MCI Tеlecommunications Corporation [MCI] and Mid American Communications, d/b/a LDDS Communications [LDDS], ap
This case involves the handling of telecommunications services within a “LATA”
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created by a consent decree entered in antitrust litigation. In 1949, the Unitеd States brought an antitrust action against Western Electric Company, Inc., and American Telephone and Telegraph Company, Inc. [AT & T], seeking AT & T’s divestiture of Western Electric, a wholly-owned subsidiary that manufactured telecommunications equipment.
United States v. American Tel. & Tel. Co.,
“Pursuant to the decree, all Bell territory in the continental United States is divided into LATAs, generally centering upon a city or other identifiable community of interest. Most simply, a LATA marks the boundaries beyond which a Bell Operating Company [after divestiture from AT & T] may not carry telephone calls. What the Operating Companies [22, controlled by seven regional holding companies after the divestiture] will do in the service field after divestiture is (1) to engage in exchange telecommunications, that is, to transport traffic betwеen telephones located within a LATA, and (2) to provide exchange access within a LATA, that is, to link a subscriber’s telephone to the nearest transmission facility of AT & T or one of AT & T’s long-haul competitors.
“Once the divestiture is completed, the Operating Companies will be allowed to transport communications only to and from telephones and other apparatuses located within the same LATA (intra-LATA traffic); because of their local monopoly position, the decree does not permit the Operating Companies to carry calls between different LATAS (inter-LATA traffic). Only AT & T and its intercity competitors [also known as interexchange carriers, inter-LATA carriers, or other common carriers (OCCs)] — such as MCI, Sprint, and Satellite Business Systems — may carry telecommunications traffic which originates in one LATA and terminates in another.”
Id. at 993-94.
With regard to interLATA exchange service, the consent decree required the divested Bell Operating Companies to provide equal dialing access, without access codes, to all interexehange carriers:
“(ii) Each BOC shall, in accordance with the schedule set out in paragraph (1), offer as a tariffed service exchange access that permits each subscriber automatically to route, without the use of access codes, all the subscriber’s interexchange communications to the interexchange carrier of the customer’s designation.”
United States v. American Tel. & Tel. Co., supra,
“... if a subscriber wishes to place an intra-LATA call through AT & T, MCI, Sprint, Microtel, or one of the other competitive services, he will have to add four digits at the time of calling (ie., an access code of ‘10XX’). If an access code is not dialed, the intra-LATA call will automatically be carried by the Operating Company.”
United States v. Western Elec. Co., Inc.,
Those events in the telecommunications industry at the national level were followed by regulatory changes at the state level. In 1989 the Legislature passed Senate Bill No. 2820 (S.L.1989, ch. 566, § 14), which amended § 49-21-07, N.D.C.C., to provide in part:
“It shall be unlawful for any telecommunications company to make any unjust or unreasonable discrimination in prices, practices, or service for or in connection with like telecommunications service, or give any undue or unreasonable preference or advantage to any person or telecommunications company or to subject any person or telecommunications company to any undue or unreasonable prejudice or disadvantage in the service rendered by it to the public or to a telecommunications company, or to charge or receive for any such service rendered, more or less than the prices provided for in the schedules then on file with the commission.”
In 1989, the Public Service Commission opened an investigation into the effects of S.B. 2820. On April 7, 1992, the PSC issued findings of fact, conclusions of law, and an order. The PSC found, among other things, that “[a]s a first and most important step to realizing the benefits of competition, we believe that both intraLATA 1-plus equal access and interLATA 1-plus equal access shоuld be implemented in North Dakota rapidly,” and that “10XXX dialing access is not equal to 1 + access.” The PSC concluded, in part:
“11. Equal access would further the development of competitive markets without unreasonably distracting from the efficient provision of telecommunications services and would make available to all people of North Dakota modern and efficient telecommunications at the most economic and reasonable cost.
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“14. Until an end office is converted to offer intraLATA equal access, a local exchange company is providing interex-change carriers other than AT & T an inferior access for interLATA [sic] traffic. The price of inferior intraLATA access should be less than the price for superior, or premium, access.”
The PSC ordered, among other things: “IntraLATA 1-plus equal access and inter-LATA 1-plus еqual access shall be implemented in North Dakota as rapidly as feasible.” Upon appeal, the district court concluded that the PSC had not complied with the rulemaking provisions of Ch. 28-32, N.D.C.C., reversed, and remanded for further proceedings.
