2004-785, APPEAL OF VERIZON NEW ENGLAND, INC. d/b/a VERIZON NEW HAMPSHIRE

Commission (PUC) requiring the imputation of at least $23.3 million earne d by (Telephone Company) appeals an order of the New Hampshire Public Utilities DALIANIS, J. Verizon New England, Inc. d/b/a Verizon New Hampshire

Advocate, as amicus curiae. staff attorney, on the brief, and Ms. Ross orally), for the Office of Co nsumer F. Anne Ross, consumer advocate (Ms. Ross and Rorie E.P. Hollenberg,

on the brief, for the State. attorney general, on the brief and orally), and Edward N. Damon, of Concord, Kelly A. Ayotte, attorney general (Wynn E. Arnold, senior assi stant

the brief, for the petitioner. Bruce P. Beausejour and Victor D. Del Vecchio, of Boston, Massachusetts, on Camerino and Sarah B. Knowlton on the brief, and Mr. Camerino orally), and McLane, Graf, Raulerson & Middleton, P.A., of Concord (Steven V.

(New Hampshire Public Utilities Commission)

APPEAL OF VERIZON NE W ENGLAND, INC. d/b/a VERIZON NEW

No. 2004 - 785 Public Utilities Commission

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

as warranted. The order also directed the Telephone Company to provide the Directory Company, and it reserv ed the right to take further regulatory action continue to monitor the relationship between the Telephone Company and the into effect without modification. The PUC noted, however, that it would On July 1 p. 2 2, 1985, the PUC issued an order allowing the 1984 DPA to go

either party on one year’s notice. would be automatically renewed on a yearly basis, subject to termination by Company. The agreement was to remain in force for five years, after which it subscriber s, and further agreed to pay annual publishing fees to the Telephone publish telephone directories for distribution to the Telephone Company’s telephone directories. The Directory Company agreed to compile, print and the purposes of soliciting and obtaining directory advertising for publication in the term of the agreement to contact the Telephone Company’s s ubscribers for Telephone Company granted the Directory Company the exclusive right during agreement with the Directory Company (1984 DPA). Under the 1984 DPA, the The Telephone Company, th erefore, entered into a directory publishing the “White Pages” – to all of its customers. N.H. Admin. Rules, PUC 405.04. directory, it was still required to provide a compilation of subscriber listings – Although the Telephone Company no longer published a telephone

a non - regulated affiliat e. transfer assets associated with directory operations to the Directory Company, businesses. Id. at 194. At divestiture, the Telephone Company elected to operating companies were permitted to retain their Yellow Pages print including the Telephone Company. See id. at 141, p. 2 222 - 25. The d ivested litigation, AT&T divested itself of twenty - two regional operating companies, In 1984, pursuant to a consent decree arising from major anti - trust

operating company. directory operations were included in the regula ted books of the regional aff’d, 460 U.S. 1001 (1983). All revenues, expenses and assets associated with United States v. American Tel. and Tel. Co., 55 p. 2 2 F. Supp. 131, 193 (D.C. 1982), The Yellow Pages business e arned the company “supra - competitive” profits. operations and revenues belonged entirely to the regional operating company. telephone directories for New Hampshire “in house,” and Yellow Pages a regulated regional operating company, compiled, published and distributed devoted to advertisements sold by the publisher. Prior to 1984, AT&T, th rough subscribers and their telephone numbers, and “Yellow Pages,” a section directories have been comprised of “White Pages,” an alphabetical listing of telecommunications business for over a century. Traditionally, telephone The publication of telephone directories has been an integral part of the

(Directory Company), for ratemaking purposes. We affirm. the Telephone Company’s unregulated affiliate, Verizon Yellow Pages Company p. 3 3

termination of the 1991 DLA to January 1, 2000. On January 1, 2000, the Directory Company notified the Telephone Company that it was postponing to file the 1999 amendment with the PUC. On December 24, 1998, the sharing payments to the Telephone Company. The Telephone Company failed Company were restricted to Maine, as were its obligations to make revenue Under the 1999 amendm ent, the exclusive licenses granted to the Directory effective as of January 1, 1999, allowing the 1991 DLA to remain in effect. Company executed an amendment to the 1991 DLA (1999 amendment), On December 2 p. 3 3, 1998, the Directory Company and the Telephone

