Opinion ID: 76304
Heading Depth: 2
Heading Rank: 6

Heading: Just Compensation Provided by FCC's Rate

Text: 51 In both the first and the second petition, Georgia Power argues FCC's rate denied it just compensation for the taking mandated by the Telecommunications Act. As Georgia Power concedes, this issue is now controlled by our recent decision in Alabama Power. In Alabama Power, FCC rejected the price demanded by Alabama Power for a cable company's attachments to its utility poles. Alabama Power petitioned for review of the FCC's order, arguing that the cable rate imposed by FCC did not provide the constitutionally-required just compensation for the taking effected by the Telecommunications Act. See Ala. Power, 311 F.3d at 1360-61. Chief among Alabama Power's complaints was FCC's use of historical costs rather than fair market value or replacement cost. See id. at 1367. 52 Alabama Power's argument for some alternative to the cable rate established by FCC was complicated by one known fact, one unknown fact, and one legal principle. Id. at 1368. The known fact is that an attacher must pay for any make-ready costs and all other marginal costs of using the utility's poles. See id. The legal principle is that just compensation for a taking is determined by the loss to the person whose property is taken. Id. at 1369 (citing United States v. Causby, 328 U.S. 256, 261, 66 S.Ct. 1062, 1065-66, 90 L.Ed. 1206 (1946); United States v. Va. Elec. & Power Co., 365 U.S. 624, 635, 81 S.Ct. 784, 792, 5 L.Ed.2d 838 (1961)). In the more typical case of rivalrous goods, the `value' of the thing taken is congruent with the loss to the owner. Id. The part of the utility pole that is taken for mandated pole attachments is, however, practically nonrivalrous — use by one entity does not necessarily diminish use by others. Id. In most cases, there is enough space on the existing utility pole network to accommodate the attaching entity's needs without forcing the utilities to sacrifice anything. The only possible loss to the utilities is the lost opportunity to rent space at market prices, but the Court found it irrelevant whether the government keeps the property it has taken for itself or instead transfers it to another entity. Id. 53 The crucial unknown fact on which Alabama Power turned was whether the utility's poles were at full capacity, at which point the space on which the cable company wanted to attach would become rivalrous. Id. at 1370. Alabama Power did not establish that its pole network was crowded, so it could not claim the cable rate provided insufficient compensation. According to the Court, 54 before a power company can seek compensation above marginal cost, it must show with regard to each pole that (1) the pole is at full capacity and (2) either (a) another buyer of the space is waiting in the wings or (b) the power company is able to put the space to a higher-valued use with its own operations. Without such proof, any implementation of the Cable Rate (which provides for much more than marginal cost) necessarily provides just compensation. 55 Id. at 1370-71. 56 The instant case does not materially differ from Alabama Power. In fact, Georgia Power has even less to complain about than did its sister, Alabama Power. Recall that the 1996 Telecommunications Act mandates two different formulas for calculating pole attachment rates: the cable rate for cable company attachments and the new telecom rate for telecommunications attachments. Alabama Power was a challenge to the cable rate, while the rate set by FCC in this case was predicated on the same number of attachers as is presumptively set by the telecom rate. As Alabama Power recognized, however, the telecom rate yields a higher pole attachment rate for telecommunications attachments than the cable rate yields for cable attachments. Id. at 1371 n. 23. If the cable rate provided more than just compensation in Alabama Power, then the higher rate set by FCC in this case provides just compensation to Georgia Power. It follows that Georgia Power's claim that FCC has failed to provide just compensation must be rejected in light of this Circuit's precedent.