ÿWPC}– U/: %TZn­j 0/ØU6@ï4/PC“w@›Û mÝ 0+Jô 0D># ‚ AQ•bæ 0Jî 0T8 BŒ 0^© 0h 1mo 0cÜÆ? 0D 0@I 0D‰ D/Í 0rü 0|n 0†ê 0p 1u 0du 0TÙ B- D3J UN} &Ë B)ñ DC! AM]!U*ª!…Ô!(Y#µ%Â6'Tø*KL-“—/*1Ÿ23}Ñ4N6zU:Ï;Šæ=…p?7õB½,E\éGKEK=PàÍT+­XfØ]î>a,d]-f9ŠhŽÃoQqtas±Õt°†vË6xtzùu{Žn}‘ü~e€±òƒ)£†~̈JŠaË‹v~,vÓª<þ6X9`("Courier NewTTX3|x¯ «<þ6X9`("Courier NewTTXXxþ6X@ÉDQX@(°“'$¡¡ÑTR[  AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓ  ÓÓÓÔ€XÆXXXÔÔ€XC\XXXÆÔô\  `(Times NewRomanTTzƒ=#“'$¡¡BellSouthÌ 8$ ' IB011C3   /ž Z+Ÿ   ¡ E¢ +£ ¤ ¥ Ó€¯ ÿU‹ÿÀÀÀ(ú(2J$¤¤Ý ƒ“'!ÝÑTR[  AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓ  ÓÓÓÔ€XÖ”XXXÔÔ€XÈõXXXÖ”ÔÝ  ÝÓÓÒ°ÒÒX°Òà ` àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLhÎ $%&)+Cþÿ<< Cÿÿ- ù-2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô d2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô##Ce37=CIQYag­­1.a.i.(1)(a)(i)1)a)(;3Æ$´´Ô2CeÔÚ  Ú0Ú  Ú.Ô3  Ôà0  àƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý("ÿÿ$££Ò  ÒÒ  Ò($$””ò òÚ  Ú1Ú  Úó óAA'÷ÿ dxd2@ 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  Ô679: ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ(—8$——ÔªÔò òòòóóó óÔªÔüÿP Pd'ÿÿdxdg6Times New Roman Regularhttp://www.del.com% Line 7 dOOOO7Border 1dd$&PCþÿ << Gÿÿ< Œ 9p`(Arial {Ý ƒ!ÝÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ%"ÝÝ  ÝÔ€RÔÔ€RÔÓ  Óò òÔ YYY ÔFILEDÔ€RXÔÌÌOctober€1,€1997ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó ó Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€details€of€these€early€efforts€are€recounted€in€òòTennessee€Cable€Television€Assoc.€v.ÏTennessee€Pub.€Serv.€Ô_ÔCommððnÔ_Ô,óó€844€S.W.2d€151,€155„58€(Tenn.€Ct.€App.€1992).Ì «Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Comp.€R.€&€Regs.€r.€1220„4„2„.55€(1993).€€This€rule€was€revised€again€in€JuneÏ1995.Ì ¸Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€Commission€specifically€declined€to€follow€its€staff€recommendation€favoringÏforecasts€because€the€companyððs€actual€earnings€had€been€below€the€forecasted€earnings.€€TheÏCommission€noted€that€ð ð[Ô_Ôc]ontinuationÔ_Ô€of€a€policy€similar€to€that€which€we€started€in€1990€could,€ifÏforecasts€continue€to€be€missed,€result€in€rate€decreases€for€companies€that€need€rate€increases,€andÏrate€increases€for€companies€that€are€Ô_ÔoverearningÔ_Ô.ðð€€òòIn€re€Earnings€Investigation€of€South€CentralÏBell€Telephone€Co.,€óó1993„1995,€Docket€No.€92„13527,€at€7.€€Ì JÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€Consumer€Advocate€Division€in€the€Office€of€the€Attorney€General€and€Reporter€wasÏcreated€in€1994€for€the€purpose€of€representing€the€interests€of€Tennesseeððs€consumers€before€theÏCommission.€€Tenn.€Code€Ann.€ðð€65„4„118(c)€(Supp.€1996).€€Ì AÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€Form€PSC„3.01€report€is€a€monthly€report€containing€a€telephone€companyððsÏintrastate€operating€results€in€accordance€with€rules€and€forms€established€by€the€Commission.€€òòSeeóóÏTenn.€Comp.€R.€&€Regs.€r.€1220„4„1„.10(2)(a)(1),€„€.10(3)(a)€(1988).Ì ‰Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAct€of€May€24,€1995,€ch.€305,€1995€Tenn.€Pub.€Acts€450.Ì þÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAct€of€May€25,€1995,€ch.€408,€1995€Tenn.€Pub.€Acts€703,€codified€at€Tenn.€Code€Ann.Ïðððð€65„4„101,€„123€&€„124,€65„4„201,€„203,€„207,€and€65„5„208€to€„213€(Supp.€1996).Ì •Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Code€Ann.€ðððð€65„5„207,€„208,€„209(f),€(h)€(Supp.€1996).Ì sÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Code€Ann.€ðð€65„4„124(a).Ì ýÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔPrior€to€1995,€the€Commission€could€not€permit€new€competitors€to€enter€a€marketÏalready€served€by€another€provider€unless€it€found€that€the€current€service€was€ð ðinadequate€to€meetÏthe€reasonable€needs€of€the€public.ðð€€Tenn.€Code€Ann.€ðð€65„4„203(a)€(Supp.€1996).€€The€1995Ïlegislation€exempts€telecommunications€service€providers€from€this€requirement.€€Tenn.€Code€Ann.Ïðð€65„4„203(c).€€The€1995€legislation€also€permits€new€competitors€to€enter€a€market€if€theyÏdemonstrate€that€they€will€adhere€to€the€applicable€legal€requirements€and€that€they€possessÏsufficient€managerial,€financial,€and€technical€abilities€to€provide€the€service.€€Tenn.€Code€Ann.€ððÏ65„4„201(c).Ì pÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Code€Ann.€ðð€65„5„209.Ì Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Code€Ann.€ðð€65„5„212,€„213.€€For€the€purposes€of€this€program,€a€ð ðsmallÏbusinessðð€is€one€with€annual€gross€revenues€of€less€than€$4,000,000.€€Tenn.€Code€Ann.€ðð€65„5„212.Ì €Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Comp.€R.€&€Regs.€r.€1220„4„2„.55€(1995).Ì {Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Code€Ann.€ðð€65„5„209(c)€required€an€audit€of€the€existing€telephone€companyððs€Ïmost€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report€available€when€the€company€filed€its€application€for€a€priceÏregulation€plan.€€When€BellSouth€filed€its€application€for€a€price€regulation€plan,€it€had€already€filedÏa€Form€Ô_ÔPSCÔ_Ô„3.01€report€for€the€twelve€months€ending€on€March€31,€1995.€€This€report,€asÏopposed€to€the€report€for€the€twelve€months€ending€on€December€31,€1994,€was€BellSouthððs€mostÏrecent€report.Ì -Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔBellSouth€had€reported€a€10.20%€earned€rate€of€return€on€its€Form€Ô_ÔPSCÔ_Ô„3.01€report€and€Ïcontested€the€corrections€made€by€the€Commissionððs€staff.€€We€need€not€resolve€this€dispute€here.Ì ³Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€Commission€entered€an€order€on€November€9,€1995€formally€denying€BellSouthððsÏpetition€for€a€declaratory€order.€€BellSouth€filed€a€Tenn.€R.€App.€P.€12€petition€in€this€court€onÏJanuary€5,€1996,€seeking€appellate€review€of€this€order.€€òòBellSouth€Telecommunications,€Inc.€v.ÏÔ_ÔGreerÔ_Ô,óó€App.€No.€01A01„9601„BC„00008.Ì RÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€Commission€allocated€$21.5€million€to€reduce€Ô_ÔIntraLATAÔ_Ô€long€distance€message€tollÏrates,€$27.4€million€to€eliminate€the€$1.50€residential€Ô_ÔtouchtoneÔ_Ô€rates,€and€$7.4€million€to€eliminateÏthe€$1.00€zone€charge.€€The€Commission€also€directed€BellSouth€to€waive€the€service€connectionÏcharges€for€computer€lines€at€schools€and€libraries€and€to€provide€a€flat„rate€option€to€customersÏwho€have€expressed€a€desire€to€be€included€in€Metro€Area€Calling.Ì AÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔBellSouth€had€already€appealed€from€an€October€16,€1995€order€entered€by€the€ChanceryÏCourt€of€Davidson€County€dismissing€its€petition€for€a€writ€of€mandamus€to€compel€theÏCommission€to€implement€its€price€regulation€plan.€€òòState€ex€rel.€BellSouth€Telecommunications,ÏInc.€v.€Ô_ÔBissellÔ_Ô,óó€App.€No.€01A01„9601„CH„00016.€€This€appeal€and€the€appeal€from€theÏCommissionððs€denial€of€BellSouthððs€petition€for€a€declaratory€order,€òòBellSouthÏTelecommunications,€Inc.€v.€GreerÔ_Ô,óó€App.€No.€01A01„9601„BC„00008,€were€consolidated€withÏthe€appeal€from€the€Commissionððs€January€23,€1996€order.€€Later,€on€BellSouthððs€motion,€weÏdismissed€the€appeal€in€the€mandamus€case€on€the€grounds€of€Ô_ÔmootnessÔ_Ô€but€reserved€taxing€costsÏpending€the€resolution€of€this€appeal.€€òòState€ex€rel.€BellSouth€Telecommunications,€Inc.€v.€Ô_ÔBissellÔ_Ô,óóÏApp.€No.€01A01„9601„CH„00016€(Tenn.€€Ct.€App.€May€3,€1996).Ì 3Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€Commission€ceased€to€exist€on€June€30,€1996.€€While€the€General€AssemblyÏprovided€transition€provisions€with€regard€to€the€Commissionððs€rules,€employees€and€property,€òòseeóóÏTenn.€Code€Ann.€ðð€65„1„301€to€„306€(Supp.€1996),€it€did€not€address€the€status€of€regulatoryÏproceedings€pending€before€the€Commission€or€of€pending€judicial€proceedings€involving€actionsÏof€the€Commission.€€The€members€of€the€Authority€did€not€succeed€to€the€offices€of€the€membersÏof€the€Commission.€€However,€the€Authority€has€assumed€the€regulatory€power€formerlyÏpossessed€by€the€Commission€with€regard€to€the€matters€at€issue€on€this€appeal.€€Accordingly,€onÏJuly€16,€1996,€we€substituted€the€members€of€the€Authority€in€place€of€the€members€of€theÏCommission.Ì ÖÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔPreemption€may€result€from€action€by€Congress€itself€or€by€action€of€a€federal€agencyÏacting€within€the€scope€of€its€authority.€€òòCity€of€New€York€v.€F.C.C.Ô_Ô,€óó486€U.S.€57,€63„64,€108€S.ÏCt.€1637,€1642€(1988);€òòLouisiana€Pub.€Serv.€Ô_ÔCommððnÔ_Ô€v.€Ô_ÔF.C.C.Ô_Ô,óó€476€U.S.€355,€369,€106€S.€Ct.Ï1890,€1898„99€(1986).€€Federal€agencies€must€declare€their€intent€to€preempt€state€law€with€someÏspecificity.€€òòÔ_ÔSchneidewindÔ_Ô€v.€Ô_ÔANRÔ_Ô€Pipeline€Co.,óó€485€U.S.€293,€309€n.12,€108€S.€Ct.€1145,€1155Ïn.12€(1988).Ì !Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€Telecommunications€Act€of€1996€ð ðpromotes€competition€and€reduces€regulation€inÏorder€to€secure€lower€prices€and€higher€quality€services€for€American€telecommunicationsÏconsumers€and€to€encourage€the€rapid€development€of€new€telecommunications€technologies.ðð€ÏHouse€Rpt.€No.€104„204,€104th€Cong.,€2d€Sess.€47,€òòreprinted€inóó€1996€Ô_ÔU.S.C.C.A.N.Ô_Ô€10,€11.€ÏOne€of€the€principal€ways€it€accomplishes€its€goal€is€to€impose€a€general€duty€of€interconnection€onÏall€telecommunications€carriers€thereby€requiring€local€telephone€companies€to€offer€competitorsÏaccess€to€part€of€their€networks.€€47€U.S.C.A.€ðð€251€(West€Supp.€1997);€House€Rpt.€No.€104„204,€104th€Cong.,€2d€Sess.€48,€òòreprinted€inóó€1996€Ô_ÔU.S.C.C.A.N.Ô_Ô€10,€11.€€Tenn.€Code€Ann.€ðð€65„4„123€states€a€similar€purpose,€and€Tenn.€Code€Ann.€ðð€65„4„124(a)€(Supp.€1996)€imposes€aÏsimilar€duty€of€interconnection€on€local€telephone€companies.Ì \Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔòòSee€alsoóó€47€U.S.C.A.€ðð€251(d)(3)€(West€Supp.€1997)€which€directs€the€FederalÏCommunications€Commission€not€to€promulgate€regulations€that€prevent€state€commissions€fromÏenforcing€local€regulations,€orders,€or€policies€(1)€that€establish€local€telephone€companiesðð€accessÏand€interconnection€obligations,€(2)€that€are€ð ðconsistentðð€with€the€47€U.S.C.A.