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American Elec. Power v. FCC, No. 11-1146 (D.C. Cir.)

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Released: February 26, 2013
USCA Case #11-1146 Document #1422293 Filed: 02/26/2013 Page 1 of 19












United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

______

Argued January 23, 2013 Decided February 26, 2013

No. 11-1146

AMERICAN ELECTRIC POWER SERVICE CORPORATION, ET AL.,
PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED
STATES OF AMERICA,
RESPONDENTS

CONSUMERS ENERGY COMPANY, ET AL.,
INTERVENORS
______

On Petition for Review of an Order
of the Federal Communications Commission
______


Eric B. Langley argued the cause for petitioners. With
him on the briefs were J. Russ Campbell, Jason B. Tompkins,
and Sean B. Cunningham.

USCA Case #11-1146 Document #1422293 Filed: 02/26/2013 Page 2 of 19

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John B. Richards and Thomas B. Magee were on the brief
for intervenors Consumers Energy Company, et al. in support
of petitioners.

Edward H. Comer, Aryeh B. Fishman, Shirley S.
Fujimoto, Jeffrey L. Sheldon, and Kevin M. Cookler were on
the brief for amicus curiae Edison Electric Institute in support
of petitioners.

C. Grey Pash Jr., Counsel, Federal Communications
Commission, argued the cause for respondents. On the brief
were Robert B. Nicholson and Kristen C. Limarzi, Attorneys,
U.S. Department of Justice, and Austin C. Schlick, General
Counsel, Federal Communications Commission, Peter
Karanjia
, Deputy General Counsel, and Richard K. Welch,
Deputy Associate General Counsel. Laurel R. Bergold,
Attorney, Federal Communications Commission, entered an
appearance.

Helgi C. Walker argued the cause for intervenors United
States Telecom Association, et al. With her on the brief were
Bennett L. Ross, Brendan T. Carr, John E. Benedict, William
A. Brown
, Gary L. Phillips, Michael E. Glover, Edward
Shakin
, and Katharine R. Saunders.
Jonathan E. Nuechterlein argued the cause for
intervenors Comcast Corporation, et al. With him on the brief
were Kelly P. Dunbar, Rick Chessen, Neal M. Goldberg, Lynn
R. Charytan
, T. Scott Thompson, Michael T.N. Fitch, Craig
Gilmore
, Alan G. Fishel, Jeffrey E. Rummel, Adam D.
Bowser
, David P. Murray, Thomas Jones, Gardner Gillespie,
Wesley R. Heppler, Paul Glist, Daniel L. Brenner, Michael F.
Altschul
, Brian M. Josef, Jonathan D. Hacker, Loren L.
AliKhan
, and John D. Seiver. Christopher A. Fedeli, Paul A.
Werner III
, Christopher M. Heimann, and Heather M.
Zachary
entered appearances.
Before:
TATEL, Circuit Judge, and WILLIAMS and
SENTELLE, Senior Circuit Judges.

USCA Case #11-1146 Document #1422293 Filed: 02/26/2013 Page 3 of 19

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______

WILLIAMS, Senior Circuit Judge: Section 224 of the
Communications Act of 1934, 47 U.S.C. § 224, provides a
variety of advantages to certain types of firms seeking to
attach their wires, cable, or other network equipment to utility
poles. The Federal Communications Commission, which is
charged with applying § 224, in 2011 made three revisions to
its interpretation of the statute. In the Matter of
Implementation of Section 224 of the Act,
Report and Order
and Order on Reconsideration, 26 FCC Rcd. 5240 (April 7,
2011) (“Order”). The Order (1) for the first time allows
incumbent local exchange carriers (“ILECs”) (which are
principally the descendants of the “Baby Bells” that emerged
from AT&T’s 1984 break-up, see 47 U.S.C. § 251(h)) to share
the benefits of some of § 224’s provisions; (2) reformulates
the ceiling on the rate that pole-owning utilities can charge
“telecommunications carriers” seeking to make pole
attachments; and (3) moves back the date as of which
compensatory damages start to accrue in favor of parties filing
successful complaints against utilities. The reader should note
that because § 224(a)(5) excludes ILECs from the definition
of “telecommunications carriers,” the newly reformulated
rates do not directly affect the rates chargeable to ILECs.
Petitioners, the American Electricity Power Services
Corporation and other power companies, challenge all three
changes. We reject petitioners’ arguments and deny the
petition.
* * *

