STATEMENTS OF POLICY
[52 PA. CODE CH. 41]
[L-00010152]
Evidentiary Criteria Used to Decide Motor Common Carrier Applications
[31 Pa.B. 2389] The Pennsylvania Public Utility Commission (Commission) on March 22, 2001, adopted a proposed policy statement order establishing evidentiary criteria used to decide motor common carrier applications. The contact person is Rhonda Daviston, Law Bureau, (717) 787-6166.
Public Meeting held
March 22, 2001Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice Chairperson, concurring in result; Nora Mead Brownell; Aaron Wilson, Jr.; Terrance J. Fitzpatrick, statement follows.
Order By the Commission:
Under section 1102 of the Public Utility Code (Code) 66 Pa.C.S. § 1102 (relating to enumeration of acts requiring certificate), a public utility must obtain a certificate of public convenience from the Commission before offering service within this Commonwealth. As defined by section 1102 of the Code, ''public utility'' includes common carriers that transport passengers by motor vehicle between points within this Commonwealth for compensation. See 66 Pa.C.S. § 102 (relating to definitions). The evidentiary criteria governing applications for this type of authority are set forth in a Commission policy statement in § 41.14 (relating to general orders, policy statement and guidelines on transportation utilities).
As part of a continuing effort to ensure that our regulatory requirements are necessary and appropriate, we have considered whether the evidentiary criteria of § 41.14 should continue to be applied to our review of applications for motor common carrier authority. In view of the increasing competition developing in traditional utility markets, we are reexamining the scope of our regulation of motor carrier service providers.
Under § 41.14, an applicant must currently demonstrate that the proposed service will serve a public purpose responsive to a public demand or need. See 52 Pa. Code § 41.14(a). An applicant must also establish that it possesses the technical and financial ability to provide the proposed service. The Commission may deny this authority if the applicant ''lacks a propensity to operate safely and legally.'' See 52 Pa. Code § 41.14(b). Finally, existing providers may show that the applicants proposed service would endanger or impair them to an extent that authorizing the proposed service would be contrary to the public interest. See 52 Pa. Code § 41.14(c).
After a thorough review of this Commission policy, we believe that the criteria should be changed to eliminate many of the restrictions now faced by an entity that seeks a certificate of public convenience to provide motor common carrier services. In this era of increasing competition, it is difficult to justify the continuation of burdensome entry restrictions which potential motor common carrier service providers must overcome. Thus the Commission proposes to alter § 41.14 to eliminate certain standards that govern our review of motor common carrier applications. Specifically, applicants would no longer be required to produce evidence of public need for the service. Further, the Commission would not consider the effect that a new carrier in the transportation industry would have on existing providers. This action is taken so that our review of all motor carrier applications is consistent with our review of limousine applications. Under our order adopted today at L-00980135, we have amended our policy statement at § 41.14 to eliminate the requirement for the applicant to demonstrate public need and to forego consideration of the impact of new entrants on existing providers.
We believe that easing the entry of carriers into the transportation industry should foster competition, and is therefore necessary and proper for the accommodation of the public. We will in no way relax our overview of safety and insurance requirements. Nor will we issue a certificate to a motor carrier applicant who fails to demonstrate technical and financial fitness to provide the proposed services. In particular, the remaining evidentiary criteria in the policy statement will continue to apply to all prospective limousine applications. That provision provides that :
An applicant seeking motor carrier authority has a burden of demonstrating that it possesses the technical and financial ability to provide the proposed service, and in addition, authority may be withheld if the record demonstrates that the applicant lacks a propensity to operate safely and legally.52 Pa. Code § 41.14(b).
The Commission has authority to change § 41.14 and has done so before. In 1983, the Commission adopted § 41.14 to eliminate the requirement that an applicant for motor common carrier authority show the inadequacy of the existing service. In subsequent litigation, the Commonwealth Court found that the Commission had the authority to make this change. Seaboard Tank Lines v. Pa. P.U.C., 502 A.2d 762, (Pa. Cmwlth. 1985). In Seaboard, the court stated that the Commission's mandate to grant certificates of public convenience was broad, and that the Commission could formulate the criteria for the granting of such certificates. Id.
These proposed changes correspond with Federal intervention in the area of intrastate transportation. The Federal government had preempted the State regulation of property carriers (49 U.S.C.A. §§ 11501(h) and 4171(b)) and bus service (49 U.S.C.A. § 14501(a)) except for safety and insurance requirements. We reemphasize that we will not relax any Commission safety and insurance requirements for present or future motor carrier service providers.