€ðð€251,€and€(3)€thatÏdo€not€substantially€prevent€the€implementation€of€the€requirements€of€47€U.S.C.A.€ðð€251€or€theÏTelecommunications€Act€of€1996.Ì äÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔSome€courts€have€even€cited€a€statuteððs€legislative€history€to€buttress€their€interpretationÏwhen€a€statute€is€not€ambiguous.€€òòSee,€e.g.,óó€òòÔ_ÔWorleyÔ_Ô€v.€Ô_ÔWeigelÔ_Ôððs,€Inc.,óó€919€S.W.2d€at€593;ÏòòÔ_ÔVanArsdallÔ_Ô€v.€State,óó€919€S.W.2d€626,€632€(Tenn.€Ô_ÔCrimÔ_Ô.€App.€1995).€€Ì ÷Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔTenn.€Code€Ann.€ðð€65„5„209(c)€envisions€that€the€process€will€be€completed€withinÏninety€days€after€the€company€files€its€application€for€a€price€regulation€plan.Ì SÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€term€ð ðauditðð€appears€only€twice€in€Title€65€of€the€Tennessee€Code€Annotated.€€OtherÏthan€Tenn.€Code€Ann.€ðð€65„5„209,€it€appear€in€Tenn.€Code€Ann.€ðð€65„15„201€(Supp.€1996)€whichÏrelates€to€ð ðsafety€management€auditsðð€for€motor€carriers.€Ì /Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔThe€staff€audit€report€dated€September€15,€1995€explains€that€ÌÌà8 àthe€Staff€has€followed€the€statements€of€the€sponsors€of€the€Bills€that€became€theÏnew€law€by€auditing€the€Companyððs€financial€records€for€the€twelve€months€endedÏMarch€31,€1995,€to€determine€if€the€amounts€on€the€Ô_ÔTPSCÔ_Ô€3.01€Report:Ìà àà à*à8 àare€accurately€taken€from€the€companyððs€books€andÏrecords;Ìà àà à*à8 àaccurately€reflect€any€Commission€ordered€rateÏmaking€adjustments;Ìà àà à*à8 àdo€not€include€unusual€or€abnormal€financialÏoccurrences;Ìà àà à*à8 àwere€calculated€following€proper€accounting€rulesÏand€procedures€for€separating€the€companyððsÏinterstate€and€intrastate€operations,€as€well€as,€itsÏregulated€and€Ô_ÔnonregulatedÔ_Ô€operations;Ìà àà à*à8 àaccurately€reflect€allowable€charges€from€affiliatedÏcompanies.ÌÌà8 àà àThese€points€were€taken€from€a€memo€by€Dr.€Chris€Klein,€Director€of€theÏUtility€Rate€Division,€and€Mike€Gaines,€Manager€of€the€TelecommunicationsÏSection,€to€Ô_ÔPSCÔ_Ô€Chairman€Keith€Ô_ÔBissellÔ_Ô€in€response€to€a€letter€from€SenatorÏRochelle.€€This€memo,€and€the€transcripts€of€the€ð ðlegislative€intentðð€statements€readÏby€Senator€Rochelle€and€Representative€Purcell€on€the€Senate€and€House€floors,€areÏattached€as€Appendices€B,€C,€and€D€to€this€Report.Ì „Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔSenate€Bill€No.€891/House€Bill€No.€695,€Section€6.Ì Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔòòSeeóó€Amendment€No.€2€to€Amendment€No.€2,€Senate€Journal€of€the€Ninety„NinthÏGeneral€Assembly€of€the€State€of€Tennessee,€First€Session,€1157„58€(1995)€(ð ðSenate€Journalðð).Ì jÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔSenate€Journal,€at€1159.Ì §Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAmendment€No.€8€was€tabled€by€a€vote€of€18€to€15.€€òòSeeóó€Senate€Journal,€at€1160.Ì ¦Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAmendment€No.€9€failed€by€a€vote€of€13€to€16.€€òòSeeóó€Senate€Journal,€at€1164„65.Ì ÁÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAmendment€No.€18€failed€under€Senate€Rule€39(3)€by€a€vote€of€11€to€19€to€1.€€òòSeeóóÏSenate€Journal,€at€1167.Ì jÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔSenate€Journal,€at€1168.Ì ïÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAmendment€No.€17,€ðð€1,€2€House€Journal€of€the€Ninety„Ninth€General€Assembly€of€theÏState€of€Tennessee,€First€Session,€1847€(1995)€(ð ðHouse€Journalðð).Ì „Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAmendment€No.€17,€ðð€15,€House€Journal,€at€1858.Ì ‡Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAmendment€No.€17,€ðð€17,€House€Journal,€at€1859„60.Ì [Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔRepresentative€Purcell€is€referring€to€an€April€13,€1995€memorandum€from€Chris€KleinÏand€Mike€Gaines€to€Chairman€Keith€Ô_ÔBissellÔ_Ô.€€The€memorandum€describes€the€intended€scope€of€theÏcompliance€audit€that€had€already€been€initiated€by€the€Commission€in€March€1995.€€TheÏCommissionððs€staff€later€cited€this€memorandum€as€authority€for€the€scope€of€the€audit€ofÏBellSouthððs€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report€on€which€its€September€15,€1995€report€wasÏbased.Ì §Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔRepresentative€Purcellððs€description€of€the€scope€of€the€compliance€audit€was€drawnÏcompletely€from€the€April€memorandum€written€by€Messrs.€Klein€and€Gaines.€€The€version€of€hisÏremarks€appearing€in€the€House€Journal€contains€minor,€nonsubstantive€differences€with€his€actualÏremarks€on€the€House€floor.€€òòSeeóó€House€Journal,€at€1865.Ì Ý ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔòòSeeóó€House€Journal,€at€1864.€€The€House€Journal€infers€that€Representative€PurcellððsÏremarks€followed€the€final€vote€on€the€bill;€however,€the€tapes€of€the€legislative€debates€show€to€theÏcontrary.Ì tÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔòòSeeóó€Senate€Journal,€at€1631.Ì wÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔòòSeeóó€Senate€Journal,€at€1631„32.Ì WÝ ƒ!ÝÑ#€d#ÑÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÝ ƒ $ÝÓÓÒ  ÒÒ X Òà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ_ÔAT&T€made€a€similar€argument€with€regard€to€the€Commissionððs€approval€of€the€priceÏregulation€plan€for€United€Telephone€Southeast,€Inc.€€This€court€did€not€reach€the€substance€of€thisÏargument€because€a€majority€of€the€panel€that€heard€the€case€concluded€that€the€court€lackedÏjurisdiction€over€the€appeal.€€òòAT&T€Communications€of€the€South€Central€States,€Inc.€€v.€€Greer,óóÏApp.€€No.€€01A01„9512„BC„00556,€1996€WL€697945,€at€7€(Tenn.€€Ct.€€App.€€Dec.€€6,€1996)€(NoÏTenn.€€R.€€App.€€P.€€11€application€filed).ÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva ÒÝ ƒ!ÝÔ . ÔÔ€ÔÑ\R AØ'\ÑÓ  ÓÓÓÔ€ÔÝ  ÝÑ „ ÑÒ  ÒÒ ° ÒÒ  ÒÒ X ÒÓÓÔ€¼Ô›Þ ÞÌÌà@ àÔ€„Ôò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEE̜ـ$ÙßR€QSPA1-j|´ÿ4` z `€€@ÿRß›à@ àMIDDLE€SECTION€AT€NASHVILLEó óÌÌÌÌÌÌÔ€ŠÔBELLSOUTH€TELECOMMUNICATIONS,€INC.à à)Ìd/b/a€SOUTH€CENTRAL€BELL€TELEPHONEà àà à)ÌCOMPANY,à àà àà àà àà àà àà à)Ìà àà àà àà àà àà àà àà à)Ìà àPetitioner/Appellant,à àà àà àà à)à àPublic€ServiceÌà àà àà àà àà àà àà àà à)€à àCommission€€€€€€€€€€€€€€€€ÌVS.à àà àà àà àà àà àà àà à)à àNo.€95„03383Ìà àà àà àà àà àà àà àà à)ÌH.€LYNN€GREER,€Chairman,€SARA€KYLE,à àà à)à àAppeal€No.ÌDirector,€and€MELVIN€J.€MALONE,€Director,à àà à)à à01A01„9601„BC„00008ÌConstituting€the€Tennessee€Regulatory€Authority,à à)Ìà àà àà àà àà àà àà àà à)Ìà àRespondents/Appellees.à àà àà àà à)ÌÌÌÌÌBELLSOUTH€TELECOMMUNICATIONS,€INC.,à à)Ìà àà àà àà àà àà àà àà à)à àPublic€ServiceÌà àPetitioner,à àà àà àà àà àà à)à àCommission€€€€€€€€€Ìà àà àà àà àà àà àà àà à)à àNo.€95„02614ÌVS.à àà àà àà àà àà àà àà à)Ìà àà àà àà àà àà àà àà à)à àAppeal€No.ÌTENNESSEE€PUBLIC€SERVICE€COMMISSION,à à)à à01A01„9602„BC„00066Ìà àà àà àà àà àà àà àà à)Ìà àRespondent.à àà àà àà àà àà à)ÌÌÌÌÌSTATE€OF€TENNESSEE,€on€relations€ofà àà à)ÌBELLSOUTH€TELECOMMUNICATIONS,€INC.,à à)Ìà àà àà àà àà àà àà àà à)Ìà àPetitioner/Appellant,à àà àà àà à)à àDavidson€ChanceryÌà àà àà àà àà àà àà àà à)à àNo.€95„2965„IIÌVS.à àà àà àà àà àà àà àà à)Ìà àà àà àà àà àà àà àà à)ÌKEITH€BISSELL,€STEVE€HEWLETT,€andà àà à)à àAppeal€No.ÌSARA€KYLE,€in€their€capacity€as€Commissionersà à)à à01A01„9601„CH„00016Ìof€the€Tennessee€Public€Service€Commission,à àà à)Ìà àà àà àà àà àà àà àà à)Ìà àRespondents/Appellees.à àà àà àà à)ÌÌÌÌÌÌÌÌÔ€¼ÔÌÌÌà@ àò òAPPEAL€FROMÌà@ àTHE€TENNESSEE€PUBLIC€SERVICE€COMMISSIONÌà@ àNASHVILLE,€TENNESSEEÌó óÌà@ àÌÌÌÌòòÒ€à€ÒFor€BellSouth€Telecommunications,ÏInc.óó:ÌÌGuy€M.€Hicks,€IIIÌBennett€L.€RossÌNashville,€TennesseeÌÌJames€G.€HarralsonÌAtlanta,€GeorgiaÌÌÌÌòòFor€AT&T€Communications€of€theóóÌòòSouth€Central€States,€Inc.óó:ÌÌVal€SanfordÌJohn€Knox€WalkupÌGullett,€Sanford,€Robinson€&€MartinÌNashville,€TennesseeÉòòFor€Tennessee€Public€Service€Comm.óó:ÌÌCharles€W.€BursonÌAttorney€General€&€ReporterÌÌMichael€E.€MooreÌSolicitor€GeneralÌÌMichael€W.€CatalanoÌAssociate€Solicitor€GeneralÌNashville,€TennesseeÌÌÌòòÌFor€Tennessee€Consumersóó:ÌÌCharles€W.€BursonÌAttorney€General€&€ReporterÌÌMichael€E.€MooreÌSolicitor€GeneralÌÌL.€Vincent€WilliamsÌConsumer€AdvocateÌNashville,€TennesseeÌÉÉÒÒÌÌÌÌà@ àò òÔ€„ÔVACATED€AND€REMANDEDÔ€¼Ôó óÌÌÌÌÌÌÌÌÌà àà àà àà àà àà àà àWILLIAM€C.€KOCH,€JR.,€JUDGEÇÑ7€DöüDˆˆdüXXdì7Ñà@ àÔ€„Ôò òòòO€P€I€N€I€O€Nóóó óÌÓ€ÓÔ€¼ÔÌÔ_ÔÑ€ÑÑ  Ñà àThis€consolidated€appeal€of€three€separate€proceedings€involves€the€effortsÏof€BellSouth€Telecommunications,€Inc.€to€take€advantage€of€the€1995€legislationÏeasing€the€traditional€regulatory€burdens€on€telecommunications€serviceÏproviders.€€After€making€significant€adjustments€in€BellSouthððs€reportedÏoperating€results,€the€Tennessee€Public€Service€Commission€determined€thatÏBellSouthððs€current€earned€rate€of€return€exceeded€its€authorized€rate€of€returnÏand€that€BellSouth€was€receiving€$56.285€million€in€excess€revenues.€€TheÏCommission€directed€BellSouth€to€reduce€its€rates€by€$56.285€million€and€set€theÏinitial€rates€in€the€companyððs€price€regulation€plan€accordingly.€€On€this€appeal,ÏBellSouth€and€another€intervening€party€take€issue€with€the€procedures€employedÏby€the€Commission€to€consider€and€act€upon€BellSouthððs€application€for€a€priceÏregulation€plan.€€We€have€determined€that€these€proceedings€were€not€preemptedÏby€the€federal€Telecommunications€Act€of€1996.€€We€have€also€determined€thatÏthe€General€Assembly€did€not€give€the€Commission€authority€to€adjust€BellSouthððsÏreported€operating€results€and€that€the€Commission€should€have€convened€aÏcontested€case€hearing€when€BellSouth€took€issue€with€the€Commissionððs€decisionÏto€adjust€its€reported€operating€results.€€Accordingly,€we€vacate€the€CommissionððsÏJanuary€23,€1996€order€and€all€earlier€related€orders.ÌÌà@ àò òI.ó óÌÌà àAlmost€ten€years€ago,€the€Tennessee€Public€Service€Commission€began€itsÏefforts€to€modernize€Tennesseeððs€telecommunications€network€and€to€explore€lessÏcumbersome€ways€to€regulate€the€telephone€companies€under€its€jurisdiction.Ô_Ô× ƒT ××  ×Ô_ÔÍThe€Commissionððs€work€culminated€in€its€first€regulatory€reform€rule€that€tookÏeffect€on€January€10,€1993.