ÿWPC ! …# VU>a %Ÿ 0(¥4ÍáUFð6 w@> 0L~ 0kÊ 0D5 0Jy 0Tà 0^ 0hu 0rÝ 0|O 0†Ë 0Q 1uá 0dVU6º 0LðB)<DCe AM¨ BõU* D3<o# 0@¢½â!ŸSÀv~vÓ‘ AOdƳ 0Dy D/½ Bì ˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 <èÀ( 9Z &Courier RegularX($¡¡DÒ x°°3|xò <¾½Q 9Z ‹.Courier New Regular à á â Dã ä Då æ ç Dè Ó€ò > ÿÿ$Small Circleððà0 à(+ $¤¤Ô€ô°ØôXXÔÓ  ÓÚ  Ú1Ú  Ú€€(#Ã$òòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Courier New>c$"Small Circleð"ðà0 à% Line 7 d%%%%7Border 1dd€-&Cþÿ << Gÿÿ d< Œ 9p`(Arial(((('ÿÿdxd Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€#ÔÝ  ÝÔ€)ÔÔ€)ÔÓ  Óò òÔ YYY ÔFILEDÔ€)XÔÌÌDecember€6,€1996ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó ó Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€#ÔÝ  ÝÝ ƒ $ÝÔ€#ôÔÓ  ÓÚ  ÚÚ  Ú€€Ý  ÝThis€case€was€commenced€against€Keith€Bissell,€Steve€Hewlett,€and€SaraÏKyle,€who€constituted€the€Tennessee€Public€Service€Commission.€€However,€theÏPublic€Service€Commission€ceased€to€exist€on€30€June€1996€and€the€GeneralÏAssembly€vested€much€of€the€Public€Service€Commission's€authority,€includingÏthe€power€to€set€rates,€in€the€Tennessee€Regulatory€Authority.€Ì("ÿÿ$££Ò  ÒÒ  Ò ³Ý ƒ!ÝÑ#€d#ÑÔ€#ÔÝ  ÝÝ ƒ $ÝÔ€#ôÔÓ  ÓÚ  ÚÚ  Ú€€Ý  ÝAs€previously€stated,€this€court€granted€a€motion€to€consider€post„judgmentÏfacts€namely€the€case€of€òòò òAT&T€Communications€of€the€S.€Cent.€States,ÏInc.€v.€Bisselóóó ó,€No.€95„3094„II€(Davidson€Chan.€7€May€1996).€€This€case€isÏthe€declaratory€action€discussed€herein.Ì Ý ƒ!ÝÑ#€d#ÑÔ€#ÔÝ  ÝÝ ƒ $ÝÔ€#ôÔÓ  ÓÚ  ÚÚ  Ú€€Ý  ÝAT&T€will€use€UTS's€services.€€Thus,€it€will€be€subject€to€the€ratesÏcharged€pursuant€to€the€price€regulation€plan.Ì IÝ ƒ!ÝÑ#€d#ÑÔ€#ÔÝ  ÝÝ ƒ $ÝÔ€#ôÔÓ  ÓÚ  ÚÚ  Ú€€Ý  ÝThe€authority,€i.e.€the€Tennessee€Regulatory€Authority,€now€has€the€powerÏto€implement€a€price€regulation€plan€pursuant€to€Tennessee€Code€AnnotatedÏsection€65„5„209.ÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  inion Geneva ÒÒ  inion Geneva Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€#ÔÝ  ÝÑ\R AØ'\ÑÓ ` Ü‚Xœ ’X ÓÑ\R AØ'\ÑÑ7€®XdÈdÈ7ÑÑ  Ñ›Þ ÞÌAT&T€COMMUNICATIONS€OF€THEà à)ÌSOUTH€CENTRAL€STATES,€INC.,à à)Ìà àà à)ÌÓ#` Ü‚Xœôx‘X#Óà àPetitioner/Appellant,à à)à àAppeal€No.Ìà àà à)à à01„A„01„9512„BC„00556Ìv.à àà à)Ìà àà à)à àÌH.€LYNN€GREER,€Chairman,à à)à àPublic€Service€CommissionÌSARA€KYLE,€Director,€andà à)à àNo.€95„02615̜ـ€ÙÙ€€ÙßR€'+&A1-j|­G` ç `€€@ÿRß›MELVIN€J.€MALONE,€Director,à à)ÌConstituting€the€Tennesseeà à)ÌRegulatory€Authority,à à)Ìà àà à)Ìà àRespondents/Appellees.× ƒ, ××  ×à à)ÌÌÌÌÓ  ÓÔ€#¼ÔCOURT€OF€APPEALS€OF€TENNESSEEÌÌMIDDLE€SECTION€AT€NASHVILLEÌÌÌAPPEAL€FROM€THE€TENNESSEE€PUBLIC€SERVICE€COMMISSIONÌÌ€FOR€DAVIDSON€COUNTYÌÌAT€NASHVILLE,€TENNESSEEÌÌÌÓ ` Ü‚XœÈ“X ÓÌÌÓ  ÓÌÌÔ€#XÔVAL€SANFORDÌJOHN€KNOX€WALKUPÌGullett,€Sanford,€Robinson€&€MartinÌ230€4th€Avenue€North,€3rd€FloorÌP.€O.€Box€198888ÌNashville,€Tennessee€€37219„8888Ìà àATTORNEYS€FOR€PETITIONER/APPELLANTÌÌÌÌCHARLES€W.€BURSONÌAttorney€General€and€ReporterÌÌJONATHAN€D.€SHELLÌAssistant€Attorney€GeneralÌTax€DivisionÌ404€James€Robertson€Parkway,€Suite€2121ÌNashville,€Tennessee€€37243„0489Ìà àATTORNEYS€FOR€RESPONDENTS/APPELLEESÌÌÌœÓ  ÓDISMISSED€AND€REMANDED›ÌÌÌÓ  ÓÔ€#¼ÔSAMUEL€L.€LEWIS,€JUDGEÌÓÓòòÓ  ÓÔ€#°ÔOÔ€#¼Ô€P€I€N€I€O€NÌÓ  ÓÓ#` Ü` ä œÈ“X#ÓóóÔ€#XÔà àThis€is€an€appeal€by€petitioner/appellant,€AT&TÏCommunications€of€the€South€Central€States,€Inc.