Before the advent of cable television, utilities—including
power companies and ILECs—owned and operated extensive
networks of poles that carried their wires, cables, and other
network equipment. These utilities often shared poles,

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operating them under joint ownership agreements that split the
costs. Cable companies sought access to the poles for their
own network equipment; the utilities, in turn, sought “to
charge monopoly rents” for that access. Nat’l Cable &
Telecomms. Ass’n v. Gulf Power Co.
, 534 U.S. 327, 330
(2002) (“NCTA”).

In 1978 Congress responded by passing the Pole
Attachment Act (“the 1978 Act”), adding it as § 224 of the
Communications Act. (Because we address many provisions
of § 224, we attach its current version below in its entirety.)
The 1978 Act provided that “the Commission shall regulate
the rates, terms, and conditions for pole attachments to
provide that such rates, terms, and conditions are just and
reasonable.” 47 U.S.C. § 224(b)(1). It also adopted upper
and lower bounds for “just and reasonable” rates: the upper
bound is “the fully allocated cost of the construction and
operation of the pole to which [the] cable is attached,” FCC v.
Florida Power Corp.
, 480 U.S. 245, 253 (1987), the lower
bound the “marginal cost of [the] attachments,” id. See 47
U.S.C. § 224(d)(1). Under this authority, the Commission
adopted a rate formula that has become known as the “cable
rate.” See 47 C.F.R. § 1.1409(e)(1).
The Telecommunications Act of 1996 (“the 1996 Act”)
adjusted and expanded the provisions of the 1978 Act. Three
sets of changes in the 1996 Act are especially relevant to this
petition. First, the 1996 Act amended § 224 to define a “pole
attachment” as “any attachment 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.” 47
U.S.C. § 224(a)(4)(emphasis added). The 1978 Act had
identified only cable television systems as § 224’s potential
beneficiaries.

Second, besides clarifying the definition of “utility” to
include local exchange carriers (i.e., ILECs and competitive

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LECs), the 1996 Act provided a special definition of
“telecommunications carrier,” excluding ILECs from that
category for purposes of § 224. 47 U.S.C. § 224(a)(5). Its
language is the gravamen of petitioners’ claim that ILECs are
not in any respect among § 224’s beneficiaries.
Third, Congress added § 224(e) to authorize the FCC to
develop regulations governing the charges for “pole
attachments used by telecommunications carriers to provide
telecommunications services.” In 1998 the Commission
issued such regulations, thereby establishing what has been
known as the “telecom rate.” See Implementation of Section
703(e) of the Telecommunications Act of 1996
, 13 FCC Rcd
6777, 6822-23, ¶¶ 99-102 (1998) (“1998 Order”). The 1996
Act left intact the Commission’s broad rate-setting authority
under § 224(b)(1).
In 2011 the Commission issued the Order, adopting the
three new interpretations identified at the outset. We review
the Commission’s interpretation of § 224 for reasonableness
under the familiar standard of Chevron, USA, Inc. v. NRDC,
Inc.,
467 U.S. 837 (1984), “which . . . means (within its
domain) that a ‘reasonable agency interpretation prevails.’”
Northern Natural Gas Co. v. FERC, 700 F.3d 11, 14 (D.C.
Cir. 2012) (quoting Entergy Corp. v. Riverkeeper, Inc., 556
U.S. 208, 218 (2009)). Because the Order is a change in the
Commission’s position, the requirement of reasoned
decisionmaking demands that it “display awareness that it is
changing position.” FCC v. Fox Television Stations, Inc., 556
U.S. 502, 515 (2009). “But it need not demonstrate to a
court’s satisfaction that the reasons for the new policy are
better than the reasons for the old one; it suffices that the new
policy is permissible under the statute, that there are good
reasons for it, and that the agency believes it to be better.” Id.

