Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

Alabama Cable Telecommunications Association; )

Comcast Cablevision of Dothan, Inc. et al. )

Complainant, )

) File No. PA 00-003

v\. )

)

Alabama Power Company, )

Respondent. )

# ORDER

**Adopted: September 8, 2000 Released: September 8, 2000**

By the Deputy Chief, Cable Services Bureau:

1.  On June 23, 2000, the above-captioned Complainant filed a pole
    attachment complaint (\"Complaint\") with the Federal Communications
    Commission (\"Commission\") against the above-captioned Respondent
    pursuant to Section 224 of the Communications Act of 1934, *as
    amended* (\"Pole Attachment Act\")[^1] and Subpart J of the
    Commission\'s Rules.[^2] Complainant also filed a Petition for
    Temporary Stay (\"Petition\"). Respondent filed its Response on July
    14, 2000. Along with its Response, Respondent filed a Motion to
    Dismiss the Complaint for lack of jurisdiction, a Motion for
    Confidential Treatment of its financial information and an
    opposition to Complainant's Petition. Complainant filed its Reply on
    August 29, 2000, along with its opposition to Respondent's Motion
    for Confidential Treatment.[^3] Our rules require that the parties
    seek first to resolve their differences by negotiation.[^4] Based on
    our review of the record, we believe that further negotiations
    between the two parties are likely to be fruitless.[^5] In this
    Order, we deny Respondent's Motion to Dismiss, we grant the
    Complaint in part, we temporarily grant Respondent's Motion for
    Confidential Treatment in part and we dismiss the Petition for Stay
    as moot.

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. The Commission shall provide that such rates, terms and
conditions are just and reasonable.[^6] 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.[^7] The
Commission is authorized to adopt procedures necessary to hear and to
resolve complaints concerning such rates, terms, and conditions.[^8] The
formula developed to resolve complaints concerning rates is known as the
Cable Formula. The Telecommunications Act of 1996 (\"1996 Act\"),[^9]
expanded the scope of Section 224 by applying the pole attachment rate
formula to rates for pole attachments made by telecommunications
carriers[^10] in addition to cable systems,[^11] until a separate
methodology[^12] becomes effective for telecommunications carriers after
February 8, 2001.[^13] Our current Cable Formula applies to attachments
made by cable systems and telecommunications carriers providing
telecommunications services until February 8, 2001.[^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]

3.  The parties to this Complaint have been engaged in an approximately
    20 year relationship, during which time Complainant's attachments to
    Respondent's poles were governed by agreements which provided for
    Complainant to pay an annual pole attachment fee to Respondent. For
    a number of years prior to this Complaint, the parties' have used
    the Commission's Cable Formula as the basis for negotiating this
    rate. For the year beginning July 1999 through June 2000,
    Complainant was charged an annual pole attachment rate of \$7.47 per
    pole.[^16] Complainant has not challenged that rate. In June of this
    year, Respondent announced that it was rescinding all existing
    agreements and desired Complainant to enter into new agreements,
    effective September 11, 2000, which are similar to the old
    agreements except that the annual rate charged is \$38.81 instead of
    \$7.47. Complainant responded by filing this Complaint. In order to
    calculate a reasonable pole attachment rate when the parties to a
    pole attachment agreement cannot negotiate a reasonable rate, we
    apply our Cable Formula using public data when available. Both
    parties submitted pole attachment rate calculations that drew
    similar conclusions. Complainant even submitted calculations that
    took into account arguments raised by Respondent, which increased
    the maximum rate calculation.[^17] Complainant has agreed to pay an
    annual pole attachment rate of \$7.47, which exceeds the maximum
    rate either party calculated using the formula prescribed by the
    Pole Attachment Act, and therefore exceeds Respondent's fully
    allocated costs associated with the attachment.

4\. Respondent does not attempt to justify its \$38.81 rate using the
Cable Formula. Instead Respondent argues first that we dismiss the
Complaint for lack of jurisdiction, based on the recent decision in Gulf
Power, et al. v. FCC[^18] (\"Gulf Power II\"). Gulf Power II disposed of
consolidated petitions for review of the Commission's Order[^19]
implementing 47 USC § 224, as amended by the 1996 Act. Further
litigation in this matter is in progress and as a consequence, the
mandate in the Gulf Power II proceeding has not been issued by the
Court. Pending the issuance of a mandate from the Court, or a
clarification of the Gulf Power II decision, we will continue to apply
our pole attachment rules to all attachers who are either cable service
or telecommunications service providers. Therefore, we will deny
Respondent's Motion to Dismiss.

