Co, 143 Iowa 590, 121 NW 1033 (1909); New York Tel Co v Siegel-Cooper Co, 202 NY 502, 96 NE 109 (1911); Southern Bell Tel & Tel Co v Beach, 8 Ga App 720 (1911).

[182] Central Union Tel. Co. v. Fehring, 45 NE 64 ( Ind 1896); State ex rel Gwynn v Citizens Tel Co., 61 SC 83, 39 SE 257 (1901); Gwynn v. Citizens Tel Co., 69 SC 434, 48 SE 460 (1904); Yancey v Batesville Tel Co, 81 Ark 486 (1907); Brandford v Citizens Tel Co., 161 Mich 385, 126 NW 444 (1910); Mooreland Rural Tel. Co. v. Mouch, 48 Ind App 521, 96 NE 193 (1911). Statutory violations were rejected in some cases, but not because of any disagreement in principle. See Cumberland Tel & Tel Co. v Kelly, 160 Fed 316 (6 th cir 1908); Vaught v East Tenn Tel Co., 123 Tenn 318, 130 SW 1050 (1910); Younts v Southwestern Tel & Tel Co, 192 Fed 200 (ED Ark 1911); Montgomery v Southwestern Ark Tel Co., 110 Ark 480, 161 SW 1060 (1913).

[183] Hockett v State, 105 Ind 205, 5 NE 178 (1886), appeal dismissed, 131 US 438 (1889); Central Union Tel Co v. Bradbury, 106 Ind 1, 5 NE 721 (1886); Central Union Tel Co v State, 188 Ind 194 (1889); Central Union Tel Co v Manufacturers Assn, 106 Ill app 54 (1902); People ex rel City of Chicago v Chicago Tel co, 220 Ill 238, 77 NE 245 (1906); Charles Simons Sons Co v Maryland tel & Tel co, 99 Md 141, 57 Atl 193 (1904). See also Chesapeake & Potomac Tel Co v Manning, 186 US 238 (1902); Nebraska Tel Co v State, 55 Neb 627, 76 NW 171 (1898).

[184] Central Union Tel Co v State, 118 Ind 194, 208 (1889).

[185] Parks v Alta California Tel Co, 13 Cal 422, 424 (1859).

[186] 154 US 1, 14-15 (1894). See also Birney v. New York & WP Tel Co., 18 Md. 341 (1862); Ellis v. American Tel Co, 95 Mass 226 (1866); Schwartz v Atlantic & Pacific Tel Co, 18 Hun 157 (NY 1879).

[187] Breese v. US Tel. Co., 48 NY 132 (1871) (compare majority and concurring opinions); Dorgan v Telegraph Co., 7 Fed Cas No 4004 (SD Ala 1874); Western Union Tel. Co. v Fontain, 58 Ga 433 (1877) (compare multiple opinions); Birkett v Western Union Tel. Co. v. Swoveland, 14 Ind App 1035, 42 NE 1035 (1896) (telephone company liability).

[188] Western Union Tel. Co. v. Graham, 1 Colo 230 (1871); Western Union Tel. Co. v Reynolds Bros, 77 Va 173 (1883); Reed v Western Union Tel. Co., 135 Mo 661, 37 SW 904 (1896); Cogdell v Western Union Tel. Co., 135 NC 431, 47 SE 490 (1904); Western Union Tel. Co. v Short, 14 SW 649 (Ark 1890); Western Union Tel. Co. v. Crall, 38 Kan 679 (1888).

[189] Western Union Tel. Co. v Short, 14 SW 649, 650 ( Ark 1890).

[190] See discussion infra in Part VII.

[191] Postal Telegraph Cable Co v. Warren-Godwin Lumber Co., 251 US 27 (1919); Western Union Tel. Co. v Esteve Bros & Co, 256 US 566 (1921); Western Union Tel. Co. v Czizek, 264 US 281 (1924); Western Union Tel. Co. v. Priester, 276 US 252 (1928).

[192] Act of Oct. 21, 1891, Ga. Laws, 1890-91, No. 748, p. 151.

[193] Act of Oct. 22, 1905, Ga Laws, No 76, p. 79; Act of Aug 23, 1907, Ga Laws, No. 223, p. 72.

[194] Act of Mar 5, 1891, NC Laws, c. 320, p. 275; Act of Mar 6, 1893, NC Laws, c 512, p. 468. See also Act of Mar. 6, 1899, NC Laws, c 164, p 291; Act of Mar 11, 1907, NC Laws, c 469, p 675, and c. 966, p. 1372.

