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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 8, 2003 Decided May 16, 2003

No. 02-1163

PUBLIC SERVICE COMPANY OF COLORADO,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

MILE HI CABLE PARTNERS, L.P., ET AL.,

INTERVENORS

On Petition for Review of an Order of the

Federal Communications Commission

David R. Poe argued the cause for petitioner. With him on

the briefs was Brett A. Snyder.

Roberta L. Cook, Counsel, Federal Communications Commission, argued the cause for respondents. With her on the

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.
2

brief were Robert B. Nicholson and Robert J. Wiggers, Attorneys, U.S. Department of Justice, Jane E. Mago, Assistant

General Counsel, Federal Communications Commission, and

John E. Ingle, Deputy Associate General Counsel. Gregory

M. Christopher, Counsel, entered an appearance.

T. Scott Thompson argued the cause for intervenors. With

him on the brief were Wesley R. Heppler and Brian M. Josef.

Before: ROGERS and GARLAND, Circuit Judges, and

SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed Per Curiam.

Per Curiam: Public Service Company of Colorado (PSCo)

petitions for review of a Federal Communications Commission order that found certain terms and conditions of their

pole attachment agreement with Mile Hi Cable Partners,

L.P., et al. (TCI) unreasonable. We deny the petition. The

FCC’s modifications of the ‘‘rates, terms, and conditions’’ of

the agreement were a reasonable exercise of its regulatory

authority under the Pole Attachment Act.

I.

The statute authorizes the FCC to ‘‘regulate the rates,

terms, and conditions for pole attachments to provide that

such rates, terms, and conditions are just and reasonable’’ in

states that do not have regulations themselves (like Colorado). 47 U.S.C. § 224(b)(1). Accordingly, the Commission

adopted complaint and enforcement procedures to ensure that

cable systems have ‘‘nondiscriminatory access to utility poles,

ducts, conduits, and rights-of-way on rates, terms, and conditions that are just and reasonable.’’ 47 C.F.R. § 1.1401. If a

cable company believes that a particular rate, term, or condition of a pole attachment agreement is unjust or unreasonable, it is expected to attempt to renegotiate with the utility.

If negotiations fail, the company may seek resolution by filing

a complaint with the Commission.

The original agreements between PSCo and TCI were

signed between 1983 and 1995. Each of the agreements

required TCI to submit a written application and gain PSCo’s
3

approval before making an attachment. PSCo also has the

right to inspect the attachments, and TCI must maintain

them according to the applicable state and local safety regulations. The utility is indemnified for legal injuries related to

the attachments.

In May 1995, PSCo sent a new pole attachment agreement

to TCI for signature and advised TCI that it was terminating

the previous agreements. TCI signed but voiced objections.

The new agreement keeps most of the same obligations but

adds the requirement that TCI notify PSCo after the completion or removal of any installation. It also provides for a onetime fee of $250.00 for each attachment made by the cable

systems without the required authorization, replacing the

previous $50.00 penalty. And it further specifies that the

authorized attachment rate will be calculated according to a

FCC formula, an average of $3.77 annually per pole. When

PSCo exercises its right to audit the poles to detect unauthorized attachments and such attachments are found, TCI may

be charged for the costs.

In March 1996, about nine months after it had implemented

the new agreement, PSCo conducted an audit. The survey

disclosed that TCI had more than 25,000 unauthorized attachments. PSCo notified TCI about the study’s findings and

sent invoices for 23,231 of them on March 2, 1998. The

charges, totaling almost $6 million, included: (1) the unauthorized attachment charge of $250 per pole, (2) pole attachment

rental fees of $1.72 per pole for a six-month period for the

unauthorized attachments, and (3) a charge of $3.50 for each

unauthorized attachment for TCI’s share of the survey cost,

pursuant to their agreement. TCI refused to pay the

charges, and on March 13, 1998, PSCo filed suit against TCI

in the Denver District Court alleging breach of contract and

seeking damages for the unpaid invoice.

