US West Communications, Inc. v. Washington Utilities & Transportation Commission
In US West Communications, Inc. v. Washington Utilities & Transportation Commission, 134 Wn.2d 74, 949 P.2d 1337, 1350 (Wash. 1997), US West argued against directory imputation, contending that Dex should be free from regulation as are other directory publishing companies.
In response, the Washington Supreme Court stated:
The fact is that the Company is different from other directory publishing companies competing for the business. The record shows that US West did not develop this lucrative business by its initiative, skill, investment or risk-taking in a competitive market. Rather, it did so because it was the sole provider off local telephone service, and as such owned the underlying customer databases and had established business relationships with virtually all of the potential advertisers in the yellow pages. . . .
The record indicates that the billing and collection service provided to Dex by US West is a valuable business advantage to Dex. The record also indicates that in contrast with potential publishing competitors, Dex's publishing enjoys a unique and direct benefit by being associated with the Company's regulated telecommunications services. The affiliated transactions of US West's competitors do not present an analogous public policy issue because competitors lack the formidable and historical dominance in the local exchange market that US West possesses. Id.
The Washington court further noted that, at the time of its decision, thirteen of fifteen state regulatory jurisdictions in US West's service area imputed income from Dex's publishing operations to US West in setting rates. See 949 P.2d at 1350 n.8.