€("AT&T"),€fromÏthe€decision€of€the€Tennessee€Public€Service€Commission€("TPSC")Ïto€implement€a€price€regulation€plan€for€United€TelephoneÏSoutheast,€Inc.€("UTS").€€AT&T€claims€that€TPSC€failed€to€followÏthe€proper€standards€and€procedures€when€it€addressed€theÏapplication€of€UTS€to€elect€a€price€regulation€plan€pursuant€toÏTennessee€Code€Annotated€section€65„5„209.€€The€facts€out€of€whichÏthis€matter€arose€are€as€follows.ÌÌà àOn€16€June€1995,€UTS€filed€an€application€to€implement€aÏprice€regulation€plan€pursuant€to€Tennessee€Code€Annotated€sectionÏ65„5„209.€€During€the€proceedings,€the€following€companies€filedÏpetitions€for€leave€to€intervene:€BellSouth€Telecommunications,ÏInc.€("Bell");€AT&T;€MCI€Metro€Access€Transmission€Services,€Inc.;Ïthe€Consumer€Advocate;€and€MCI€Telecommunications,€Inc.€€TPSCÍgranted€all€petitions.ÌÌà àOn€7€August€1995,€TPSC€issued€a€notice€setting€the€case€forÏhearing€on€7€September€1995.€€Thereafter,€TPSC's€staff€filed€itsÏaudit€of€UTS's€31€December€1994€3.01€report.€€The€staffÏrecommended€that€TPSC€find€that€UTS's€rates€were€affordable€andÏthat€no€other€contested€case€proceedings€were€necessary.€€On€24ÏAugust€1995,€AT&T€filed€a€reply€arguing€that€the€staff's€reportÏwas€an€initial€determination€and€that€further€contested€caseÏproceedings€were€necessary€for€TPSC€to€carry€out€its€statutoryÏpowers€and€duties.€€Four€days€later,€TPSC's€staff€filed€aÏmemorandum€in€support€of€its€recommendation.€€ÌÌà àOn€5€September€1995,€TPSC€entered€an€order€canceling€the€7ÏSeptember€hearing€because€there€was€no€statutory€authority€for€aÏcontested€case€hearing.€€TPSC€then€ordered€the€staff€to€auditÏUTS's€most€recent€3.01€report€of€31€March€1995.€€The€staffÏconcluded€that€UTS's€earned€rate€of€return€did€not€exceed€itsÏcurrent€authorized€fair€rate€of€return€and€was€below€theÏauthorized€range.€€On€20€September,€TPSC€entered€an€order€adoptingÏthe€staff's€audit€report€and€holding€that€the€rates€which€were€inÏeffect€as€of€6€June€1995€were€affordable€pursuant€to€TennesseeÏCode€Annotated€section€65„5„209(c).€€TPSC€also€approved€theÏeffective€date€proposed€by€UTS.€€Finally,€TPSC€stated€that€theÏorder€would€become€final€if€UTS€did€not€request€a€contested€caseÏhearing.€€Thereafter,€UTS€informed€TPSC€it€would€not€request€suchÍa€hearing.ÌÌà àOn€28€September€1995,€AT&T€filed€a€motion€in€which€itÏraised€an€issue€as€to€the€proper€application€and€construction€ofÏTennessee€Code€Annotated€section€65„5„209€and€requested€anÏopportunity€to€be€heard.€€UTS€opposed€the€motion.€€On€13€OctoberÏ1996,€TPSC€found€that€its€previous€orders€addressed€most€of€AT&T'sÏissues€and€that€it€did€not€have€the€authority€to€address€any€issueÏnot€resolved€in€its€previous€orders.€€As€a€result,€it€deniedÏAT&T's€motion.ÌÌà àOn€12€December€1995,€AT&T€filed€a€petition€for€reviewÏpursuant€to€Tennessee€Rule€of€Appellate€Procedure€12.€€UTS€andÏBell€filed€notices€of€appearance€as€respondents€in€support€ofÏTPSC's€order.€€On€26€January€1996,€TPSC€filed€a€motion€to€dismiss.€ÏTPSC€claimed€that€this€court€lacked€jurisdiction€because€the€13ÏOctober€order€was€not€the€result€of€a€contested€case.€€On€12€AprilÏ1996,€this€court€denied€the€motion€and€held€that€this€court€hasÏjurisdiction€to€determine€jurisdictional€issues.ÌÌà àOn€11€July€1996,€this€court€granted€TPSC's€motion€toÏconsider€post„judgment€facts.€€Specifically,€the€order€allowedÏthis€court€to€consider€the€chancery€court's€decision€in€òòò òAT&TÏCommunications€of€the€S.