**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+------------------------------+-------+------------------------------+
| In the Matter of             | )     | File No. PA 98-003           |
|                              |       |                              |
| Mile Hi Cable Partners,      | )     |                              |
| L.P.; Mountain States Video, |       |                              |
| Inc., d/b/a TCI of Colorado, | )     |                              |
| Inc.; United Cable           |       |                              |
| Television of Colorado,      | )     |                              |
| Inc., d/b/a TCI of Colorado, |       |                              |
| Inc.; TCI Cablevision of     | )     |                              |
| Colorado, Inc.; Heritage     |       |                              |
| Cablevision of Tennessee,    | )     |                              |
| Inc.; and TCI Cablevision of |       |                              |
| Florida, Inc.,               | )     |                              |
|                              |       |                              |
| Complainants                 | )     |                              |
|                              |       |                              |
| v\.                          | )     |                              |
|                              |       |                              |
| Public Service Company of    | )     |                              |
| Colorado,                    |       |                              |
|                              | )     |                              |
| Respondent                   |       |                              |
|                              | )     |                              |
|                              |       |                              |
|                              | )     |                              |
|                              |       |                              |
|                              | )     |                              |
|                              |       |                              |
|                              | )     |                              |
+------------------------------+-------+------------------------------+

**ORDER**

  ------------------------------- ------- -------------------------------
  **Adopted: June 29, 2000**              **Released: June 30, 2000**

  ------------------------------- ------- -------------------------------

By the Deputy Chief, Cable Services Bureau:

##  I. INTRODUCTION

1.  In this Order we consider a pole attachment complaint
    (\"Complaint\"), filed with the Federal Communications Commission
    (\"Commission\") on April 1, 1998, by the above-captioned
    complainants (\"Complainant\") against the Public Service Company of
    Colorado (\"Respondent\"), pursuant to Section 224 of the
    Communications Act (\"Pole Attachment Act\")[^1] and Part 1, Subpart
    J, of the Commission's rules.[^2] Respondent filed its Answer
    (\"Response\") on July 28, 1998.[^3] Complainant filed its Reply
    (\"Reply\") on August 17, 1998. On September 14, 1998, Respondent
    moved to supplement its Response.[^4] The Commission gave Respondent
    two extensions of time to file its Response, stating that no further
    extensions would be considered.[^5] We will deny Respondent's motion
    to supplement its Response. On February 22, 1999, the Commission
    issued an order affirming its jurisdiction to resolve the
    Complaint.[^6] Pursuant to the Commission's rules,[^7] further
    information was requested by the Commission via letter[^8] and both
    Complainant and Respondent replied on May 3, 1999.[^9] Our rules
    require that the parties seek first to resolve their differences by
    negotiation.[^10] Based on our review of the record, we accept
    Complainant's assertion that it has attempted to negotiate with
    Respondent.[^11]

2.  Complainant requests that we declare an unauthorized attachment
    penalty unjust and unreasonable both at the original amount of
    \$50.00 and the increased amount of \$250.00. Complainant also asks
    that we declare that Complainant is not liable to Respondent for
    unauthorized attachment charges for attachments to drop poles prior
    to December 29, 1997, when Respondent notified Complainant of its
    intent to collect such fees. Further, Complainant requests that we
    determine that the imposition of the standard authorization process
    for drop poles is an unjust and unreasonable term or condition.
    Complainant also requests that we find that pole attachment fees for
    drop poles are unjust and unreasonable. Complainant asks that we
    declare that the pole audit costs billed to it constitute an unjust
    and unreasonable term or condition and that we order Respondent to
    provide Complainant with documentation to enable it to determine the
    validity of the pole audit. Lastly, Complainant asks that we order
    refunds of amounts paid and actual and punitive damages. In this
    Order, we grant the Complaint in part.

3.  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. The Commission shall provide that
    such rates, terms and conditions are just and reasonable.[^12] 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.[^13] The Commission is authorized to adopt
    procedures necessary to hear and to resolve complaints concerning
    such rates, terms, and conditions.[^14] A utility must charge a pole
    attachment rate that does not exceed the maximum amount permitted by
    the formula developed by the Commission. We have concluded that
    \"where onerous terms or conditions are found to exist on the basis
    of the evidence, a cable company may be entitled to a rate
    adjustment or the term or condition may be invalidated.\"[^15]