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* * *
ILECs’ Pole Attachment Rights. Section 224(a)(4), as
amended by the 1996 Act, defines a pole attachment as any
attachment either by the operators of cable television systems
covered by the 1978 Act or by any “provider of
telecommunications services.” The Commission relies on
§ 224(a)(4) to support its decision to allow ILECs access to
benefits from § 224. Petitioners challenge that conclusion,
claiming that via § 224(a)(5) Congress intended to rigorously
exclude ILECs from any of those benefits.
We reiterate, to make clear just what the Commission has
and has not done, that it has not purported to bring ILECs
under the new telecom rate adopted under § 224(e)(1). The
Order simply classifies ILECs as among the potential
beneficiaries of §
224(b)(1), which authorizes the
Commission to regulate the rates, terms and conditions of
“pole attachments” and assure that they are “just and
reasonable.” For now, noting the existence of possible
distinctions between ILECs and other pole attachers, the
Commission says that it will handle any complaints by ILECs
“on a case-by-case basis.” Order ¶ 214 & n.647.
To support their challenge, petitioners point to the two
statutory provisions that define “telecommunications carrier.”
First, § 153(51), part of the Act’s general list of definitions for
Chapter 5, provides (with an irrelevant exception) that “[t]he
term ‘telecommunications carrier’ means any provider of
telecommunications services.” Second, § 224(a)(5) specifies
that “[f]or purposes of this section, the term
‘telecommunications carrier’ (as defined in section 153 of this
title) does not include any incumbent local exchange carrier as
defined in section 251(h) of this title,” i.e., does not include
any ILEC. Thus, because § 224(a)(5) excludes ILECs from
the category “telecommunications carrier,” and § 153 partially
defines “telecommunications carrier” as “any provider of

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telecommunications services,” petitioners argue that for
purposes of § 224 there is a simple equation:

telecommunications carriers equals providers of
telecommunications services (and thus, by definition, the
reverse). Accordingly, in their view, § 224(a)(5)’s exclusion
of ILECs necessarily applies to § 224(a)(4)’s reference to “a
provider of telecommunications services.”
We will accept, for purposes of this analysis, petitioners’
assumption that the word “means” is equivalent to “equals,”
see Helvering v. Morgan’s, Inc., 293 U.S. 121, 125 n.1
(1934), though we think that such equivalence is in fact not
universal. With that assumption, it is true that under
§ 153(51), telecommunications carrier equals provider of
telecommunications services, and thus vice versa, or, to
express that equation in the sort of mathematical language that
petitioners have invoked,
TC = PTS.
We agree with this reading of § 153(51).
Section 224(a)(5) provides another, related equation.
Paraphrasing § 224(a)(5) by substituting § 153(51)’s
definition of telecommunication carrier for the cross
reference, we have the proposition: telecommunications
carrier (for purposes of § 224) equals provider of
telecommunications services minus ILECs. (This formulation
assumes the undisputed proposition that without the
qualifying language of § 224(a)(5) ILECs are “providers of
telecommunication services.”) So, if we use TC224 to signify
“telecommunications carriers for purposes of §
224,”
§ 224(a)(5) means
TC224 = PTS – ILEC,
and, equivalently,
PTS = TC224 + ILEC.

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Thus, on petitioners’ own rather mathematized reading of the
statute, §
224(a)(4)’s reference to any “provider of
telecommunications services” embraces ILECs rather than
excludes them.
Before turning to explain why this reading makes
contextual sense, we pause to identify petitioners’ error. They
take the first definition, § 153(51), and insert into it
§
224(a)(5)’s exclusion of ILECs, but fail to note that
§ 153(51) is the general definition of telecommunications
carrier, not the one tailored to § 224. Thus, they take
§ 153(51)’s equation TC = PTS and claim to find TC224 =
PTS. But Congress never said the latter.
Congress’s uses of the two terms (telecommunications
carrier, provider of telecommunications services) conform
readily to the understanding we have just sketched out.
Section 224(a)(4), defining pole attachment to include an
attachment by a “provider of telecommunications services,” is
cheek by jowl with § 224(a)(5), with its restricted definition of
telecommunication carrier. This proximity suggests an
entirely intentional character in § 224(a)(4)’s use of the
broader term. Petitioners detect an anomaly in the
Commission’s reading of § 224(a)(5), as § 224(f) mandates
that utilities provide nondiscriminatory access only for “a
cable television system or any telecommunications carrier,”
47 U.S.C. § 224(f)(1), despite the Commission’s view that
ILECs benefit from the statute as providers of
telecommunications services. But as the Commission pointed
out, the result simply puts ILECs in the position that cable
television stations occupied between 1978 and 1996: open to
the benefits of §
224(b) but with no explicit right to
nondiscriminatory access. Order ¶ 212.
Because the Commission in 2011 was changing from one
supposedly permissible interpretation of § 224(a)(5) to
another permissible interpretation, it set out to justify the

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change. Given our analysis of the relevant language, we very
much doubt if the prior interpretation was reasonable.