× ƒU ××  ×€€One€day€later,€BellSouth€Telecommunications,€Inc.Ïfiled€its€conditional€election€to€operate€under€this€rule.€€ÌÌà àOn€August€20,€1993,€the€Commission€entered€an€order€governingÏBellSouthððs€rates€from€1993€through€1995.€€See€òòIn€re€Earnings€Investigation€ofÏSouth€Central€Bell€Telephone€Co.,€1993„1995,óó€Docket€No.€92„13527.€€Based€onÏthe€results€of€an€earnings€investigation€that€had€been€commenced€in€1992,€theÏCommission€concluded€that€a€range€of€return€on€BellSouthððs€rate€base€of€10.65%Ïto€11.85%€would€be€just€and€reasonable.€€The€Commission€adopted€BellSouthððsÏrecommendation€that€future€rate€adjustments€and€deferred€revenue€accountÏcontributions€should€be€based€on€the€companyððs€actual€first„year€results,€asÏopposed€to€projections.Ô_Ô× ƒV ××  ×Ô_Ô€€It€also€determined€that€there€would€be€no€rateÏadjustment€for€1993€because€BellSouthððs€forecasted€rate€of€return€for€1993€fellÏwithin€the€approved€range.€€This€court€approved€the€Commissionððs€order€in€allÏrespects.€€òòAmerican€Assoc.€of€Retired€Persons€v.€Tennessee€Pub.€Serv.€Ô_ÔCommððnÔ_Ô,óóÏ896€S.W.2d€127€(Tenn.€Ct.€App.€1994).ÌÌà àIn€December€1994,€the€Consumer€Advocate× ƒW ××  ×€requested€the€Commission€toÏresolve€what€he€considered€to€be€inappropriate€expense€allocations€in€BellSouthððsÍForm€Ô_ÔPSCÔ_Ô„3.01€reports.œ× ƒX ××  ×›€€When€the€Commission€did€not€respond,€the€ConsumerÏAdvocate€filed€a€petition€on€January€23,€1995€requesting€the€Commission€toÏcommence€an€investigation€into€BellSouthððs€earnings.€€In€March€1995,€theÏCommission€announced€that€it€was€commencing€another€earnings€investigationÏwith€regard€to€BellSouth.ÌÌà àIn€the€meantime,€two€competing€telecommunications€bills€were€introducedÏin€the€first€session€of€the€Ninety„Ninth€General€Assembly€that€had€convened€inÏJanuary€1995.€€The€avowed€purpose€of€both€bills€was€to€ease€the€traditionalÏregulatory€constraints€on€local€telephone€companies€and€to€permit€greaterÏcompetition€for€local€telecommunications€services.€€Filed€concurrently€with€theseÏbills€was€a€bill€to€replace€the€Commission€with€a€new€regulatory€entity.€€On€MayÏ26,€1995,€the€Governor€signed€a€bill€replacing€the€Commission€with€theÏTennessee€Regulatory€Authority€effective€July€1,€1996.× ƒY ××  ×€€Two€weeks€later,€theÏGovernor€signed€another€bill€dramatically€altering€the€regulation€of€localÏtelephone€companies€and€opening€up€the€local€telecommunications€market€toÏunprecedented€opportunities€for€competition.× ƒZ ××  ×ÌÌà àThe€expressed€goal€of€the€new€regulatory€structure€was€ÌÓÓà8 àà8 àto€foster€the€development€of€an€efficient,€technologicallyÏadvanced,€statewide€system€of€telecommunicationsÏservices€by€permitting€competition€in€allÏtelecommunications€services€markets,€and€by€permittingÍalternative€forms€of€regulation€for€telecommunicationsÏservices€and€telecommunications€services€providers.€€òòÌÌÓ€ÓSeeóó€Tenn.€Code€Ann.€ðð€65„4„123€(Supp.€1996).€€In€broad€terms,€the€1995Ïlegislation€set€out€to€accomplish€this€goal€in€five€ways.€€First,€it€mandated€theÏuniversal€availability€of€basic€telephone€service€at€affordable€rates€and€froze€basicÏand€non„basic€telephone€rates€for€four€years.× ƒ[ ××  ×€€Second,€it€required€incumbentÏlocal€telephone€companies€to€make€available€non„discriminatory€interconnectionÏto€their€public€networks€to€other€providers.× ƒ\ ××  ×€€Third,€it€eased€the€traditionalÏlimitations€on€the€ability€of€new€providers€to€enter€the€market.× ƒ] ××  ×€€Fourth,€itÏprovided€a€transition€procedure€to€enable€existing€local€telephone€companies€toÏtake€advantage€of€the€newly€relaxed€regulatory€environment.× ƒ^ ××  ×€€Fifth,€itÏestablished€a€five„year,€$10€million€loan€guarantee€program€to€induce€small€andÏminority€businesses€to€enter€the€telecommunications€market.× ƒ_ ××  ×ÌÌà àThe€transition€procedure€for€existing€local€telephone€companies€wasÏdesigned€to€be€simple€and€expeditious.€€It€requires€an€existing€local€telephoneÍcompany€desiring€to€take€advantage€of€the€new€regulatory€environment€to€file€anÏapplication€for€a€price€regulation€plan€and€envisions€that€the€Commission€will€actÏon€the€application€within€ninety€days.€€òòSeeóó€Tenn.€Code€Ann.€ðð€65„5„209(c).€€ItÏrequires€the€Commission€to€base€its€decision€whether€to€grant€the€application€onÏan€audit€of€the€applicantððs€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€òòSee€óóTenn.€CodeÏAnn.€ðð€65„5„209(c),€„209(j).ÌÌà àTenn.€Code€Ann.€ðð€65„5„209(c)€states€that€the€companyððs€rates€existing€onÏJune€6,€1995€will€be€the€initial€rates€under€its€price€regulation€plan€if€theÏcompanyððs€earned€rate€of€return€on€its€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report€is€lessÏthan€its€current€authorized€fair€rate€of€return€existing€when€the€application€wasÏfiled.€€The€statute€also€empowers€the€Commission€or€Authority€to€initiate€aÏcontested€rate„making€proceeding€if€the€audit€of€the€Form€Ô_ÔPSCÔ_Ô„3.01€reportÏreveals€that€the€companyððs€earned€rate€of€return€is€greater€than€its€currentÏauthorized€fair€rate€of€return.€€Conversely,€the€statute€permits€the€company€toÏrequest€a€contested€rate„making€hearing€if€the€audit€reveals€that€its€earned€rate€ofÏreturn€is€less€than€its€current€authorized€fair€rate€of€return.€€ÌÌà àThe€Commissionððs€revised€regulatory€reform€rules€took€effect€one€weekÏafter€the€Governor€signed€the€telecommunications€reform€legislation.× ƒ` ××  ×€€On€JuneÏ20,€1995,€BellSouth€filed€its€application€for€a€price€regulation€plan.€€On€July€24,Ï1995,€the€Commission€permitted€AT&T€Communications€of€the€South€CentralÏStates,€Inc.€to€intervene€in€the€proceeding.€€Approximately€two€weeks€later,€theÏCommission€directed€its€staff€to€conduct€the€audit€of€BellSouthððs€most€recentÏForm€Ô_ÔPSCÔ_Ô„3.01€report€in€accordance€with€Tenn.€Code€Ann.€ðð€65„5„209(c),€(j).€€ÌÌà à€€On€August€17,€1995,€the€Commissionððs€staff€issued€the€results€of€its€auditÏof€BellSouthððs€Form€Ô_ÔPSCÔ_Ô„3.01€report€for€the€twelve„month€period€ending€onÏDecember€31,€1994.€€At€the€outset,€the€staff€determined€that,€except€for€fourÏminor€discrepancies,€€BellSouthððs€December€1994€report€accurately€reflected€theÏcompanyððs€books€and€records,€that€it€reflected€the€Commissionððs€previouslyÏordered€rate„making€adjustments,€and€that€it€complied€with€the€generally€acceptedÏaccounting€principles€as€adopted€in€Part€32€of€the€Uniform€System€of€Accounts.€ÏAccordingly,€the€staff€concluded€that€BellSouthððs€corrected€rate€of€return€forÏ1994,€as€taken€from€its€books,€was€10.21%.ÌÌà àEven€though€BellSouthððs€corrected€rate€of€return€for€1994€was€less€than€itsÏauthorized€rate€of€return€in€the€Commissionððs€August€20,€1993€order,€theÏCommissionððs€staff€decided€that€BellSouthððs€audited€rate€of€return€should€beÏadjusted€to€reflect€ð ðout„of„period€and€non„recurring€itemsðð€and€ð ðknown€chargesððÏoccurring€during€the€audit€period.€€Accordingly,€the€staff€concluded€thatÏBellSouthððs€adjusted€rate€of€return€for€1994€was€12.29%€and€that€this€adjustedÏrate€of€return€ð ðmore€accurately€reflects€the€earnings€potential€of€the€rates€inÏeffect€at€the€end€of€the€audit€period.ðð€€Since€this€adjusted€rate€of€return€exceededÏBellSouthððs€currently€authorized€rate€of€return,€the€staff€recommended€that€theÏCommission€initiate€a€contested€rate„making€proceeding€under€Tenn.€Code€Ann.Ïðð€65„5„209(c)€to€establish€the€initial€rates€for€Bell€Southððs€price€regulation€plan.€ÌÌà àThe€staffððs€August€17,€1995€report€and€recommendations€provoked€a€swiftÏand€strong€reaction€from€BellSouth.€€On€September€12,€1995,€the€company€filedÏa€petition€for€a€declaratory€order€pursuant€to€Tenn.€Code€Ann.€ðð€4„5„223(a)Ï(1991)€questioning€the€staffððs€authority€to€recommend€adjustments€to€its€correctedÏForm€Ô_ÔPSCÔ_Ô„3.01€report.€€In€the€meantime,€the€Commission€rejected€the€AugustÍ17,€1995€report€because€it€was€based€on€an€incorrect€Form€PSC„3.01€reportÔ_Ô× ƒa ××  ×Ô_ÔÏand€directed€its€staff€to€audit€the€proper€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€ÌÌà àOn€September€15,€1995,€the€Commissionððs€staff€issued€its€second€auditÏreport€„€this€time€covering€BellSouthððs€Form€Ô_ÔPSCÔ_Ô„3.01€report€for€the€twelveÏmonths€ending€on€March€31,€1995.€€This€report€employed€the€same€auditÏmethodology€used€in€the€August€17,€1995€report.€€The€staff€made€threeÏcorrections€to€BellSouthððs€Form€Ô_ÔPSCÔ_Ô„3.01€report€and€then€concluded€that€theÏcorrected€report€accurately€reflected€the€companyððs€books€and€records€and€theÏCommissionððs€previously€ordered€rate„making€adjustments€and€that€it€compliedÏwith€the€generally€accepted€accounting€principles€as€adopted€in€Part€32€of€theÏUniform€System€of€Accounts.€€As€a€result€of€its€corrections,€the€staff€concludedÏthat€BellSouthððs€corrected€rate€of€return€for€the€twelve€months€ending€on€MarchÏ31,€1995€was€10.30%.Ô_Ô× ƒb ××  ×Ô_ÔÌÌà àThe€staff€again€recommended€making€ð ðadjustmentsðð€to€the€results€inÏBellSouthððs€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€It€recommended€fifteen€ð ðout„of„periodððÏadjustments€to€remove€items€recorded€on€BellSouthððs€books€during€the€twelveÏmonths€ending€on€March€31,€1995€that€applied€to€months€prior€to€April€1994€andÏfor€items€recorded€outside€the€audit€period€that€applied€to€the€audit€period.€€ItÏrecommended€nine€additional€adjustments€for€abnormal€or€unusual€expenses€thatÏwere€not€expected€to€occur.€€Finally,€it€recommended€twelve€adjustments€forÍð ðknown€changesðð€reflecting€the€annualized€cost€of€rate€changes€or€volumeÏchanges€occurring€during€the€period€covered€by€the€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€As€aÏresult€of€these€adjustments,€the€Commissionððs€staff€concluded€that€BellSouthððsÏadjusted€rate€of€return€was€12.74%.€€Since€this€adjusted€rate€of€return€exceededÏBellSouthððs€currently€authorized€rate€of€return,€the€staff€again€recommended€thatÏthe€Commission€initiate€a€contested€rate„making€proceeding€to€establishÏBellSouthððs€initial€rates.ÌÌà àOn€September€20,€1995,€the€Commission€accepted€its€staffððs€September€15,Ï1995€report€and€convened€a€contested€case€proceeding€to€set€BellSouthððs€initialÏrates.€€Approximately€one€month€later,€it€also€convened€a€contested€caseÏproceeding€to€consider€BellSouthððs€petition€for€a€declaratory€order€concerningÏthe€staffððs€audit€methodology€and€directed€that€the€proceeding€be€consolidatedÏwith€the€pending€contested€rate„making€proceeding.