In response, TCI filed a complaint with the FCC, pursuant

to the Pole Attachment Act, alleging that the rates, terms,

and conditions that generated the civil action in Colorado

were unjust and unreasonable. The Bureau denied PSCo’s

Motion to Dismiss, rejecting the utility’s assertions that the
4

FCC lacked jurisdiction and that TCI was merely looking to

avoid the contractual remedy for its unauthorized attachments. See Mile Hi Cable Partners, L.P. v. Public Serv. Co.

of Colorado, 13 FCC Rcd 13407 (Cable Serv. Bur. 1998). One

week later, the state trial court dismissed PSCo’s complaint

on the grounds that the FCC had primary jurisdiction to

determine whether the rates, terms, and conditions of the

agreement were reasonable under the Pole Attachment Act.

See Public Serv. Co. of Colorado. v. Mile Hi Cable Partners,

L.P., No. 98CV2225, Order (Colo. Dist. July 21, 1998).

The Commission affirmed the Bureau’s decision, concluding

that the statute gave it primary jurisdiction to regulate the

alleged unjust and unreasonable terms and conditions in the

agreement. See Mile Hi Cable Partners, L.P. v. Public Serv.

Co. of Colorado, 14 FCC Rcd 3244 (1999). The Colorado

Court of Appeals also affirmed the essentials of the trial

court’s ruling, but remanded to reinstate PSCo’s breach of

contract claim and stay the proceedings until the FCC’s final

determination on the reasonableness of the unauthorized

attachment provisions. See Public Serv. Co. of Colorado v.

Mile Hi Cable Partners, L.P., 995 P.2d 310 (Colo. App. 1999).

The Cable Services Bureau addressed the merits of TCI’s

complaint on June 30, 2000. The Bureau determined, and the

Commission later agreed, that the $250.00 fee for unauthorized attachments was excessive. See Mile Hi Cable Partners, L.P. v. Public Serv. Co. of Colorado, 15 FCC Rcd 11450

(Cable Serv. Bur. 2000). The Commission affirmed the Bureau’s finding that, on the facts of this case, a reasonable

unauthorized attachment charge would equal ‘‘five times the

annual rent that [TCI] would have paid if the attachment had

been authorized.’’ Mile Hi Cable Partners, L.P. v. Public

Serv. Co. of Colorado, 17 FCC Rcd 6268, 6272 (2002).1

 It

1 The Bureau had indicated that a reasonable unauthorized

attachment fee would not exceed an amount equal to the annual

pole attachment fee for ‘‘the number of years since the most recent

inventory or five years, whichever is less.’’ Mile Hi Cable, 15 FCC

Rcd at 11458.
5

recommended that the charge be imposed in lieu of any

amounts recoverable for unpaid annual fees and in addition to

the recovery of the attachment survey costs. The Commission relied heavily upon the prevailing industry rates and the

length of time for the average TCI attachment in calculating

its figure.

The Commission also agreed with the Bureau that it would

be unjust and unreasonable to permit the utility to collect

unauthorized attachment fees for connections to ‘‘drop poles,’’

(poles that typically take a service drop line to customers that

are unusually far from a ‘‘mainline pole’’), prior to December

29, 1997, when PSCo sent invoices notifying TCI that it was

charging for drop pole attachments separately. The Bureau

considered PSCo’s failure to present evidence challenging

TCI’s assertion that it had never submitted an application to

make an attachment to a drop pole, and took note of an old

application’s sample sketch, which did not include drop poles

in its key. However, the Commission did find it reasonable

for PSCo to charge an annual pole attachment fee for drop

poles after it had notified TCI.

Finally, the Bureau concluded that it would be unjust and

unreasonable for PSCo to assess an unauthorized attachment

fee without taking into account TCI’s alleged payment for

poles to which it had not attached. In affirming the Bureau’s

decision, the Commission directed the utility to recalculate

the number of unauthorized attachments and to grant TCI

access to its records to verify the count.

II.

PSCo’s main contention is that the FCC exceeded its

jurisdiction under the Pole Attachment Act, 47 U.S.C.

§ 224(b)(1), and ignored its own precedent, by addressing

matters suited for the state trial court in Colorado. Specifically, PSCo believes that the FCC’s review of the agreement’s

application to drop poles, and its order directing the utility to

recalculate the number of unauthorized attachments and

credit TCI for payments supposedly made for unattached
6

poles, intruded on the state court’s jurisdiction over contract

law.2

 We do not agree.