Assuming that it was, we assess the Commission’s
explanation for its change of view under the latitudinarian
standards of Fox. That explanation was in essence that
whereas in 1978 the power companies and the historic phone
companies had, by virtue of the roughly equal scale of their
pole systems, roughly equal incentives for sharing, that
equality had since eroded, leaving the power companies with
a far higher proportion of poles and a lesser incentive to share.
See Order ¶ 206. While petitioners say that the Commission’s
data for the past are wrong, their only attack on its numbers
for the present is that the data are incomplete and might not be
representative. See Pet’rs Br. at 28. They have offered
neither conflicting data on the current situation, nor any actual
reason to suppose that the Commission’s numbers are
materially unrepresentative. There is therefore every reason
to believe the new view satisfies Fox’s requirements that
“there are good reasons for” the Commission’s choice
(assuming it was free to choose), and “that the [Commission]
believes [the new interpretation] to be better.” Fox, 556 U.S.
at 515.
Accordingly we uphold the Commission’s view that
ILECs are “providers of telecommunications services” for
purposes of § 224(a)(4).
Telecom Rate Revision. Petitioners separately challenge
the Commission’s decision to adopt telecom rates under
§§ 224(d) & (e) that it has designed to be substantially
equivalent to its already adopted cable rates. (The new
telecom rates, unless the Commission should apply them
independently to ILECs via its rate-setting authority under
§§
224(a)(4) and (b), apply only to telecommunications
carriers as defined above. See NCTA, 534 U.S. at 335-36
(rejecting the contention that §§ 224(d) & (e) limit the
Commission’s authority under § 224(b)(1) to define just and

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reasonable rates outside the “self-described scope” of the
former); Order ¶¶ 214-20.)
While § 224(b)(1) gives the Commission broad authority
to ensure that pole attachment rates are “just and reasonable,”
other provisions of § 224 limit that authority. Section 224(d),
applying to “the rate for any pole attachment used by a cable
television system solely to provide cable service,” 47 U.S.C.
§ 224(d)(3), sets a lower bound (roughly, incremental cost)
and an upper bound (roughly, fully allocated cost) to govern
the Commission’s formulation of the cable rate, id.
§ 224(d)(1).
Section 224(e), the statutory basis for the telecom rate, is
in important respects less specific than § 224(d). Paragraph
(1) authorizes the Commission to “prescribe regulations . . . to
govern the charges for pole attachments used by
telecommunications carriers to provide telecommunications
services, when the parties fail to resolve a dispute over such
charges,” id. § 224(e)(1), and then gives the utilities
instructions for apportioning, among the entities using a pole,
both “the cost of providing space on a pole . . . other than
usable space among entities,” and the cost of providing
“usable space,” id. §§ 224(e)(2) & (3). The parties agree that,
while § 224(e) prescribes the apportionment criteria rather
specifically, it nowhere defines the term “cost.”
As the Commission explained in the Order, the previous
cable and telecom rate formulae yielded markedly different
results. The Commission estimates that the formulae
promulgated under the 1998 Order yielded rates for cable of
about 7.4% of the annual pole cost, and rates for telecom
ranging between 11.2% and 16.9% of the annual pole cost.
Order ¶ 131 n.399. The Order reinterpreted §§ 224(e)(2) and
(3) with the goal of reducing this disparity, so that the telecom
rate would generally “recover the same portion of pole costs
as the current cable rate.” Id. ¶ 8. The Commission justified