# II. BACKGROUND

4.  Respondent began providing the referenced cable systems with access
    to its poles in 1981.[^16] Complainant acquired the systems between
    1991 and 1993, except for one that was acquired in 1988.[^17] The
    original agreements ("Old Agreement") with Respondent for pole
    attachments by the cable systems were signed between 1983 and 1995
    and are essentially the same, with minor revisions not relevant to
    this proceeding.[^18] By letter dated May 15, 1995, Respondent sent
    a new agreement to Complainant for signature advising that the
    previous agreement was terminated effective 90 days from that date,
    which would have been August 13, 1995. Complainant acquiesced to the
    new agreements ("New Agreement") voicing its objections and
    reservations[^19] in a cover letter to the signed agreements dated
    June 9, 1995. Respondent executed the agreement on June 26, 1995. In
    March 1996, Respondent commenced a survey of Complainant's
    attachments to Respondent's poles to identify attachments which were
    not authorized.[^20] In seven invoices dated December 29, 1997, and
    one dated March 2, 1998, Respondent advised Complainant that it owed
    \$5,951,985.62 for unauthorized attachments.[^21] Complainant filed
    its Complaint on April 1, 1998.

5.  The agreements between the parties require a written application for
    attachment[^22] and approval by Respondent before attachment can be
    made.[^23] The application is a form prescribed by Respondent plus a
    sketch identifying poles to which attachments are to be made.[^24]
    The Old Agreement provides an application form[^25] and sample
    map.[^26] Both agreements also require notification of removal of an
    attachment.[^27] The New Agreement requires notification of
    completion of installation.[^28] In both agreements all attachments
    must be made in accordance with specifications included in the
    agreement,[^29] which include compliance with the National
    Electrical Safety Code (\"NESC\").[^30] In both agreements
    Respondent has the right to inspect attachments and require
    maintenance to maintain compliance with safety specifications.[^31]
    Under both agreements Complainant must use competent employees
    knowledgeable about electric poles for its installation.[^32] In
    both agreements Complainant must repair any damage done to a pole
    during installation.[^33] In both agreements Complainant is required
    to indemnify Respondent for legal injury or adverse consequences
    resulting from the actions taken by Complainant in furtherance of
    the agreement.[^34] The Old Agreement provided for a \$50.00 charge
    for each unauthorized attachment.[^35] The New Agreement provides
    for a \$250.00 charge for each unauthorized attachment[^36] and
    allows that, when an audit for unauthorized attachments is conducted
    and unauthorized attachments are found, Respondent may charge
    Complainant for the cost of the audit.[^37] The New Agreement
    specifies that Complainant will pay Respondent the cost of all work
    performed for surveys, inspections, etc.[^38] Lastly, the New
    Agreement specifies that the annual fee will be calculated using the
    Commission formula,[^39] which means that the rate will be the
    maximum permissible and based upon fully allocated costs.

6.  Respondent's contractor identified 25,070 allegedly unauthorized
    attachments by Complainant. Respondent's arrangement with the
    contractor provides compensation only for unauthorized attachments
    identified at a rate of \$3.50 for each such attachment found.[^40]
    Pursuant to the New Agreement, Respondent billed Complainant for
    \$255.22 for each allegedly unauthorized attachment, \$250.00
    unauthorized attachment charge plus \$3.50 paid to the contractor
    for the survey plus \$1.72 for the pole attachment fee for the first
    half of 1998.[^41] Respondent, however, only included 23,231 poles
    on the invoices.[^42] Respondent's contractor used maps provided by
    Respondent, which included those provided by Complainant with
    applications when available, to identify poles for which
    authorization had been given.[^43] Poles to which attachment had
    been made, but which were not identified on these maps, were deemed
    to have unauthorized attachments.[^44] Respondent's contractor also
    was given Respondent's billing records to identify the number of
    poles for which Complainant had been paying an annual fee.[^45]
    There are several instances where Respondent's contractor found that
    Complainant was attached to fewer poles, including those alleged to
    be unauthorized, than the number for which Complainant had been
    paying the annual fee.[^46] There are also significant instances
    where Complainant is allegedly attached to Respondent's mainline
    poles without authorization.[^47]

# 

# III. DISCUSSION

A. Pole Audit Costs

7.  In enacting the Pole Attachment Act, Congress recognized that
    Commission involvement in pole attachment matters would include the
    review of \"pole attachment practices.\"[^48] We stated that the
    \"conditions\" of pole attachments include both the reasonableness
    of contract provisions and the reasonableness of pole owner
    practices in implementing such provisions.[^49] The New Agreement
    contains a clause which states that Respondent may conduct a
    facility audit to verify authorized pole attachments.[^50] It also
    states that if the audit discloses an unauthorized attachment,
    Respondent may require Complainant to pay the cost of the
    audit.[^51] Complainant does not challenge the contract term but
    Respondent's application of the term in this case. Complainant
    asserts that Respondent's charges for the costs of the pole audit
    are not just and reasonable because they include costs unrelated to
    Complainant's attachments.[^52] Specifically, Complainant argues
    that the audit benefited Respondent by providing a complete mapping
    of its system.[^53] Complainant also asserts that Respondent has not
    answered its request for information to verify the cost.[^54]
    Respondent states that its contractor was paid \$3.50 for each
    unauthorized attachment it located and that Respondent's costs were
    passed along to Complainant.