Telecommunications Act of 1996 as its prima ry motivation for doing so. telecommunications service providers and directory providers” required by the 1999. It cited the “important changes in the relationships between the Telep hone Company that it was terminating the 1991 DLA as of January 1, licensing agreements. On December 9, 1997, the Directory Company notified discriminatory policy from the time of the 1984 divestiture in its listings U.S.C. § 222(e) (2000). The Telephone Company had followed such a non person requesting such information for directory publishing purposes. 47 “under nondiscriminatory and reasonable rates, terms and conditions” to any required telephone service providers to furnish subscriber list information U.S.C.A. §§ 151 e t seq. (2001 & Supp. 2005), which, among other things, In 1996, Congress adopted the Telecommunications Act of 1996, 47

approving it without modification. the agreement “just and reasonable,” issued an order on March 6, 1991, subject to term ination by either party on one year’s notice. The PUC, finding for five years, after which it would be automatically renewed on a yearly basis, The 1991 DLA, like the 1984 DPA it superseded, was to remain in force

publishing endeavors. annual fee based upon the revenues generated by its telephone directory license, the Directory Company agreed to pay the Telephone Company an as the “official” directories of the Telephone Company. As consideration for this granted the Directory Company the exclusive right to designate its directories and marks in publishing and distributing directories. T he 1991 DLA also its name in soliciting directory advertising, as well as to use its name, slogans, Telephone Company granted the Directory Company an exclusive license to use January 1, 1991 (1991 DLA), with th e intent of replacing the 1984 DPA. The Directory Company entered into a Directory License Agreement, effective December p. 3 30, 1990. In November 1990, the Telephone Company and the The 1984 DPA remained in effect from January 1, 1984, through

the 198 p. 4 4 DPA, including information about income derived fr om Yellow Pages. PUC with updated information about changes in the terms and conditions of 4

determined that the 1991 DLA was not validly terminated before 1999, and to RSA 366:3 (1995), it was unenforceable in New Hampshire. It further an affiliate cont ract, and that because it was not filed with the PUC pursuant Company. The PUC concluded that the 1999 amendment was a modification of derived by the Directory Company from its association with the Telephone not compensate the Telephone Company and its ratepayers for the value On July 9, 200 p. 4 4, the PUC issued an order finding that the 2000 DPA did

any rights or interest in those revenues. and whether or not the Telephone Company retained, or should have retained, the proper regulatory treatment of Yellow Pages revenues in New Hampshire, On the basis of the audit, the PUC initiated a proceeding t o determine

likely have substantial value were it to be sold in an arm’s length transaction. or interest in Yellow Pages revenues, and that the Yellow Pages business would approved the Telephone Company’s existing co ntract in which it had no rights Company without the express permission of the PUC, that the PUC had not company, Verizon, Inc., removed Yellow Pages revenues from the Telephone C ompany. The auditor concluded that the Telephone Company’s parent In October 2001, the PUC commissioned an audit of the Telephone

basis, and could be terminated by either party upon ninety days’ notice. The 2000 LLA was valid for one year, was automatically renewable on a yearly on a yearly basis, subject to termination by either party on one year’s notice. to remain in force for two years, after which it would be automatically renewed advertising sales as part of the licensing fee arrangement. The 2000 DPA was the Directory Comp any to pay any fees or to share revenues from directory parties. Unlike the 198 p. 4 4 DPA and the 1991 DLA, the 2000 LLA did not require Telephone Company reserved the right to issue similar licenses to other use the Telephone Company’s listing information for directory use, and the The 2000 LLA granted the Directory Company a non - exclusi ve license to

advertising. received by the Directory Company in connection with the sale of directory the Telephone Company would have no rights or interest in any revenues was given the right to sell advertising “in any section” of the directories, and publication and distribution of telephone directories. The Directory Company Telephone Company’s continuing regulatory obligations with respect to the 2000. Unde r the 2000 DPA, the Directory Company agreed to fulfill the license agreement (2000 LLA), which were filed with the PUC on March 8, entered into a new directory publishing agreement (2000 DPA) and a listings In early 2000, the Telephone Company and the Directory Company

time to execute a new directory publishing agreement. companies again postponed termination to March 31, 2000, to allow for more p. 5 5

relinquished its rig ht to payments under it.” The Telephone Company points that “the Telephone Company had unilaterally terminated the [1991 DLA] and law by ruling that “the 1991 DLA was not validly terminated” after concluding The Telephone Company first argues that the PUC erred as a matter of