€Cent.€States,€Inc.€v.€Bisseló óóó,€No.Ï95„3094„II€(Davidson€Chan.€7€May€1996).€€On€16€July€1996,€thisÏcourt€entered€an€order€substituting€the€members€of€the€TennesseeÍRegulatory€Authority€as€appellees€in€the€place€of€the€members€ofÏTPSC.ÌÌÓÓà àAT&T€has€presented€two€issues€for€our€review.€€They€are:€ÌÌà8 à1.€€Whether€the€final€order€issued€by€the€TennesseeÏPublic€Service€Commission€.€.€.€in€the€matterÏstyled,€òòIn€re€Application€of€United€StatesÏTelephone„Southeast,€Inc.€for€Approval€to€ImplementÏPrice€Regulation€Planóó,€Docket€No.€95„02615,€wasÏillegal€and€void€as€being€contrary€to€the€governingÏstatutes,€particularly€T.C.A.€ðð€65„5„209€(1995ÏSupp.)?Ìà8 à2.€€Whether€the€proceeding€before€the€Commission€inÏthe€matter€styled,€òòIn€re€Application€of€UTS„Southeast,€Inc.€for€Approval€to€Implement€PriceÏRegulation€Plan,€óóDocket€No.€95„02615,€was,€as€aÏmatter€of€statutory€and€constitutional€law,€aÏcontested€case€proceeding,€which€should€have€beenÏso€conducted€by€the€Commission,€and€from€whichÏjurisdiction€to€review€is€in€this€Court?ÌÓÓÓÓÌÓÓWe€begin€our€discussion€of€this€matter€with€a€discussion€of€theÏ"Telecommunications€Reform€Act€of€1995."€€This€appeal,€as€pointedÏout€by€the€Attorney€General,€is€the€most€recent€in€a€series€ofÏattempts€by€AT&T€to€derail€the€legislature's€efforts€to€deregulate€Ïlocal€telecommunications€services€and€to€open€the€localÏtelecommunications€industry€to€competition.ÌÌà àIn€1995,€the€General€Assembly€passed€€Public€Chapter€408,Ïthe€"Telecommunication€Reform€Act€of€1995."€€1995€Tenn.€Pub.€ActsÏch.€408€(codified€in€title€65).€€Chapter€408€became€effective€on€6ÏJune€1995.€€The€General€Assembly€stated€its€purpose€in€passing€Ïchapter€408€as€follows:€€"The€general€assembly€declares€that€theÏpolicy€of€this€state€is€to€foster€the€development€of€an€efficient,Ítechnologically€advanced,€statewide€system€of€telecommunicationsÏservices€by€permitting€competition€in€all€telecommunicationsÏservices€markets,€and€by€permitting€alternative€forms€ofÏregulation€for€telecommunications€services€and€telecommunicationsÏservices€providers."€€Tenn.€Code€Ann.€ðð€65„4„123€(Supp.€1996).€ÏPrior€to€the€passage€of€chapter€408,€the€providing€of€localÏtelephone€services€was€not€open€to€competition.€€One€provider€in€aÏparticular€locality€held€the€exclusive€right€to€provide€suchÏservice€for€the€designated€area€unless€the€service€was€inadequate.€ÏBecause€there€was€no€competition€forcing€providers€to€charge€fairÏand€reasonable€rates,€TPSC€established€the€rates€charged€for€suchÏservices.€€The€rate€regulation€procedures€adopted€by€TPSC€includedÏan€extensive€inquiry€into€the€provider's€cost€of€doing€business,Ïits€capital€investment,€i.e.,€"rate€base,"€and€its€revenues;€intoÏthe€nature€and€extent€of€the€services€provided;€and€into€variousÏother€factors€that€enabled€TPSC€to€determine€a€"fair€rate€ofÏreturn"€on€the€provider's€"rate€base."€€ÌÌà àTPSC€collected€this€information€and€determined€the€fairÏrate€of€return€through€contested€case€proceedings€in€which€TPSCÏallowed€interested€parties€to€intervene€and€participate.€€Usually,€Ïthese€were€lengthy€and€expensive€proceedings.€€TPSC€then€set€theÏrates€the€provider€was€to€charge€for€its€services€with€theÏobjective€being€to€make€the€provider's€earned€rate€of€return€equalÏto€its€authorized€fair€rate€of€return.