No. 03-14-00340-CV

In the Court of Appeals

Third District of Texas – Austin

Appellants, CPS Energy, Time Warner Cable Texas LLC, and Southwestern 

Bell Telephone Company d/b/a AT&T Texas// Cross-Appellant, Public Utility 

Commission of Texas

v.

Appellee, Public Utility Commission of Texas// Cross-Appellee, CPS Energy, 

Time Warner Cable Texas LLC and Southwestern Bell Telephone Company 

d/b/a AT&T Texas

On Appeal from 250th District Court, Travis County, Texas 

Cause No. D-1-GN-13-001238 (Consolidated) 

Joint Response of AT&T Texas and Time Warner Cable Texas LLC

to the April 20, 2015 Letter from the Attorney General to the Court

Len G. Briley, Jr.

AT&T Legal Department 

1010 N. St. Mary's St. 

Room 14Q 

San Antonio, TX 78215 

Phone: (210) 351-4832 

Fax: (210) 886-2127

J. David Tate

Katherine C. Swaller 

Thomas Ballo

AT&T Legal Department

 816 Congress Avenue Suite 

1100 

Austin, TX 78701

Phone: (512) 457-2304 

Fax: (512) 870-3420

Michael T. Sullivan 

(admitted pro hac vice)

Mayer Brown LLP

71 S. Wacker Drive 

Chicago, IL 60606 

Phone: (312) 782-0600 

Fax: (312) 706-8689 

ACCEPTED

03-14-00340-CV

5205250

THIRD COURT OF APPEALS

AUSTIN, TEXAS

5/8/2015 9:45:51 AM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 5/8/2015 9:45:51 AM JEFFREY D. KYLE Clerk
Southwestern Bell Telephone Company d/b/a AT&T Texas (“AT&T”) and 

Time Warner Cable Texas LLC (“TWC”) file this Joint Response to the April 20, 

2015 letter from the Attorney General, on behalf of the Public Utility Commission 

of Texas (“Commission”), to the Clerk of this Court (“April 20 Letter”), which 

claims that this Court does not have jurisdiction over one of the issues on appeal. 

In particular, the Commission claims that its determination that Public Utility 

Regulatory Act (“PURA”) § 54.204 automatically incorporates revisions to the 

Federal Communications Commission’s (“FCC”) Telecom Formula is an 

“advisory opinion” that CPS Energy (“CPS”) does not have standing to appeal. 

Respectfully, the Commission is mistaken. 

BACKGROUND

PURA § 54.204 requires that CPS’ maximum pole attachment rate be 

determined for each year through application of the FCC Telecom Formula 

adopted under 47 U.S.C. § 224(e). CPS’ petition filed with the Commission 

sought an order (1) requiring AT&T and TWC to pay pole attachment fees it had 

calculated pursuant to PURA for certain years, and (2) finding “that the method 

used by CPS Energy to calculate its pole attachment fees is reasonable and 

consistent with the requirements of PURA.”1

 In response to motions to dismiss, 

the Commission found that it did not have jurisdiction to compel payment of pole 

1 AR, Record Binder 1, Item 1 at 11 (Petition And Request For Enforcement Of CPS Energy). 

1

 
attachment fees, and therefore the case proceeded solely as a declaratory judgment 

action. The Commission explained: “CPS Energy has standing to seek a 

declaratory order regarding the issue of whether its pole attachment rates comply 

with section 54.204 of PURA,” and “may seek a declaratory order to clarify its 

obligations under section 54.204.”2

 

During the course of the Commission proceeding, the FCC issued an order 

that revised the Telecom Formula effective June 8, 2011.3

 A dispute then arose 

between the parties over whether PURA § 54.204 requires such revisions to be 

automatically incorporated into PURA. At the parties’ request, the Administrative 

Law Judge hearing the case certified the following issue to the Commission: 

Do the requirements of PURA § 54.204(c) incorporate revisions to the 

FCC's rules under 47 U.S.C. § 224(e) that are adopted subsequent to 

September 1, 2006, and if so, when do any such revisions become 

applicable to PURA § 54.204(c)?

The issue certified was a pure legal issue of statutory interpretation, and the 

parties’ briefs on the issue focused solely on the plain language of PURA § 54.204, 

2 AR, Record Binder 1, Item 25 at 1, 5 (PUC Docket No. 36633, Doc. 25, Order on Appeal of 

Order No. 3, May 21, 2009).

3 In the Matter of Implementation of Section 224 of the Act, a National Broadband Plan for Our 

Future, WC Docket No. 07-245, Report and Order and Order on Reconsideration, FCC 11-50 

(rel. April 7, 2011).