A. The 1991 DLA and 199 9 Amendment

brackets omitted). for Ratepayers Rights, 14 p. 5 5 N.H. 671, 675 (2001) (quotation, ellipses, and We give the PUC’s policy choices considerable deference.” Appeal of Campaign to supplant the PUC's ba lance of interests with one more nearly to our liking. which seek to balance competing economic interests[,] our responsibility is not of Pinetree Power, 152 N.H. at 95. “When we are reviewing agency orders the PUC are presumed prima facie lawful and reasonable. RSA 541:13; Appeal see also Appeal of Pinetree Power, 152 N.H. 92, 95 (2005). Findings of fact by the evidence, that the order is unjust or unreasonable. See RSA 541:13 (1997); demonstrating that the order is contrary to law or, by a clear preponderance of A party seeking to set aside an order of the PUC has the burden of

I. The 2000 DPA

amendment. We address each issue in turn. $1,000 penalty upon the Telephone Company for its failure to file the 1999 Company; and (3) the PUC unsustainably exercised its discretion by imposing a million in revenues earned by the Directory Company to the Telephone enterprise; (2) the PUC erred as a matter of law in imputing at least $23.3 Telephone Company and its ratepayers any value from the directory publishing unjust and unreasonable because it did not reserv e for the benefit of the order: (1) the PUC erred as a matter of law in ruling that the 2000 DPA was The Telephone Company raises three issues in its appeal of the PUC’s

Company in th e amount of $1,000 for failing to file the 1999 amendment. statements. The PUC also assessed a civil penalty upon the Telephone effectuated by a line item adjustment on the Telephone Company’s financial Company to the Telephone Company, the PUC ordered that imputation be Rather than order the direct payment of $23. 3 million from the Directory $23.3 million of the Directory Company’s revenues to the Telephone Company. The PUC determined that the appropriate remedy was to impute at least

contribu tion arising therefrom on behalf of itself or its ratepayers. unilaterally relinquish the value derived from Yellow Pages or the right to PUC also concluded that, as a matter of law, the Telephone Company could not Hampshire Yellow Pages operations were improperly terminated in 1999. The that revenue sharing payments under the 1991 DLA with respect to New p. 6 6

before us. agreements as a “unilateral” one is irrelevant to the outcome of the matter Pages revenues under the 1999 amendment and, thereafter, the 2000 Telephone Company’s decision to surrender its rights a nd interest in Yellow 1999 was, indeed, improper. Whether the PUC erroneously characterized the Thus, the termination of revenue sharing payments under the 1991 DLA in the 1991 DLA, which re mained in effect until its termination in early 2000. unenforceable under RSA 3 p. 6 66:4, it could not and did not modify the terms of superseded by the 2000 agreements. Because the 1999 amendment was conclusion, as the 1991 DLA was not terminated until early 2000, when it was the 1991 DLA was not validly terminated before 1999 – an incont estably valid position that the Telephone Company unilaterally terminated it. It states that state that “the 1991 DLA was not validly terminated,” nor does it take the Contrary to the Telephone Compan y’s assertion, the PUC order does not

such opportunity . . . .” derived from Yellow Pages publication nor the right to contribution arising from unilaterally relinquish on its behalf, or on behalf of ratepayers, the value The PUC further concluded that the Tel ephone Company “did not, nor could it

improperly terminated during calendar year 1999. New Hampshire Yellow Pages operations were sharing payments under the 1991 DLA with respect to was not validly terminated before 1999, revenue New Hampshire under RSA 3 p. 6 66:4 and the 1991 DLA [B]ecause the 1999 Amendment [was] unenforceable in

3 p. 6 66:4. The PUC, therefore, concluded that: the PUC as mandated by RSA 366:3, and, thus, was unenforceable under RSA eliminating rev enue sharing payments under the 1991 DLA, was not filed with enforceable in New Hampshire. RSA 366:4 (1995). The 1999 amendment, contract or arrangement not filed in accordance with RSA 366:3 is not upon which the contract or arrangement is reached. RSA 366:3 (1995). Any must be filed by the public utility with the PUC withi n ten days after the date affiliate providing for the furnishing of services, or any modification thereof, Any contract or arrangement entered into between a public utility and an