€€Periodically,€TPSCÏcompared€the€provider's€earned€rate€of€return€with€the€authorizedÍrate€of€return€and€ordered€rate€adjustments€to€bring€the€earnedÏrate€of€return€into€compliance€with€the€authorized€rate€of€return.€ÏThis€became€known€as€the€"rate€base€„„€rate€of€return"€method€ofÏrate€regulation.ÌÌà àThe€passage€of€chapter€408€has€truly€reformed€the€provisionÏand€the€regulation€of€local€telecommunications€services.€€ChapterÏ408€allows,€for€the€first€time,€competition€in€allÏtelecommunications€services€markets€and€gives€incumbent€localÏexchange€telephone€companies€("incumbents"),€now€providing€localÏtelephone€services,€the€option€to€select€an€alternative€form€ofÏrate€regulation.€€Instead€of€the€traditional€rate€of€returnÏmethod,€incumbents,€such€as€UTS,€may€elect€to€have€their€ratesÏregulated€through€a€price€regulation€plan.€€ò òòòSeeó óóó€Tenn.€Code€Ann.€ððððÏ65„5„208€&€„209€(Supp.€1996).ÌÌà àThe€change€to€price€regulation€plans€reduced€TPSC's€powerÏto€control€the€individual€prices€charged€by€incumbents€forÏindividual€services.€Thus,€it€enhanced€an€incumbent's€ability€toÏcompete€in€the€market€place€by€setting€boundaries€of€acceptableÏpricing€policies,€rather€than€dictating€the€incumbents€exactÏprice.€€Within€prescribed€bounds€of€conduct,€an€incumbent€now€hasÏthe€ability€to€adjust€its€prices€in€response€to€the€competitiveÏenvironment€in€which€it€finds€itself.€ÌÌà àThe€Tennessee€General€Assembly€delegated€to€TPSC€the€powerÍto€"fix€just€and€reasonable€individual€rates."€€ò òòòId.ó óóó€ðð€65„5„201.€ÏThe€legislature€then€determined€that€for€purposes€of€priceÏregulation€plans€rates€"are€just€and€reasonable€when€they€areÏdetermined€to€be€affordable€.€.€.€."€€ò òòòId.€ó óóóðð€65„5„209(a).€€TheÏincumbent's€rates€on€6€June€1995€are€deemed€affordable€underÏsection€65„5„209€if€the€incumbent's€earned€rate€of€return€is€lessÏthan€or€equal€to€its€authorized€fair€rate€of€return€at€the€time€ofÏthe€company's€application€for€price€regulation.€€ò òòòId.ó óóó€ðð€65„5„209(c).€€Ìà àPrior€to€issuing€an€order€adopting€a€price€regulation€planÏfor€an€incumbent,€TPSC€must€verify€the€incumbent's€earned€rate€ofÏreturn€by€auditing€the€incumbent's€most€recent€TPSC€3.01€financialÏreport.€€ò òòòId.ó óóó€€If€the€audit€shows€the€incumbent's€earned€rate€ofÏreturn€is€equal€to€its€authorized€rate€of€return,€then€its€ratesÏexisting€on€6€June€1995€are€deemed€affordable€and€are€to€be€usedÏas€the€initial€rates€on€which€price€regulation€will€be€based.€€ò òòòId.ó óóó€ÏIf€the€earned€rate€of€return€is€too€high€then€TPSC€must€initiate€aÏcontested,€evidentiary€proceeding€to€establish€the€initial€rates.€Ïò òòòId.€€óóó óAlternatively,€if€the€incumbent's€earned€rate€of€return€isÏbelow€its€authorized€fair€rate€of€return,€the€incumbent€mayÏrequest€that€TPSC€initiate€a€contested,€evidentiary€proceeding€toÏset€its€initial€rates.€€Tenn.€Code€Ann.€ðð€65„5„209(c)(Supp.€1996).€ÏIf€it€does€not€request€such€a€hearing,€however,€the€rates€existingÏon€6€June€1995€shall€become€the€initial€rates.€€ò òòòId.ó óóóÌÌà àAt€the€outset,€we€must€address€the€jurisdictional€issueÍraised€in€TPSC's€motion€to€dismiss.€€We€must€determine€if€theÏproceedings€by€which€UTS€became€subject€to€price€regulation€underÏTennessee€Code€Annotated€section€65„5„209€was€a€contested€case.€ÏIf€it€was€not€a€contested€case,€we€do€not€have€jurisdiction.