€€The€consolidated€proceedingÏcommenced€on€November€1,€1995.€€After€denying€BellSouthððs€request€for€aÏdeclaratory€order€without€permitting€BellSouth€to€introduce€proof€substantiatingÏits€challenge€to€the€staffððs€audit€methodology€and€conclusions,Ô_Ô× ƒc ××  ×Ô_Ô€the€CommissionÏproceeded€with€the€proof€establishing€a€fair€rate€of€return€for€BellSouth.€€OnÏNovember€7,€1995,€the€Commission€determined€that€BellSouthððs€rate€of€returnÏshould€be€10.35%€and,€based€on€the€adjustments€in€its€staffððs€September€15,€1995Ïreport,€directed€BellSouth€to€reduce€its€rates€by€$56.285€million.€€ÌÌà àOn€November€20,€1995,€the€Commission€resumed€its€hearing€to€considerÏrecommendations€from€BellSouth,€the€Consumer€Advocate,€and€AT&TÏconcerning€the€most€appropriate€way€to€reduce€BellSouthððs€rates€by€$56.285Ímillion.€€On€January€23,€1996,€the€Commission€entered€an€order€formallyÏdetermining€that€BellSouthððs€rate€of€return€should€be€10.35%€and,€therefore,€thatÏBellSouth€was€earning€$56.285€million€in€excess€revenues.€€The€CommissionÏprescribed€changes€in€BellSouthððs€rate€design€to€eliminate€these€excess€revenuesÔ_Ô× ƒd ××  ×Ô_ÔÏand€determined€that€BellSouthððs€rates€would€be€affordable€for€the€purpose€ofÏTenn.€Code€Ann.€ðð€65„5„209(c)€once€these€reductions€were€in€place.€€ÌÌà àOn€February€14,€1996,€BellSouth€filed€a€Tenn.€R.€App.€P.€12€petition€toÏreview€the€Commissionððs€January€23,€1996€order.€€òòBellSouthÏTelecommunications,€Inc.€v.€Tennessee€Pub.€Serv.€Ô_ÔCommððnÔ_Ô,óó€App.€No.€01A01„9602„BC„00066.€€On€February€27,€1996,€this€court€stayed€the€CommissionððsÏJanuary€23,€1996€order€and,€in€orders€filed€on€February€27,€1996€and€March€30,Ï1996,€consolidated€this€appeal€with€two€other€related€appeals€by€BellSouth.Ô_Ô× ƒe ××  ×Ô_Ô€€OnÏApril€3,€1996,€we€clarified€our€earlier€stay€order€by€stating€that€it€applied€to€bothÏthe€rate€reductions€ordered€by€the€Commission€as€well€as€the€implementation€ofÏBellSouthððs€price€regulation€plan.€€On€this€appeal,€both€BellSouth€and€AT&T€takeÏissue€with€numerous€aspects€of€the€procedure€and€reasoning€employed€by€theÍCommission€to€dispose€of€BellSouthððs€application€for€a€price€regulation€planÏunder€Tenn.€Code€Ann.€ðð€65„5„209.ÌÌà@ àò òII.ó óÌà@ àòòò òPreemption€by€the€Telecommunications€Act€of€1996ó óóóÌÌà àAs€a€threshold€matter,€we€take€up€AT&Tððs€assertion€that€this€appeal€shouldÏbe€remanded€to€enable€the€Authority€to€determine€whether€the€federalÏTelecommunications€Act€of€1996€preempts€state€law€authorizing€BellSouth€toÏbegin€operating€under€a€price€regulation€plan.œ× ƒf ××  ×›€€AT&T€claims€that€theÏpreemption€issue€should€be€addressed€before€the€approval€of€BellSouthððs€priceÏregulation€plan€because€the€interconnection€provisions€in€state€law€differ€fromÏthose€in€the€Telecommunications€Act€of€1996€and€because€state€law€contains€noÏprovision€for€modifying€a€price€regulation€plan€once€it€has€been€approved.€€WeÏhave€determined€that€the€possibility€of€preemption€is€not€so€pressing€that€itÏrequires€a€remand€to€the€Authority€for€further€proceedings.ÌÌà@ àò òA.ó óÌÌà àOur€federal€system€of€government€recognizes€the€dual€sovereignty€of€theÏfederal€government€and€the€various€state€governments.€€òòÔ_ÔPrintzÔ_Ô€v.€United€States,óóÏ___€U.S.€___,€___,€117€S.€Ct.€2365,€2376€(1997);€òòGregory€v.€Ashcroft,óó€501€U.S.Í452,€457,€111€S.€Ct.€2395,€2399€(1991).€€The€states€possess€sovereignty€withinÏtheir€particular€spheres€concurrent€with€the€federal€Ô_ÔgovernmentÔ_Ô€subject€only€toÏthe€limitations€imposed€by€the€Supremacy€Clause,€U.S.€Const.€art.€VI,€cl.€2.€ÏòòÔ_ÔTafflinÔ_Ô€v.€Levitt,€óó493€U.S.€455,€458,€110€S.€Ct.€792,€795€(1990).€ÌÌà àThe€Supremacy€Clause€provides€Congress€with€the€power€to€preempt€stateÏlaw.Ô_Ô× ƒg ××  ×Ô_Ô€€The€courts€are,€however,€reluctant€to€presume€that€preemption€of€stateÏlaw€has€occurred.€€òòBuilding€&€Constr.€Trades€Council€v.€Associated€Builders€&ÏContractors€of€Massachusetts/Rhode€Island,€Inc.,óó€507€U.S.€218,€224,€113€S.€Ct.Ï1190,€1194€(1993);€òòExxon€Corp.€v.€Governor€of€Maryland,óó€437€U.S.€117,€132,Ï98€S.€Ct.€2207,€2217€(1978).€€Thus,€the€courts€work€from€the€assumption€that€theÏhistoric€powers€of€the€states€are€not€displaced€by€a€federal€statute€unless€that€wasÏthe€clear€and€manifest€intent€of€Congress.€€òòCalifornia€Div.€of€Labor€StandardsÏEnforcement€v.€Ô_ÔDillinghamÔ_Ô€Contr.,€N.A.,óó€___€U.S.€___,€___,€117€S.€Ct.€832,€838Ï(1997);€òòÔ_ÔBFPÔ_Ô€v.€Resolution€Trust€Corp.,óó€511€U.S.€531,€544,€114€S.€Ct.€1757,€1765Ï(1994);€òòÔ_ÔLouisianaÔ_Ô€Pub.€Serv.€Ô_ÔCommððnÔ_Ô€v.€Ô_ÔF.C.C.Ô_Ô,€óó476€U.S.€at€368,€106€S.€Ct.€atÏ1898.ÌÌà àPreemption€occurs€when€there€is€an€outright€or€actual€conflict€betweenÏfederal€and€state€law.€€òòFreightliner€Corp.€v.€Ô_ÔMyrickÔ_Ô,óó€514€U.S.€280,€287,€115€S.ÏCt.€1483,€1487€(1995);€òòÔ_ÔLouisianaÔ_Ô€Pub.€Serv.€Ô_ÔCommððnÔ_Ô€v.€Ô_ÔF.C.C.Ô_Ô,óó€476€U.S.€at€368,Ï106€S.€Ct.€at€1898.€€It€can€also€occur€by€implication€when€compliance€with€bothÏfederal€and€state€law€is€impossible€or€when€state€law€obstructs€theÏaccomplishment€of€Congressððs€objectives.€€òòBoggs€v.€Boggs,€óó___€U.S.€___,€___,Í117€S.€Ct.€1754,€1760„61€(1997);€òòÔ_ÔCSXÔ_Ô€Transp.,€Inc.€v.€Ô_ÔEasterwoodÔ_Ô,óó€507€U.S.Ï658,€663,€113€S.€Ct.€1732,€1737€(1993);€òòCalifornia€Fed.€Ô_ÔSavÔ_Ô.€&€Loan€Ô_ÔAssððnÔ_Ô€v.ÏÔ_ÔGuerraÔ_Ô,óó€479€U.S.€272,€281,€107€S.€Ct.€683,€689€(1987).€€Preemption€may€alsoÏarise€when€Congressððs€legislation€is€so€pervasive€that€it€leaves€no€room€for€stateÏlegislative€action.€€òòÔ_ÔCipolloneÔ_Ô€v.€Ô_ÔLiggettÔ_Ô€Group,€Inc.,óó€505€U.S.€504,€516,€112€S.ÏCt.€2608,€2617€(1992);€òòLouisiana€Pub.€Serv.€Ô_ÔCommððnÔ_Ô€v.€Ô_ÔF.C.C.Ô_Ô,€óó476€U.S.€at€368,Ï106€S.€Ct.€at€1898.€ÌÌà àPreemption€is€basically€a€question€of€Congressional€intent.€€òòBarnett€Bank€ofÏMarion€County,€N.A.€v.€Nelson,óó€___€U.S.€___,€___,€116€S.€Ct.€1103,€1107Ï(1996);€òòHawaiian€Airlines,€Inc.€v.€Norris,óó€512€U.S.€246,€252,€114€S.€Ct.€2239,Ï2243€(1994);€òòÔ_ÔR.J.Ô_Ô€Reynolds€Tobacco€Co.€v.€Durham€County,€óó479€U.S.€130,€140,Ï107€S.€Ct.€499,€506€(1986).€€This€intent€must€be€reflected€in€the€text€and€structureÏof€the€federal€statute.€€òòIngersoll„Rand€Co.€Ô_Ôv.€McClendonÔ_Ô,óó€498€U.S.€133,€138,€111ÏS.€Ct.€478,€482€(1990);€òòShaw€v.€Delta€Air€Lines,€Inc.,€óó463€U.S.€85,€95,€103€S.€Ct.Ï2890,€2899€(1983).€€The€best€evidence€of€preemptive€intent€is€an€expressÏpreemption€clause.€€òòÔ_ÔCSXÔ_Ô€Transp.,€Inc.€v.€Ô_ÔEasterwoodÔ_Ô,óó€507€U.S.€at€664,€113€S.€Ct.Ïat€1737.€€However,€in€the€absence€of€explicit€preemption€language,€the€courtsÏmust€also€examine€the€structure€and€purpose€of€the€federal€statute€for€implicitÏÔ_ÔpreemptoryÔ_Ô€intent.€€òòDe€Ô_ÔBuonoÔ_Ô€v.€Ô_ÔNYSAÔ_Ô„ILA€Medical€&€Clinical€Servs.€Fund,óóÏ___€U.S.€___,€___,€117€S.€Ct.€1747,€1751€(1997);€òòBarnett€Bank€of€MarionÏCounty,€N.A.€v.€Nelson,óó€___€U.S.€at€___,€116€S.€Ct.€at€1108;€òòÔ_ÔFMCÔ_Ô€Corp.€v.ÏÔ_ÔHollidayÔ_Ô,óó€498€U.S.€52,€56„57,€111€S.€Ct.€403,€407€(1990).ÌÌà àThe€courts€begin€their€inquiry€with€the€presumption€that€Congress€did€notÏintend€to€preempt€state€law.€€òòBuilding€&€Constr.€Trades€Council€v.€AssociatedÏBuilders€&€Contractors€of€Massachusetts/Rhode€Island,€Inc.,€óó507€U.S.€at€224,€113ÏS.€Ct.€at€1194.€€The€proper€approach€is€to€reconcile€the€federal€and€state€laws,ÍòòMerrill€Lynch,€Pierce,€Ô_ÔFennerÔ_Ô€&€Smith,€Inc.€v.€Ware,óó€414€U.S.€117,€127,€94€S.ÏCt.€383,€389„90€(1973),€rather€than€to€seek€out€conflict€where€none€clearly€exists.€ÏòòExxon€Corp.€v.€Governor€of€Maryland,óó€437€U.S.€at€130,€98€S.€Ct.€at€2216.€€StateÏlaw€should€be€displaced€by€federal€law€only€to€the€extent€there€is€a€conflict.€ÏòòDalton€v.€Little€Rock€Family€Planning€Ô_ÔServsÔ_Ô.,óó€___€U.S.€___,€___,€116€S.€Ct.Ï1063,€1064€(1996).ÌÌà@ àò òB.ó óÌÌà àAT&T€asserts€that€the€case€should€be€remanded€to€the€Authority€toÏconsider€whether€the€Telecommunications€Act€of€1996€preempts€state€law€becauseÏthe€federal€Actððs€interconnection€provisions€differ€from€their€state€lawÏcounterparts.€€However,€the€mere€existence€of€a€federal€regulatory€program€doesÏnot€imply€preemption€of€similar€state€laws.€€òòEnglish€v.€General€Electric€Co.,óó€496ÏU.S.€72,€87,€110€S.€Ct.€2270,€2279€(1990).€€Thus,€AT&T€must€demonstrateÏsomething€more€if€its€preemption€argument€is€to€succeed.ÌÌà àThe€goals€of€the€federal€Telecommunications€Act€of€1996€and€TennesseeððsÏ1995€telecommunications€legislation€are€similar.Ô_Ô× ƒh ××  ×Ô_Ô€€Neither€the€federal€Act€norÏthe€regulations€promulgated€by€the€Federal€Communications€CommissionÏpursuant€to€the€Act€contain€explicit€preemption€provisions.€€In€fact,€the€ActÏspecifically€states€that€ð ð[Ô_Ôt]hisÔ_Ô€Act€and€the€amendments€made€by€this€Act€shall€notÍbe€construed€to€modify,€impair,€or€supersede€Federal,€State,€or€local€law€unlessÏexpressly€provided€in€such€Act€or€amendments.ðð€€Telecommunications€Act€ofÏ1996,€ðð€601(c)(1),€47€U.S.C.A.€ðð€152€note€(West€Supp.€1997).€€CongressÏincluded€this€provision€to€prevent€ð ðaffected€parties€from€asserting€that€the€billÏimpliedly€pre„Ô_ÔemptsÔ_Ô€other€laws.ðð€€House€Conference€Report€No.€104„458,€104thÏCong.,€2d€Sess.,€201,€òòreprinted€inóó€1996€Ô_ÔU.S.C.C.A.N.Ô_Ô€124,€215.€€With€specificÏreference€to€the€interconnection€issue,€the€Act€also€states€that€it€should€not€beÏconstrued€to€prohibit€state€commissions€from€enforcing€or€promulgatingÏregulations€or€from€imposing€additional€requirements€that€ð ðare€necessary€toÏfurther€competition€in€the€provision€of€telephone€exchange€service€or€exchangeÏaccessðð€as€long€as€they€are€ð ðnot€inconsistentðð€with€the€Act.€€òòSeeóó€47€U.S.C.A.€ððÏ261(b),€(c)€€(West€Supp.€1997).× ƒi ××  ×ÌÌà àThe€Telecommunications€Act€of€1996€contains€no€explicit€preemptionÏlanguage€and€does€not€contain€provisions€that€are€in€outright€or€actual€conflictÏwith€state€law.€€Accordingly,€AT&Tððs€preemption€argument€can€succeed€only€if€itÏcan€demonstrate€that€Congressððs€regulatory€statutes€have€completely€occupied€theÏfield,€that€it€is€impossible€to€comply€with€the€requirements€of€both€the€federal€andÏstate€law,€or€that€the€state€law€somehow€obstructs€the€accomplishment€of€theÏobjectives€of€the€Telecommunications€Act€of€1996.