PUC’s order. review of the record, we believe that th e Telephone Company misreads the contract, as was its right under section p. 6 6.1 of the 1991 DLA. After a thorough out that it was, in fact, the Directory Company that attempted to terminate the p. 7 7

RSA 366:5, which gives the PUC full investigative authority and places the position, the Telephone Company misconstrues the au thority of the PUC under burden upon the PUC to make such a showing. We believe that, in taking this deserved to be compensated accordingly. It cites no authority placing the Telephone Compan y, and that the Telephone Company and its ratepayers flow to the Directory Company as a result of its alleged association with the or evidentiary” grounds in support of its conclusion that a value continued to The Telephone Company asserts that the PUC failed to identify any “legal

C. Evidentiary Support

from doing so. reasons discussed above, we conclude that it was not collaterally estopped accordingly found that the 2000 DPA was unjust and unreasonable. For the and not ratepayers, did not represent an arm’s length transaction. It between the Directory Company and the Telephone Company for stockhol ders concluded that the 2000 DPA, in reserving all of the value of the association of 1996 required the termination of revenue sharing payments. The PUC rejected the Telephone Company’s cont ention that the Telecommunications Act Telephone Company and its ratepayers deserved to be compensated. The PUC from its association with the regulated Telephone Company, and that the det ermined that the Directory Company continued to derive significant value Exercising its investigative authority under RSA 366:5, the PUC

thereunder it finds unjust and unreasonable. Id. disapprove any such contract or arrangement and disallow payments reaso nable order relating thereto as the public good requires.” Id. It may such contract or arrangement is unjust or unreasonable, it “may make such transaction. RSA 366:5. If the PUC, after notice and hearing, finds that any public utility and affiliate bear the burden of proving the reasonableness of the arrangement, purchase, or sale between a public utility and an affiliate; the The PUC has the full power and authority to investigate any contract,

parties. See RSA 366:5 (1995). exercising its regulatory authority over future agreements between the same a contract between a public utility and an affiliate does not pr eclude it from unreasonable. That the PUC may have approved the termination provisions of ruled that the 2000 DPA that superseded the 1991 DLA was unjust and 1991. The PUC’s order, however, makes no such ruling. Rather, the PUC 1991 DLA and its termination provisions without modification in March of sharing agreement therein was unreasonable because it had approved the estopped” from ruling that the termination of the 1991 DLA and the revenue The Telephone Company next argues that the PUC was “collaterally

B. Collateral Estoppel p. 8 8

affixed to directories published on behalf of the Telephone Company, would be promotion detailed above, it concluded that the Verizon name and logo, when company other than the Telephone Compan y. Citing the history of cross name and logo “connote[d] in the popular view in New Hampshire” a Verizon The PUC noted that there was no evidence in the record that the Verizon

claims could apply. Company conceded that i t was the only directory publisher to which those association between the companies. In testimony before the PUC, the Directory DIRECTORY FOR OVER 100 YEARS!” on its cover, as evidence of continued the directory’s 2003 - 2004 edition, which carries the phrase “YOUR unsurpassed record of 100 years of reliable delivery.” The PU C also referenced virtually every home and business in your market,” and as having “an businesses throughout the region for over 100 years,” as being “distributed to 2000 - 2001 Yellow Pages directo ry, promoting it as having “been in homes and its association with the Telephone Company in advertising the advantages of its The PUC then found that the Directory Company continued to promote

including 100 - year - old traditions of quality and service. linked to the reputation of the Telephone Company’s pr edecessor entities, Company and Telephone Company belong to the same corporate family and are Directory Company’s 1990 - 1991 and 1995 directories state that the Directory the publishing and dist ributing of its directories. Advertisements in the in soliciting directory advertising and to use its name, slogans, and marks in Directory Company an exclusive license to use the Telephone Company’s name Directory” of the Telephone Company. The 1991 DLA expressly granted the Directory Company began billing its Yellow and White Pages as the “Off icial The PUC also cited evidence showing that prior to the 1991 DLA, the

exchange for a publishing fee. Telephone Company for directory advertising and publishing purposes in the Directory Company an exclusive right to promote its associat ion with the competitive market. As discussed above, the 19 p. 8 84 DPA that followed granted having employed its own initiative, skill, investment, or risk - taking in a directory advertising business from the regulated operating company without time of the 1984 divestiture, the Directory Company inherited an established the regional telephone business. The witness also acknowledged that, at the business w as a legacy of the regulated operating company’s long dominance of Telephone Company conceded that the Directory Company’s Yellow Pages In testimony given during the PUC’s investigation, a witness for the