ÌÌà àThe€Uniform€Administrative€Procedures€Act,€Tennessee€CodeÏAnnotated€title€4,€chapter€5,€and€Tennessee€Rule€of€AppellateÏProcedure€12.1(a)€govern€this€court's€review€of€TPSC's€actions.€ÏTennessee€Code€Annotated€section€4„5„322(a)(5)€describes€thisÏcourt's€jurisdiction€to€hear€petitions€for€judicial€review€ofÏTPSC's€orders.€€Pursuant€to€that€section,€"[a]€person€who€isÏaggrieved€by€a€final€decision€ò òin€a€contested€caseó ó€is€entitled€toÏjudicial€review€under€this€chapter,€which€shall€be€the€onlyÏavailable€method€of€judicial€review."€€ò òòòId.ó óóó€ðð€4„5„322(a)(1)(1991€&ÏSupp.€1996)(emphasis€added).€€Thus,€only€a€final€decision€in€aÏcontested€case€is€subject€to€judicial€review.ÌÌà àTPSC€contends€that€this€court€lacks€jurisdiction€becauseÏTPSC€did€not€issue€the€final€order€from€which€AT&T€seeks€appeal€inÏa€contested€case.€€TPSC€argues€that€Tennessee€Code€AnnotatedÏsection€65„5„209€required€it€to€issue€an€order€implementing€aÏprice€regulation€plan€for€UTS€if€UTS€satisfied€certain€financialÏcriteria.€€Moreover,€TPSC€contends€that€nothing€in€section€65„5„209€permitted€AT&T€to€initiate€a€contested€case€proceeding€as€partÏof€UTS's€application€for€a€price€regulation€plan.ÌÌà àClearly,€TPSC€did€not€conduct€a€contested€case€proceedingÏin€connection€with€UTS's€application.€€In€fact,€that€is€theÏsubstance€of€AT&T's€complaint€in€this€appeal.€€Given€theseÏcircumstances,€the€actual€jurisdictional€question€for€this€courtÏto€resolve€is€whether€AT&T€had€a€constitutional€right€to€be€heardÏmaking€the€proceeding€a€contested€case€as€a€matter€of€law.ÌÌà àIn€a€declaratory€judgment€action€filed€by€AT&T,× ƒ. ××  ×€AT&TÏcontended€that€Tennessee€Code€Annotated€section€65„5„209(c)Ïdeprived€it€of€its€due€process€"right€to€be€heard€as€to€theÏjustness€and€reasonableness€of€rates€to€which€it€is€to€beÏsubject."€The€chancellor€ruled€that€AT&T€had€no€constitutionallyÏprotected€interest€in€the€rates€it€was€charged.× ƒ/ ××  ×€€The€chanceryÏcourt€entered€a€judgment€in€the€declaratory€judgment€action€on€7ÏMay€1996€and€no€appeal€was€taken.€€Relitigation€of€this€issue€isÏbarred€by€the€doctrine€of€collateral€estoppel.ÌÌà à"Under€the€doctrine€of€collateral€estoppel,€when€an€issueÏhas€been€actually€and€necessarily€determined€in€a€former€actionÏbetween€the€parties,€that€determination€is€conclusive€upon€them€inÏsubsequent€litigation."€€òòò òKing€v.€Brooksóóó ó,€562€S.W.2d€422,€424Í(Tenn.€1978).€€"In€order€to€bar€the€relitigation€of€certain€factsÏdetermined€in€the€former€action€by€applying€the€doctrine€ofÏcollateral€estoppel,€there€must€be€an€identity€of€the€parties€orÏtheir€privies€and€identity€of€the€issue."€€òòò òStacks€v.€Saundersóóó ó,Ï812€S.W.2d€587,€591€(Tenn.€App.€1990).ÌÌà àThe€declaratory€judgment€action€involved€all€the€partiesÏthat€are€involved€in€this€case.€€Thus,€there€was€identity€of€theÏparties.€€As€to€the€identity€of€the€issues,€AT&T€contends€that€theÏchancery€court€did€not€address€the€issue€of€whether€AT&T€had€anyÏdue€process€rights€as€to€the€rates€charged€to€it€by€otherÏproviders.€€The€issues€raised€in€the€declaratory€judgment€actionÏinvolved€AT&T's€general€contention€that€Tennessee€Code€AnnotatedÏsection€65„5„209€was€unconstitutional.€€AT&T's€complaint€clearlyÏalleged€that€AT&T€had€a€due€process€interest€in€the€rates€it€wasÏcharged€and€that€Tennessee€Code€Annotated€section€65„5„209(c)Ïviolated€those€rights.€€In€its€complaint,€AT&T€alleged:ÌÓÓÓ)` Ü` ä ‡ßœx‘X)Óà8 àà à10.