8.  We previously stated that a utility cannot engage a contractor to
    perform a pole count and disregard the costs because the attacher is
    responsible for paying for it.[^55] We also stated that the survey
    work should be done at a competitive rate in consonance with the
    nature of the work to be done.[^56] The cost of an inspection of
    pole attachments should be borne solely by the cable company only if
    cable attachments are the sole attachments inspected and there is
    nothing in the inspection to benefit the utility or other attachers
    to the pole.[^57] Also, a separate charge or fee for periodic
    inspections of the pole plant, including a pole count survey, is not
    justified if the costs associated with the inspection are already
    included in the rate, based on fully allocated costs, which the
    utility charges the cable company.[^58] We look closely at charges
    in excess of fully allocated costs to ensure that there is no double
    recovery for expenses for which the utility has been reimbursed
    through the annual fee.[^59]

9.  In order to determine whether the amount billed to Complainant for
    the pole count survey is excessive, we must consider whether the
    field count was related solely to cable attachments or contained an
    element of benefit to Respondent and, if the project was solely a
    field count of pole attachments, whether the cost for the survey was
    reasonable.[^60] Respondent has made no attempt to show that the
    survey was limited to cable attachments. Although Respondent stated
    that it paid its consultant \$3.50 per pole for 23,231 unauthorized
    attachments for a total of \$81,308.50, which Respondent passed
    through to Complainant, Respondent also states that it paid its
    consultant \$244,164.00 for a two year audit of its entire service
    area.[^61] Respondent also made no attempt to show that the
    unauthorized attachment survey charges were directly related to the
    actual costs of conducting the survey. However, there is nothing
    before us that would indicate that the costs of the audit charged to
    Complainant are unreasonable based solely on the sum of the charge
    to Complainant.[^62] Therefore, we conclude that, despite the
    methodology used to calculate the survey charges, the total charges
    to Complainant appear to be a reasonable reflection of the actual
    cable-related costs associated with the audit. However, Respondent
    must provide an explanation that supports the conclusion that the
    charges for the survey are not otherwise included in the carrying
    charges and the annual rate. Complainant must also be given access
    to all pertinent records so that it may verify the results of the
    audit as it pertains to the number of unauthorized attachments in
    order to verify the cost of the audit.[^63] As more fully discussed
    below, the number of unauthorized attachments, and therefore the
    total charge for the audit, should be reduced.

B. Unauthorized Attachment Penalties

10. The terms and conditions of pole attachment agreements and the
    practices implementing pole attachment agreements, including
    penalties for unauthorized attachments, must be just and
    reasonable.[^64] Respondent may takes steps to ensure that
    attachments made to its poles are in accordance with agreed upon
    safety standards[^65] so long as the terms and conditions imposed
    are just and reasonable.[^66] Unauthorized penalty fees are not per
    se unreasonable.[^67] Although an unauthorized attachment penalty
    may exceed the annual pole attachment rate, the amount of the
    penalty and the circumstances under which it is imposed must be just
    and reasonable.[^68] In this case, Complainant and Respondent
    disagree on the amount of the penalty and the number of unauthorized
    attachments upon which it is imposed.

11. The parties have agreed on an authorization process, which neither
    disputes is just and reasonable.[^69] The process allows Respondent
    to collect payment for attachments and to monitor compliance with
    safety codes.[^70] Complainant asserts only that the penalty
    provided for unauthorized attachments is excessive either in an
    amount of \$250.00 per pole or \$50.00 per pole. Complainant offers
    evidence to demonstrate that industry practice is to impose a
    penalty of \$15.00 to \$25.00 or one based upon a limited number of
    years.[^71] Respondent variously characterizes the penalty fee as
    \"an unauthorized attachment penalty of a one-time charge;\"[^72]
    both liquidated damages and a penalty including elements of
    \"deterrent value, unknown safety risk value, back rent and
    administrative cost factors;\"[^73] and a liquidated damages
    clause.[^74] In calculating its penalty, Respondent assumes that
    Complainant's unauthorized attachments have been on the poles for
    fourteen years. It then calculates the present value of back rent
    and asserts that if the unauthorized attachment penalty remained at
    \$50.00 Complainant would have a financial incentive to attach to
    poles and no incentive to comply with the agreement.[^75]

12. The applications process provides assurance to Respondent that it
    will be compensated for Complainant's attachments and satisfied that
    Complainant's attachments are in compliance with safety codes or
    negotiate with Complainant to resolve any disagreements regarding
    safety issues.[^76] The requirement of authorization prior to
    attachment, when applied in a fair and reasonable manner, is not
    unjust or unreasonable and Complainant is obligated to comport with
    the agreed to procedure. The only benefit to Complainant of failure
    to make application for attachment is the annual fee that it would
    not pay due to Respondent's ignorance of the particular attachment.
    An unauthorized attachment provides no benefit to Complainant with
    regard to safety. Complainant is under the same obligation to make
    its attachments safely and incurs the same liability for any safety
    violations for unauthorized attachments as it does for authorized
    ones. Any compromise to the integrity of the pole jeopardizes
    Complainant's installation and service as it does that of
    Respondent.