[195] Miss Anno Code ss 4291, 4324-25 (1892), reenacted Miss Code ss 4843, 4878-79 (1906), supp by Miss Laws, 1908, c 76, 78 and 80, pp 65-67.

[196] Act of Feb 21, 1898, SC Laws, No 486, p 780; Act of Feb 25, 1904, SC Laws, No 281, p. 496. See SC Const. Art 9, s 14 (1895).

[197] La Const art 283-89 (1898). See also Act of July 17, 1904, La Laws, No 24, p. 28; Act of July 8, 1908, La Laws, No 199, p 293.

[198] Neb Laws, 1897, c 56, p 303. See also Act of Mar [?], 1907, Neb Laws, c 90, p 311.

[199] Alabama: Act of Sept 15, 1915, Ala Laws, No 501, p 567; Act of Sept 25, 1915, Ala Laws, No 746, p 865. Limited authority was conferred by the Act of Aug 9, 1907, Ala Laws, No 741, p. 716.

Arizona: Ariz. Const Art SV (1912); Act of May 18, 1912, Ariz Laws, c 90, p 495.

Arkansas: Ark Laws, No 571, p 411. See also Act of Feb 15, 1921, Ark Laws, No 124, p 177.

California: Cal Const. Art XII, s 23; Act of Dec 23, 1911, Cal Laws, c 14, p 18 (extra session). See also Act of Jan 2, 1912, Cal Laws, c 40, p. 168; Act of June 14, 1913, Cal Laws, c 553, p. 934.

Colorado: Act of Apr 12, 1913, Colo Laws, c 127, p. 464.

Connecticut: Act of July 11, 1911, Conn Laws, c 128, p 1387.

Florida: Act of May 26, 1911, Fla Laws, c 6186, p 127, and c 6187, p 128. See also Act of June 6, 1913, Fla Laws, c 6525, p 389.

Idaho: Act of Mar 13, 1913, Idaho Laws, c 61, p 247.

Illinois: Act of June 30, 1913, Ill Laws, p 459.

Indiana: Act of Mar. 4, 1913, Ind Laws, c 76, p 167.

Kansas: Act of of Mar 14, 1911, Kans Laws, c 238, p 417.

Kentucky: Act of Mar 15, 1916, Ky Laws, c 18, p 84. Limited authority was conferred by Ky Laws, 1912, c 99, p 285 and c 143, p 649.

Maine: Act of Mar 23, 1913, Me Laws, c 129, p 133.

Maryland: Act of Apr 5, 1910, Md Laws , c 180, p 338.

Massachusetts: Act of June 13, 1913, Mass Laws c 784, p 815. Limited regulation authority was exercised earlier by the highway commission under the Act of May 31, 1906, Mass Laws c 433, p 448, and by the Commissioner of corporations under the Act of June 18, 1894, Mass Laws c 452, p 514.

Michigan: Act of Apr 24, 1911, Mich Laws No 138 p 199 (telephone only). See also Act of May 26 1909, Mich Laws No 144 p 307.

Minnesota: Act of Apr 16 1915, Minn Laws c 152, p 208 (telephone only).

Missouri: Missouri Laws 1913 p 556.

Montana: Act of Mar 4, 1913, Mont Laws c 52 p 88.

Nevada: Act of Mar 5, 1907, Nev Laws, c 44, p 73. See also Act of Mar 28 1919, Nev Laws, c 109, p 198.

New Hampshire: Act of Apr 15, 1911, NH Laws c 164 p 187.

New Jersey: Act of Mar 24, 1910, NJ Laws c 41, p 56. See also Act of Apr 21, 1911, NJ Laws, c 195, p 374.

New Mexico: NM Const Art 11 (1912); Act of June 12, 1912, NM Laws, c 78, p 137.

New York: NY Laws 1910 c 673 p 1929.

North Dakota: Act of Feb 27, 1911, ND Laws, c 255, p. 374. See also Act of Mar 1, 1915, c 209 p 314.

Ohio: Act of May 31, 1911, 102 Ohio Laws 549.

Oklahoma: Okla Const art IX ss 15-35 (1907).

Oregon: Act of Feb 24, 1911, Ore Laws, c 279, p 483. See also Act of Feb 16 1917, Ore Laws, c 164, p 209.

Pennsylvania: Act of July 26, 1913, Pa Laws No 854 p 1374. Limited authority was conferred by Act of May 31, 1907, Pa Laws No 250 p 337.

Rhode Island: Act of Apr 17, 1912, RI Laws, c 795 p. 84.