€€AT&T€has€failed€on€allÏcounts.€€Nothing€in€the€text€or€structure€of€the€Act€supports€its€unfocusedÏpreemption€claims.ÌÌà àCongress€plainly€did€not€desire€to€displace€local€telecommunicationsÏregulation€when€it€enacted€the€Telecommunications€Act€of€1996.€€The€Act€itselfÏmakes€it€clear€that€state€commissions€play€a€pivotal€role€in€implementingÏtelecommunications€policy.€€They€provide€a€forum€for€resolving€disputes€betweenÏexisting€local€telephone€companies€and€their€competitors€seeking€access€to€anÏexisting€telephone€network.€€òòSeeóó€47€U.S.C.A.€ðð€252.€€By€the€same€token,€the€textÏof€the€Act€and€Tennesseeððs€telecommunications€statutes€do€not€suggest€thatÏtelephone€companies€will€be€unable€to€comply€with€the€requirements€of€both€orÏthat€compliance€with€the€state€statutes€will€somehow€obstruct€the€objectives€of€theÏTelecommunications€Act€of€1996.ÌÌà àAT&T€has€already€invoked€the€remedies€before€the€Authority€madeÏavailable€by€47€U.S.C.A.€ðð€252.€€In€March€1996,€it€initiated€interconnectionÏnegotiations€with€BellSouth.€€One€month€later,€it€requested€BellSouth€to€provideÏinformation€concerning€BellSouthððs€costs€for€providing€certainÏtelecommunications€services.€€After€BellSouth€declined€to€provide€theÏinformation€on€the€ground€that€it€was€not€relevant€to€the€interconnectionÏnegotiations,€AT&T€filed€a€petition€in€May€1996€requesting€the€Authority€toÏresolve€the€dispute€over€the€issue€of€access€to€the€requested€information.€€As€farÏas€this€record€shows,€this€proceeding€remains€before€the€Authority.€€This€type€ofÏproceeding,€and€others€like€it,€provide€the€parties€with€an€appropriate€forum€toÏair€out€and€resolve€more€clearly€defined€issues€concerning€the€possibleÏpreemptive€effect€of€specific€provisions€of€the€Telecommunications€Act€of€1996Ïor€of€the€Federal€Communications€Commissionððs€regulations.ÌÌà@ àò òIII.ó óÌà@ àòòò òPrice€Regulation€Plans€Under€Tenn.€Code€Ann.€ðð€65„5„209ó óóóÌÌà àThe€determinative€issues€on€this€appeal€involve€the€Commissionððs€processÏfor€considering€BellSouthððs€application€for€a€price€regulation€plan.€€BellSouthÏessentially€asserts€that€the€Commission€and€its€staff€exceeded€the€plain€mandate€ofÏTenn.€Code€Ann.€ðð€65„5„209.€€For€its€part,€AT&T€argues€that€the€CommissionÏdid€not€go€far€enough€in€fashioning€the€details€of€BellSouthððs€price€regulationÏplan.€€The€resolution€of€these€issues€requires€us€to€construe€Tenn.€Code€Ann.€ððÏ65„5„209€and€other€related€statutes€enacted€by€the€General€Assembly€in€1995€toÏfoster€the€development€of€an€efficient,€technologically€advanced,€statewide€systemÏof€telecommunications€in€Tennessee.ÌÌà@ àò òA.ó óÌÌà àThe€search€for€the€meaning€of€statutory€language€is€a€judicial€function.€ÏòòRoseman€v.€Roseman,óó€890€S.W.2d€27,€29€(Tenn.€1994);€òòState€ex€rel.€Ô_ÔWeldonÔ_Ô€v.ÏÔ_ÔThomasonÔ_Ôóó,€142€Tenn.€527,€540,€221€Ô_ÔS.W.Ô_Ô€491,€495€(1920).€€Courts€mustÏascertain€and€give€the€fullest€possible€effect€to€the€statute€without€undulyÏrestricting€it€or€expanding€it€beyond€its€intended€scope.€€òòPerry€v.€Sentry€Ins.€Co.,óóÏ938€S.W.2d€404,€406€(Tenn.€1996);€òòÔ_ÔKulturaÔ_Ô,€Inc.€v.€Southern€Leasing€Corp.,óó€923ÏS.W.2d€536,€539€(Tenn.€1996).€€At€the€same€time,€courts€must€avoid€inquiringÏinto€the€reasonableness€of€the€statute€or€substituting€their€own€policy€judgmentsÏfor€those€of€the€legislature.€€òòState€v.€Grosvenor,óó€149€Tenn.€158,€167,€258€Ô_ÔS.W.Ô_ÔÏ140,€142€(1924);€òòState€v.€Henley,óó€98€Tenn.€665,€679„81,€41€Ô_ÔS.W.Ô_Ô€352,€354„55Ï(1897);€òòÔ_ÔHamblenÔ_Ô€County€Educ.€Ô_ÔAssððnÔ_Ô€v.€Ô_ÔHamblenÔ_Ô€County€Bd.€of€Educ.,óó€892ÏS.W.2d€428,€432€(Tenn.€Ct.€App.€1994).ÌÌà àWhen€approaching€statutory€text,€courts€must€also€presume€that€theÏlegislature€says€in€a€statute€what€it€means€and€means€in€a€statute€what€it€says€there.€ÏòòConnecticut€Ô_ÔNatððlÔ_Ô€Bank€v.€Germain,óó€503€U.S.€249,€253„54,€112€S.€Ct.€1146,€1149Í(1992);€òòÔ_ÔWorleyÔ_Ô€v.€Ô_ÔWeigelÔ_Ôððs,€Inc.,€óó919€S.W.2d€589,€593€(Tenn.€1996).€ÏAccordingly,€we€must€construe€statutes€as€they€are€written,€òòJackson€v.€Jackson,Ïóó186€Tenn.€337,€342,€210€S.W.2d€332,€334€(1948),€and€our€search€for€theÏmeaning€of€statutory€language€must€always€begin€with€the€statute€itself.€€òòÔ_ÔNeffÔ_Ô€v.ÏCherokee€Ins.€Co.,€óó704€S.W.2d€1,€3€(Tenn.€1986);€òòÔ_ÔPlessÔ_Ô€v.€Franks,óó€202€Tenn.Ï630,€635,€308€S.W.2d€402,€404€(1957);€òòCity€of€Nashville€v.€Ô_ÔKizerÔ_Ô,óó€194€Tenn.Ï357,€364,€250€S.W.2d€562,€564„65€(1952).ÌÌà àStatutory€terms€draw€their€meaning€from€the€context€of€the€entire€statute,ÏòòLyons€v.€Ô_ÔRasarÔ_Ô,óó€872€S.W.2d€895,€897€(Tenn.€1994);€òòKnox€County€ex€rel.€Ô_ÔKesselÔ_ÔÏv.€Ô_ÔLenoirÔ_Ô€City,óó€837€S.W.2d€382,€387€(Tenn.€1992),€and€from€the€statuteððs€generalÏpurpose.€€òòCity€of€Ô_ÔLenoirÔ_Ô€City€v.€State€ex€rel.€City€of€Ô_ÔLoudonÔ_Ô,óó€571€S.W.2d€297,Ï299€(Tenn.€1978);€òòÔ_ÔLoftinÔ_Ô€v.€Ô_ÔLangsdonÔ_Ô,óó€813€S.W.2d€475,€478€(Tenn.€Ct.€App.Ï1991).€€We€give€these€words€their€natural€and€ordinary€meaning,€òòState€ex€rel.ÏMetropolitan€Ô_ÔGovððtÔ_Ô€v.€Ô_ÔSpicewoodÔ_Ô€Creek€Watershed€Dist.,óó€848€S.W.2d€60,€62Ï(Tenn.€1993),€unless€the€legislature€used€them€in€a€specialized,€technical€sense.€ÏòòCordis€Corp.€v.€Taylor,óó€762€S.W.2d€138,€139„40€(Tenn.€1988).ÌÌà àThe€legislative€process€does€not€always€produce€precisely€drawn€laws.€ÏWhen€the€words€of€a€statute€are€ambiguous€or€when€it€is€just€not€clear€what€theÏlegislature€had€in€mind,€courts€may€look€beyond€a€statuteððs€text€for€reliableÏguides€to€the€statuteððs€meaning.€€We€consider€the€statuteððs€historical€background,Ïthe€conditions€giving€rise€to€the€statute,€and€the€circumstances€contemporaneousÏwith€the€statuteððs€enactment.€€òòStill€v.€First€Tenn.€Bank,€N.A.,óó€900€S.W.2d€282,Ï284€(Tenn.€1995);€òòÔ_ÔMascariÔ_Ô€v.€Ô_ÔRainesÔ_Ô,óó€220€Tenn.€234,€239,€415€S.W.2d€874,€876Ï(1967);€òòDavis€v.€Aluminum€Co.€of€Am.,óó€204€Tenn.€135,€143,€316€S.W.2d€24,€27Ï(1958).€€We€also€resort€to€legislative€history.€€òòStorey€v.€Bradford€Furniture€Co.Ï(In€re€Storey),óó€910€S.W.2d€857,€859€(Tenn.€1995);€òòUniversity€Computing€Co.€v.ÍOlsen,óó€677€S.W.2d€445,€447€(Tenn.€1984);€òòChapman€v.€Sullivan€County,óó€608ÏS.W.2d€580,€582€(Tenn.€1980).× ƒj ××  ×ÌÌà àCourts€consult€legislative€history€not€to€delve€into€the€personal,€subjectiveÏmotives€of€individual€legislators,€but€rather€to€ascertain€the€meaning€of€the€wordsÏin€the€statute.€€The€subjective€beliefs€of€legislators€can€never€substitute€for€whatÏwas,€in€fact,€enacted.€€There€is€a€distinction€between€what€the€legislature€intendedÏto€say€in€the€law€€and€what€various€legislators,€as€individuals,€expected€or€hopedÏthe€consequences€of€the€law€would€be.€€The€answer€to€the€former€question€is€whatÏcourts€pursue€when€they€consult€legislative€history;€the€latter€question€is€notÏwithin€the€courtsðð€domain.ÌÌà àRelying€on€legislative€history€is€a€step€to€be€taken€cautiously.€€òòPiper€v.ÏChris„Craft€Indus.,€Inc.,óó€430€U.S.€1,€26,€97€S.€Ct.€926,€941€(1977);€òòNorth€&ÏSouth€Rivers€Watershed€Ô_ÔAssððnÔ_Ô,€Inc.€v.€Town€of€Ô_ÔScituateÔ_Ô,óó€949€F.2d€552,€556€n.6Ï(1st€Cir.€1991).€€Legislative€records€are€not€always€distinguished€for€their€candorÏand€Ô_ÔaccuracyÔ_Ô,€òòÔ_ÔSchwegmannÔ_Ô€Bros.€v.€Ô_ÔCalvertÔ_Ô€Distillers€Corp.,óó€341€U.S.€384,€396,Ï71€S.€Ct.€745,€751€(1951)€(Jackson,€J.,€concurring),€and€the€more€that€courts€haveÏcome€to€rely€on€legislative€history,€the€less€reliable€it€has€become.€€Rather€thanÏreflecting€the€issues€actually€debated€by€the€legislature,€legislative€historyÏfrequently€consists€of€self„serving€statements€favorable€to€particular€interestÏgroups€prepared€and€included€in€the€legislative€record€solely€to€influence€theÏcourtsðð€interpretation€of€the€statute.€€òòNational€Small€Shipments€Traffic€Conf.,€Inc.Ïv.€Civil€Aeronautics€Bd.,€óó618€F.2d€819,€828€(D.C.€Cir.€1980);€òòÔ_ÔAntoninÔ_Ô€Scalia,ÏA€Matter€of€Interpretation:€Federal€Courts€and€the€Lawóó€34€(1997);€W.ÏDavid€Ô_ÔSlawsonÔ_Ô,€òòLegislative€History€and€the€Need€to€Bring€StatutoryÍInterpretation€Under€the€Rule€of€Law,óó€44€Stan.€L.€Rev.€383,€397„98€(1992);ÏKenneth€W.€Starr,€òòObservations€About€the€Use€of€Legislative€History,€óó1987€DukeÏL.€J.€371,€377;€Note,€òòWhy€Learned€Hand€Would€Never€Consult€LegislativeÏHistory€Today,€óó105€Ô_ÔHarvÔ_Ô.€L.€Rev.€1005,€1018„19€(1992).̛̜Ìà àEven€the€statements€of€sponsors€during€legislative€debate€should€beÏevaluated€cautiously.€€2A€Norman€J.€Singer,€òòStatutes€and€Statutory€Constructionóó€ððÏ48:15€(rev.€5th€ed.€1992).€€These€comments€cannot€alter€the€plain€meaning€of€aÏstatute.,€òòD.€Ô_ÔCanaleÔ_Ô€&€Co.€v.€Ô_ÔCelauroÔ_Ô,€óó765€S.W.2d€736,€738€(Tenn.€1989);€òòElliottÏCrane€Serv.,€Inc.€v.€H.G.€Hill€Stores,€Inc.,óó€840€S.W.2d€376,€379€(Tenn.€Ct.€App.Ï1992),€because€to€do€so€would€be€to€open€the€door€to€the€inadvertent,€or€perhapsÏplanned,€undermining€of€statutory€language.€€òòRegan€v.€Wald,óó€468€U.S.€222,€237,Ï104€S.€Ct.€3026,€3035€(1984).€€Courts€have€no€authority€to€adopt€interpretationsÏof€statutes€gleaned€solely€from€legislative€history€that€have€no€statutory€referenceÏpoints.€€òòShannon€v.€United€States,óó€512€U.S.€573,€583,€114€S.€Ct.€2419,€2426Ï(1994).€€Accordingly,€when€a€statuteððs€text€and€legislative€history€disagree,€theÏtext€controls.€€òòÔ_ÔStrombergÔ_Ô€Metal€Works,€Inc.€v.€Press€Mechanical,€óó77€F.3d€928,Ï931€(7th€Cir.€1996).ÌÌà@ àò òBó ó.€Ìà@ àòòò òThe€Scope€of€a€Tenn.€Code€Ann.€ðð€65„5„209€Auditó óóóÌÌà àThe€pivotal€dispute€between€BellSouth€and€the€Commission€involves€theÏscope€and€purpose€of€the€audit€required€by€Tenn.€Code€Ann.€ðð€65„5„209.€ÏBellSouth,€citing€the€statute,€asserts€that€the€auditððs€sole€purpose€is€to€verify€theÏaccuracy€of€its€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€The€Commission,€citing€aÏportion€of€the€statuteððs€legislative€history,€responds€that€the€audit€is€more€akin€toÍa€traditional€earnings€investigation€and€that€its€audit€power€under€Tenn.€CodeÏAnn.€ðð€65„5„209€includes€the€power€to€reduce€a€companyððs€rate€of€return€and€toÏorder€the€company€to€reduce€its€rates.€€We€turn€first€to€the€statute€itself€for€anÏanswer€to€this€dispute.ÌÌà@ àò ò1.ó óÌÌà àThe€1995€telecommunications€reform€legislation€requires€the€CommissionÏto€set€the€initial€rates€of€any€incumbent€local€telephone€company€that€applies€for€aÏprice€regulation€plan.