à àAT&T€is€a€customer€of€BellSouth€and€UTSEÏfor€basic€local€exchange€telephone€service€and€forÏnon„basic€service€as€those€terms€are€defined€inÏT.C.A.€ðð€65„5„208,€as€adopted€in€Chapter€408€of€theÏPublic€Acts€of€1995.€€As€such,€AT&T€has€a€direct,Ïlegally€protected€interest€in€the€rates,€chargesÏand€prices€imposed€by€BellSouth€and€UTSE€for€suchÏservices.Ìà8 àà à11.à àT.C.A.€ðð€65„5„209,€adopted€by€Section€10Ïof€Chapter€408€of€the€Public€Acts€of€1995,€sets€upÏa€new€system€for€the€regulation€of€rates,€charges,Ïand€prices€of€Incumbent€Local€Exchange€TelephoneÏCompanies€electing€to€be€governed€thereby€by€filingÏan€application€for€a€price€regulation€plan.€.€.€.ÏThe€implementation€of€such€price€regulation€plansÏby€UTSE€and€BellSouth€will€directly€affect€theÏrates,€prices,€and€charges€imposed€by€UTSE€andÍBellSouth€for€the€services€provided€to€AT&T,€andÏwill€result€in€the€deprivation€of€AT&T's€rights€andÏinterests€under€the€Constitution€of€Tennessee€andÏof€the€United€States.Ìà àà à.€.€.€.Ìà8 àà à13.à à.€.€.€Instead,€T.C.A.€ðð€65„5„209Ïprovides€a€novel€and€unprecedented€departure€formÏthe€general€law€established€for€the€setting€ofÏrates€for€public€utilities€in€this€state,€andÏdeprives€AT&T€and€other€interested€parties€of€theirÏrights€to€just€and€reasonable€rates€establishedÏunder€fair€and€reasonable€procedures.Ìà8 àà à.€.€.€.€Ìà8 àà à17.à àFurther,€the€Legislature,€underÏsubsection€(c),€on€a€finding€by€TPSC€that€aÏcompany's€earned€rate€of€return€is€less€than€orÏequal€to€that€company's€current€authorized€fairÏrate€or€return,€has€fixed€the€initial€rates€to€beÏcharged€by€a€company€under€a€price€regulation€plan,Ïsuch€as€BellSouth€or€UTSE,€for€all€servicesÏrendered,€as€the€rates€in€effect€on€the€effectiveÏdate€of€the€act.€€There€is€no€rational€basis€for€soÏfixing€such€initial€rates.€€The€act€of€theÏLegislature€in€so€doing,€therefore,€violatesÏArticle€1,€Section€8€of€the€Tennessee€Constitution.€ÏOn€this€ground,€subsection€(c)€is€unconstitutional.Ìà8 àà à18.à àNeither€in€T.C.A.€ðð€65„5„209,€norÏelsewhere€in€Chapter€408,€is€provision€made€for€theÏjudicial€review€of€the€rates€and€prices€fixed€byÏsubsection€(c)€of€T.C.A.€ðð€65„5„209.€€On€theÏcontrary,€subsection€(c)€appears€to€be€designed€toÏpreclude€such€judicial€review.€AT&T,€therefore,€isÏdeprived€of€its€constitutional€right€to€be€heard€asÏto€the€justness€and€reasonableness€of€rates€toÏwhich€it€is€to€be€subject.€€Subsection€(c),Ïtherefore,€violates€Article€1,€Section€8,€andÏArticle€1,€Section€17€of€the€TennesseeÏConstitution,€and€the€Fourteenth€Amendment€to€theÏUnited€States€Constitution.ÌÌÓÓClearly,€one€of€the€issues€set€forth€in€the€complaint€was€theÏprecise€constitutional€issue€presented€here,€i.e.,€whether€AT&TÏhas€any€due€process€rights€as€to€the€rates€charged€to€it€by€otherÏproviders.ÌÌà àThe€chancellor€provided€a€thorough€memorandum€and€opinion.€ÍAt€the€outset€of€the€memorandum,€the€court€stated:€€"[R]atepayersÏhave€no€due€process€property€rights€to€the€charging€of€particularÏrates.€€AT&T€is€forbidden,€then,€from€challenging€the€legislationÏin€issue€because€AT&T€might€object€to€the€charging€of€a€particularÏrate."€€Moreover,€the€court€specifically€ruled€that€theÏallegations€in€paragraphs€seventeen€and€eighteen€were€withoutÏmerit.ÌÌà àIt€is€the€opinion€of€this€court€that€the€issue€presented€inÏthis€case€is€the€same€as€one€or€more€of€the€issues€presented€inÏthe€declaratory€judgment€action.