**Before the**

**Federal Communications Commission**

**Washington, DC 20554**

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TCI Cablevision of Montana, Inc. )

d/b/a AT&T Cable Services )

Complainant/Applicant, )

) File No. PA 00-002

v\. )

)

Energy Northwest, Inc. )

Respondent. )

**ORDER**

**Adopted: March 19, 2002 Released: March 28, 2002**

By the Commission:

I.  **INTRODUCTION**

1\. Before the Commission is an application for review (\"Application\")
of a Cable Services Bureau (\"Bureau\") Order, DA 00-1901 (\"Bureau
Order\")[^1] released under delegated authority. The Bureau Order
dismissed a pole attachment complaint filed by TCI Cablevision of
Montana, Inc. d/b/a AT&T Cable Services (\"Complainant\") against Energy
Northwest, Inc. (\"Respondent\"), pursuant to Section 224 of the
Communications Act of 1934, *as amended* (\"Pole Attachment Act\")[^2]
and Subpart J of Part 1 of the Commission\'s Rules.[^3] The Bureau Order
concluded that Respondent is a \"person who is cooperatively organized\"
within the meaning of the Pole Attachment Act, and dismissed the
complaint for lack of jurisdiction over Respondent. In its Application,
Complainant challenges the Bureau\'s decision to dismiss the
Complaint.[^4] In this order we deny the Application and affirm the
Bureau Order.

II. **BACKGROUND**

2\. Pursuant to the Pole Attachment Act, the Commission has the
authority to regulate the rates, terms, and conditions for attachments
by a cable television system or provider of telecommunications service
to a pole, duct, conduit, or right-of-way owned or controlled by a
utility.[^5] The Pole Attachment Act grants the Commission general
authority to regulate such rates, terms and conditions, except where
such matters are regulated by a State.[^6] However, by definition, the
Commission does not have jurisdiction to regulate attachments to poles
owned or controlled by a utility that is cooperatively organized.[^7]

III. **BUREAU ORDER**

3\. According to the Bureau Order, the record in this matter revealed
that, in November 1998, Flathead Electric Cooperative acquired an
investor-owned utility's service area that included the cities of
Columbia Falls, Whitefish, and Kalispell, Montana. Because, pursuant to
Montana law, these areas were too populated to be served directly by
Flathead Electric Cooperative, Flathead Electric Cooperative created a
wholly-owned subsidiary, Energy Northwest, Inc. (the Respondent), to
service these areas.[^8] Respondent is incorporated as a for profit
corporation under Montana law because it is ineligible to incorporate as
a rural electric cooperative due to the size of its service areas.
However, Respondent's articles of incorporation and bylaws specifically
require Respondent to operate on a non-profit, patronage basis for the
mutual benefit of its patrons, the users of its services. Respondent's
patrons are represented on the board of trustees of Flathead Electric
Cooperative; its profits, if any, are allocated to its patrons; its
directors are democratically elected by its patrons; and Respondent is
classified as a cooperative by the Internal Revenue Service.

4\. Because the Bureau Order found that Respondent is \"cooperatively
organized\" as the term is used in the Pole Attachment Act, it concluded
that the Commission is without jurisdiction to resolve the Complaint and
dismissed it. The Bureau\'s conclusion that the Commission was without
jurisdiction to resolve the Complaint was based on the record evidence
and the language of the Pole Attachment Act. The Bureau Order also cited
the legislative history of the Pole Attachment Act in support of its
conclusion.[^9]

IV. **APPLICATION FOR REVIEW**

5\. In its Application, Complainant asserts that the Bureau misapplied
the Pole Attachment Act by expanding the meaning of cooperatively
organized to include Respondent, which only operates like a cooperative
but is not cooperatively organized under Montana State law. Complainant
argues that this is inconsistent with the plain language of the Pole
Attachment Act and its legislative history, which make no mention of any
exemption other than for a \"person who is cooperatively organized,\"
which Complainant concludes refers only to a person\'s nominal corporate
structure under State law. Complainant argues that Respondent does not
fit the cooperative mold envisioned by the Congress. Complainant asserts
that the Bureau misinterpreted the record facts concerning the control
and management of Respondent. Complainant also asserts that the Internal
Revenue Service classification was improperly issued because it is
inconsistent with the Internal Revenue Service\'s own tax code.
Complainant asserts that the Bureau Order will create instability as
utilities try to adopt cooperative-like policies in order to claim
exemption from the Pole Attachment Act.

