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Notes :: Common Carrier :: Telegraph Dont be a FOOL; The Law is Not DIY

- Common Carrier
- History
- Theory
- -Bailment
- - Market Power / Essential
- Duties
- - Non discrimination
- - Refusal to carry
- -Interconnection
- Benefits
-Telecom Carriers
- Telephone
- - AT&T

William JonesThe Common Carrier Concept as Applied to Telecom: A Historical Perspective (~1980)*

Principles of telecom regulation were first expressed in state statutes passed in response to invention of the telegraph. The structure and timing of the early statutes leave little doubt that they were premised on the franchise theory of regulation articulated by Lord Hale.

To function effectively, telegraph companies needed legislative authorization to use public thoroughfares. In many instances the right to traverse private property also was important. Finally, the power to proceed as a corporation was of value to facilitating the aggregation of necessary capital. The early state legislation granted one or more of these privileges and, in recognition of the favored position conferred, exacted obligations in return. Even when the statutes were silent on the responsibilities of telegraph companies, the courts often implied obligations on the basis of the special privileges conferred. State legislation also was influenced by the patent monopoly granted to Morse. The most general pattern was the grant of special privileges (use of public roads, eminent domain, incorporation) joined with the requirement that the company serve all customers, including other telegraph lines, without discrimination -- a mode of regulation appropriate to guard against monopoly abuse.

New York

William JonesThe Common Carrier Concept as Applied to Telecom: A Historical Perspective (~1980)*

As an important commercial center, New York exerted a substantial influence on early patters of state legislation. In 1845, New York enacted that

The proprietors of the pentent rights of Morse's electromangetic telegraph may be and hereby are authorized to construct lines of said telegraph from point to point and across any of the waters within the limits of this state, by the erection of posts, piers or butments for sustaining the wires of the same: Provided that the same shall not in any instance be so constructed as to endanger or injuriously interrupt the navigation of such waters; and provided also, that the private right of individuals shall be in no wise impaired by the provision of this act.[24]

Three years later, in 1848, New York adopted the first comprehensive telegraph legislation: "An act to provide for the incorporation and regulation of telegraph companies."[25] The first three sections of the act were concerned with the prerequisites for incorporation, requiring among other things a description of the "general routs of the line of telegraph, designating the points to be connected." Section 4 conferred the normal legal powers on the corporation, including the power to "make such prudential rules, regulations and by-laws, as may be necessary in the transaction of their business, not inconsistent with the laws of this state or of the United States."

Section 5 permitted construction of the telegraph line "along and upon any of the public roads and highways, or across any of the waters within the limits of this state, by the erection of the necessary fixtures . . . provided the same shall not be so constructed as to incommode the public use of said roads or highways, or injuriously interrupt the navigation of said waters..." Section 6 prescribed procedures by which landowners would be compensated for the use of their lands by the telegraph company, implicitly conferring the equivalent of the power of eminent domain.

The regulatory provisions of the statute were included in sections 11 and 12. They required service to all customers, including other telegraph companies, on a nondiscrimiatory basis:

s 11. It shall be the duty of the owner or the association owning any telegraph line, doing business within this state, to receive dispatches from and for other telegraph lines and associations, and from and for any individual, and on payment of their usual charges for individuals for transmitting dispatches, as established by the rules and regulations of such telegraph line, to transmit the same with impartiality and good faith, under penalty of one hundred dollars for every neglect or refusal to do so... [26]

s 12. It shall likewise be the duty of every such owner or association, to transmit all dispatches in the order in which they are received, under the like penalty of one hundred dollars . . . provided, however, that arrangements may be made . . . for the transmission of [newspaper dispatches] out of [their] regular order.

An 1850 statute added the provision:

Any person connected with a telegraph company... who shall willfully divulge the contents, or the nature of the contents, of any private communication entrusted to him for transmission or delivery, or who shall willfully refuse or neglect to transmit or deliver the same, [shall be adjudged guilty of a misdemeanor.] [27]

In 1951, telegraph companies were authorized to extend their lines, to construct branch lines, and to united with other incorporated telegraph companies. [28]

[24] Act of May 13, 1845 NY Laws, c. 243, p. 264

[25] Act of April 12, 1848, NY Laws, c. 265, p. 392.

