Opinion ID: 76304
Heading Depth: 2
Heading Rank: 2

Heading: FCC's Independent Adoption of an Average Number of Attachers

Text: 30 With Georgia Power having failed to establish an average number of attachers, FCC faced the problem of calculating a pole attachment rate without this crucial figure. The Cable Services Bureau solved this problem by taking the presumptive averages established in the Recon Order and applying them retroactively to the rate dispute between Teleport and Georgia Power. See Teleport, 16 F.C.C.R. at 20,242-43, ¶ 11. When the full FCC heard the rate dispute, however, it disavowed the Cable Services Bureau's retroactive application of those presumptive averages. See Final Order, 17 F.C.C.R. at 19,867, ¶ 20 (Therefore, to the extent the Bureau relied on the [ Recon ] Order, it was harmless error....). The full Commission nonetheless employed the same presumptive averages from the Recon Order to calculate the pole attachment rate. As FCC put it, we hereby independently adopt these presumptions, based on the fact that they were proffered by Teleport in this case and were not refuted by [Georgia Power]. We also conclude that the rationale set forth in the [ Recon ] Order also applies here. Id. 31 In the first petition, Georgia Power argued that the Cable Services Bureau's retroactive application of the presumptions established in the Recon Order was impermissible. Georgia Power now argues that FCC's decision to independently adopt those same presumptions based on Teleport's proffer of those numbers was arbitrary and capricious in that it amounted to a retroactive rulemaking in violation of § 551(4) of the Administrative Procedures Act. See 5 U.S.C. § 551(4). 32 As we explained supra, Part II.A, Georgia Power failed to establish its own average number of attachers in compliance with the regulatory regime at the start of Teleport's pole attachment complaint proceeding. See Telecom Order, 13 F.C.C.R. at ¶ 78. Had Georgia Power done so, Teleport could have rebutted that average only by identifying and calculating the average number of attachments on Georgia Power's poles, either by a complete inspection of the poles or with a statistically sound survey. Id. ¶ 79. Had Teleport supplied such rebuttal information, FCC could conceivably have relied on it to calculate the rate. Unfortunately, Teleport's proffer of 3 and 5 attachers for non-urbanized and urban areas, respectively, did not meet the requirements of the Telecom Order. Where Teleport substantiated every other entry in its rate calculations with data provided by Georgia Power, Teleport did absolutely nothing to substantiate its proffered average number of attachers. All it explained, in a footnote, was that its calculations illustrate[ ] two different scenarios with respect to the number of attaching entities among which unusable space is allocated: 3 entities and 5 entities. There is nothing to even suggest that Teleport had made an actual calculation or a statistically significant survey of the average number of attaching entities. 33 What FCC confronted, therefore, was a rate dispute in which neither party had provided sufficient information to establish the average number of attachments, the crucial figure that would have allowed FCC to calculate the pole attachment rate. Under FCC regulations, however, [w]here one of the parties has failed to provide information required to be provided by these rules or requested by the Commission, or where costs, values or amounts are disputed, the Commission may estimate such costs, values or amounts it considers reasonable.... 47 C.F.R. § 1.1409(a). In the absence of any sufficient information from either Georgia Power or Teleport, FCC had the authority under § 1.1409(a) to employ its own estimated average number of attaching entities. 34 In estimating the average number of attaching entities, FCC relied upon its expertise and the information it had developed during the rulemaking that led to the Recon Order. This was a perfectly reasonable response considering the lack of essential information FCC had received from the parties. FCC did not simply apply the presumptions of the Recon Order to Teleport because the Recon Order posited the authoritative rules for deciding such disputes. Rather, the rationale behind the Recon Order was sufficiently persuasive as to convince FCC, in the exercise of its regulatory expertise, that the presumptions established in that rulemaking were the best estimates of the average number of attachers. While the ordinary use of a rulemaking is to establish authoritative regulations, we see nothing arbitrary or capricious about relying on the information developed in a rulemaking as a persuasive reason for following a particular course in the resolution of an analogous adjudication. Cf. United States v. Mead Corp., 533 U.S. 218, 228, 121 S.Ct. 2164, 2172, 150 L.Ed.2d 292 (2001) (recognizing that administrative actions can possess power to persuade, if lacking power to control) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944)). Under the circumstances of this dispute, relying on the persuasive power of the Recon Order 's rationale was a reasonable exercise of FCC's power to estimate the average number of attachers under § 1.1409(a). 35 Even though FCC did not simply apply the Recon Order retroactively, Georgia Power nonetheless argues that using its presumptions to estimate the average number of attachers amounted to the same thing and was effectively retroactive. A statute or administrative regulation does not operate retroactively merely because it applies to prior conduct; rather, a statute or regulation has retroactive effect if it would impair rights a party possessed when he acted, increase [his] liability for past conduct, or impose new duties with respect to transactions already completed. Landgraf v. USI Film Prods., 511 U.S. 244, 280, 114 S.Ct. 1483, 1505, 128 L.Ed.2d 229 (1994); see also Resolution Trust Corp. v. Ford Motor Credit Corp., 30 F.3d 1384, 1388 (11th Cir.1994). Given this standard, FCC's estimate of the average number of attachers based on the rationale of the Recon Order was not retroactive. Although Georgia Power had the responsibility under the Telecom Order to create its own averages, that burden of proof is not a right that it possessed. Nor did FCC's estimate of the average number of attachers create any liabilities for past conduct. Finally, FCC imposed no new duties upon Georgia Power because both the Telecom Order and the Recon Order required it to provide the information and methodology upon which its averages were developed. Compare Telecom Order, 13 F.C.C.R. at ¶ 78 (A utility shall, upon request, provide all attaching entities and all entities seeking access the methodology and information by which a utility's presumption was determined.) with Recon Order, 16 F.C.C.R. at 12,138, ¶ 67 (The utility shall make available its data, information and methodology upon which the averages were developed, unless the default averages are used.). Therefore, FCC's reliance on the Recon Order to estimate the average number of attaching entities on Georgia Power's poles was not improperly retroactive. 36