2

 
legislative intent, and statutory construction. 4

 After careful consideration, the 

Commission concluded: 5

The plain language of PURA § 54.204(c) indicates that the 

Legislature was aware that the FCC could possibly adopt new or 

modified rules under 47 U.S.C. § 224(e), and that it was the 

Legislature's clear intent that PURA § 54.204(c) incorporate these 

new or modified rules. Additionally, nothing in the language of 

PURA § 54.204(c) expressly excludes revisions to the FCC's rules 

under 47 U.S.C. § 224(e), and reading PURA § 54.204(c) to exclude 

revisions to the FCC rules would thwart the intent of the Legislature. 

See also AR, Binder 13, Item 530 at Conclusion of Law No. 26 (PFD) (“Changes 

in 47 U.S.C. § 224(e) are incorporated into PURA § 54.204 without legislative

action.”).6

 

4 AT&T and TWC argued that the plain language of § 54.204 requires revisions to the FCC 

Telecom Formula to be automatically incorporated into PURA—specifically, they argued that 

the phrase “rules adopted by [the FCC]” plainly encompasses revisions to those rules. AR, 

Binder 8, Item 391 at 3-5 (AT&T Texas’ Brief on Certified Issues, filed June 6, 2011); Id., Item 

393 at 7-10 (TWC’s Brief on Certified Issues, filed June 6, 2011). AT&T and TWC also argued 

that under the rules of statutory construction reference to a statute applies to all revisions or 

amendments to that statute unless the statute expressly provides otherwise. And because § 

54.204 does not expressly provide otherwise, they argued that the Legislature intended revisions 

to the FCC Telecom Formula to be incorporated into PURA. Id. CPS also relied on the plain 

language of PURA. But CPS argued that the absence of the phrase “as amended from time to 

time,” or similar language, indicates the Legislature’s intent that revisions would not be 

automatically incorporated into PURA and that the Telecom Formula would always be applied 

as it existed in 2005 when PURA was enacted. Id., Item 394 at 13 (CPS Brief on Certified 

Issues, filed June 6, 2011).

5 AR, Binder 8, Item 402 at 2 (PUC Docket No. 36633, Doc. 753, Order on Certified Issues, 

June 24, 2011).

6 AR, Binder 13, Item 530 at 8-9 (PFD) “The Commission also determined that any revisions to 

the FCC rules through FCC orders apply to MOUs under PURA § 54.204(c).”); Id. at Conclusion 

of Law No. 27 (“The FCC's June 8, 2011 amendment to 47 C.F.R. 1.1409(e) applies to CPS 

Energy under PURA § 54.204(c).”); Id. at Finding of Fact No. 31(d) (“The revisions to the 

FCC's rules under 47 U.S.C. § 224(e) adopted on June 8, 2011, are incorporated into PURA 

§ 54.204(c).”) 

3

 
ARGUMENT

The Commission’s determination that PURA § 54.204 automatically 

incorporates any revisions to the FCC Telecom Formula was a declaratory 

judgment, not an “advisory opinion,” and the Court has jurisdiction over CPS’ 

appeal of that issue. 

A declaratory judgment “is a remedial measure that determines the rights of 

the parties and affords relief from uncertainty with respect to rights, status, and 

legal relations.” Halliburton Energy Serv., Inc. v. Axis Tech., LLC, 444 S.W.3d 

251, 262 (Tex. App.—Dallas 2014, no pet.). Declaratory judgment actions 

“determine the rights of the parties when a controversy has arisen, before any 

wrong has actually been committed, and are preventative in nature.” Bexar 

Metropolitan Water Dist. v. City of Bulverde, 156 S.W.3d 79, 88 (Tex. App.—

Austin 2005, pet. denied). A declaratory judgment is appropriate if a “justiciable 

controversy exists as to the rights and status of the parties” and the controversy 

“will be resolved by the declaration sought.” Juliff Gardens, L.L.C. v. Tex. 

Comm’n on Envtl. Quality, 131 S.W.3d 271, 277 (Tex. App.—Austin 2004, no 

pet.). 

Here, a controversy arose over the correct interpretation of a statute (PURA 

§ 54.204) and the parties’ rights under that statute. AT&T and TWC consistently 

have maintained that the language of PURA requires FCC revisions to the Telecom 

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Formula to be automatically incorporated into PURA. CPS’ view has been that the 

language does not automatically incorporate revisions. The Commission, at the 

request of the parties, resolved that controversy by issuing a declaratory judgment 

interpreting the statute. It is well settled that a “[d]eclaratory judgment is an 

appropriate vehicle for clarifying a party’s rights under a statute.” State v. 