13. Respondent suggests that the cost avoided by Complainant for
    unauthorized attachments is the present value of fourteen years of
    annual fees[^77] plus some speculative amount related to supposed
    increased safety risks and administrative costs.[^78] First, it is
    unreasonable to infer that the alleged unauthorized attachments at
    issue have existed for fourteen years.[^79] Second, because
    Complainant must always comply with safety concerns, there is no
    cost avoided by Complainant related to safety issues. Third, because
    Complainant is obligated to pay the maximum allowable rate, which is
    based upon fully allocated costs, any indirect administrative costs
    are recovered in the annual fee.[^80] Finally, Complainant may be
    charged the direct costs of the audit. We find that Complainant has
    met its burden to show that Respondent's penalty fees are
    unreasonable.

14. We believe that a reasonable penalty for unauthorized attachments
    will not exceed an amount approximately equal to the annual pole
    attachment fee for the number of years since the most recent
    inventory or five years, whichever is less, plus interest at a rate
    set for that period by the Internal Revenue Service (\"IRS\") for
    individual underpayments pursuant to Section 6621 of the Internal
    Revenue Code.[^81] The information submitted by Complainant[^82]
    summarizes our experience and demonstrates that an amount equal to
    no more than five years annual fee is reasonable. This penalty will
    provide incentive for Complainant to comply with a reasonable
    applications process while encouraging utilities not to delay audits
    of unauthorized attachments. We believe that use of the higher IRS
    underpayment interest rate rather than the overpayment interest rate
    is appropriate for unauthorized attachment penalties, although we
    note that the IRS interest rates for individual underpayments and
    overpayments are currently the same.[^83] The unauthorized
    attachment penalty is imposed in lieu of any amounts recoverable for
    unpaid annual fees, however, the actual cost of the audit is in
    addition to the penalty fee.

15. Complainant also argues that it is unfair to charge it for
    unauthorized attachments to drop poles prior to December 29, 1997,
    when Respondent notified Complainant of its intent to collect such
    fees. We agree. Respondent has not demonstrated that inclusion of
    drop poles in the authorization process was Respondent's practice
    prior to 1996, when it conducted the survey. The record in this case
    supports Complainant's assertion that the practices of the parties
    did not include drop poles in the authorization regime prior to
    December 29, 1997, when Respondent informed Complainant that drop
    poles would be included in future.[^84] In response to our
    questions, Complainant states that it never submitted an application
    to attach to drop poles.[^85] Respondent states that it receives
    applications for drop pole attachments[^86] and that the previous
    pole total included on the invoices to Complainant includes drop
    poles.[^87] Respondent did not directly answer our question
    concerning whether the number of drop poles identified as having
    unauthorized attachments is the total number of drop poles to which
    Complainant has attachments. Further, although Respondent asserts it
    used applications from Complainant in its audit to identify
    authorized attachments;[^88] it did not produce any such
    applications for attachments to drop poles submitted to it by
    Complainant. Lastly, the Old Agreement included a requirement that
    an application for attachment to poles include a sketch \"showing
    the detailed location of poles being applied for.\"[^89] It refers
    to Exhibit C as the sketch to be included. Exhibit C gives a
    detailed example with a key showing various types of poles. They are
    all mainline poles; no drop poles are depicted. Based on the record,
    we find that Respondent's application of the authorization process
    to drop poles prior to 1998 is retroactive and unreasonable.

16. We determine, therefore, that it is unreasonable for Respondent to
    charge unauthorized attachment penalties for drop poles prior
    to 1998. We also determine that it is unreasonable for Respondent to
    charge unauthorized attachment penalties based on a total number of
    allegedly unauthorized attachments without giving Complainant credit
    for paying for allegedly non-existent attachments. Respondent shall
    recalculate the number of unauthorized attachments, to include
    credit for the allegedly non-existent attachments for which
    Complainant paid an annual pole attachment fee, and to exclude drop
    poles from the count. Also, Respondent's contractor's fee was
    contingent upon finding unauthorized attachments and resulted in 22%
    of identified attachments being deemed unauthorized. This is in
    contrast to an earlier survey conducted in 1992 which found only 281
    unauthorized attachments by the Complainant and a survey conducted
    in 1987 which found an unspecified number of unauthorized
    attachments existing before the cable system was even acquired by
    Complainant.[^90] Therefore, for the remaining unauthorized
    attachments, Respondent shall provide Complainant with access to all
    pertinent records so that it may verify the results of the audit,
    both for the calculation of the survey costs and the penalty
    fees.[^91] Complainant may be charged a reasonable copy fee for
    records provided by Respondent.