5\. Respondent next poses a variety of arguments in support of changing
the Cable Formula. All of these arguments have been addressed and
rejected in prior Commission Orders. For two decades the Cable Formula
has provided a stable and certain regulatory framework, that may be
applied simply and expeditiously requiring \"a minimum of staff,
paperwork and procedures consistent with fair and efficient
regulation.\"[^20] Congress did not believe that special accounting
measures or studies would be necessary because most cost and expense
items attributable to utility pole, duct and conduit plant were already
established and reported to various regulatory bodies, in this case, to
the Federal Energy Regulatory Commission (\"FERC\").[^21] Further, the
United States Supreme Court has upheld the Cable Formula for calculating
pole attachment rates.[^22] Respondent bases its arguments on the 1996
Act amendments to the Pole Attachment Act, which imposed upon all
utilities, the duty to \"provide a cable television system or any
telecommunications carrier with nondiscriminatory access to any pole,
duct, conduit, or right-of-way owned or controlled by it.\"[^23] This
directive ensures that \"no party can use its control of the enumerated
facilities and property to impede, inadvertently or otherwise, the
installation and maintenance of telecommunications and cable equipment
by those seeking to compete in those fields.\"[^24] Because the Court in
Gulf Power, et al. v. FCC[^25] (\"Gulf Power I\"), held that application
of the mandatory access provisions of the amended Pole Attachment Act
effect a taking of utility property under the Fifth Amendment to the
United States Constitution,[^26] Respondent proffers that this change in
the Pole Attachment Act has changed the nature of its relationship with
Complainant from a voluntary relationship to an involuntary
relationship. Due to this change, Respondent argues that the pole
attachment fee must now satisfy the constitutional requirement of just
compensation.

6\. The Commission's rules governing pole attachment rates are directly
derived from the Pole Attachment Act.[^27] Under the Commission's rules,
a utility is compensated in full for any make-ready or change-out costs
associated with the attachment.[^28] Although our rules do not allow a
utility to recover twice for these costs,[^29] the Cable Formula used to
calculate an annual pole attachment rate allows a utility full recovery
of its costs associated with the space used for the attachment as well
as a return on capital. In order to avoid a prolonged and complex
methodology, our policy has been that not every detail of pole
attachment cost must be accounted for, nor every detail of non-pole
attachment cost eliminated from every account used in the Cable Formula.
The inclusion of unrelated expenses in certain accounts is balanced by
the exclusion of minor expenses that may have a legitimate nexus to pole
attachments in other accounts. The continued use of a clear rate formula
by the Commission is essential to encourage parties to negotiate for
pole attachment rates, terms and conditions and to avoid a prolonged and
expensive complaint process. We believe the Cable Formula accomplishes
these objectives and provides just compensation to the utility for the
space occupied on the pole.

7\. We do not believe that an attacher that is already attached to a
utility's poles needs to file a complaint for access under the
Commission's rules. However, to avoid any confusion, we will order
Respondent to allow the Complainant to continue to remain attached at
the current rate of \$7.47, pending the satisfactory negotiation of a
new agreement. Because Respondent failed to justify its proposed annual
pole attachment rate of \$38.81, we find that rate to be unreasonable
pursuant to the Pole Attachment Act and the Commission's rules. We will
order the parties to negotiate a new agreement in good faith using the
Cable Formula as a guide to establishing a reasonable rate. To the
extent that Complainant has paid the \$38.81 rate, we will order refunds
of any charges over the \$7.47 amount.

8\. Finally, Respondent requests confidential treatment of its
commercial and financial information. Because the parties have reached
an agreement on the terms of disclosure of this information to the
Complainant, it is not essential to a resolution of this Complaint to
make a final determination of this issue at this time. We are hard put
to find justification for the confidential treatment of public documents
but due to the changing nature of utility regulation, we will reserve
this issue for further review. In the interim, we will continue to
withhold the requested material from public disclosure. However, we
emphasize that it is never appropriate to withhold FERC Form 1 data and
other essential data from an attacher, nor is it ever appropriate to
require an attaching entity to agree to any curtailment of its statutory
right to access this information and to file a complaint along with its
analysis of the information with the Commission. We also emphasize the
necessity of Respondent filing a complete, unredacted copy of the FERC
Form 1 with the Commission. Additionally, because we resolve the
Complaint herein, we will dismiss the Petition for Stay as moot.

9\. 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.

10\. 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's Motion to Dismiss IS DENIED.

11\. 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's Motion for Confidential Treatment is GRANTED IN PART TO THE
EXTENT INDICATED HEREIN, pending our further review.

12\. 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
Complainant's Petition for Temporary Stay IS DISMISSED AS MOOT.

13\. 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 continue to GRANT ACCESS to Complainant on the terms of the
existing agreements pending the negotiation of new agreements and that
the pole attachment agreements between Respondent and Complainant ARE
MODIFIED TO THE EXTENT INDICATED HEREIN.

14\. 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 annual pole attachment rate of \$38.81, IS UNREASONABLE and IS
TERMINATED.

15\. 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 annual pole attachment rate of \$7.47 IS CONTINUED, pending further
negotiations.