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its decision by stating that the revised telecom rate would
“significantly reduce the marketplace distortions and barriers
to the availability of new broadband facilities and services that
arose from disparate rates.” Id. ¶ 151. To reach this
convergence, it gave utilities the option of charging the higher
of either the original telecom rate with a cost factor multiplied
by fractional coefficients—66% for urban poles, and 44% for
rural poles (priced differently due to the difference in quantity
of attachments likely to occur in urban versus rural areas, see
id. ¶ 150)—or a rate aimed at covering all costs caused by an
attachment, id. ¶¶ 143-44. Petitioners, though objecting to the
rates, do not contest the Commission’s view that this latter
option satisfies the lower bound set out in § 224(d)(1). (The
Eleventh Circuit has held that the constitutional bar on takings
without just compensation generally allows application of the
lower bound, subject to narrow exceptions. Alabama Power
Co. v. FCC
, 311 F.3d 1357, 1367-71 (11th Cir. 2002).)
The Commission expressly justifies its current policy in
terms of eliminating the differences between the cable and
telecom rates (subject, of course, to complying with
§ 224(d)(1)’s lower bound). But petitioners claim that the
word “cost” as used in § 224(e) blocks the Commission’s
move by clearly requiring use of fully allocated costs. They
invoke in support the statute’s references to the cost of the
space on the pole (either usable or not usable), and say that
“cost” must necessarily refer to the pole’s fully allocated cost.
But as the Commission found, the term “cost” in §§ 224(e)(2)
and (3) is necessarily ambiguous, and could thus “yield a
range of rates from the existing fully allocated cost approach
at the high end to a rate closer to incremental cost at the low
end.” Order ¶ 8. Indeed, the Supreme Court, in the course of
endorsing one of the most innovative calculations of cost in
the history of regulation, said:
The fact is that without any better indication of
meaning than the unadorned term, the word “cost” in

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[47 U.S.C.] § 252(d)(1), as in accounting generally,
is “a chameleon,” Strickland v. Commissioner,
Maine Dept. of Human Services,
96 F.3d 542, 546
(C.A.1 1996), a “virtually meaningless” term, R.
Estes, Dictionary of Accounting 32 (2d ed.1985).
Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467, 500 (2002).
And we have previously held that the term “cost,” without
more, is open to a wide range of reasonable interpretations.
Thus we have found the statutory term “legitimate, verifiable
and economic costs” ambiguous as to the inclusion of
“stranded” costs, Transmission Access Policy Study Group v.
FERC
, 225 F.3d 667, 703-04 (D.C. Cir. 2000) (per curiam),
aff’d, 535 U.S. 1 (2002), and held that, within the framework
of rates based on “cost,” statutory mandates against rate
discrimination did not generally bar an agency from allowing
allocation of rates among classes of customers on the basis of
their elasticity of demand, Associated Gas Distribs. v. FERC,
824 F.2d 981, 1009-12 (D.C. Cir. 1987).
The Commission’s chosen methodology—which
petitioners characterize as “nothing more than an algebraic
sleight of hand designed to conflate” the two rates, see Pet’rs
Br. at 16—draws on determinations that the revised rate will
(1) “eliminate distortions in end-user choices between
technologies, and lead to [telecom] provider behavior being
driven more by underlying economic costs than arbitrary price
differentials,” Order ¶ 147, and (2) reflect a national “interest
in continued pole investment,” id. ¶ 8. Although petitioners
challenge this policy justification, they offer neither theory
nor fact to contradict the Commission’s fundamental
proposition that artificial, non-cost-based differences in the
prices of inputs among competitors are bound to distort
competition, handicapping the disfavored competitors and at
the margin causing market share and capital to flow to less
efficient firms. In the absence of some feature of the law or
facts that contradicts the Commission’s effort to eliminate that