[26] Section 11 was amended in 1955 to add the following: [undicipherable]

[27] Act of April 10, 1950, NY Laws, c. 340, p. 739.

[28] Act of April 22, 1851, NY Laws c. 98, p. 178. Other amendments were made by Act of June 29, 1853, NY Laws, c. 471, p. 931 (various aspects, including eminent domain); Act of April 22, 1862, NY Laws c. 425, p. 761 (broadening authority to extend lines and acquire other companies); Act of May 9, 1867, NY Laws, c. 871, p. 2186 (concerned with improper access to telegrams); Act of May 2, 1970 (sic?), NY Laws, c. 568, p. 1327 (concerned with transfers of telegraph franchises and properties); Act of May 14, 1875, NY Laws, c. 319 (concerned with changes in routes); Act of May 27, 1879, NY Laws, c. 377, p. 444 (reiterating duty to transmit in terms similar to sec. 11 of the 1848 statute); Act of May 28, 1879, NY Laws, c. 397, p. 460 (concerned with underground construction of telegraph lines).

Replication of the New York Model:

In 1847, Virginia provided that any person, satisfying the board of public works of its right to use the invention, could construct telegraph lines along public roads with the consent of local authorities. A penalty was imposed on any telegraph agent "who may, from corrupt or improper motives, withhold or delay the transmission of messages or intelligence, for which the customary charges have been paid or tendered." [29] An 1849 codification of prior legislation referred to the power of telegraph companies to "make reasonable charges on [telegraph] messages." [30] A more comprehensive statute, similar to that of New York, was enacted in 1852. [31] The reference to reasonable charges was carried forward in subsequent codifications.

[29] Act of Mar. 20, 1847, Va. Laws, 1846, c. 92, p. 79 ss 3, 4. The act authorized telegraph operations by specific companies, specifying "reasonable charges" on messages transmitted. ss 1, 2. Other acts of specific incorporation include Act of Mar. 6, 1847, Va. Laws, 1846, c. 99, p. 85 (no rate standard); Act of Mar. 17, 1849, Va. Laws, 1849, c. 197, p. 138 (specified rate standard); Act of Mar. 12, 1849, Va. Laws, 1848-49, c. 200, p. 142 (referenced to reasonable rates). See Also the Act of Mar. 31, 1848, Va. Laws, 1847-48, c. 123, p. 1677, requiring telegraph companies to make annual reports to the board of public works, giving financial data and "regulations adopted to ensure the faithful discharge of the duties undertaken..."

[30] Va. code, ch. 65, sec. 1 (1849).

In 1901, following many state courts, the U.S. Supreme Court held that at common law-- i.e., even without a specific statute-- a telegraph company is a common carrier and owes a duty of non-discrimination....In 1848, New York state required telegraph companies to provide non-discriminatory service to competing telegraph companies as well as to individuals. State regulatory boards soon replaced detailed legislative regulation, first in Illinois and Massachusetts. The first independent, broadly empowered commissions to regulate common carriage facilities and utilities were set up in 1907 in Wisconsin and New York, soon regulating telecommunications, too. The Interstate Commerce Act codified in 1887 the duties of rail carriers serving the public, recognizing particularly liability and non-discrimination. Communications companies were included in 1911. In 1934, oversight of interstate and radio communications was transferred to the new Federal Communications Commission.  -- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecomm. Pol'y 435, Sec. II (1994)

In 1901, after many states had reached the same conclusion, the US Supreme Court affirmed the Nebraska supreme court holding that at common law a telegraph company is a common carrier and owes a duty of non discrimination. Wester Union Telegraph Co. v. Call Publishing Co., 181 US 92, 98 (1901). [NY p. 42]

The states' earliest approaches to public utility regulation involved legislative decision making with implementation by specific statutory enactments. In 1949, New York state required telegraph companies to provide non discriminatory service to competing telegraph companies as well as to individuals. State regulatory boards soon replaced legislative regulation notably in Illinois and Massachusetts. The first independent, broadly empowered regulatory Commissions were set up in 1907 in New York and Wisconsin. And as telephone use increased, more states began to regulate it. [NY p. 43]