in support of its conclusions. co nvinces us that the PUC did, in fact, identify numerous evidentiary grounds affiliate. See RSA 366:5. Nonetheless, a thorough review of the record burden of proving the reasonableness of a contract on the public utility and its p. 9 9

of publis hing directories in any format. conditions, to any person upon request for the purpose nondiscriminatory and reasonable rates, terms, and such service on a timely and unbundled basis, under information gathered in its capacity as a provider of exchange ser vice shall provide subscriber list [A] telecommunications carrier that provides telephone

Section 222(e) of the Act states:

Narragansett Indian Tribe, 1 p. 9 9 F.3d 685, 698 (1st Cir. 1994). Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980); State of R.I. v. words that it did not see fit to include. Id; see Consu mer Product Safety at 324. We will neither consider what the legislature might have said nor add clear on its face, its meaning is not subject to modification. Hofland, 151 N.H. v. Marshall, 203 F.3d 1, 6 (1st Cir. 200 0). When the language of a statute is Violence v. Reid, 490 U.S. 730, 739 (1989); New Hampshire Hemp Council, Inc. State v. Hofland, 151 N.H. 322, 324 (2004); see Community for Creative Non their us ual and common meaning, unless the statute suggests otherwise. When interpreting statutes, we ascribe to statutory words and phrases

prohibit revenue sharing between a public utility and its affiliate. publishing agreements such as the 1 p. 9 991 DLA and the 2000 DPA, nor does it information and has no effect whats oever upon the terms of directory argues that § 222(e) pertains only to the distribution of subscriber list it could demand publishing fees from the Directory Company. The State Telephone Company, after 1996 there no longer existed any basis upon which Company as it had under the 1984 and 1991 agreements. According to the precluded it from granting the same “special rights or value” to the Directory provided on the same terms and conditions to all directory publishers, Telecommunications Act of 1996 (the Act), req uiring that subscriber listings be The Telephone Company next argues that § 222(e) of the

D. Section 222(e) of the Telecommunications Act of 1 p. 9 996

conclusory. regarding the associative value flowing to the Directory Company were merely with the Telephone Company’s assertion that the PUC’s determi nations Having reviewed the PUC’s order and the underlying record, we disagree

the Directory Company’s Yellow Pages business. Company, and that the Telephone Company’s reputation continued to benefit identified by consumers and advertisers as representing the Telephone p. 10 10

Company and t he Directory Company. exclusive publishing and advertising arrangement between the Telephone the same name and logo. We agree with the PUC that the 2000 DPA created an Company and the Directory Company’s Yellow Pages, bundled together under agreement consisted of White Pages published on b ehalf of the Telephone 2000 - 2001 and 2003 - 2004 “Verizon” directories distributed pursuant to this the right to “sell advertising in any section of the Telephone Directories.” The directories to subscribers. The 2000 DPA also grants the Directory Company listings published in the Yellow Pages at no charge), and the delivery of subscriber listings, publication of “light faced listings” (business subscriber and distribution of telephone directories, including the publication of the Telephone Company’s regulatory obligations with respect to the publicat ion By the terms of the 2000 DPA, the Directory Company agreed to fulfill

Company, not the exclusive access to its database of subscribers. Company was the exclusive righ t to associate itself with the Telephone 1991 DLA confirm that the primary consideration received by the Directory time of the 1984 divestiture. A review of the terms of the 1984 DPA and the adopt ed the sort of non - discriminatory policy later required by § 222(e) at the examined by the PUC showed that the Telephone Company had already additional to publish its directories.” We disagree. Documentary evidence therefore “had no basis to require the Directory Company to pay it anything 1996, it no longer had anything of value t o give the Directory Company and The Telephone Company also argues that, after the passage of the Act in

E. Associative Value

publishing arrangement such as the 2000 DPA. between the Telephone Company and the Directory Company as part of a nothing in the plain language of § 222(e) that would preclude revenue sharing directory publisher in exchange for some form of remuneration. Thus, we find transferring the value of its reputation in a regional market to an affiliate language of the statute prohibits a telecommuni cations provider from telecommunications provider and directory publishers. Nothing in the 222(e) speaks only to the exchange of information between a terms, and conditions to any directory publisher that requests it. Section subscriber list information under nondiscriminatory and reasonable rate s, We agree with the State that § 222(e) pertains only to the provision of