€€Moreover,€the€parties€in€bothÏactions€were€the€same.€€As€such,€the€doctrine€of€collateralÏestoppel€applies€and€prevents€AT&T€from€challenging€theÏconstitutional€validity€of€Tennessee€Code€Annotated€section€65„5„209€on€the€basis€of€its€rights€surrounding€the€rates€charged€to€itÏby€other€providers€and€on€the€basis€of€any€other€theory€advancedÏand€resolved€in€the€declaratory€judgment€action.€€The€issue€inÏthis€case€has€been€conclusively€determined€between€these€partiesÏby€a€court€of€competent€jurisdiction€and€may€not€now€beÏrelitigated.à àÌà àTPSC's€18€August€1995€order€allowing€AT&T€to€intervene€doesÏnot€affect€this€ruling.€€The€order€merely€stated€that€theÏproceedings€"may"€affect€AT&T's€rights€and€that€AT&T€couldÏparticipate€"as€its€interest€may€appear."€€Nothing€in€the€orderÏconclusively€recognized€the€existence€of€rights€nor€did€it€createÏany€constitutionally€protected€rights€that€previously€did€notÍexist.€€AT&T€has€not€identified€a€constitutional€right€to€beÏheard.€Because€there€was€no€contested€case,€AT&T€is€left€only€withÏthe€argument€that€the€proceeding€was€a€contested€case€as€a€matterÏof€law€because€it€should€have€been€a€contested€case.€€WeÏrespectfully€disagree.ÌÌà àIn€addition€to€the€lack€of€constitutional€support,€AT&T'sÏclaim€to€a€contested€case€is€not€supported€by€the€statutes.€€NoÏreasonable€interpretation€of€Tennessee€Code€Annotated€section€65„5„209€requires€or€permits€TPSC€to€convene€a€contested€case€underÏthe€circumstances€here.€€TPSC€does€not€have€discretion€on€whetherÏto€allow€an€incumbent€to€select€price€regulation.€€Under€theÏstatute,€an€incumbent€is€entitled€to€price€regulation.€€"TheÏauthority× ƒ0 ××  ×€ò òshalló ó€enter€an€order€within€ninety€(90)€days€of€theÏapplication€of€an€incumbent€local€exchange€telephone€companyÏimplementing€a€price€regulation€plan€for€such€company."€€Tenn.ÏCode€Ann.€ðð€65„5„209(c)(Supp.€1996)(emphasis€added).ÌÌà àAT&T€has€pointed€out€that€"contested€case"€is€definedÏdifferently€in€two€applicable€statutes,€section€4„5„102(3)€andÏsection€65„5„101(2).€€Section€4„5„102(3)€defines€contested€case€asÏfollows:€€ÌÓÓà8 à"Contested€case"€means€a€proceeding,€including€aÏdeclaratory€proceeding,€in€which€the€legal€rights,Íduties€or€privileges€of€a€party€are€required€by€anyÏstatute€or€constitutional€provision€to€beÏdetermined€by€an€agency€after€an€opportunity€for€aÏhearing.€€Such€proceeding€may€include€rate€making;Ïprice€fixing;€granting€of€certificates€ofÏconvenience€and€necessity;€the€making,€review€orÏequalization€of€tax€assessments;€the€granting€orÏdenial€of€licenses,€permits€or€franchises€where€the€Ïlicensing€board€is€not€required€to€grant€theÏlicenses,€permits€or€franchises€upon€the€payment€ofÏa€fee€or€the€finding€of€certain€clearly€definedÏcriteria;€and€suspensions€of,€revocations€of,€andÏrefusals€to€renew€licenses.€€An€agency€may€commenceÏa€contested€case€at€any€time€with€respect€to€aÏmatter€within€the€agency's€jurisdiction.ÌÌTenn.€Code€Ann.€ðð€4„5„102(3)(1991).€ÌÌÌÌÓÓà àThis€court's€jurisdiction€over€this€matter€derives€fromÏTennessee€Code€Annotated€section€4„5„322,€which€allows€judicialÏreview€of€final€decisions€in€contested€cases.€€The€jurisdictionalÏstatute€is€part€of€the€UAPA,€therefore,€it€seems€appropriate€thatÏthe€definitions€given€in€the€UAPA,€such€as€the€definition€ofÏ"contested€case"€given€in€section€4„5„102(3),€would€control€theÏinterpretation€of€section€4„5„322.