C. Drop Poles

17. Finally, Complainant asserts that it is industry practice for
    utilities not to require separate applications or payment for
    attachments to drop poles.[^92] A service drop is an adjunct line to
    the electric supply or communications main line.[^93] Where it is
    necessary to maintain ground clearances a pole may be used to
    provide support for the service drop.[^94] A subscriber service drop
    is a cable connecting a subscriber to the cable distribution network
    via a tap located on or near a distribution pole. In cases where it
    is necessary for the drop to cross a roadway, a drop pole is placed
    on the side of the roadway opposite the cable tap and the drop is
    hung over the roadway suspended on the distribution pole and the
    drop pole. The cable then enters the subscriber\'s premises from the
    drop pole. Poles used for service drops are usually 30 feet or less
    in height and are typically smaller in diameter than supply line
    poles.

18. In Amendment of Rules and Policies Governing Pole Attachments,[^95]
    we determined not to exclude poles which are 30 feet or less in
    height from the pole attachment rate formula calculations. We did
    not distinguish drop poles from mainline poles. It is reasonable for
    a utility to include the cost of drop poles when calculating its
    annual pole attachment rate to the extent the utility has not been
    fully compensated for the drop poles in make-ready charges. The drop
    poles must be included in the pole count when calculating the cost
    of a bare pole. In this case, Respondent may charge an annual pole
    attachment fee for drop poles beginning in 1998, after the date it
    provided Complainant with notice that it would be charging an annual
    fee for drop poles.

19. Complainant also argues that time constraints placed upon it in
    making service connections[^96] and the delays inherent in the
    application process for attachments,[^97] make it unreasonable to
    include drop poles in the regular applications process. On the other
    hand, it is reasonable for Respondent to insist that it be notified
    of attachments to drop poles so that it may inspect them for
    compliance with safety specifications as well as charge a pole
    attachment rate for use of the poles. We believe that attachments to
    drop poles are adjuncts to attachments that are approved in the
    normal application process. As noted above, the provisions of the
    agreement assure that Complainant will diligently pursue its share
    of the joint responsibility for meeting safety requirements when
    attaching to any poles, including drop poles. For drop poles,
    therefore, notification to Respondent of Complainant's use of a drop
    pole is reasonable but Complainant need not wait for approval prior
    to attaching.

# IV. CONCLUSION

20. We conclude that the unauthorized attachment penalty fee imposed by
    Respondent is excessive. We also conclude that the retroactive
    imposition of the application process to drop poles is not just and
    reasonable. Therefore, we will order Respondent to recalculate the
    total unauthorized pole attachment penalty imposed on Complainant in
    accordance with this order. We will also order Respondent to
    recalculate is costs for the pole count survey in accordance with
    this order and allow Complainant access to the records necessary to
    verify the count and the cost. On a prospective basis, we find that
    it is reasonable for Respondent to receive compensation for
    Complainant's use of its poles, including any drop poles. However,
    we find that drop poles are subject to notification requirements but
    not prior approval requirements separate from the approval of the
    attachment for which it is an adjunct.

# V. ORDERING CLAUSES

21. Accordingly, IT IS ORDERED, pursuant to Sections 0.321 and
    1.1401-1.1418 of the Commission\'s Rules, 47 C.F.R. §§ 0.321 and
    1.1401-1.1418, that the complaint referenced herein IS GRANTED TO
    THE EXTENT INDICATED HEREIN.

22. IT IS FURTHER ORDERED, pursuant to Sections 0.321 and 1.1401-1.1418
    of the Commission\'s Rules, 47 C.F.R. §§ 0.321 and 1.1401-1.1418,
    that the unauthorized attachment penalties in the amount of \$50 and
    \$250 are UNREASONABLE.

23. IT IS FURTHER ORDERED, pursuant to Sections 0.321 and 1.1401-1.1418
    of the Commission\'s Rules, 47 C.F.R. §§ 0.321 and 1.1401-1.1418,
    that Respondent calculate a new unauthorized attachment penalty and
    a new total amount for unauthorized attachment penalties in
    accordance with this Order.