€€Tenn.€Code€Ann.€ðð€65„5„209(c)€requires€that€these€initialÏrates€must€be€the€same€as€the€applicantððs€existing€rates€if€the€rate€of€return€on€theÏcompanyððs€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report€is€equal€to€or€less€than€theÏcompanyððs€currently€authorized€rate€of€return.€€The€comparison€of€the€companyððsÏexisting€rate€of€return€with€its€currently€authorized€rate€of€return€must€beÏpreceded€by€a€staff€audit€of€the€companyððs€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€reportÏconducted€in€accordance€with€Tenn.€Code€Ann.€ðð€65„5„209(j).ÌÌà àTenn.€Code€Ann.€ðð€65„5„209(j)€states€that€the€purpose€of€the€audit€is€ð ðtoÏassure€that€the€Tennessee€Regulatory€Authority€3.01€report€accurately€reflects€.€.Ï.€the€incumbent€local€exchange€telephone€companyððs€achieved€results.ðð€€The€auditÏmust€verify€that€the€company€reported€its€achieved€results€ð ðin€accordance€withÏgenerally€accepted€accounting€principles€as€adopted€in€Part€32€of€the€UniformÏSystem€of€Accounts.ðð€€It€must€also€verify€that€the€companyððs€reported€achievedÏresults€reflect€ð ðthe€Ô_ÔratemakingÔ_Ô€€adjustments€to€operating€revenues,€expenses€andÏrate€base€used€in€the€authorityððs€most€recent€order€applicable€to€the€incumbentÏlocal€exchange€telephone€company.ðð€€ÌÌà àSince€Tenn.€Code€Ann.€ðð€65„5„209(a)€directs€the€Commission€to€set€anÏincumbent€local€telephone€companyððs€initial€rates€ð ð[Ô_Ôu]singÔ_Ô€the€proceduresÏestablished€in€this€section,ðð€the€statute€is€the€sole€source€of€the€CommissionððsÏauthority€to€adopt€a€price€regulation€plan.€€It€envisions€an€expeditious,× ƒk ××  ×€three„phase€proceeding.€€The€purpose€of€the€first€phase€is€to€verify€the€accuracy€of€theÏinformation€contained€in€the€companyððs€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€òòSeeóóÏTenn.€Code€Ann.€ðð€65„5„209(j).€€The€purpose€of€the€second€phase€is€to€compareÏthe€companyððs€reported€rate€of€return€with€its€currently€authorized€rate€ofÏreturn.€€òòSeeóó€Tenn.€Code€Ann.€ðð€65„5„209(c).€€No€further€proceedings€areÏrequired€if€the€companyððs€rate€of€return€based€on€its€audited€achieved€results€inÏits€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€report€is€equal€to€or€less€than€its€currentlyÏauthorized€rate€of€return.€€òòSee€óóTenn.€Code€Ann.€ðð€65„5„209(c).€€However,€a€thirdÏphase€is€required€if€the€companyððs€rate€of€return€exceeds€its€currently€authorizedÏrate€of€return.€€The€purpose€of€the€third€phase€is€to€set€the€companyððs€initial€ratesÏin€a€traditional,€rate„setting€proceeding.ÌÌà àTenn.€Code€Ann.€ðð€65„5„209€contains€no€specific€language€suggesting€thatÏthe€first€or€second€phases€of€the€proceeding€have€any€of€the€attributes€of€aÏtraditional€rate„setting€proceeding.€€The€audit€is€conducted€by€the€CommissionððsÏstaff,€and€the€staff€has€no€specific€statutory€authority€to€make€or€recommendÏreductions€in€a€companyððs€rate€of€return.€€The€term€ð ðauditðð€does€not€appear€inÏany€other€statute€or€rule€in€conjunction€with€the€Commissionððs€rate„settingÏauthority.× ƒl ××  ×ÌÌà àThe€textual€analysis€of€Tenn.€Code€Ann.€ðð€65„5„209€suggests€that€neitherÏthe€Commission€nor€its€staff€has€the€power€to€adjust€any€of€the€figures€containedÏin€the€applicantððs€Form€PSC„3.01€report€as€long€as€these€reports€are€correct,Ïbased€on€required€auditing€principles,€and€consistent€with€the€CommissionððsÏpreviously€ordered€rate„making€adjustments.€€The€Commission,€however,€arguesÏthat€the€term€ð ðauditðð€can€mean€more€than€simply€a€ð ðmethodical€examination€ofÏrecords€with€intent€to€verify€their€accuracy.ðð€€òòSeeóó€òòNational€Health€Corp.€v.ÏÔ_ÔSnodgrassÔ_Ô,óó€555€S.W.2d€403,€405€(Tenn.€1977).€€It€asserts€that€an€audit€underÏTenn.€Code€Ann.€ðð€65„5„209€includes€investigating,€deciding€whether€reportedÏachieved€results€are€accurate,€and€determining€the€weight€to€be€given€theseÏreported€results.€€Citing€a€staff€memorandum€€that€was€read€into€the€legislativeÏrecord,€the€Commission€insists€that€its€Tenn.€Code€Ann.€ðð€65„5„209€authority€toÏaudit€includes€the€authority€to€determine€whether€the€amounts€reported€on€theÏForm€Ô_ÔPSCÔ_Ô„3.01€ð ðdo€not€include€unusual€or€abnormal€financial€occurrences,ððÍincluding€ð ðknown€charges.ðð× ƒm ××  ×̛̜Ìà àTenn.€Code€Ann.€ðð€65„5„209€does€not€specifically€authorize€adjustmentsÏfor€ð ðunusual€or€abnormal€financial€occurrences.ðð€€Nonetheless,€because€theÏGeneral€Assembly€may€have€meant€something€different€when€it€used€the€termÏð ðaudit,ðð€we€have€reviewed€the€legislative€history€of€Tenn.€Code€Ann.€ðð€65„5„209Ïto€determine€whether€the€General€Assembly€used€the€term€ð ðauditðð€in€its€common,Ïordinary€meaning.€ÌÌÌà@ àò ò2.ó óÌÌà àThe€original€substance€of€the€telecommunications€reform€legislation€wasÏfar€different€from€the€substance€of€the€legislation€that€eventually€became€law.€ÏThe€original€legislation€contained€no€procedure€for€re„examining€an€incumbentÏlocal€telephone€companyððs€rates.€€Instead,€it€simply€provided€that€the€companyððsÏð ðrates,€terms€and€conditions€for€the€services€provided€on€February€1,€1995"€wereÏjust€and€reasonable€and€that€these€rates€would€be€the€companyððs€initial€rates.× ƒn ××  ×€ÏThis€provision€encountered€immediate€opposition€from€the€Consumer€AdvocateÏand€other€consumer€groups€because€they€believed€that€it€would€enable€BellSouthÏto€earn€between€$350€and€$800€million€in€excess€revenues.€€€ÌÌà àThe€concern€about€excess€revenues€was€the€focus€of€the€debate€on€April€11,Ï1995,€when€the€Senate€State€and€Local€Government€Committee€considered€the€billÏand€a€proposed€amendment€containing€what€would€later€become€Tenn.€Code€Ann.Ïðð€65„5„209.€€Several€committee€members€expressed€concern€about€usingÏBellSouthððs€existing€rates€because€the€Commission€had€not€reviewed€theÏcompanyððs€rate€of€return€since€1992.€€The€Consumer€Advocate€pointed€out€thatÏthe€proposed€amendment€substituted€an€ð ðaudit€of€.€.€.€[the€Form€Ô_ÔPSCÔ_Ô„3.01€report]Ï.€.€.€for€an€earnings€review.ðð€€Ô_ÔWhitfieldÔ_Ô€Ô_ÔBurchamÔ_Ô,€the€former€director€of€theÏCommissionððs€Utility€Rate€Division€who€appeared€on€behalf€of€the€AmericanÏAssociation€of€Retired€Persons,€echoed€the€Consumer€Advocateððs€concern€aboutÏthe€efficacy€of€an€audit€of€the€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€He€stated€that€ð ðwe€believeÏthat€if€you€have€an€evidentiary€hearing,€thereððs€a€high€probability€that€theÏevidence€will€show€that€the€telephone€companyððs€prices€need€to€be€adjusted.ðð€ÏThese€statements€prompted€Senator€Cohen,€the€chair€of€the€committee,€andÏSenator€Gilbert€to€suggest€that€there€should€be€a€full€rate€review€beforeÏBellSouthððs€initial€rates€should€be€set.€€A€BellSouth€representative€responded€toÍthis€suggestion€by€stating€that€ð ð[Ô_Ôw]eÔ_Ô€donððt€feel€that€a€rate€hearing€is€necessaryÏbecause€we€are€earning€within€the€authorized€range.ððÌÌà àThe€Senate€State€and€Local€Government€Committee€convened€on€April€18,Ï1995€to€continue€its€consideration€of€the€bill.€€The€hearing€again€focused€on€theÏadvisability€of€conducting€a€ð ðfull„blown€rate€hearingðð€before€approvingÏBellSouthððs€initial€rates.€€The€Commissionððs€General€Utility€Counsel€described€anÏaudit€of€the€Form€Ô_ÔPSCÔ_Ô„3.01€report€as€follows:ÌÓÓà8 àà8 àin€order€to€audit€the€3.01€statement€.€.€.€itððs€not€just€aÏmatter€of€adding€up€math€on€a€single€sheet€of€paper.€€ItððsÏknowing€that€they€[the€company]€have€accuratelyÏreported€those€figures€to€us.€€So€that€we€will€send€ourÏauditors€on€site,€theyððll€look€at€all€the€items€as€reportedÏon€the€companyððs€books€and€correlate€that€with€theÏstatement.€€And€thatððs€what€we€mean€by€a€full€audit€.€.€.ÏWhen€the€staff€concludes€their€audit,€and€they€may€findÏsome€discrepancies€or€some€items€that€need€to€beÏcorrected,€thatððll€be€re„presented€to€the€Commission€forÏapproval€in€a€contested€case€format€.€.€.ÌÌÓ€ÓThe€current€Director€of€the€Utility€Rate€Division€also€informed€the€CommitteeÏthat€Ô_ÔtheÔ_Ô€Commissionððs€staff€had€already€commenced€an€audit€of€BellSouth€and€thatÏthey€intended€to€proceed€with€the€audit€no€matter€which€telecommunications€billÏpassed.€€He€explained€that€an€audit€of€a€Form€Ô_ÔPSCÔ_Ô„3.01€report€was€an€ð ðhistoricalÏauditðð€of€the€companyððs€earnings€for€the€preceding€twelve€months€and€that€theÏstaff€planned€to€complete€its€work€in€September€1995.€€ÌÌà àCommissioner€Steve€Hewlett€also€pointed€out€to€the€Committee€thatÏð ðlooking€at€the€backup€on€a€3.01€is€significantly€different€than€a€full€blownÏaudit.ðð€€Mr.€Ô_ÔBurchamÔ_Ô€repeated€that€the€Form€Ô_ÔPSCÔ_Ô„3.01€report,€which€heÏdesigned,€ð ðwouldnððt€give€you€a€representative€picture€of€the€future.ðð€€In€addition,Ïhe€pointed€out€that€he€had€objected€to€similar€language€in€the€CommissionððsÍproposed€rule€and€that€he€had€attempted€ð ðto€€get€the€Commission€to€change€thatÏlanguage,€and€we€were€unsuccessful€in€doing€œthat;›€and€we€think€this€language€hereÏis€so€restrictive€that,€really,€youððre€not€going€to€get€an€earnings€investigation.ðð€ÏThe€Consumer€Advocate€agreed€with€Mr.€Ô_ÔBurchamÔ_Ô.€€He€pointed€out€again€thatÏthe€Ô_ÔForm€PSCÔ_Ô€3.01€report€ð ðdoesnððt€accurately€state€what€prices€should€be€in€theÏfutureðð€and€that€ð ðthe€rate€review€only€goes€forward€if€you€meet€certain€tests,€andÏthe€test€is€whether€or€not€the€Ô_ÔPSCÔ_Ô€3.01€is€within€the€range.€€If€itððs€within€theÏrange,€the€different€ranges,€then€thereððs€no€earnings€review.ðð€€€€ÌÌà àWhen€the€Senate€State€and€Local€Government€Committee€considered€theÏbill€again€on€April€25,€1995,€Chairman€Cohen€offered€an€amendment€requiringÏthe€continuation€of€rate€hearings€for€basic€telephone€services€through€1996.€ÏSenator€Rochelle,€the€billððs€sponsor,€opposed€this€amendment€on€the€ground€thatÏð ðrate€of€return€regulation€.€.€.€encourages€everybody€to€be€fat;€it€encouragesÏmonopolistic€practices;€it€encourages€lack€of€innovation.ðð€€After€tablingÏChairman€Cohenððs€amendment,€the€Committee€approved€the€bill€as€amended€forÏpassage€by€a€6€to€3€vote.ÌÌà àThe€debate€over€the€need€for€a€full„blown€rate€hearing€before€permittingÏincumbent€local€telephone€companies€to€operate€under€a€price€regulation€planÏcontinued€on€the€Senate€floor€on€May€11,€1995€when€the€bill€came€up€for€thirdÏand€final€reading.