Montgomery Cnty., 338 S.W.3d 49, 57-58 (Tex. App.—Beaumont 2011, pet. 

denied); see also Metropolitan Water Dist., 156 S.W.3d at 88 (declaratory 

judgment “may be used to clarify the meaning of statutes”); Brennan v. City of 

Willow Park, 376 S.W.3d 910, 922 (Tex. App.—Fort Worth 2012, pet. denied) (the 

Declaratory Judgments Act “grants any litigant whose rights are affected by a 

statute the opportunity to obtain a declaration of those rights under the statute”).7

The Commission, through the Attorney General, nevertheless claims that the 

Commission’s determination is an “advisory opinion” because it purportedly is just 

a “statement[] about the future.”8

 It made this claim for the first time in this Court 

on the eve of oral argument, notwithstanding that the Commission has already 

defended its Order on Rehearing on this issue before the trial court and fully 

briefed the issue before this Court. At no point before the April 20 Letter did the 

7 In this respect, the Commission’s conclusion that CPS had the right to “seek a declaratory order 

to clarify its obligations under section 54.204” is spot on. AR, Record Binder 1, Item 25 at 1, 5 

(PUC Docket No. 36633, Doc. 25, Order on Appeal of Order No. 3, May 21, 2009).

8 April 20 Letter at p.1.

5

 
Commission ever suggest that its decision with respect to the meaning of PURA 

§ 54.204 was an “advisory opinion.” And it is not.

The Commission mischaracterizes both the nature of advisory opinions and 

the nature of the Commission’s determination. An advisory opinion is one 

“advising what the law would be on a hypothetical set of facts.” Robinson v. 

Parker, 353 S.W.3d 753, 756 (Tex. 2011). That is, an advisory opinion is one that 

depends on uncertain or contingent future events that may or may not occur. R.R. 

Comm’n of Tex. v. Centerpoint Energy Res. Corp., Nos. 03–13–00533–CV, 03–

13–00534–CV, 03–13–00535–CV, 2014 WL 4058727 *3 (Tex. App.—Austin 

Aug, 14, 2014, no pet.). The Commission’s determination is not a statement about 

the future, does not depend on hypothetical or theoretical future events, and will 

not change regardless of any future facts. It is a pure legal determination about the 

meaning of disputed statutory language, which courts have unequivocally held is a 

proper subject for a declaratory judgment. Montgomery Cnty., 338 S.W.3d at 57-

58; Metropolitan Water Dist., 156 S.W.3d at 88; Brennan, 376 S.W.3d at 922. 

One only needs to look at the briefs filed by the parties on the certified issue 

(which focused solely on the plain language of the statute, legislative intent, and 

statutory construction) to see that the relief requested was purely legal and did not 

depend on the development of future facts.9

 “When a party seeks only a pure legal 

9

 Supra, n.4.

6

 
determination that is not contingent of the development of additional facts, the 

relief requested is not advisory.” Complaint of Chermac Energy Corp. Regarding 

Certain Qualifying Facilities Under PURPA, 2010 WL 3524026 *4 (Tex. P.U.C. 

2010). 

In Chermac, the Commission reversed an Administrative Law Judge’s 

determination that the relief sought by the complainant was not ripe and that a 

decision in the case would therefore be an advisory opinion. 2010 WL 3524026 

*4. The Commission explained that the complainant asked the Commission “to 

determine, as a pure legal matter, the proper interpretation of Rule 25.242,” and 

“specifically, whether the rule applies to purchases of energy from facilities 

located in Oklahoma.” Id. The Commission further explained that “there is a 

current dispute involving the legal interpretation of the Rule,” and “the dispute can 

easily be resolved by the Commission in a manner that will bind the parties and 

settle the controversy.” Id. Such pure legal determination is “not contingent of the 

development of additional facts,” and therefore is “not advisory.” Id. 

Similarly, in City of Waco v. Texas Natural Resource Conservation 

Commission, the City of Waco sought a declaratory judgment that section 122.4(i) 

of the Code of Federal Regulation (which had been incorporated into state law) 

prohibits the TNRCC from issuing permits until it complies with certain 

requirements. 83 S.W.3d 169, 175 (Tex. App.—Austin 2002, pet. denied). The 

7
TNRCC argued that the City’s claim sought an advisory opinion and that the 

agency’s compliance with the statute could only be determined in the context of an 

application for a permit. Id. at 176. This Court rejected the TNRCC’s argument, 

finding that “[t]he City’s claim poses a purely legal question—the interpretation of 

section 122.4(i)—which will not benefit from the development of additional facts 

in connection with a specific permit application.” Id. at 177. The Court further 

found “[t]here is a judiciable controversy between the parties regarding the effect 

of section 122.4(i) on the agency’s permitting process,” and “[a] declaration 

regarding the effect of section 122.4(i) will resolve this controversy.” Id. at 178. 