C.F.R. § 64.2321 (2004). t hat the carrier provides the information to its directory publishing affiliate. 47 directory publisher that requests it at the same rates, terms, and conditions telecommunications carrier must provide subscriber list information to any 47 U.S.C.A. § 222(e). The corollary FCC regulations state that a p. 11 11

directory publishing assets. notification from the Telephone Company of a sale or permanent transfer of into the 2000 DPA, the PUC had yet to receive any conclusive evidence or Consumers’ Council, 120 N.H. 173, 174 (1980). At the time of its investigation a finding that the sales are for the public good); Appeal of Legislative Utility transfers of regulat ed public utility property must be approved by the PUC after N.H. 479, 483 (1984) (recognizing the “fact” that under RSA 374:30, all sales or public good.” See RSA 374:30; see also Appeal of Public Serv. Co. of N.H., 124 the PUC approves of such a transfer after determining that it will be “for the public utility to transfer its “franchise, works, or system,” or any part thereof, if business in the public interest pursuant to RSA 374:30 (1995), which allows a Telephone Company request PUC approval of the transfer of the Yellow Pages provision of certain services. At no time in 1984 or the years follo wing did the 366:3. The terms of the 1984 DPA are consistent with an agreement for the as an affiliate services agreement by filing it pursuant to RSA 366:3. See RSA Moreover, the Telephone Company pr esented the 1984 DPA to the PUC

disposition of the Yellow Pages business. that the terms of the 1984 DPA were not consistent with a permanent artwork, and canvassing lists.” The PUC was not unreasonable in concluding work in progress, including but not limite d to advertising contracts, copy, Directory Company was required to turn over to the Telephone Company “all which the 1984 DPA was in effect. Upon termination of the 1984 DPA, the pursuant to t he agreement and expressly limited that right to the period during soliciting and obtaining directory advertising to appear in directories published Company the exclusive right to contact subscribers for the purposes of permanent sale of assets. The Telephone Company granted the Directory A review of the terms of the 1984 DPA confirms that i t did not effect a

transfer of the Telephone Company’s right to Yellow Pages revenues. acknowledged that the agreement did not provide for a sale or permanent an “aff iliated agreement.” A different Telephone Company witness of a purchase or sale of a business or business assets, but rather in the form of Telephone Company witness conceded that the 1984 DPA was not in the form business for regulatory purposes. During the PUC’s investigation, however, a 1984 DPA was not a sale or other permanent disposition of t he Yellow Pages The Telephone Company further challenges the PUC’s finding that the

F. Transfer of Assets

insufficient compensation terms under the 2000 DPA. unreasonable in finding t hat the Telephone Company accepted inadequate and value after the passage of the Act, and that the PUC was not unjust or continued to provide the Directory Company with a compensable associative We, therefore, concur with the PUC that the Telephone Company p. 12 12

interests. See Appeal of Campaign for Ratepayers Rights, 145 N.H. at 675. deference, including agency orde rs which seek to balance competing economic the outset of our analysis, we accord the PUC’s policy choices considerable we now turn to the issue of revenue imputation as a remedy. As we noted at m anner when it determined that the 2000 DPA was unjust and unreasonable, Having determined that the PUC acted in a lawful, just and reasonable

II. Imputation of Revenues

unreasonable as it pertains to the Telephone Company and its customers. before us, we affirm its determination that the 2000 DPA was unjust and Given the deference we accord the PUC in matters such as the one now

disposition of the directory publishing business. finding that the 1984 DPA was neither in form nor in effect a sale or permanent We conc lude, therefore, that the PUC was not unjust or unreasonable in to the Directory Company, such transfer would be invalid under RSA 374:30. intended to permanently transfer its directory publishing assets and operations Even if we were to assume that the Telephone Company attempted or

publishing affiliate were “u tility operations.” Id. transferred from the post - divestiture telephone company to its directory Service Commission’s conclusion that directory publishing operations company’s rate base. Id. Thus, the court found no error in the Utah Public 251. Moreover, directory publishing assets were part of the Utah o perating both telecommunications services and directory publishing operations. Id. at operating expenses and applied ratepayer funds without distinction to support operating company included directory publishing expenses with its other utility Utah, 998 P.2d 247 (Utah 2000). Prior to the 1984 divestiture, AT&T’s Utah instructively similar conclusion. See U.S. West v. Public Service Com’n of wake of th e 1984 divestiture, the Supreme Court of Utah reached an Among courts addressing analogous issues and circumstances in the