16\. 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 REFUND to Complainant, within thirty (30) days of the
release of this Order, that portion of the amount paid in excess of
\$7.47, plus interest to the date of refund, for the period from June
23, 2000 to the present, plus interest.

17\. 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 and Complainant SHALL NEGOTIATE IN GOOD FAITH, new pole
attachment agreements with a just and reasonable annual pole attachment
rate, in accordance with the Commission's rules.

FEDERAL COMMUNICATIONS COMMISSION

William H. Johnson, Deputy Chief

Cable Services Bureau

[^1]: 47 U.S.C. §224.

[^2]: 47 C.F.R. §§1.1401--1.1418.

[^3]: We granted Complainant an extension of time to file its Reply.
    *See* In the Matter of Alabama Cable Telecommunications Association,
    et al. v. Alabama Power Company, File No. PA 00-003, DA 00-1847
    (released August 11, 2000). On August 11, 2000, the parties reached
    an agreement concerning the confidential treatment of information
    provided to the Complainant by the Respondent, and Complainant was
    provided with an unredacted copy of the Response. *See* letter dated
    August 22, 2000 to Kathleen F. Costello, Cable Services Bureau, from
    Raymond A. Kowalski, counsel for Respondent.

[^4]: 47 C.F.R. § 1.1404 (l) (1999).

[^5]: Complaint at ¶ 20.

[^6]: 47 U.S.C. §224 (b) (1).

[^7]: 47 U.S.C. § 224(b)(1) and (2). Alabama 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).

[^8]: 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, 15 FCC Rcd 6453 (2000).

[^9]: Pub. L. No. 104-104, 110 Stat. 56 (1996).

[^10]: 47 U.S.C. § 153(44).

[^11]: 47 U.S.C. § 153(8); 47 U.S.C. § 602(5).

[^12]: *See* Implementation of Section 703(e) of the Telecommunications
    Act of 1996, 13 FCC Rcd 6777 at ¶¶ 116-130 (1998).

[^13]: *See* 47 U.S.C. § 224(d)(3) and 47 U.S.C. § 224(e)(4).

[^14]: *See* Amendment of Rules and Policies Governing Pole Attachments,
    FCC 00-116, 15 FCC Rcd 6453 at ¶ 5 (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]: *See* Complaint at Exhibit 4.

[^17]: We decline to address the parties' specific issues relating to
    the application of the formula because, under any scenario proposed
    by the Respondent, Complainant's agreed rate of \$7.47 exceeds the
    fully allocated costs.

[^18]: Gulf Power, et al. v. FCC and USA, 208 F. 3d 1263 (11th Cir.,
    released April 11, 2000).

[^19]: Implementation of Section 703(e) of the Telecommunications Act of
    1996, CS Docket No. 97-151, FCC 98-20, 13 FCC Rcd 6777 (1998).

[^20]: ^?^*See* S. Rep. No. 95-580, 95th Cong., 1st Sess. at 21 (1977)
    (stating that it was the desire of the drafters "that the Commission
    institute a simple and expeditious CATV pole attachment program
    which will necessitate a minimum of staff, paperwork and procedures
    consistent with fair and efficient regulation").

[^21]: *Id.*

[^22]: FCC v. Florida Power Corporation, 480 U.S. 245 (1987); *see
    also,* Gulf Power v. USA, 998 F. Supp. 1386 (N.D. Fla 1998),
    *aff'd,* 187 F.3d 1324 (11th Cir. 1999).

[^23]: 47 U.S.C. § 224 (f) (1).

[^24]: Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996, 11 FCC Rcd 15499 at ¶ 1123 (1996).

[^25]: Gulf Power, et al. v. USA and FCC, 187 F.3d 1324 (11th Cir.
    1999).

[^26]: U.S. Const., amend V (private property shall not be taken for
    public use without just compensation).

[^27]: The Supreme Court found that Congress enacted this legislation
    \"as a solution to a perceived danger of anticompetitive practices
    by utilities in connection with cable television service.\" FCC v.
    Florida Power Corp., 480 U.S. 245, 247 (1987). By conferring
    jurisdiction on the Commission to regulate pole attachments,
    Congress sought to constrain the ability of telephone and electric
    utilities to extract monopoly profits from cable television systems
    operators in need of pole space. *Id.* at 247-48. *See also* Alabama
    Power Co. v. FCC, 773 F.2d 363, 364 (D.C. Cir. 1985).

[^28]: "Make-ready\" generally refers to the modification of poles or
    lines or the installation of guys and anchors to accommodate
    additional facilities. A pole \"change-out\" is the replacement of a
    pole to accommodate additional users.

[^29]: We have stated on numerous occasions that the attaching entity
    should not be charged twice for the same costs, once for make-ready
    costs and again for the same costs if the business expense is
    reported in the corresponding pole or conduit capital account. See
    Amendment of Rules and Policies Governing Pole Attachments, FCC
    00-116, 15 FCC Rcd 6453 at ¶ 7 (2000).