South Dakota: Act of Mar 11, 1907, SD Laws c 239 p 474. See also Act of Mar 9 1909, SD Laws c 289 p 435; Act of Mar 10, 1911 SD Laws c 207 p 296.

Tennessee: Act of Apr 9, 1913, Tenn Laws c 32 p 81. See also Tenn Laws, 1919 c 49 p 143.

Utah: Act of Mar 8, 1917, Utah Laws c 47 p 128.

Vermont: Act of Jan 20, 1909, Vt Laws, 1908, No 116, p 101. See also Act of Apr 2, 1915, Vt Laws No 163 p 271.

Virginia: Act of Mar 13, 1914, Va Laws c 95 p 174; Act of Mar 27, 1914, Va Laws c 340 p 673. See also Va Code ss 4064-73 (1919).

Washington: Act of Mar 11, 1909, Wash Laws c 93 p 191. See also Act of Mar 18, 1911, Wash Laws c 117, p 538.

West Virginia: Act of Feb 22, 1913, W Va Laws c 9 p 53.

Wisconsin: Act of July 9, 1907, Wis Laws c 499, p 1130 (telephone only).

[202] Act of June 18, 1910, 36 Stat 539.

[203] 45 Cong Rec 5533-37, 6972-74 (1910). See also the discussion of competition at pp 7129-30.

[204] Id at 5534 (1910).

[205] Id at 5533.

[206] Act of June 10, 1921, 42 Stat 27.

[207] Senate Rep No 75, 67 th Cong, 1 st Sess 1-2 (1921); House Rep No 109, 67 th Cong, 1 st Sess 1-2 (1921). 61 Cong Rec 1983-93 (1921).

[208] 48 Stat 1064 (1934), as amended, 47 U.S.C. § 151 et seq.

[209] Senate Rep No 781, 73d Cong., 2d Sess, 2-3 (1934); House Rep No 1850, 73d Cong 2d Sess 2-3 (1934); 78 Cong Rec 4139, 8822-24, 8853, 10312-17, 10322-23 (1934). See also Hearings before Sen Comm on Interstate Commerce on Commission on Communications, 71 st Cong, 1 st and 2 nd Sess, 1085-88, 1250, 1582-85, 2115-31, 2137 (1929-1930); Study of Communications by an Interdepartmental Committee, Print of Sen Comm on Interstate Commerce, 73d Cong, 2d Sess 1-2, 7-9 (1934); Preliminary Report on Communication Companies, House Rep No 1273, Part I, pp V-Vi, XII, XIV, XVI, XXX-XXXI, 1, 39-43, 75-76, 89-93 (1934); Report on Communications Companies, Part III, pp IX-XII, 841, 845-47, 854, 856-62, 901-02, 929, 961-63 (1934); Hearing before Sen Comm on Interstate Commerce on Federal Communications Commission, 73d Cong., 2d Sess 74-75, 78, 87, 100, 132-38 (1934); Hearings before House Comm on Interstate and Foreign Commerce on Federal Communications Commission, 73d Cong, 2d Sess. 5-6, 10-12 (1934); House Conf. Rep No 1918, 73d Cong., 2d Sess 46 (1934).

[210] S Rep No 781, 73d Cong., 2d Sess 2 (1934).

[211] 78 Cong Rec 4139 (1934).

[212] Id at 10315 (1934)

[213] Report on Communications Companies, House Rep No 1273, 73d Cong., 2d Sess, Part III, No 1, pp X, 841, 845-47, 854, 856-62, 901-02 (1934).

[214] Report on Communications Companies, House Rep. No. 1273, 73d Cong., 2d Sess., Part III, No. 1, p. 998 (1934).

[215] Report on Communications Companies, House Rep. No. 1273, 73d Cong., 2d Sess., Part III, No. 1, p. 961-63 (1934).

[216] Report on Communications Companies, House Rep. No. 1273, 73d Cong., 2d Sess., Part III, No. 1, p. X (1934).

[217] Report on Communications Companies, House Rep. No. 1273, 73d Cong., 2d Sess., Part III, No. 1, p. 961-63 (1934). See also Hearings before Sen. Comm. On Interstate Commerce on Commission on Communications, 71 st Cong., 2d Sess, pp 1086-88 (1930); Hearings Before Sen Common Interstate Commerce on Federal Communications Commission, 73d Cong., 2d Sess pp 132-33 (1934).

[218] Report on Communications Companies, House Rep. No. 1273, 73d Cong., 2d Sess., Part III, No. 1, pp. 961, 998 (1934).