or system.” fairly be characterized as part of the Telephone Company’s “franchise, works, operating company. Thus, the directory publishing assets and operations can directory publishing operations were included in the regulated book s of the Co., 552 F. Supp. at 193. All revenues, expenses and assets associated with earned the company “supra - competitive” profits. See American Tel. and Tel. the Telephone Company’s regulated pred ecessor operating company, and they Prior to 1984, Yellow Pages operations and revenues belonged entirely to p. 13 13

contract or agreement is unjust and unreasonable because of the absence of instances such as the one now before us, in which it determines that a arrangement. The PUC would be left powerless to fashion a remedy in is unjust or unreasonable is to disallow payments called for by the contract, agreement, purchase, or sale between a public utility and its affiliate 366:5, we would, in effect, hold that the PUC’s only reme dy upon finding that a If we were to concur with the Telephone Company’s reading of RSA

disallowance of payments by the PUC. utility and its affiliate, as evidence that RSA chapter 366 contemplates only the similarly reference the PUC’s authority to disallow payments betw een a public The Telephone Company also points to RSA 366:4 and RSA 366:7, which

commission shall find to be unjust or unreasonable. thereunder or such part of any such payment as the disapprove the same and disallow payments contract, agreement, purchase, or sale, the [PUC] may satisfy the [PUC] of the reasonableness of any such requires. . . . If the public utility and affiliate fail to reasonable order relating thereto as the public good unjust or unreasonable, the [PUC] may make such such contract, arrangement, purchase, or sale to be [I]f the [PUC] after notice and hearing shall find any

states, in relevant part: investigate affiliate contracts and agreements filed pursuant to RSA 366:3, RSA 366:5, which vests in the PUC the full power and a uthority to

isolation. Id. interpret statutes in the context of the overall statutory scheme and not in ambiguous, we need not look to legislative intent. Id. Furthermore, we ordinary meaning. Id. Unless we fi nd that the statutory language is statute itself, and, if possible, construe that language according to its plain and 100, 103 (2005). In interpreting a statute, we first look to the language of the in the words of a statute considered as a whole. DeLucca v. DeLucca, 152 N.H. This court is the final arbiter of the intent of the legislature as expressed

payments between such entities. unregulated affiliate, because it contemplates only the disallowance of authorize the PUC to impute revenues to a regulated utility from an Telephone Company asserts that RSA chapter 366 cannot be construed to it misinterpreted the intent of RSA chapter 366 in doing so. Specifically, the unregulated Directory Company to the regulated Telephone Company, and that articulated legal or factual standard when it imputed revenues earn ed by the The Telephone Company contends that the PUC failed to identify any p. 14 14

before us. Prior to the 1984 divestiture, AT&T’s Utah operating company 253. The factual underpinnings of the case are similar to those of the case now of imputing profits earned by the carrier’s directory publishing affiliate. Id. at telecommunications services provider’s request that it discontinue its practice affirmed an order of the Utah Public Service Commission denying a DPA. U.S. West, 998 P.2d at 247. In U.S. West, the Supreme Court of Utah substantive regulatory similarities to the circumstance s attendant to the 2000 order, the PUC specifically considered U.S. West because of factual and by directory publishing affiliates is recognized by other jurisdictions. In its The imputation to tele phone companies of Yellow Pages revenues earned

found that it was consistent with the public good. reasonable means of making the Telephone Company’s ratepayers whole, and 2000 DPA in its entirety. Moreover, the PUC selected imputation as a States from the potential extra - territoria l effect of an order disapproving the potential disruptions to the Telephone Company and the policies of other PUC determined that imputation was a narrowly tailored remedy that avoided U pon concluding that the 2000 DPA was unjust and unreasonable, the

unjust or unreasonable. See RSA 366:5. the public good when it determines that an affiliate contract or agreement is RSA 366:5 grants the PUC the power to make any reasonable order required for grant of power. Appeal of Granite State Elec. Co., 120 N.H. 536, 539 (1980). statutorily created, but also exercise those powers inherent within its broad Pinetree Power, 152 N.H. at 100. The PUC must not only perform duties interests of the regulated utilities. See RSA 363:17 - a (1995); see also Appeal of empowered to be the arbiter between the interests of the customer and the revenues as a remedy. We note, however, that the PUC is legislatively RSA chapter 366 does not specifically prescribe the imputation of