As in Chermac and City of Waco, the Commission decided a pure legal issue 

of statutory interpretation. The Commission’s determination did not depend on the 

development of additional facts and fully resolved the controversy, and is therefore 

a declaratory judgment, not an advisory opinion.

The Commission now asserts that no controversy exists because the FCC 

revision that gave rise to the legal issue became effective on June 8, 2011, several 

months after the last year for which the Commission determined CPS’ maximum 

allowable pole attachment rate (i.e., test/bill year 2009/2010).10 This new position 

ignores the scope of the Commission proceeding. While the Commission did 

apply the Telecom Formula to determine CPS’ maximum pole attachment rate for 

10 April 20 Letter at 1.

8

 
certain years for which it had data (test/bill years 2004/2005 through 2009/2010) as 

requested by CPS, that does not mean there were no other controversies for the 

Commission to resolve. To the contrary, the parties agreed that the Commission 

should resolve the legal issue of whether PURA automatically incorporates 

revisions to the FCC Telecom Formula. In resolving that legal issue, the 

Commission did not apply the June 8, 2011 revision to hypothetical future facts. 

The Commission’s late-in-the-game suggestion that pole attachment rates 

after June 8, 2011 are not at issue is also factually wrong. The Commission issued 

its final order in February 2013—well after the June 8, 2011 revision. By that 

time, CPS had charged or was owed for pole attachments for years 2011 through 

2013. And there was a live controversy between the parties over the rates during 

that time frame. Indeed, the parties presented arguments regarding how to 

calculate pole attachment rates starting June 8, 2011,11 and Staff calculated and

proposed a specific pole attachment rate of $5.08 to be charged starting June 8, 

2011.12 Although the Commission found that it could not calculate the final rate 

for years after test/bill year 2009/2010 because the data specific to those years 

necessary to calculate the maximum allowable pole attachment rate had not been 

introduced into evidence,13 the Commission issued associated findings regarding 

11 AR, Binder 13, Item 530 at 121-123 (PFD).

12 Id. at 123.

13 Id. at 43, Finding of Fact No. 31(g), Ordering Paragraph No. 1. 

9

 
the methodology to be used for those years, thus making it clear that amounts owed 

after June 8, 2011 were at issue:

The rate charge by CPS Energy may not exceed the maximum 

allowable pole attachment rate calculated by the Telecom Formula 

adjusted by 66 % after June 8, 2011.14 

Because this change became effective in the middle of the year, 

determining whether CPS has complied with PURA § 54.204(c) with 

respect to its 2011 pole attachment billings requires a "blended" 

approach to the calculating the maximum allowable pole attachment 

rate. For January 1 through June 7, 2011, multiply the maximum 

allowable rate [by] 158 (the number of days between January 1 and 

June 7). Do the same for June 8 through December 31, 2011, multiply 

the maximum allowable rate by 207 (the number of days between 

June 8 and December 31. Divide these two figures by 365 (the days of 

the year).15

By addressing in its February 2013 Order on Rehearing the methodology for rates 

starting June 8, 2011, the Commission was not making a determination about a 

future, hypothetical event, but was ruling on the methodology applicable for years 

that had already come to pass, based on a change to the FCC Telecom Formula that 

had already been adopted and become effective.16 

The Commission also suggests that CPS does not have standing because it 

was not aggrieved by the Commission’s so-called advisory opinion. The standing 

14 Id. at Finding of Fact No. 86.

15 Id. at Finding of Fact No. 87.

16 Of course, even if the parties had not litigated issues regarding rates after June 8, 2011, and 

even if the Commission’s order had been issued before June 8, 2011, the Commission still could 

have issued a declaratory judgment clarifying the parties’ rights under PURA § 54.204 as 

explained in the text. 

