BellSouth cannot bar competing local telephone service providers from adding their logos to the covers of white pages directories, the Tennessee Supreme Court said Wednesday in a unanimous decision, upholding Tennessee Regulatory Authority judgments and overturning a ruling by the state Court of Appeals.
“...The governmental interest in this case is important, indeed, for informing consumers about their choices in the local telecommunications service market is a fundamental aspect of promoting free competition,” Justice Adolpho A. Birch, Jr., wrote for the court. “Moreover, the government’s chosen means to advance its goals, the requirement that logos of competing telecommunications service providers be displayed on equal footing with BellSouth’s logo, does not substantially affect BellSouth’s ability to communicate its own speech to customers in the market.”
In the opinion, Birch said two TRA decisions allowing competitors’ logos on the directories did not violate the First Amendment to the United States Constitution, as claimed by BellSouth Advertising & Publishing Corporation, a part of BellSouth Corporation created to produce telephone directories. Only the BellSouth logo currently appears on directory covers published by BAPCO for BellSouth Telecommunications, Inc.
“After a painstaking review of the voluminous record and a thorough consideration of the issues, we hold that the TRA is authorized to require that the names and logos of competing local exchange telephone companies be included on the cover of white pages directories published on behalf of BellSouth,” Birch wrote.
The Supreme Court decision resulted from a consolidated appeal by the TRA, which is charged under Tennessee law with regulating public utilities in the state. The TRA, in a 2-1 decision, had ruled
in favor of AT&T, a BellSouth competitor, saying BAPCO must provide the opportunity for AT&T to include its name and logo on telephone directory covers “under the same terms and conditions as BAPCO provides to BellSouth by contract.”
While the appeal of the AT&T proceeding was pending in the Court of Appeals, another competitor, Nextlink, filed a petition with the TRA asking the regulatory board to order BAPCO to give all competing local exchange telephone companies the same opportunity to appear on white pages directory covers in their service areas. The TRA ruled in favor of Nextlink and the decision was appealed by BAPCO to the Court of Appeals. The Court of Appeals consolidated the appeals and reversed the TRA, saying the agency had exceeded its authority. That decision was appealed by the TRA to the state Supreme Court, which agreed to take the case.
Citing state law and earlier Supreme Court decisions involving public utilities, Birch said the legislature gave the TRA broad regulatory and rule-making authority. The General Assembly “has provided that the laws governing the TRA shall be given ?a liberal construction’ and has mandated that ?any doubts as to the existence or extent of a power conferred on the TRA ... shall be resolved in favor of the existence of the power...,” he wrote.
“While it is abundantly clear that the TRA has jurisdiction over BellSouth, a regulated public utility, BAPCO suggests that because it is not a public utility, it is beyond the reach of the TRA,” Birch wrote. “... BellSouth is a public utility regulated by the TRA and is required by law to provide a white pages directory in its market area. BellSouth has contracted that duty to BAPCO, an affiliated company within BellSouth’s parent corporation. Thus, for purposes of these two declaratory order proceedings, we conclude that the TRA had jurisdiction over BAPCO.”
The TRA’s orders were designed to help consumers by compelling BellSouth to disclose information about the identity of its competitors, Birch said.
Until 1995, local telephone services in Tennessee were provided only by “monopoly providers,” Birch wrote in the court’s decision. A change in state law abolished “monopolistic control of the local telephone service market” and allowed open-market competition. Long-distance competition took effect under the federal Telecommunications Act of 1996.
“BellSouth Telecommunications, Inc. (BellSouth), under its former name, South Central Bell, operated as a monopoly in providing local telephone service in Tennessee markets” prior to the change in state law, Birch wrote. The telephone company was required to publish a white pages directory listing all telephone subscribers within each service area. BellSouth contracted with BAPCO to publish both its white and yellow pages directories.