Section 224(b)(1) of the Pole Attachment Act provides that:

[T]he Commission shall regulate the rates, terms,

and conditions for pole attachments to provide that

such rates, terms, and conditions are just and reasonable, and shall adopt procedures necessary and

appropriate to hear and resolve complaints concerning such rates, terms, and conditions.

47 U.S.C. § 224(b)(1) (emphasis added). The plain meaning

of the statute supports the Commission. It simply decided

that an agreement’s rate (unauthorized attachment charges),

term (application to drop poles), and condition (concerning

credits for overpayments) were unjust and unreasonable, and

authorized modifications pursuant to 47 C.F.R. § 1.1410.3

Moreover, if there were any ambiguity–which there is not–the

Commission’s interpretation of the jurisdictional scope of the

‘‘rates, terms, and conditions’’ of an agreement would be

entitled to Chevron deference. See Transmission Access

Policy Study Group v. FERC, 225 F.3d 667, 694 (D.C. Cir.

2000); Oklahoma Natural Gas Co. v. FERC, 28 F.3d 1281,

1283–84 (D.C. Cir. 1994).

2 At oral argument, the Commission abandoned its contention

that PSCo’s jurisdiction challenge is untimely. The government, as

a separate respondent, had not joined the FCC’s waiver argument

in the first place.

3 The regulation provides that:

If the Commission determines that the rate, term, or

condition complained of is not just and reasonable, it may

prescribe a just and reasonable, rate, term, or condition

and may:

(a) Terminate the unjust and unreasonable rate, term,

and condition;

(b) Substitute in the pole attachment agreement the just

and reasonable rate, term, or condition established by

the Commission; and

(c) Order a refund, or payment, if appropriate.
7

Nor do we think that the Commission’s decision regarding

drop poles, finding it unreasonable for the term ‘‘pole’’ to be

applied retroactively to cover them without prior notification,4

amounts to a question of contract interpretation appropriate

only for the state trial court applying Colorado law. The

statute provides that the Commission is to regulate the terms

of a pole attachment contract unless ‘‘such matters are regulated by a State.’’ 47 U.S.C. § 224(c)(1). Since Colorado has

not established such regulations, the Commission was permitted to regulate the application of a ‘‘term’’ of this agreement

as it relates to the application of a particular ‘‘rate.’’ And the

Commission reasonably affirmed the Bureau’s reliance on the

utility’s failure to produce any evidence that TCI had ever

submitted an application for drop pole attachments and could

not explain why drop poles were not depicted in the sample

sketches on the attachment applications.

PSCo also contends that the Bureau’s order to ‘‘recalculate

the number of authorized attachments, to include credit for

allegedly non-existent attachments for which TCI paid an

annual pole attachment fee, and to exclude drop poles from

the count’’ was an assessment of damages that only the state

trial court had authority to calculate. Mile Hi Cable, 15 FCC

Rcd at 11459. But we see nothing in the language of the Act

that conflicts in any way with that order. The express

authority to regulate rates surely includes the power to

specify how those rates should be calculated.

The directive to exclude drop poles from the recount was

just an outgrowth of the FCC’s view of the agreement’s

applications to such poles. But it was also permissible for the

Commission to add the ‘‘condition’’ that PSCo credit any

nonexistent attachments that have already been paid for.

4 Section 2.11(a) of the agreement obligates TCI to pay unauthorized attachment charges: ‘‘[i]f any of [TCI]’s Facilities shall be

found attached to poles for which no license or Application has been

approvedTTTT’’ Section 4.1(a) requires that: ‘‘[TCI] shall pay for

use of poles under this License, an annual rental fee for each pole

included within an approved Application, in such amount as shall be

specified therein.’’
8

Congress has given the FCC the authority to ‘‘take such

action as it deems appropriate and necessary, including issuing cease and desist orders’’ to enforce ‘‘any determinations

resulting from complaint procedures established pursuant to

this subsection.’’ 47 U.S.C. § 224(b)(1).

The Commission has left the door open for potential litigation of factual disputes over whether specific authorized attachments have been accounted for and/or unauthorized attachments incorrectly identified, although it is not at all

apparent that under the statute it was obligated to do so. As

the Commission explained in its initial jurisdictional order,

moreover, its decision does not contradict its prior holdings.