6\. In opposition, Respondent defends the Bureau\'s conclusions, arguing
that, based on its corporate structure, Respondent is, in fact,
cooperatively organized. Respondent agrees that it does not meet the
definition of a *rural* cooperative as that term is used in Montana
State law. Respondent explains that, because there is no other separate
category under which cooperatives may organize if they exceed the size
limitation for rural electric cooperatives, Respondent was required to
incorporate under the general business laws of Montana. However,
Respondent\'s articles of incorporation and bylaws require Respondent to
operate on a non-profit, patronage basis for the mutual benefit of its
patrons, the users of its services. Respondent points out that any
revenues generated by higher pole rates can only be used to meet
Respondent\'s expenses or be returned to Respondent\'s patrons.

V.  **DISCUSSION**

7\. We find the Bureau\'s conclusion concerning Respondent\'s status as
an exempt entity under the \"cooperatively organized\" exemption
contained in the Pole Attachment Act to be fully supported by the
record. Further, the legal conclusions in the Bureau Order are
consistent with the plain language and legislative history of the Pole
Attachment Act. The Complainant has raised no new argument in its
Application that would call the Bureau\'s reasoning into question.
Therefore, we affirm the Bureau\'s conclusion that Respondent is
\"cooperatively organized\" as that term is used in the Pole Attachment
Act.[^10]

VI. **CONCLUSION AND ORDERING CLAUSE**

8\. For the reasons discussed above, we conclude that Applicant\'s
application for review should be denied.

9\. Accordingly, IT IS ORDERED, pursuant to Section 1.115 of the
Commission\'s Rules, 47 C.F.R. § 1.115, that the Application for Review
of In the Matter of TCI Cablevision of Montana, Inc. d/b/a AT&T Cable
Services v. Energy Northwest, Inc., File No. PA 00-002, DA 00-1901, 15
FCC Rcd 15130 (2000) IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton

Acting Secretary

[^1]: *In the Matter of TCI Cablevision of Montana, Inc. d/b/a AT&T
    Cable Services v. Energy Northwest, Inc.*, 15 FCC Rcd 15130 (2000).

[^2]: 47 U.S.C. § 224.

[^3]: 47 C.F.R. §§ 1.1401--1.1418.

[^4]: Respondent filed an opposition to the Application and Complainant
    filed a reply. Complainant also filed a subsequent history
    supplement to the record, updating a previously filed exhibit.

[^5]: 47 U.S.C. § 224 (b) (1).

[^6]: 47 U.S.C. § 224(b) and (c).

[^7]: The term \"utility\", as it is used in the Pole Attachment Act,
    \"does not include . . . any person who is cooperatively organized .
    . ..\" 47 U.S.C. § 224 (a) (1). *See also* 47 C.F.R. § 1.1402 (a).

[^8]: Respondent honored a settlement agreement, entered into by
    Complainant and the investor owned utility that had previously
    served Columbia Falls, Whitefish and Kalispell, until the agreement
    expired in December 1999. At that point, Respondent increased the
    annual pole attachment rate from \$3.75 per pole to \$13.84, a rate
    similar to that being charged by Flathead Electric Cooperative in
    its service areas outside of Columbia Falls, Whitefish and
    Kalispell.

[^9]: ^?^ *See* S. Rep. No. 95-580, 95th Cong., 1st Sess. (1977) (\"pole
    rates charged by . . . cooperative utilities are already subject to
    a decision making process based upon constituent needs . . . These
    rates presumably reflect what . . . managers of customer-owned
    cooperatives regard as an equitable distribution of pole costs
    between utilities and cable television systems.\").

[^10]: On March 11, 2002, Complainant informed the Commission by letter
    of recent changes in Montana law concerning cooperatively structured
    utilities and pole attachments. Although late-filed, this material
    was reviewed by the Commission in its deliberation of this item. We
    conclude that the changes in Montana law do not affect our
    jurisdiction in this matter.