10

 
doctrine, however, “reflects ... the prohibition against court-issued advisory 

opinions.” Thomas v. Cook, 350 S.W.3d 382, 389 (Tex. App.—Houston [14th 

Dist.] 2011, pet. denied). To have standing, a controversy must exist between the 

parties. Id. As explained above, there was a controversy between the parties 

regarding their rights under § 54.204, and the Commission resolved that 

controversy in a manner that bound the parties and settled the dispute. CPS 

therefore has standing to appeal that determination. Contrary to the Commission’s 

claim, a party “seeking a declaratory judgment need not have incurred actual 

injury.” Bexar, 156 S.W.3d at 88. A declaratory judgment is “intended to provide 

a means to determine, before any wrong has actually occurred, the right of parties 

when a controversy has arisen and is remedial in nature.” Chermac, 2010 WL 

3524026 at 4 (emphasis in original); Bexar, 156 S.W.3d at 88.17 Likewise, courts 

can issue declaratory judgments construing statutes even “before the statute is 

violated” (Bexar, 156 S.W.3d at 88-89) and “whether or not further relief is or 

could be claimed” (Brennan, 376 S.W.3d at 922). 

Finally, if the Court were to conclude that the Commission’s determination 

is an advisory opinion, then the parties would have to re-litigate the same issue of 

statutory interpretation at the Commission (then likely on appeal). This dispute has 

17 The two decisions cited in the April 20 Letter are inapposite. Neither involved the use of a 

declaratory judgment to resolve a dispute about the interpretation of a statute, which courts have 

unequivocally held is permissible.

11

 
been ongoing since 2008, with the proceeding at the Commission spanning more 

than four years. Any re-litigation of the issue would be a mirror image of what has 

already taken place: the parties would raise the same legal arguments regarding the 

plain language of PURA, legislative intent, and statutory construction. There 

would be nothing new for the Commission to consider. It is contrary to judicial 

economy to force an additional administrative proceeding simply to have the 

Commission reaffirm its current interpretation of PURA. 

For these reasons, the Court should find that CPS has standing to appeal the 

Commission’s determination that PURA automatically incorporates revisions to 

the Telecom Formula and that the Court has jurisdiction to review the issue. 

May 8, 2015 Respectfully submitted,

/s/ Michael T. Sullivan 

Michael T. Sullivan 

(admitted pro hac vice)

Mayer Brown LLP

71 S. Wacker Drive

Chicago, IL 60606

Phone: (312) 782-0600

Fax: (312) 706-8689

msullivan@mayerbrown.com

Len G. Briley, Jr. 

State Bar No. 00783723

AT&T Legal Department

1010 N. St. Mary’s St., 14th Floor

San Antonio, Texas 78215

Phone: (210) 351-4832

Fax: (210) 886-2127

len.briley@att.com

12
J. David Tate

Katherine C. Swaller

Thomas Ballo

AT&T Legal Department

816 Congress Avenue, Suite 1100

Austin, Texas 78701

Phone: (512) 457-2304

Fax: (512) 870-3420

jon.david.tate@att.com 

katherine.swaller@att.com

thomas.ballo@att.com

Attorneys for AT&T Texas

/s/ Valerie P. Kirk

Valerie P. Kirk 

State Bar No. 11516900 

Melissa Lorber 

State Bar No. 24032969 

ENOCH KEVER PLLC 

600 Congress Ave., Suite 2800 

Austin, Texas 78701 

Phone: (512) 615-1200 

Fax: (512) 615-1198 

vkirk@enochkever.com 

mlorber@enochkever.com

John Davidson Thomas 

J. Aaron George 

SHEPPARD MULLIN RICHTER & 

HAMPTON LLP 

2099 Pennsylvania Ave. NW, Suite 100 

Washington, DC 20006 

Phone: (202) 747-1900 

Fax: (202) 747-1901 

dthomas@sheppardmullin.com 

ageorge@sheppardmullin.com 

Attorneys for Time Warner Cable Texas 

LLC

13
CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of this document was served 

electronically and/or by regular U.S. mail upon the following attorneys of record 

on this 8th day of May, 2015.

/s/ Len G. Briley, Jr. 

Counsel for Public Utility Commission 

of Texas:

Douglas Fraser

Megan M. Neal

Office of the Attorney General

P.O. Box 12548, Capitol Station

Austin, Texas 78711-02548

Phone: (512) 463-2012

Fax: (512) 457-4610

douglas.fraser@texasattorneygeneral.gov

megan.neal@texasattorneygeneral.gov

Counsel for CPS Energy:

Curt D. Brockmann

CPS Energy

145 Navarro

P.O. Box 1771

San Antonio, TX 78296

Phone: (210) 353-5689

Fax: (210) 353-6832

cdbrockmann@cpsenergy.com

Alfred R. Herrera 

HERRERA & BOYLE, PLLC

816 Congress Avenue, Suite 1250

Austin, TX 78701

Phone: (512) 474-1492

Fax: (512) 474-2507

aherrera@herreraboylelaw.com

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