24. IT IS FURTHER ORDERED, pursuant to Sections 0.321 and 1.1401-1.1418
    of the Commission\'s Rules, 47 C.F.R. §§ 0.321 and 1.1401-1.1418,
    that Respondent calculate a new total amount for the actual costs of
    the pole count audit in accordance with this Order.

25. IT IS FURTHER ORDERED, pursuant to Sections 0.321 and 1.1401-1.1418
    of the Commission\'s Rules, 47 C.F.R. §§ 0.321 and 1.1401-1.1418,
    that Respondent provide to Complainant all maps and other documents
    created during or supporting Respondent's pole count audit and an
    explanation and verification of its methodology for calculating the
    cost.

26. IT IS FURTHER ORDERED, pursuant to Sections 0.321 and 1.1401-1.1418
    of the Commission\'s Rules, 47 C.F.R. §§ 0.321 and 1.1401-1.1418,
    that Respondent shall develop a simplified procedure in accordance
    with this Order, for Complainant to notify Respondent that
    Complainant is attaching to a drop pole.

> FEDERAL COMMUNICATIONS COMMISSION
>
> William H. Johnson
>
> Deputy Chief, Cable Services Bureau

[^1]: Communications Act of 1934, *as amended*, 47 U.S.C. § 224.

[^2]: 47 C.F.R. §§ 1.1401-1.1418.

[^3]: We granted Respondent two extensions of time to file its Response.
    *See* In the Matter of Mile Hi Cable Partners, LP, et al. v. Public
    Service Company of Colorado, 13 FCC Rcd 13407 (1998) (\"First Mile
    Hi Order\"); *see also,* letter dated July 24, 1998 from Elizabeth
    W. Beaty, Chief, Financial Analysis and Compliance Division, Cable
    Services Bureau to Marjorie K. Connor, Hunton & Williams, counsel
    for Respondent (\"July 24, 1998 letter\"). On April 19, 1999, the
    Cable Services Bureau received notice of substitution of counsel for
    Respondent to LeBoeuf, Lamb, Greene & MacRae, LLP.

[^4]: Complainant filed an opposition to the motion on September 22,
    1998 and Respondent filed a reply to the opposition October 2, 1998.
    The exhibits offered in the supplement are pictures of alleged
    safety violations involving cable attachments and anecdotal
    incidents of service disruptions involving a wire identified as
    being a cable television wire.

[^5]: *See* July 24, 1998 letter.

[^6]: *See* In the Matter of Mile Hi Cable Partners, LP, et al. v.
    Public Service Company of Colorado, 14 FCC Rcd 3244 (1999) (\"Second
    Mile Hi Order\").

[^7]: 47 C.F.R. § 1.1409 (a).

[^8]: *See* letters dated April 1, 1999 to both parties from Patrick A.
    Boateng, Acting Chief, Financial Analysis and Compliance Division,
    Cable Services Bureau.

[^9]: *See* Complainant's \"Response to Letter Inquiry\"
    (\"Complainant's Answers\") and Respondent's \"Answers of Public
    Service Company of Colorado to Questions of the Cable Services
    Bureau\" (\"Respondent's Answers\").

[^10]: 47 C.F.R. § 1.1404 (l).

[^11]: Complaint at ¶ 25.

[^12]: 47 U.S.C. §224 (b) (1).

[^13]: 47 U.S.C. § 224(b)(1) and (2). Colorado has not certified that it
    regulates rates, terms and conditions of pole attachments. *See*
    Public Notice, \"States That Have Certified That They Regulate Pole
    Attachments,\" DA 92-201, 7 FCC Rcd 1498 (1992).

[^14]: 47 U.S.C. § 224(b)(1). The Commission has developed a formula
    methodology to determine the maximum allowable pole attachment rate.
    *See* Adoption of Rules for the Regulation of Cable Television Pole
    Attachments, First Report and Order, 68 FCC 2d 1585 (1978); Second
    Report and Order, 72 FCC 2d 59 (1979); Memorandum and Order, 77 FCC
    2d 187 (1980), *aff\'d*, Monongahela Power Co. v. FCC, 655 F.2d 1254
    (D.C. Cir. 1985) (*per curiam*); and Amendment of Rules and Policies
    Governing the Attachment of Cable Television Hardware to Utility
    Poles, 2 FCC Rcd 4387 (1987). *See also*, Implementation of Section
    703(e) of the Telecommunications Act of 1996, 13 FCC Rcd 6777 (1998)
    and Amendment of Rules and Policies Governing Pole Attachments, FCC
    00-116 (released April 3, 2000).

[^15]: Amendment of Rules and Policies Governing the Attachment of Cable
    Television Hardware to Utility Poles, Memorandum Order and Opinion
    on Reconsideration, 4 FCC Rcd 468 at ¶ 25 (1989).