Before further proceedings were held, the 1993 Legislative Assembly adopted S.B. 2385 (S.L. 1993, ch. 470), which, “effective through July 31, 1999,” provides:
“In order to continue to make available to all people оf this state modern and efficient telecommunications services at the most economic and reasonable cost, the provisioning of dialing parity on an intra-LATA basis, otherwise known as 1+ intra-LATA equal access, may not be required to be provided by any company providing local exchange service.”
MCI and LDDS sued the Attorney General for a declaratory judgment that 1993 S.B. 2385 violates Art. I, § 22, N.D. Const., Art. IV, § 13, N.D. Const., and unconstitutionally delegates legislаtive powers to private entities in violation of Art. IV, N.D. Const. U.S. West Communications, Inc. and a group of 13 independent telephone companies [ITCG] were allowed to intervene. The trial court granted the Attorney General’s motion for summary judgment and a judgment of dismissal was entered.
On appeal, MCI and LDDS contend that S.B. 2385(1) violates Art. I, § 22, N.D.
MCI and LDDS contеnd that S.B. 2385 violates Article IV, § 13, N.D. Const., “because it constitutes a ‘special law’ designed to protect US WEST’S deregulated monopoly over intraLATA long distance telephone calls.” Article IV, § 13, N.D. Const., provides in pertinent part:
“The legislative assembly shall enact all laws necessary to carry into effect the provisions of this constitution. Except as otherwise provided in this constitution, no local or special laws may be enаcted, nor may the legislative assembly indirectly enact special or local laws by the partial repeal of a general law but laws repealing local or special laws may be enacted.”
This court recently reiterated a number of premises underlying analysis of constitutional challenges to statutes:
“ ‘[A]n act of the legislature is presumed to be correct and valid, and any doubt as to its constitutionality must, where рossible, be resolved in favor of its validity.’ Southern Valley Grain Dealers Ass’n v. Board of County Comm’rs,257 N.W.2d 425 , 434 (N.D.1977). ‘A statute enjoys a conclusive presumption of constitutionality unless it is clearly shown that it contravenes the state or federal constitution.’ Richter v. Jones,378 N.W.2d 209 , 211 (N.D.1985). “The justice, wisdom, necessity, utility and expediency of legislation are questions for legislative, and not for judicial determination.’” Manikowske v. North Dakota Workmen’s Compensation Bureau,338 N.W.2d 823 , 825 (N.D.1983), quoting Asbury Hospital v. Cass County,72 N.D. 359 ,7 N.W.2d 438 , 442 Syllabus ¶11 (1943).”
Haney v. North Dakota Workers Compensation Bureau,
“ ‘A statute relating to persons or things as a class is a general law; one relating to particular persons or things of a class is special.’ ”
Vermont Loan & Trust Co. v. Whithed,
On its face, S.B. 2385 appears to be a general law, applying, as it does, to all com-
“The plaintiffs contend that Senate Bill No. 2385 is in essence a special law treating local exchange companies, i.e., US WEST, different from all other telecommunication carriers in an intraLATA market. It does not apply uniformly to all similarly situated.
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“In application to the telecommunications industry, Senate Bill 2385 provides US WEST with a continued monopoly on all intraLATA calling. This section effectivеly denies access in US WEST’S service territory to other long distance telecommunication carriers, such as MCI and LDDS, because in order to access other carriers, consumers must dial a particular five digit access code before dialing the long distance number. Other long distance carriers are not totally excluded from carrying intraLATA calls becaúse consumers can access other carriers by dialing ‘10XXX.’ Such 10XXX’ aсcess is inferior access. It requires consumers to memorize and dial four extra digits.”
We are met at the outset of our analysis of this issue with a dispute as to the proper test to apply. MCI and LDDS contend that a “reasonableness,” but not a “rational basis,” test applies. US WEST contends that a reasonableness test applies, but that it and the rational basis test are essentially the same. The Attorney General contends that the appropriate test is “whether there is a reasonable basis for the statute.” The ITCG contends that the rational basis test of equal protection analysis applies. For the purposes of this appeal we need not decide which of the tests is to be applied for special law challenges. Senate Bill 2385 passes constitutional muster under the special laws provision using either test.