€€Clearly,€the€General€AssemblyÏintended€the€definition€in€section€4„5„102(3)€to€refer€toÏproceedings€before€TPSC.€€TPSC€is€the€only€agency€concerned€withÏrate€making€and€granting€of€certificates€of€convenience€andÏnecessity€both€of€which€are€specifically€mentioned€in€section€4„5„102(3).€€ò òòòSee€United€œInter„Mountain›€Tel.€Co.€v.€Public€Serv.ÏComm'nó óóó,€555€S.W.2d€389,€391€(Tenn.€1977).€ÌÌà àUnder€the€UAPA€definition,€a€contested€case€is€a€proceedingÏin€which€"the€legal€rights,€duties€or€privileges€of€a€party€areÍrequired€by€any€statute€or€constitutional€provision€to€beÏdetermined€by€an€agency€after€an€opportunity€for€a€hearing."ÏBecause€œAT&T€has€not€set€forth€any€statutory€or€constitutionalÏprovisions€which€required€TPSC€to€provide€AT&T€with€an€opportunityÏto€be€heard€before€TPSC€implemented€UTS's€request€for€priceÏregulation,€the€proceeding€was€not€a€contested€case€as€defined€inÏTennessee€Code€Annotated€section€4„5„103(b).ÌÌà àThe€Tennessee€General€Assembly€has€extremely€broad€powersÏto€determine€the€method€and€the€extent€to€which€it€will€regulateÏutilities.€€It€has€the€power€to€do€all€acts€not€expressly€orÏimpliedly€forbidden€by€the€Tennessee€Constitution€or€the€UnitedÏStates€Constitution.€€ò òòòSee€Bank€of€Commerce€&€Trust€Co.€v.ÏSenteró óóó,€149€Tenn.€569,€576,€260€S.W.€144,€146€(1924)(discussingÏtaxing€powers).€€The€regulation€of€rates€charged€by€publicÏutilities€is€€a€legislative€function.€€ò òòòMcCollum€v.€SouthernÏBell€Tel.€&€Tel.€Co.ó óóó,€163€Tenn.€277,€280,€43€S.W.2d€390,€390„91Ï(1931);€òòò òTennessee€Cable€Television€Ass'n€v.€Tennessee€Pub.ÏServ.€Comm'nó óóó,€844€S.W.2d€151,€159€(Tenn.€App.€1992).€€TheÏdecision€of€whether€to€regulate€utilities€and€the€extent€andÏmethod€of€such€regulations€are€within€the€exclusive€domain€of€theÏlegislature€and€are€subject€to€change€at€the€will€of€theÏlegislature.€€ò òòòSee€Tennessee€Elec.€Power€Co.€v.€TennesseeÏValley€Auth.ó óóó,€306€U.S.€118,€141,€59€S.€Ct.€366,€371,€83€L.€Ed.Ï543,€551€(1939).€€Moreover,€it€is€the€opinion€of€the€majority€thatÏthe€concurring€opinion€would€not€fulfill€the€intent€of€theÍlegislature.€€Adoption€of€the€concurring€opinion€would€not€promoteÏthe€reform€sought€by€the€enactment€of€the€statute.€€In€essence,Ïthe€litigious€nature€of€the€process€would€not€change.ÌÌà àBy€enacting€chapter€408,€the€General€Assembly€expressed€itsÏwill€€to€open€the€local€telecommunications€market€to€competitionÏand€declared€that€price€regulation€is€a€proper€method€ofÏregulation.€€We€are€of€the€opinion€that€AT&T's€interpretation€andÏcontentions€concerning€chapter€408€are€contrary€to€the€plainÏwording€of€the€act€and€to€the€policy€statement€expressed€inÏTennessee€Code€Annotated€section€65„4„123.ÌÌà àTherefore,€it€results€that€the€appeal€of€AT&T€is€dismissedÏfor€lack€of€jurisdiction€by€this€court.€€Costs€on€appeal€are€taxedÏto€petitioner/appellant,€AT&T€Communications€of€South€CentralÏStates,€Inc.,€and€the€cause€is€remanded€to€the€TennesseeÏRegulatory€Authority€for€any€further€necessary€proceedings.ÌÌÓÓà àÌà àà àà àà à__________________________________Ìà àà àà àà àSAMUEL€L.€LEWIS,€JUDGEÌÌÌÌÌÌÌCONCUR:ÌÌÌÌ_________________________________ÌHENRY€F.€TODD,€P.J.,€M.S.ÌÌÌÌWILLIAM€C.€KOCH,€JR.,€J.ÌCONCURRING€INÌSEPARATE€OPINIONÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