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distortion, its reasoning amply satisfies the standard imposed
by Fox.
Because the Commission’s methodology is consistent
with the unspecified cost terms contained in § 224(e), and the
Commission’s justifications are reasonable, the revision
warrants judicial deference.
Refund Period. The Order revised the Commission’s
earlier determination that overcharged attachers are entitled to
refunds starting at the date of the initial complaint. In its
place, the Commission will now determine the refund period
“consistent with the applicable statute of limitations.” 47
C.F.R. § 1.1410(a)(3). The Commission argues that
petitioners have waived their challenge by failing to raise the
issue before the agency, but under United Church of Christ v.
FCC
, 779 F.2d 702, 706 (D.C. Cir. 1985), 47 U.S.C.
§ 405(a)(2)’s requirements are satisfied so long as the issues
were presented to the Commission by some party, even if not
by the party raising the issue on appeal. See Order ¶ 106 &
n.329.
Petitioners’ arguments have no serious statutory basis.
Section 224(b)(1) provides, in relevant part, that “the
Commission shall regulate the rates, terms, and conditions for
pole attachments”; it “shall adopt procedures necessary and
appropriate to hear and resolve complaints concerning such
rates, terms, and conditions”; and “[f]or purposes of enforcing
any determinations resulting from complaint procedures
established pursuant to this subsection, the Commission shall
take such action as it deems appropriate and necessary.” 47
U.S.C. § 224(b)(1).
Under this broad authorization, it is hard to see any legal
objection to the Commission’s selection of any reasonable
period for accrual of compensation for overcharges or other
violations of the statute or rules. The current Order has
amended 47 C.F.R. § 1.1410 to provide that refunds or

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payments are to be made “consistent with the applicable
statute of limitations,” but it does not appear to specify what
makes a limitations period applicable. Petitioners note but do
not complain about that uncertainty. Pet’rs Br. at 53.
As with the other issues on appeal, the Order reverses
decades-old Commission policy. The original theory for
adopting the date-of-complaint rule was that such a limitation
would tend to “avoid abuse and encourage early filing when
rates are considered objectionable.” In the Matter of Adoption
of Rules for the Regulation of Cable Television Pole
Attachments
, First Report and Order, 68 FCC 2d 1585, ¶ 45
(Aug. 11, 1978). In explaining its change of viewpoint, the
Commission has noted that such a system gave parties a
“disincentive to engage in pre-complaint negotiation,” as
doing so would cut the complainant’s recovery period short.
Order ¶ 111 n.345. Petitioners identify neither a material flaw
in that reasoning nor any powerful countervailing
consideration. As the Commission has met Fox’s modest
demands for changing its policy, upholding its decision
follows ineluctably.
* * *
We have considered petitioners’ many subsidiary
arguments and find them to be without merit. The petition is
Denied.

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Statutory Appendix: 47 U.S.C. § 224 (2010)
(a) Definitions
As used in this section:
(1) The term “utility” means any person who is a local
exchange carrier or an electric, gas, water, steam, or other
public utility, and who owns or controls poles, ducts, conduits,
or rights-of-way used, in whole or in part, for any wire
communications. Such term does not include any railroad, any
person who is cooperatively organized, or any person owned
by the Federal Government or any State.
(2) The term “Federal Government” means the Government of
the United States or any agency or instrumentality thereof.
(3) The term “State” means any State, territory, or possession
of the United States, the District of Columbia, or any political
subdivision, agency, or instrumentality thereof.
(4) The term “pole attachment” means any attachment 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.
(5) For purposes of this section, the term “telecommunications
carrier” (as defined in section 153 of this title) does not
include any incumbent local exchange carrier as defined in
section 251(h) of this title.
(b) Authority of Commission to regulate rates, terms, and
conditions; enforcement powers; promulgation of regulations
(1) Subject to the provisions of subsection (c) of this section,
the 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. For purposes of
enforcing any determinations resulting from complaint

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16
procedures established pursuant to this subsection, the
Commission shall take such action as it deems appropriate and
necessary, including issuing cease and desist orders, as
authorized by section 312(b) of this title.
(2) The Commission shall prescribe by rule regulations to
carry out the provisions of this section.
(c) State regulatory authority over rates, terms, and
conditions; preemption; certification; circumstances
constituting State regulation
(1) Nothing in this section shall be construed to apply to, or to
give the Commission jurisdiction with respect to rates, terms,
and conditions, or access to poles, ducts, conduits, and rights-
of-way as provided in subsection (f) of this section, for pole
attachments in any case where such matters are regulated by a
State.
(2) Each State which regulates the rates, terms, and conditions
for pole attachments shall certify to the Commission that--
(A) it regulates such rates, terms, and conditions; and
(B) in so regulating such rates, terms, and conditions, the State
has the authority to consider and does consider the interests of
the subscribers of the services offered via such attachments, as
well as the interests of the consumers of the utility services.
(3) For purposes of this subsection, a State shall not be
considered to regulate the rates, terms, and conditions for pole
attachments--
(A) unless the State has issued and made effective rules and
regulations implementing the State's regulatory authority over
pole attachments; and
(B) with respect to any individual matter, unless the State
takes final action on a complaint regarding such matter--