€€Senator€Rochelle€offered€an€amendment€to€the€bill€containingÏwhat€would€later€become€Tenn.€Code€Ann.€ðð€65„5„209(j)× ƒo ××  ×€and€explained€thatÏð ð[Ô_Ôt]hereÔ_Ô€was€a€concern€that€they€[the€incumbent€local€telephone€companies]€couldÏcook€the€books,€and€what€this€does€is€expressly€state€that€the€Commission€shallÏconduct€an€audit€of€the€audit€to€verify€that€the€figures€are€correct.ðð€€After€theÍSenate€tabled€Senator€Cohenððs€motion€to€invite€Mr.€Ô_ÔBurchamÔ_Ô€to€address€themÏconcerning€Senator€Rochelleððs€amendment,€Senator€Rochelle€reiterated€that€theÏpurpose€of€his€amendment€was€to€ð ð[set]€out€very€exactly€that€the€Public€ServiceÏCommission€has€the€.€.€.€power€to€do€a€full€blown€audit€of€that€audit€[the€€FormÏÔ_ÔPSCÔ_Ô„3.01€report]€to€make€sure€theyððve€been€given€correct€figures.ðð€€He€alsoÏstated€categorically€that€this€amendment€ð ðdoesnððt€address€rate€setting.€€ThisÏaddresses€auditing€of€an€audit.ððÌÌà àUpon€hearing€Senator€Rochelleððs€explanation€of€his€proposed€amendment,Ïother€senators,€including€Senators€Cohen,€Cooper,€and€Gilbert€pointed€out€thatÏthe€amendment€would€permit€the€Commission€to€make€sure€that€the€numbers€areÏcorrect€but€not€to€go€behind€the€numbers.€€These€senators€asserted€that€theÏCommission€should€conduct€a€traditional€earnings€investigation€before€approvingÏan€incumbent€local€telephone€companyððs€initial€rates.€€Senator€Rochelle€opposedÏthese€suggestions€on€the€ground€that€the€rate€hearings€demanded€by€these€senatorsÏwould€be€a€ð ðthree„year€ordeal.ðð€€The€Senate€finally€adopted€Senator€RochelleððsÏamendment€on€a€voice€vote.× ƒp ××  ×ÌÌà àThe€adoption€of€Senator€Rochelleððs€amendment€did€not€end€the€matter.€ÏThe€Senate€considered€and€defeated€three€other€amendments€that€would€haveÏreplaced€the€audit€of€the€Form€Ô_ÔPSCÔ_Ô„3.01€report€with€a€more€traditional€rateÏproceeding.€€One€amendment€would€have€authorized€the€Commission€to€conduct€aÏcontested€case€proceeding€ð ðto€determine€the€justness€and€reasonableness€of€theÏexisting€ratesðð€and€to€ð ðmake€appropriate€adjustments€to€arrive€at€just€andÍreasonable€rates.ðð× ƒq ××  ×€€Another€amendment€was€to€the€same€effect.× ƒr ××  ×€€The€thirdÏamendment€would€have€required€the€Commission€to€ð ðmake€public€the€anticipatedÏrevenues€and€profits€each€provider€will€make€under€such€plan.ðð× ƒs ××  ×ÌÌà àSenator€Rochelle€opposed€each€of€these€amendments€on€the€ground€thatÏthey€were€motivated€by€the€ð ðgreedðð€of€BellSouthððs€competitors€who€desired€toÏdelay€the€companyððs€ability€to€compete€in€a€less€regulated€market.€€He€disagreedÏwith€Senator€Gilbertððs€observation€that€it€would€make€ð ðbetter€sense€to€have€a€fullÏevidentiary€hearing€before€we€turn€those€market€forces€loose.ðð€€When€asked€byÏSenator€Gilbert€to€point€out€the€language€in€his€amendment€that€permitted€theÏCommission€to€adjust€the€rate€ð ðif€there€is€a€problem€with€the€audit€or€that€thingsÏhave€not€been€stated€as€they€should€have€been€stated,ðð€Senator€RochelleÏresponded:ÌÓÓà8 àà8 à[Ô_ÔW]eððreÔ_Ô€using€the€existing€rules€that€have€already€beenÏadopted€by€the€Ô_ÔPSCÔ_Ô€and€that€gives€them€the€ability€to€setÏthe€rates.€€It€wouldnððt€be€in€the€bill.€€Weððre€usingÏexisting€practices,€rules,€and€statutes.ÌÌÓ€ÓIn€response€to€Senator€Rochelleððs€explanation,€Senator€Gilbert€then€pointed€out€toÏhis€colleagues€that€ÌÓÓà8 àà8 àWeððre€passing€a€statutory€scheme€that€may€beÏinterpreted€to€override€every€one€of€those€existing€rules.€ÏLet€me€tell€you€why€he€canððt€point€to€any€language€inÏsubsection€(c)€that€tells€you€that€the€Ô_ÔPSCÔ_Ô€will€change€.€.€.Ïthe€rates€if€they€find€out€through€their€audit€thatÏsomethingððs€wrong,€because€there€isnððt€any€language€inÏthat€section€that€allows€them€to€do€that.ÌÌÓ€ÓSenator€Rochelle€ended€the€colloquy€by€pointing€out€that€the€Commission€couldÏadjust€the€rates€if€it€determined€that€BellSouthððs€earnings€were€above€theÏcompanyððs€authorized€rate€of€return.€€The€Senate€thereafter€approved€theÏamended€version€of€Senate€Bill€No.€891€by€24€to€8€to€1€vote€and€sent€the€bill€toÏthe€House€of€Representatives.× ƒt ××  ×ÌÌà àThe€House€leadership€was€not€satisfied€with€the€Senateððs€version€of€the€bill.€ÏAccordingly,€when€Senate€Bill€891€came€on€for€third€and€final€reading€on€MayÏ24,€1995,€Representative€Purcell,€one€of€the€billððs€House€sponsors,€convinced€hisÏcolleagues€to€adopt€an€amendment€that€added€several€new€provisions€to€theÏSenateððs€version€of€the€bill.€€This€amendment€contained€the€restated€version€of€theÏtelecommunications€policy€that€now€appears€in€Tenn.€Code€Ann.€ðð€65„4„123,× ƒu ××  ×Ïthe€provision€requiring€the€General€Assembly€to€review€the€implementation€ofÏthe€Act€every€two€years€that€now€appears€in€Tenn.€Code€Ann.€ðð€65„5„211€(Supp.Ï1996),× ƒv ××  ×€and€the€provisions€creating€a€$10€million€small€and€minorityÏtelecommunications€business€assistance€program€that€now€appear€in€Tenn.€CodeÏAnn.€ðððð€€65„5„212,€„213.× ƒw ××  ×ÌÌà àThe€House€amendment€did€not€alter€the€portions€of€the€Senate€amendmentÏcontaining€Tenn.€Code€Ann.€ðð€65„5„209(c)€and€adding€the€language€that€was€toÏbecome€Tenn.€Code€Ann.€ðð€65„5„209(j).€€In€fact,€the€differences€between€anÍearnings€investigation€and€an€audit€of€a€Form€Ô_ÔPSCÔ_Ô„3.01€report€that€hadÏpreoccupied€the€Senate€were€never€mentioned€during€the€House€discussion€of€theÏbill.€€In€his€closing€remarks€after€the€House€cut€off€further€debate€on€the€bill,ÏRepresentative€Purcell€told€his€colleagues:ÌÓÓà8 àà8 àI€need€to,€at€this€point,€with€your€indulgence,€read€threeÏbrief€statements€into€the€record€for€legislative€intentÏpurposes€as€this€bill€leaves€this€House€and€goes€to€theÏSenate.€€The€first€was€requested€by€the€Ô_ÔAARPÔ_Ô.€€TheÏaudit€provisions€in€this€bill€were€requested€by€theÏAARP,€and€it€was€their€hope€that€we€would,€as€a€matterÏof€legislative€intent,€make€it€clear€what€we€mean.€€AndÏso,€let€me€say€on€the€subject€of€Section€13,€legislativeÏintent€is€that€this€bill€establishes€a€process€by€whichÏconsumers€are€assured€affordable€rates.€€To€achieve€this,Ïthe€bill€provides€that€the€rates€of€incumbent€localÏexchange€companies€will€be€based€on€an€audit€of€theÏcompanyððs€actual€achieved€results€and€not€on€aÏspeculative€forecast.€€ÌÌà8 àà8 àà àAn€audit€consistent€with€the€provisions€of€this€billÏis€currently€being€performed€by€the€Ô_ÔTPSCÔ_Ô€staff€by€theirÏcompliance€unit€of€Ô_ÔSCBÔ_Ôððs€Ô_ÔTPCÔ_Ô€3.01€form.€€As€stated€byÏDr.€Chris€Klein,€Director€Ô_Ôof€theÔ_Ô€Ô_ÔPSCÔ_Ôððs€Utility€RateÏDivision,€in€a€letter€sent€earlier€this€year,Ô_Ô× ƒx ××  ×Ô_Ô€the€Ô_ÔTPSCÔ_ÔÏ3.01€form€is€a€monthly€report€showing€monthly,€year„to„date,€and€twelve€month„to„date€financial€informationÏincluding€rate€of€return,€adjusted€to€reflect€theÏCommissionððs€prior€rate„making€decision.€€TheÏcompliance€audit€verifies€that€the€amounts€shown€on€theÏÔ_ÔTPSCÔ_Ô€3.01,€(1)€are€actually€taken€from€the€companyððsÏbooks€and€records;€(2)€accurately€reflect€anyÏCommission€order€of€rate€making€adjustments;€(3)€doÏnot€include€unusual€or€abnormal€financial€occurrences;Ï(4)€were€calculated€following€proper€accounting€rulesÍand€procedures€for€separating€the€companyððs€interstateÏand€intrastate€operations,€as€well€as€its€regulated€andÏnon„regulated€operations;€and€finally,€accurately€reflectÏallowable€charges€from€affiliated€companies.€€ÌÌà8 àà8 àœà àSection›€13€makes€clear€that€this€Ô_ÔTPSCÔ_Ô€3.01Ïcompliance€audit€of€actual€achieved€results€and€withoutÏspeculative€forecasts€will€be€completed,€and€affordableÏrates€will€be€set€pursuant€to€Section€10€(c)€and€(j)€of€thisÏbill.× ƒy ××  ×ÌÌÓ€ÓòòSeeóó€House€Journal,€at€1865.€€The€House€then€passed€Senate€Bill€No.€891€by€an€89Ïto€8€vote.× ƒz ××  ×ÌÌà àThe€bill€containing€the€House€amendments€was€returned€to€the€Senate€andÏwas€called€up€for€consideration€on€May€25,€1995.€€On€this€occasion,€SenatorÏRochelle€read€the€same€statement€that€Representative€Purcell€had€read€theÏprevious€day.€€When€asked€to€explain€how€the€amended€bill€would€assureÏaffordable€telephone€service,€Senator€Rochelle€replied€ÌÓÓà8 àà8 àwe€have€read€.€.€.€for€legislative€intent€purposes,€theÏlanguage€requested€that€helped€everybody€understandÏthat€the€authority€of€the€Consumer€Advocate€and€theÏauthority€of€the€Ô_ÔPSCÔ_Ô€and€such€as€that€remains€in€placeÏand€is€there€to€.€.€.€help€insure€that€all€reports,€auditsÏand€such€as€that€are€based€on€actual€figures,€notÏspeculative€forecasts€and€such€as€that.€€So€I€would€referÏyou€to€the€statement€of€legislative€intent,€and€to€theÏlanguage€thatððs€previously€been€in€the€bill,€plus€theÏlanguage€in€Amendment€No.€2€to€2.ÌÌÓ€ÓWhen€asked€how€the€Houseððs€version€of€the€bill€differed€from€the€SenateððsÏversion,€Senator€Rochelle€explained€that€the€principal€change€was€the€creation€ofÏthe€fund€for€small€and€minority€businesses€and€that€ð ðthere€are€language€changes,Ïof€course,€but€they€were€changes€that€were€worked€out€with€the€Ô_ÔAARPÔ_Ô,€they€wereÏafter€consultation€with€the€Ô_ÔAARPÔ_Ô,€Mr.€Ô_ÔBurchamÔ_Ô,€and€these€other€folks.ðð€€TheÏSenate€proceeded€to€concur€in€the€House€amendments€by€a€23€to€10€vote.× ƒ{ ××  ×€€BothÏSenator€Rochelle€and€Senator€Gilbert,€who€had€voted€against€the€bill€and€theÏHouse€amendments,€requested€that€Senator€Rochelleððs€statements€concerning€theÏscope€of€the€audit€of€the€Form€Ô_ÔPSCÔ_Ô„3.01€report€be€included€verbatim€in€theÏSenate€Journal.× ƒ| ××  ×ÌÌà@ àò ò3.ó óÌÌà àThe€legislative€history€of€Tenn.€Code€Ann.€ðð€65„5„209€reveals€severalÏsignificant€milestones€in€the€formulation€of€this€statute.€€The€original€version€ofÏthe€bill€contained€no€procedure€of€any€sort€for€reviewing€incumbent€localÏtelephone€companiesðð€rates.€€The€billððs€critics€objected€to€this€omission€becauseÏthey€believed€that€it€would€enable€the€telephone€companies€to€earn€excessiveÏprofits€and€argued€that€the€Commission€should€hold€one€last€ð ðfull€blownððÏtraditional€earnings€investigation€before€the€competitive€market€forces€wereÏturned€loose.€€The€billððs€proponents€opposed€this€suggestion€and€proposed€insteadÏthat€the€Commission€audit€the€telephone€companiesðð€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01Ïreport.€€Their€adversaries€asserted€that€this€proposal€did€not€go€far€enoughÏbecause€auditing€the€Form€Ô_ÔPSCÔ_Ô„3.01€report€would€not€provide€a€representativeÏpicture€of€the€companiesðð€future€earnings.