1983-07-20 Public Hearings and Regular Meeting

Browse Search

• Dallas, Texas, Saturday, ey 2, 1983 25 Cents • Court denies Bell bl*d'for '* 061*5_M1llion 11 • By Richard Fish Austin Bureau of The News . AUS71N — A state district judge ruled Friday that Southwestern Bell has failed to justify $61.5 mil- lion worth of payments to its par- ent company and is not entitled to charge the costs to Texas custom- ers. The ruling was handed down in Austin by state Dist. Judge Harley Clark one week after Southwestern Bell filed a record $1.7 billion rate - increase request. Bell had asked Clark to restore charges that the Texas Public Util- ity Commission cut from the phone company's 1982 rate request. Bell sought a $471.5 million rate increase last year, but the PUC al- lowed the phone company to raise rates by only $243.9 million. Bell officials said the PUC im- properly rejected more than $90 million of its rate request, includ- ing $61.5 million that it had paid to its parent firm, American ;Tele• phone & Telegraph, for special services. A PUC examiner said Bell sought to charge Texas customers for costs of political lobbying in other states and in Congress and for development of products that will never be marketdd. The PUC rejected the reimburse• ment request, saying Bell couldn't Please see COURT on Page 14A. 14 A 0,,belualladiloraiag rks Saturday, July 2, 1983 Court rules SW Bell has failed to J*ustify $61.5 million charge Continued from page 1A. prove that the expenses benefited Texans. Attorneys for Atty. Gen. Jim 11atLox'.office and the Texas Munic- ipal i.eague argued successfully Friday that Texas law requires spe- cific justification of payments made between affiliate companies such as Southwestern Bell and AT&T. Assistant Aity. Gen. Fernando Rodriguez said Bell provided the PUC with 4,600 budget reports to Justify the AT&T payments. But Ro• driguez said that many of the re- ports were "unclear and cryptic. ' "The PUC staff couldn't divine the Propeand Bell'srtthem,numbers from Own witnesses (the 1982 hearing) couldn't divine them, either," Rodriguez said. He said some documents "clearly demonstrated" that the AT&T charges were improper. Bell attorney Robert Hearon said some of the charges may have been unwarranted, but he said that "there is an underlying injustice" in throwing out the entire request. "Everyone in this room knows that Southwestern Bell and its ra- tepayers got a substantial benefit from most of these services," Hearon said. Rodriguez said. that lawyers found $1.8 million in questionable charges after randomly examining Bell's reports. "AT&T has sucked out of the (re- gional) operating companies funds which, it has been proved, went to improper purposes," Rodriguez said. Clark also rejected Bell's conten- tion that it had been required to re- fund too much money to customers after the PUC cut its 1982 rate -in- crease request. The PUC ordered Bell to return $29.4 million to phone customers. The company said it should have refunded only $8 million. After the ruling. Bell spokesman Dale Johnson said, "We still feel very emphatically that (the con- tract payments to AT&T) contain large amounts of benefit to Texas ratepayers.... We will take under consideration whether to appeal."