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(i) within 180 days after the complaint is filed with the State,
or
(ii) within the applicable period prescribed for such final
action in such rules and regulations of the State, if the
prescribed period does not extend beyond 360 days after the
filing of such complaint.
(d) Determination of just and reasonable rates; “usable space”
defined
(1) For purposes of subsection (b) of this section, a rate is just
and reasonable if it assures a utility the recovery of not less
than the additional costs of providing pole attachments, nor
more than an amount determined by multiplying the
percentage of the total usable space, or the percentage of the
total duct or conduit capacity, which is occupied by the pole
attachment by the sum of the operating expenses and actual
capital costs of the utility attributable to the entire pole, duct,
conduit, or right-of-way.
(2) As used in this subsection, the term “usable space” means
the space above the minimum grade level which can be used
for the attachment of wires, cables, and associated equipment.
(3) This subsection shall apply to the rate for any pole
attachment used by a cable television system solely to provide
cable service. Until the effective date of the regulations
required under subsection (e) of this section, this subsection
shall also apply to the rate for any pole attachment used by a
cable system or any telecommunications carrier (to the extent
such carrier is not a party to a pole attachment agreement) to
provide any telecommunications service.
(e) Regulations governing charges; apportionment of costs of
providing space
(1) The Commission shall, no later than 2 years after February
8, 1996, prescribe regulations in accordance with this
subsection to govern the charges for pole attachments used by

USCA Case #11-1146 Document #1422293 Filed: 02/26/2013 Page 18 of 19

18
telecommunications carriers to provide telecommunications
services, when the parties fail to resolve a dispute over such
charges. Such regulations shall ensure that a utility charges
just, reasonable, and nondiscriminatory rates for pole
attachments.
(2) A utility shall apportion the cost of providing space on a
pole, duct, conduit, or right-of-way other than the usable
space among entities so that such apportionment equals two-
thirds of the costs of providing space other than the usable
space that would be allocated to such entity under an equal
apportionment of such costs among all attaching entities.
(3) A utility shall apportion the cost of providing usable space
among all entities according to the percentage of usable space
required for each entity.
(4) The regulations required under paragraph (1) shall become
effective 5 years after February 8, 1996. Any increase in the
rates for pole attachments that result from the adoption of the
regulations required by this subsection shall be phased in
equal annual increments over a period of 5 years beginning on
the effective date of such regulations.
(f) Nondiscriminatory access
(1) A utility shall 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.
(2) Notwithstanding paragraph (1), a utility providing electric
service may deny a cable television system or any
telecommunications carrier access to its poles, ducts, conduits,
or rights-of-way, on a non-discriminatory basis where there is
insufficient capacity and for reasons of safety, reliability and
generally applicable engineering purposes.
(g) Imputation to costs of pole attachment rate

USCA Case #11-1146 Document #1422293 Filed: 02/26/2013 Page 19 of 19

19
A utility that engages in the provision of telecommunications
services or cable services shall impute to its costs of providing
such services (and charge any affiliate, subsidiary, or
associate company engaged in the provision of such services)
an equal amount to the pole attachment rate for which such
company would be liable under this section.
(h) Modification or alteration of pole, duct, conduit, or right-
of-way
Whenever the owner of a pole, duct, conduit, or right-of-way
intends to modify or alter such pole, duct, conduit, or right-of-
way, the owner shall provide written notification of such
action to any entity that has obtained an attachment to such
conduit or right-of-way so that such entity may have a
reasonable opportunity to add to or modify its existing
attachment. Any entity that adds to or modifies its existing
attachment after receiving such notification shall bear a
proportionate share of the costs incurred by the owner in
making such pole, duct, conduit, or right-of-way accessible.
(i) Costs of rearranging or replacing attachment
An entity that obtains an attachment to a pole, conduit, or
right-of-way shall not be required to bear any of the costs of
rearranging or replacing its attachment, if such rearrangement
or replacement is required as a result of an additional
attachment or the modification of an existing attachment
sought by any other entity (including the owner of such pole,
duct, conduit, or right-of-way).



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