
    New York Telephone Company, Respondent, v State of New York, Division of State Police, Appellant.
    (Claim No. 60423.)
    Argued October 5, 1982;
    decided November 18, 1982
    
      APPEARANCES OF COUNSEL
    
      Robert Abrams, Attorney-General (Richard J. Dorsey and William J. Kogan of counsel), for appellant.
    
      Martin J. Murtagh and Saul Scheier for respondent.
   OPINION of the court

Memorandum.

The order of the Appellate Division should be affirmed, with costs.

Claimant contracted with defendant to provide “Data-speed 40” telecommunications services for the State Police teletype system, and the Public Service Commission (PSC) approved claimant’s rate tariffs for that service. As part of a subsequent general rate case, the PSC ordered a rate increase for claimant’s “Dataspeed 40” service. In a letter to the PSC, the Superintendent of State Police protested this increase and maintained that it conflicted with the terms of the State Police’s contract with claimant. The PSC deemed this letter to be a petition for rehearing, rejected the superintendent’s contentions and denied the petition. Defendant sought no direct administrative or judicial review of the PSC order.

In this action by claimant to recover the amount owed it under the increased rates, defendant now challenges the validity of the higher rates. Defendant should be barred from doing so. In denying the petition for rehearing, the PSC passed on the same issue that defendant now seeks to litigate. Defendant had an opportunity to challenge the PSC determinations through an article 78 proceeding, but chose not to do so. Having failed to seek direct review of the PSC rate determination, defendant is precluded from making the instant challenge to that determination. Summary, judgment, therefore, was properly granted to claimant.

Chief Judge Cooke and Judges Jasen, Jones, Wachtler and Meyer concur; Judges Gabrielli and Fuchsberg taking no part.

Order affirmed, with costs, in a memorandum.  