€€The€only€concession€that€the€billððsÍproponents€were€willing€to€make€was€to€specifically€empower€the€Commission€toÏsatisfy€itself€that€the€information€on€the€Form€Ô_ÔPSCÔ_Ô„3.01€report€was€accurate.€ÏThe€opponents€tried€repeatedly€to€convince€their€legislative€colleagues€to€requireÏone€last€traditional€rate„setting€proceeding.€€When€they€were€rebuffed€threeÏtimes,€they€abandoned€their€efforts€to€amend€the€bill€and€resorted€to€the€tactic€ofÏincluding€a€statement€in€the€legislative€record€containing€an€interpretation€of€theÏlegislation€similar€to€the€position€that€their€colleagues€had€repeatedly€declined€toÏadopt.€€ÌÌà àThe€statements€concerning€the€scope€of€the€audit€read€into€the€record€byÏSenator€Rochelle€and€Representative€Purcell€are€inconsistent€with€the€language€ofÏTenn.€Code€Ann.€ðð€65„5„209.€€By€its€own€terms,€this€statute,€not€theÏCommissionððs€other€statutes€and€regulations,€governs€the€manner€in€which€theÏCommission€must€consider€and€act€upon€applications€for€price€regulation€plans.€ÏThe€Commissionððs€powers€under€Tenn.€Code€Ann.€ðð€65„5„209€are€more€limitedÏthan€its€powers€in€the€context€of€a€traditional€earnings€investigation,€as€long€as€theÏcompanyððs€rate€of€return€on€its€Form€Ô_ÔPSCÔ_Ô„3.01€report€is€less€than€its€currentlyÏauthorized€rate€of€return.€€ÌÌà àThe€Commission,€like€any€other€administrative€agency,€must€conform€itsÏactions€to€its€enabling€legislation.òò€€Tennessee€Pub.€Serv.€Ô_ÔCommððnÔ_Ô€v.€SouthernÏRy.,óó€554€S.W.2d€612,€613€(Tenn.€1977);€òòÔ_ÔPharrÔ_Ô€v.€Nashville,€C.€&€St.€L.€Ry.,€óó186ÏTenn.€154,€161,€208€S.W.2d€1013,€1016€(1948).€€It€has€no€authority€or€powerÏexcept€that€found€in€the€statutes.€€òòTennessee„Carolina€Transp.,€Inc.€v.€Pentecost,óóÏ206€Tenn.€551,€556,€334€S.W.2d€950,€953€(1960).€€While€its€statutes€are€remedialÏand€should€be€interpreted€liberally,€òòseeóó€Tenn.€Code€Ann.€ðð€65„4„106€(Supp.Ï1996),€they€should€not€be€construed€so€broadly€as€to€permit€the€Commission€toÍexercise€authority€not€specifically€granted€by€law.€€òòÔ_ÔPharrÔ_Ô€v.€Nashville,€C.€&€St.ÏL.€Ry.,óó€186€Tenn.€at€161,€208€S.W.2d€at€1016.ÌÌà àBoth€the€language€of€Tenn.€Code€Ann.€ðð€65„5„209€and€its€legislativeÏhistory€confirm€that€the€General€Assembly€established€a€three„phase€process€forÏconsidering€applications€for€a€price€regulation€plan.€€The€first€and€second€phasesÏinvolve€verifying€the€accuracy€of€the€information€in€the€applicantððs€Form€Ô_ÔPSCÔ_Ô„3.01€report€and€comparing€the€applicantððs€reported€rate€of€return€with€itsÏcurrently€authorized€rate€of€return.€€During€these€phases,€the€Commission€and€itsÏstaff€are€empowered€to€audit€the€applicantððs€most€recent€Form€Ô_ÔPSCÔ_Ô„3.01€reportÏfor€three€purposes:€(1)€to€verify€that€the€information€on€the€report€accuratelyÏreflects€the€information€in€the€applicantððs€books€and€records,€(2)€to€verify€that€theÏreport€was€prepared€consistently€with€generally€accepted€accounting€principles,Ïand€(3)€to€verify€that€the€applicantððs€calculations€reflected€the€CommissionððsÏpreviously€issued€orders.€€The€Commissionððs€authority€to€adjust€the€figures€on€theÏForm€Ô_ÔPSCÔ_Ô„3.01€report€is€limited€to€correcting€errors€with€regard€to€these€threeÏcategories.€€The€Commission€may€only€adjust€an€applicantððs€rate€of€return€after€itÏdetermines€that€the€rate€of€return€reported€on€the€applicantððs€most€recent€FormÏÔ_ÔPSCÔ_Ô„3.01€report€exceeds€the€applicantððs€currently€authorized€rate€of€return.ÌÌà àThe€Commission€exceeded€its€authority€under€Tenn.€Code€Ann.€ðð€65„5„209(c)€&€(j)€by€adjusting€the€figures€in€BellSouthððs€Form€Ô_ÔPSCÔ_Ô„3.01€report€toÏcompensate€for€out€of€period€items,€abnormal€or€unusual€expenses,€and€knownÏcharges.€€It€had€already€concurred€with€its€staffððs€conclusion€that€the€rate€ofÏreturn€on€BellSouthððs€corrected€Form€Ô_ÔPSCÔ_Ô„3.01€report€was€10.30%.€€Since€thisÏrate€of€return€did€not€exceed€BellSouthððs€currently€authorized€rate€of€return€ofÏbetween€10.65€and€11.85%,€the€Commission€should€have€found€that€BellSouthððsÏexisting€rates€were€affordable€under€Tenn.€Code€Ann.€ðð€65„5„209(a)€and€shouldÍhave€approved€BellSouthððs€application€for€a€price€regulation€plan€based€onÏBellSouthððs€rates€existing€on€June€6,€1995€as€required€by€Tenn.€Code€Ann.€ðð€65„5„209(c).ÌÌà@ àò òC.ó óÌà@ àòòò òBellSouthððs€Right€to€a€Contested€Case€Hearingó óóóÌÌà àBellSouth€also€asserts€that€the€Commission€should€have€granted€its€requestÏfor€a€contested€case€hearing€to€challenge€the€legal€and€factual€basis€for€theÏadjustments€to€BellSouthððs€Form€Ô_ÔPSCÔ_Ô„3.01€report.€€The€Commission€respondsÏthat€BellSouth€is€not€entitled€to€a€contested€case€hearing€because€the€first€twoÏphases€of€a€Tenn.€Code€Ann.€ðð€65„5„209€proceeding€are€essentially€an€audit,€andÏan€audit€is€not€a€contested€case.€€The€Commission€overlooks€two€significantÏpoints.€€First,€BellSouth€desired€to€challenge€the€Commissionððs€interpretation€andÏuse€of€its€staffððs€audit.€€Second,€the€Commissionððs€use€of€the€audit€affectedÏBellSouthððs€legal€rights€and€privileges.ÌÌà àThe€Commission€relies€on€òòNational€Health€Corp.€v.€Ô_ÔSnodgrassÔ_Ô,óó€555€S.W.2dÏ403€(Tenn.€1977)€to€support€its€argument;€however,€this€case€is€significantlyÏdifferent€from€the€one€before€us.€€In€òòNational€Health€Corp.óó,€the€state€comptrollerÏaudited€several€related€intermediate€care€facilities€to€determine€whether€theirÏcharges€were€consistent€with€federal€and€state€law.€€After€the€auditors€concludedÏthat€the€company€had€overcharged€the€State,€the€Department€of€Public€HealthÏinformed€National€Health€Corp.€that€it€intended€to€withhold€a€portion€of€its€nextÏregularly€scheduled€payment€to€offset€the€overcharge.€€Instead€of€proceedingÏagainst€the€Department€of€Public€œHealth,›€National€Health€Corp.€sought€judicialÏreview€of€the€comptrollerððs€audit€under€the€Uniform€Administrative€ProceduresÏAct.ÌÌà àThe€Chancery€Court€for€Davidson€County€dismissed€National€HealthÏCorp.ððsÌpetition€for€review€under€Tenn.€Code€Ann.€ðð€4„5„322€(Supp.€1996)€based€on€itsÏconclusion€that€the€comptrollerððs€audit€reports€were€not€contested€cases,€and€theÏTennessee€Supreme€Court€affirmed€the€decision.€€The€court€concluded€that€theÏaudit€was€not€a€contested€case€because€an€auditÌÓÓà8 àà8 àin€and€of€itself,€does€not€determine€any€legal€rights,Ïduties€or€privileges€of€any€party€to€the€audit.€€It€isÏmerely€a€report€of€factual€material,€withÏrecommendations€of€the€auditor.€€If€some€action€is€takenÏor€decision€is€made€by€a€state€official€based€on€the€auditÏreport,€the€decision€made€or€action€taken€may€constituteÏa€ð ðcontested€case,ðð€but€not€the€audit€or€the€report€basedÏon€the€audit,€which€at€most€would€be€only€ð ðevidenceðð€toÏsupport€the€decision€or€action€taken.ÌÌÓ€ÓòòNational€Health€Corp.€v.€Ô_ÔSnodgrassÔ_Ô,óó€555€S.W.2d€at€405„06.ÌÌà àBellSouth€has€the€right€to€have€its€application€for€a€price€regulation€planÏconsidered€in€accordance€with€Tenn.€Code€Ann.€ðð€65„5„209.€€It€also€has€the€rightÏto€base€its€initial€rates€on€its€existing€rates€if€its€earned€rate€of€return€does€notÏexceed€its€currently€authorized€rate€of€return.€€The€Commissionððs€decision€toÏtrigger€a€rate„setting€proceeding€by€adjusting€the€figures€on€BellSouthððs€FormÏÔ_ÔPSCÔ_Ô„3.01€report€affected€BellSouthððs€rights.€€While€the€Commission€permittedÏBellSouth€to€present€legal€arguments€concerning€its€authority€to€adjust€its€FormÏÔ_ÔPSCÔ_Ô„3.01€report,€it€did€not€œprovide›€BellSouth€with€an€opportunity€to€prove€thatÏthe€staffððs€findings€or€conclusions€with€regard€to€the€ð ðout„of„period€adjustments,ððÏð ðabnormal€or€unusual€expenses,ðð€and€ð ðknown€chargesðð€were€factually€incorrect.€ÏGiven€the€interests€at€stake,€the€Commission€should€have€permitted€BellSouth€toÏprove€that€the€suggested€adjustmentsÌwere€incorrect€or€not€supported€by€the€facts.ÌÌà@ àò òIV.ó óÌà@ àòòò òReview€of€All€BellSouthððs€Rates€and€Tariffsó óóóÌÌà àAT&T€also€argues€that€the€Commission€did€not€complete€its€task€because€itÏfailed€to€review€each€of€BellSouthððs€rates€and€tariffs€to€determine€whether€theyÏwere€affordable€and€non„discriminatory.× ƒ} ××  ×€€We€need€not€address€this€issue€inÏlight€of€our€holding€that€the€Commission€should€have€approved€BellSouthððsÏapplication€for€a€price€regulation€plan€based€on€the€rates€in€existence€on€June€6,Ï1995.€€Since€the€Commission€had€already€determined€that€these€rates€and€tariffsÏwere€just€and€reasonable€and€nondiscriminatory,€it€is€not€required€to€make€thisÏdetermination€again€absent€some€specific€reason€to€do€so.ÌÌà@ àò òV.ó óÌÌà àIn€summary,€we€vacate€the€Commissionððs€January€23,€1996€order€and€allÏrelated€earlier€orders€with€regard€to€BellSouthððs€application€for€a€priceÏregulation€plan.€€Since€the€Commission€has€adopted€its€staffððs€conclusion€thatÏBellSouthððs€rate€of€return€reported€on€its€Form€Ô_ÔPSCÔ_Ô„3.01€report€for€the€twelveÏmonths€ending€March€31,€1995€is€less€than€its€current€authorized€rate€of€return,Ïwe€remand€the€case€to€the€Tennessee€Regulatory€Authority€with€directions€toÏapprove€BellSouthððs€application€for€a€price€regulation€plan.€€In€light€of€ourÏconclusion€that€the€Commission€did€not€have€the€authority€to€adjust€œthe€actual›Íresults€on€BellSouthððs€Form€Ô_ÔPSCÔ_Ô„3.01€report,€we€need€not€consider€the€remainingÏissues€raised€by€BellSouth€and€AT&T.€€These€issues€and€all€other€issues€raised€byÏthe€parties€are€accordingly€Ô_ÔpretermittedÔ_Ô.€€ÌÌà àWe€tax€the€costs€of€this€appeal€which€includes€òòBellSouthÏTelecommunications,€Inc.€v.€Greer,€óóApp.€No.€01A01„9601„BC„00008€andÏòòBellSouth€Telecommunications,€Inc.€v.€Tennessee€Pub.€Serv.€Ô_ÔCommððnÔ_Ô,óó€App.€No.Ï01A01„9602„BC„00066€to€the€Tennessee€Regulatory€Authority.€€We€tax€the€costsÏof€the€appeal€in€òòState€ex€rel.€BellSouth€Telecommunications,€Inc.€v.€Ô_ÔBissellÔ_Ô,óó€App.ÏNo.€01A01„9601„CH„00016€to€BellSouth€Telecommunications,€Inc.€and€its€suretyÏfor€which€execution,€if€necessary,€may€issue.ÌÔ4‚J€oÔÝ‚?—8ÝÔªÔò òòòÝ  ÝÔ5  ÔÔ6äFÔÝ‚?—8øFnateÝóóó óÔªÔÝ  ÝÔ7th)GÔÌÓÓà àà àà àà àà àà àà àà à__________________________Ìà àà àà àà àà àà àà àà àWILLIAM€C.€KOCH,€JR.,ÏJUDGEÌÌCONCUR:ÌÌÌ_________________________________ÌSAMUEL€L.€LEWIS,€JUDGEÌÌÌ_________________________________ÌBEN€H.€CANTRELL,€œJUDGE›