366:5. the PUC is limited to the disallowan ce of payments as a remedy under RSA power. We, therefore, disagree with the Telephone Company’s contention that specific remedies under the statute does not obviate its grant of broad remedial public good requ ires.” RSA 366:5. That the legislature permitted additional unjust or unreasonable, to “make such reasonable order relating thereto as the its broad authority, upon finding that an affiliate contract or agreement is broad statutory powers, Appeal of Easton, 125 N.H. 205, 210 (1984), including Co. of N.H., p. 14 141 N.H. 13, 22 (1996). As such, we recognize that the PU C has establishment and control of public utilities in the State. Appeal of Public Serv. The PUC was established to provide comprehensive provisions for the

PUC. suggests that the legislature intended to so limit the remedial authority of the payment or compensation. Nothing in the plain language of RSA 366:5 p. 15 15

$25,000 against any public utility that violates any provision of Title 34 of the RSA 365:41 (1995) permits the PUC to assess a civil penalty of up to

consequent change in revenues of which the PUC should have been aware. inadvertent, and that its subsequently filed financial reports reflected a argues that its failure to file the 1999 amendment with the PUC was failure to file the 1999 amendment in the manner required by RSA 366:3. It unsustainably exercised its discretion by imposing a $1,000 civil penalty for its Finally, we address the Telephone Company’s assertion that the PUC

III. The $1,000 Civil Penalty

substitute for a valid constitutional argument and is therefore waived). 503, 504 (1996) (passing reference to a constitu tional principle is not a State v. Fernandez, p. 15 152 N.H. 233, 239 (2005); see also State v. Chick, 141 N.H. has not developed the argument sufficiently to warrant appellate review. See taking of its property w ithout compensation because the Telephone Company address the Telephone Company’s argument that the PUC order will result in a also had such authority pursuant to RSA 378:7 (1995). Also, we decline to found in the 2000 DPA, we need not address the question of whether the PUC under RSA 366:5 in ordering the imputation of revenues to remedy the def ects Because we conclude that the PUC acted within its broad authority

uncompensated transfer of its intangible assets to an unregulated affiliate). compensated ratepayers for telephone cor poration’s improper cost - shifting and 660 N.E.2d 1112, 1117 (N.Y. 1995) (imputation of royalty properly P.2d 716, 721 - 22 (N.M. 1995); cf. Rochester Tel. Corp. v. Public Serv. Com’n, (Minn. Ct. App. 1987); see also Matter of Rates and Charges of U.S. West, 909 (Wash. 1997); Matter of Minn. Public Utilities Com’n, 417 N.W.2d 274, 285 - 86 Communications, Inc. v. Utilities & Transp. Com’n, 949 P.2d 1337, 1351 - 52 “regulatory remedy” of imputation. Id. at 252 - 53; accord U.S. West 51. The court proceeded to uphold the Ut ah Public Service Commission’s utility operations in which ratepayers had a compensable interest. Id. at 250 services, the directory operations transferred to the affiliate company were relationsh ip between the telecommunications and directory publishing The Supreme Court of Utah concluded that, in light of the historical

company. Id. company transferred its directory publishing operations to an affiliate operation expenses. Id. at 251. Following divestiture, the Utah operating company included its directory publishing expenses with its o ther utility as a result of AT&T’s monopoly position. Id. at 250 - 51. The Utah operating telecommunications services, and did so without competition for many decades provided telephone directorie s to subscribers in conjunction with its p. 16 16

concurred. BRODERICK, C.J., and NADEAU, DUGGAN and GALWAY, JJ.,

penalty against the Telepho ne Company. a reasonable amount. We, therefore, affirm the imposition of the $1,000 civil statute to assess a civil penalty against the Telephone Company, and did so in amen dment in subsequent financial filings, the PUC was still authorized by inadvertent and that it constructively put the PUC on notice of the 1999 with the PUC. Even assuming that the Telephone Company’s failure to file was Telephone Company violated RSA 366:3 by failing to file the 1999 amendment New Hampshire Revised Statutes Annotated, including RSA 366:3. The