See Mile Hi Cable, 14 FCC Rcd at 3248. In Appalachian

Power Co. v. Capitol Cablevision Corp., 49 Rad. Reg. 2d

(P&F) 574 (1981), for example, the utility requested, inter

alia, an order directing the cable company to pay Appalachian all amounts due for pole attachment rentals. (Appalachian essentially brought to the FCC the claim PSCo has

taken to the state trial court.) Although it determined a

reasonable annual rental rate, the FCC in Appalachian decided that it did not have the authority to issue such an order.

It held that the collection of unpaid fees is a matter for state

courts. See id. at 578.

In this case, the FCC has simply said that in order for the

unauthorized attachment rate and related terms of the agreement to be reasonable, PSCo should take into account the

allegedly nonexistent attachments for which TCI had paid.

After the utility performs its recalculation, the state trial

court, as it anticipated, will be able to decide the utility’s

claim according to the FCC’s modifications of the agreement.

See Mile Hi Cable, 995 P.2d at 312–13.

III.

PSCo does not challenge the Commission’s authority to

modify the unauthorized attachment rate (five times the

annual attachment rent, plus interest). Instead, petitioner
9

contends that the FCC’s calculation is ‘‘arbitrary’’ and ‘‘capricious’’ under the APA. PSCo’s primary concern is that the

FCC’s calculated rate undermines the utility’s ability to protect the safety of its poles and to deter TCI from making

unauthorized attachments. Petitioner is correct that unauthorized attachment fees can be used to accomplish the

objective of ‘‘preventing unsafe and unauthorized attachments.’’ See Alert Cable TV of N.C., Inc. v. Carolina Power

and Light Co., 1985 FCC LEXIS 3679 *6 (March 20, 1985).

But the Commission has not decided otherwise here. Rather,

it has simply concluded that, given the provisions and obligations of the entire agreement, the industry rate effectively

promotes these objectives. In doing so, the Commission has

maintained consistency with its prior decisions by judging

‘‘the fairness’’ of the charge ‘‘in relation to other provisions of

the contract, as well as prevailing practices in the industries

involved, and the pole rate charges involved in the particular

case.’’ Id. at *5.

In its analysis, the FCC approved of the Bureau’s assessment of the prevailing industry standards, which showed that

while TCI has perhaps paid as much as $750.00 per pole, and

as little as nothing, for unauthorized attachments, most utilities currently charge a one-time fee of ‘‘$15.00 to $25.00 per

pole, or charges based on back rent for no more than three

years.’’ Mile Hi Cable, 17 FCC Rcd at 6271–72. Finding no

reason to doubt TCI’s uncontested expert testimony regarding industry practices, the Commission correctly figured that

an attachment rate based on the years of unpaid annual rent,

on average $3.77 per pole plus interest, would put the charge

right in the middle of the industry’s range – a calculation

hardly indicative of arbitrary decision making and a rate that

apparently provides sufficient deterrence for most other pole

attachment agreements. In addition, as intervenors (TCI)

point out, under the FCC’s unauthorized attachment rate, a

violating cable company would face the same penalty, five

times the rental rate plus interest, even for an unauthorized

attachment that had only been in place for two weeks.

Also underlying the rate modification was the evidence that

TCI had acquired all but one of the cable systems in question
10

between 1991 and 1993, on average about five years before

PSCo began its attachment survey. The Commission thought

it unreasonable to subject TCI to unauthorized attachment

fees for the 10 years prior to its owning the attachments in

question, especially since PSCo did not conduct systemic

surveys of its poles. It believed the calculation balanced the

need to provide an effective remedy with the need to encourage utilities not to delay audits of unauthorized attachments,

which also serve as a deterrent. See id. at 6272–73.

Contrary to PSCo’s suggestion, the FCC’s decision did take

into account PSCo’s safety concerns. The Commission noted

the agreement provisions that obligate TCI to comply with

the applicable state and local government safety regulations,

and indemnify PSCo for any liability associated with its

attachments (authorized or not). See id. at 6273 n.26. It

then concluded reasonably that TCI’s exclusive liability for

hazards related to its attachments, and the detrimental effect

that unsafe attachments would have on its own services, offer

adequate incentives to heed the pertinent safety codes.

Without any additional evidence, such as widespread safety or

deterrence failures in similar agreements at the industry rate,

the Commission was not compelled to consider formulating a

higher one.

Accordingly, the petition is denied.