[^16]: ^?^ Response at p. 7.

[^17]: ^?^ Reply at Exhibit 1.

[^18]: ^?^ Complaint at p. 2, n. 1; Response at p. 7. The sample
    provided in the Complaint was executed on June 29, 1982.

[^19]: ^?^ The letter suggests that there was some discussion and
    unfruitful attempts at negotiation between the parties.

[^20]: ^?^ Response at Attachment 1.

[^21]: ^?^ Complaint at Exhibit 3.

[^22]: ^?^ Old Agreement §2.1; New Agreement §2.1.

[^23]: ^?^ Old Agreement §2.5; New Agreement §2.4.

[^24]: ^?^ Old Agreement §2.1; New Agreement §2.1.

[^25]: ^?^ Old Agreement, Exhibit B.

[^26]: ^?^ Old Agreement; Exhibit C.

[^27]: ^?^ Old Agreement §2.6; New Agreement §§2.7 &2.8

[^28]: ^?^ New Agreement §2.6.

[^29]: ^?^ Old Agreement,§2.9; New Agreement §1.

[^30]: ^?^ Old Agreement, Specifications, Item 7; New Agreement, §2.9 &
    Specifications, Item 7.

[^31]: ^?^ Old Agreement §2.10; New Agreement §2.10.

[^32]: ^?^ Old Agreement §3.10; New Agreement §3.12.

[^33]: ^?^ Old Agreement §3.6; New Agreement §3.8.

[^34]: ^?^ Old Agreement §3.7; New Agreement §3.9(a).

[^35]: ^?^ Old Agreement §6.7.

[^36]: ^?^ New Agreement §2.11(a).

[^37]: ^?^ New Agreement §2.11(b).

[^38]: ^?^ New Agreement §4.3.

[^39]: ^?^ New Agreement §4.1(b).

[^40]: ^?^ Response at Attachment 1.

[^41]: ^?^ Complaint at Exhibit 3.

[^42]: ^?^ *Id*. The major discrepancy is on Invoice 03387 wherein
    Respondent charges for 1,980 allegedly unauthorized attachments in
    Littleton, but not 211 in Cherry Hills Village, 1,089 in Englewood,
    9 in Greenwood Village, and 407 in Sheridan. Complaint at Exhibit 3.
    There are minor discrepancies on Invoices 03383 (difference of 17
    poles), and 03385 (difference of 16 poles). *Id*.

[^43]: ^?^ Respondent's Answers at No. 3.

[^44]: ^?^ *Id*.

[^45]: ^?^ *Id*.

[^46]: ^?^ *See, e.g.*, Complaint at Exhibit 3, Invoice 03380: San
    Luis/San Pablo, Invoice 03382: Northglenn, Invoice 03383: City and
    County of Denver, and Invoice 03385: Jefferson County

[^47]: ^?^ *See, e.g.*, Complaint, at Exhibit 3, Invoice 03384, Invoice
    03385: Golden, Lakewood, Invoice 03387: Adams County, Commerce City,
    and Invoice 03389.

[^48]: Newport News Cablevision, Ltd. Communications, Inc. v. Virginia
    Electric and Power Company, PA 87-006, DA 92-500, 7 FCC Rcd 2610 at
    ¶ 4 (1992), *citing* S. Rep. No. 580, 95^th^ Cong., 1^st^ Sess. at
    14 (1977).

[^49]: *Id.* at ¶ 4.

[^50]: New Agreement § 2.11 (b).

[^51]: *Id.*

[^52]: ^?^ Complaint at ¶¶ 69-71.

[^53]: *Id.*

[^54]: ^?^ Complaint at ¶¶ 67-68.

[^55]: *See* Cable Texas v. Entergy at ¶ 14.

[^56]: *Id.*

[^57]: *See* In the Matter of Cable Texas, Inc. v. Entergy Services,
    Inc., File No. PA 97-006, DA 99-751, 14 FCC Rcd 6647 at ¶ 13 (1999)
    (\"Cable Texas v. Entergy\"); *see also* Newport News Cablevision,
    Ltd. v. Virginia Power, 7 FCC Rcd 2610 at ¶ 8 (1992).

[^58]: Amendment of Rules and Policies Governing the Attachment of Cable
    Television Hardware to Utility Poles, 2 FCC Rcd 4387 at ¶ 44 (1987).

[^59]: *Id.* *See also,* In the Matter of Texas Cable &
    Telecommunications Association, et al. v. Entergy Services, Inc. et
    al., File No. PA 97-005, DA 99-1118, 14 FCC Rcd 9138 (1999); *and*
    Teleprompter Corp. v. Houston Lighting and Power Co., 49 Rad. Reg.
    2d 1301 (1981).