Reasonable classification does not violate the special laws provision of the North Dakota Constitution.
Bellemare v. Gateway Builders, Inc., supra.
When we examine a statute to decide if a classification used is impermissibly particular, that is, special, rather than general, we examine the reasonableness of the classification.
Best Products Co., Inc. v. Spaeth, supra.
In other words, the test of the constitutionality of a statutory classification under the special laws provision of the North Dakota Constitution is thе reasonableness of the classification. A “statutory classification challenged under the special laws provision of our constitution is ... to be upheld if it ⅛ natural, not arbitrary, and standing upon some reason having regard to the character of the legislation of which it is a feature.’ ”
Id.,
A company providing local exchange service is different from a company providing only long distance service. “It may appropriately be generalized that local telephone service is relatively more relied upon by individuals and that long distance is more business-oriented.”
United States v. Western
Senate Bill 2385 also withstands analysis under a rational basis standard. There was evidence before the Lеgislature that it would cost a substantial amount of money for the local exchange companies to acquire the sophisticated computer equipment necessary to provide 1 + equal access service to the inter-exchange carriers for intraLATA toll calls. The federal court recognized that “[i]f the objective of telephone service available at reasonable rates to all is not tо be jeopardized, it is ... most important that local rates not be burdened by unnecessary increases.”
United States v. Western Elec. Co., Inc.,
MCI and LDDS argue: “US WEST currently has a virtual monopoly over intra-LATA long distance calls in North Dakota. Its rates for such service are not subject to public utility rate regulation. It can charge whatever it likes for such service.” We do not agree. If the interexchange companies “truly offer a better price or a better service ..., they should be able to educate their potential customers that it is worth the extra four numbers to take advantage of their offering.”
United States v. Western Elec. Co., Inc.,
MCI and LDDS argue: “Senate Bill No. 2385 violates the North Dakota Constitution because it grants legislative powers to a private entity by granting local exchange companies the ability to determine the extent, and under what conditions, competition will be allowed in the intraLATA toll market.” Except as otherwise provided in the North Dakota Constitution, our Legislature may not delegate legislative powers to others.
E.g., County of Stutsman v. State Historical Society,
“The public service commission ... shall not issue its order or a certificate of public convenience and necessity to any electric public utility to extend its electric distribution lines beyond the corporate limits of a municipality ... unless the electric co-operative corporation with lines or facilities nearest the place where service is required shall consent in writing to such extension ... or unless, ... it shall be shown that the service required cannot be provided by an electric cо-operative corporation.”
Id. at 419.
This court deemed the question of who should be allowed to provide electric service in rural areas to be a legislative question, and because Section 3 “leaves that determination to the electric co-operative, ... this clearly is an unlawful delegation of legislative authority.”
Id.
at 421. No such legislative questions are involved here. Senate Bill No. 2385 allows companies providing local exchange service to provide 1+ intraLATA equal access, but temporarily provides that they may not be required to do so. Senate Bill No. 2385 does not give companies providing local exchange service “the authority to make a law,” but “pertains only to the execution of a law which was enacted by the Legislature” in dealing with discrimination in the telecommunications industry.
Stutsman, supra,
at 327. ‘“The Public Service Commission hаs only such powers as have been conferred upon it by the Legislature.’ ”
Cass County Elec. Co-op., Inc. v. Northern States Power Co.,
MCI and LDDS have failed to overcome the presumption of constitutionality accorded to statutes, and the judgment of dismissal is affirmed.
Notes
. "The acronym 'LATA' stands for ‘Local Access and Transport Area.’ "
United States v. Western Elec. Co., Inc.,
. Article I, § 22, N.D. Const., provides: "All laws of a general nature shall have a uniform operation." Although MCI and LDDS raised violation of Art. I, § 22, as an issue, they did not brief or argue it. Thus, that issue is deemed abandoned.
Osterman-Levitt v. MedQuest, Inc.,
. US WEST is but one of 23 local exchange telecommunications companies in North Dakota, and S.B. 2385 applies to all of them with regard to the access service they provide to interex-change long distance telecommunications companies.
. The fact that an otherwise valid statute may have a harshly disparate impact on some, but not all, persons does not invalidate the statute.
See, e.g., State v. Knoefler,