We note with respect to certain telecommunications applications, that we have concluded that applicants seeking to offer competitive local exchange carrier and competitive access provider services under 66 Pa.C.S. § 1103(a) (relating to procedure to obtain certificates of public convenience) need not demonstrate a particular need for the proposed services in rural areas. Rather, public need for competitive services is presumed. Application of Vanguard Telecom Corp., d/b/a Cellular One, Docket Nos. A-310621, F.0002 and A-310621, F.0003 (Order Entered August 23, 2000) (evidentiary criteria for market entry under 66 Pa.C.S. § 1103(a) modified to reflect procompetitive policy) Slip op. at 18-19. Application of Armstrong Communications, Inc., Docket Nos. A-310583, F0002 (Order Entered March 4, 1999) (facilities-based CLEC need not demonstrate public need or inadequacy of existing service).
Our approach to these telecommunications applications, wherein the evidentiary criteria are modified and tailored to the present industry structure, is very similar to what we propose to do in the transportation industry. In short, we believe that the introduction of competition would be responsive to a public need for more choices.
Lastly, we note that this proposed policy change will have no effect on our review of applications for taxicab service under the Philadelphia taxicab medallion program. We also note that this proposed policy change will have no effect on the Port Authority of Allegheny County's exclusive jurisdiction over the transportation system within Allegheny County. The Commission welcomes comments on the proposed changes to § 41.14.
Accordingly, under 66 Pa.C.S. §§ 501 and 1102, the Commonwealth Documents Law (45 P. S. § 1201 et. seq.), and regulations promulgated thereunder in 1 Pa. Code §§ 7.1--7.4, the Commission issues this policy statement as set forth in Annex A: Therefore,
It Is Ordered that:
1. The proposed amendments to 52 Pa. Code Chapter 41, as set forth in Annex A, is issued for comment.
2. The Secretary shall submit this order and Annex A to the Governor's Budget Office for review of fiscal impact.
3. The Secretary shall certify this order and Annex A and deposit them with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
4. Interested persons may submit an original and 15 copies of written comments to the Office of the Secretary, Pennsylvania Public Utility Commission, P. O. Box, 3265, Harrisburg, PA 17105-3265, within 30 days from the date this order is published in the Pennsylvania Bulletin.
JAMES J. MCNULTY,
Secretary(Editor's Note: For a statement of policy relating to this document, see 31 Pa.B. 2385 (May 5, 2001).)
Fiscal Note: 57-220. No fiscal impact; (8) recommends adoption.
Statement of Commissioner Terrance J. Fitzpatrick Today the Commission is considering the Final Policy Statement on evidentiary criteria used to review applications to provide limousine service, and a Proposed Policy Statement on evidentiary criteria used to review all other motor common carrier applications. I wholeheartedly support the Law Bureau's recommendations that the Commission adopt the Final Policy Statement and the Proposed Policy Statement.
Both the Proposed and Final Policy Statements would eliminate two elements of the Commission's current policy--the requirement that an applicant prove a ''public demand or need'' for the service, and the provision that an application may be denied where it threatens the operations of existing common carriers. 52 Pa. Code § 41.14(a) and (c). An applicant would still be required to demonstrate that it is technically and financially fit. 52 Pa. Code § 41.14(b).
In an era when we allow entry into the local telecommunications market and electricity supply markets upon a simple showing of technical and financial fitness, there is no justification for requiring an applicant for motor carrier authority to clear a higher threshold by demonstrating a public demand or need for the service. There is also no sound policy reason why the Commission should protect existing carriers from additional competition. These outdated requirements do not protect the public interest; they protect private interests by providing fuel for protests and litigation that can be used to discourage entry.
To the extent that the Commission's staff is freed from applying these outdated standards to motor carrier applications, the staff will be better able to focus on safety and the many other truly important issues to come before the Commission.
For these reasons, I support the Law Bureau's recommendations.
Annex A
TITLE 52. PUBLIC UTILITIES
PART I. PUBLIC UTILITY COMMISSION
Subpart B. CARRIERS OF PASSENGERS OR PROPERTY
CHAPTER 41. GENERAL ORDERS, POLICY STATEMENT AND GUIDELINES ON TRANSPORTATION UTILITIES § 41.14. Evidentiary criteria used to decide motor common carrier applications--statement of policy.
[(a) An applicant seeking motor common carrier authority has a burden of demonstrating that approval of the application will serve a useful public purpose, responsive to a public demand or need.
(b)] An applicant seeking motor common carrier authority has the burden of demonstrating that it possesses the technical and financial ability to provide the proposed service. In addition, authority may be withheld if the record demonstrates that the applicant lacks a propensity to operate safely and legally.
[(c) The Commission will grant motor common carrier authority commensurate with the demonstrated public need unless it is established that the entry of a new carrier into the field would endanger or impair the operations of existing common carriers to an extent that, on balance, the granting of authority would be contrary to the public interest.
(d) Subsections (a) and (c) do not apply to an applicant seeking authority to provide motor carrier of passenger service under §§ 29.331--29.335 (relating to limousine service).]
[Pa.B. Doc. No. 01-784. Filed for public inspection May 4, 2001, 9:00 a.m.]
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