[^60]: *Id.* at ¶ 9.

[^61]: *See* Response at Attachment 1. Respondent does not state whether
    the contract with DCP Consulting was awarded competitively. We note
    that Ms. Linda Major, who awarded the contract on behalf of
    Respondent is now a partner in DCP consulting. *Id.*

[^62]: The audit examined approximately 115,000 attachments and
    Complainant was billed \$3.50 for each one alleged to be
    unauthorized or \$81,308.50. This is approximately \$0.70 per pole;
    a rate that our experience suggests may be reasonable. *See*,
    *e.g*., Cable Texas v. Entergy at ¶ 16 (survey cost per pole set at
    \$1.40).

[^63]: Reply at p. 13.

[^64]: ^?^ Second Mile Hi Order at ¶ 19.

[^65]: ^?^ *Id.*

[^66]: ^?^ 47 U.S.C. §224(b).

[^67]: *See* In the Matter of Williamsburg Cablevision v. Carolina Power
    and Light Co., PA 82-007, and Alert Cable TV of North Carolina, Inc.
    v. Carolina Power and Light, PA 82-0012, 52 Rad. Reg. 2d. 1697,
    aff\'d sub nom. Alert Cable TV of North Carolina, Inc. v Carolina
    Power and Light Company, 1985 FCC LEXIS 3679 (1985).

[^68]: ^?^ Second Mile Hi Order at ¶ 19.

[^69]: With the exception of drop poles, which we discuss below.

[^70]: ^?^ *See* Response at p. 8; Complaint at ¶ 15.

[^71]: ^?^ Complaint at ¶ 28 and at Exhibit 10.

[^72]: ^?^ Response at p. 5.

[^73]: ^?^ *Id*.

[^74]: ^?^ *Id.* at p. 7.

[^75]: ^?^ Response at pp. 17-18.

[^76]: ^?^ The applications process may be used for various purposes by
    different utilities, such as notifying the utility of the need for
    make-ready work or to requesting rectification of pre-existing
    safety violations. Some agreements, such as here, provide for an
    optional engineering survey to identify any special conditions
    affecting the proposed attachment. *See* Old Agreement §2.2, New
    Agreement §2.2. An application may be denied only in limited
    circumstances. See 47 C.F.R. §1.1403(a). Lack of capacity on a
    particularly facility does not automatic entitle a utility to deny
    an application. Implementation of the Local Competition Provisions
    in the Telecommunications Act of 1996, 11 FCC Rcd 15499 at ¶¶
    1162-1163 (1996).

[^77]: ^?^ Response at p. 18.

[^78]: ^?^ Response at p. 19, n. 28.

[^79]: In addition to partial surveys done in 1987 and 1992 (*see*
    Respondent's Answers at No. 1), Complainant acquired the systems
    less than 14 years ago. Also, Respondent states that the audit that
    generated this complaint was triggered by its perception that *new*
    construction was occurring without authorization. *See* Respondent's
    Answers at No. 2.

[^80]: ^?^ *See* Texas Cable & Telecommunications Association, et al. v.
    Entergy Services, Inc., et al., DA 99-1118, 14 FCC Rcd 9138 (1999).

[^81]: ^?^ 26 U.S.C. §6621; *see also* 26 C.F.R. §§ 301.6621-1. Current
    interest rates can be found at Rev. Rul. 2000-30, 2000-25 I.R.B.
    1262.

[^82]: ^?^ Complaint at Exhibit 10.

[^83]: *Cf.* In the Matter of Long-Term Telephone Number Portability
    Tariff Filings, 14 FCC Rcd 17339 (1999) (overpayment rate
    appropriate when the interest is not a penalty).

[^84]: ^?^ Complainant's Answers at no. 1.

[^85]: ^?^ *Id*. at no. 3.

[^86]: ^?^ Respondent's Answers at no. 4.

[^87]: ^?^ *Id*.

[^88]: ^?^ Respondent's Answers at no. 3.

[^89]: ^?^ Old Agreement, §2.1.

[^90]: Respondent's Answers at no. 1.

[^91]: Respondent denies that it counted overlashed wires as a separate
    attachment. If Complainant's review of the survey indicates that
    overlashed wires were counted as a separate attachment, these should
    also be removed from the total count.

[^92]: ^?^ Complaint at ¶ 54.

[^93]: ^?^ NESC §2.

[^94]: ^?^ Complaint at ¶ 51.

[^95]: In the Matter of Amendment of Rules and Policies Governing Pole
    Attachments, Report and Order, CS Docket No. 97-98, FCC 00-116,15
    FCC Rcd 6453 (2000).

[^96]: ^?^ Complaint at ¶ 59.

[^97]: ^?^ Complaint at ¶ 58.