American Electric Power v. FCC & USA, No. 11-1146 (D.C. Cir.)
ORAL ARGUMENT NOT YET SCHEDULED
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 1 of 88
BRIEF FOR RESPONDENTS
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
NO. 11-1146
AMERICAN ELECTRIC POWER
SERVICE CORPORATION, ET AL.
PETITIONERS,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS.
ON PETITION FOR REVIEW OF AN ORDER OF THE
FEDERAL COMMUNICATIONS COMMISSION
SHARIS A. POZEN
AUSTIN C. SCHLICK
ACTING ASSISTANT ATTORNEY GENERAL
GENERAL COUNSEL
ROBERT B. NICHOLSON
PETER KARANJIA
KRISTEN C. LIMARZI
DEPUTY GENERAL COUNSEL
ATTORNEYS
RICHARD K. WELCH
UNITED STATES
DEPUTY ASSOCIATE GENERAL COUNSEL
DEPARTMENT OF JUSTICE
WASHINGTON, D.C. 20530
NANDAN M. JOSHI
COUNSEL
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 2 of 88
1. Parties.
All parties appearing in this Court are listed in petitioners’ brief.
2. Rulings under review.
Implementation of Section 224 of the Act, Report and Order and Order
on Reconsideration, 26 FCC Rcd 5240 (2011) (J.A. __).
3. Related cases.
The order on review has not previously been before this Court or any
other court. We are not aware of any related cases pending in this Court or in
any other court.
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 3 of 88
Table of Authorities......................................................................................... iii
Glossary......................................................................................................... viii
Jurisdiction ........................................................................................................1
Introduction and Questions Presented...............................................................1
Statutes and Regulations ...................................................................................4
Counterstatement...............................................................................................4
I.
The Commission’s Authority to Regulate Pole Attachments....................4
A. Regulation Prior to the 1996 Act...........................................................4
B. Regulation After the 1996 Act ..............................................................8
II. The Order on Review ..............................................................................13
Summary of Argument....................................................................................22
Argument.........................................................................................................25
I.
The Order is Subject to Deferential Standards of Review ......................25
II. The Commission Lawfully Modified the Telecom-Rate
Formula ....................................................................................................26
A. The Commission Has Broad Rate-setting Authority
Under § 224 .........................................................................................27
B. The New Telecom-Rate Formula Represents a
Reasonable Exercise of the FCC’s Rate-setting Authority.................29
C. Section 224(e) Does Not Require Use of a Fully
Allocated Cost Measure ......................................................................37
III. The Commission Has Authority under § 224(b) to Regulate
Pole Attachments by ILECs .....................................................................41
i
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A. The Commission Reasonably Determined That § 224
Authorizes the FCC to Regulate ILEC Attachments ..........................42
B. The Commission Adequately Explained its Change in
Policy...................................................................................................50
IV. Petitioners’ Challenge to the Commission’s Decision to
Extend the Refund Period is Meritless.....................................................57
Conclusion.......................................................................................................60
ii
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 5 of 88
Ad Hoc Telecomms. Users Comm. v. FCC,
572 F.3d 903 (D.C. Cir. 2009) ............................................................. 30, 32
Alabama Power Co. v. FCC,
311 F.3d 1357 (11th Cir. 2002),
cert. denied, 540 U.S. 937 (2003) .......................................................... 6, 39
Alaska Dept. of Envtl. Conservation v. EPA,
540 U.S. 461 (2004) ....................................................................................34
AT&T v. Iowa Utils. Bd., 525 U.S. 366 (1999) ...............................................25
BDPCS, Inc. v. FCC,
351 F.3d 1177 (D.C. Cir. 2003) ........................................................... 47, 57
BellSouth Corp. v. FCC,
162 F.3d 1215 (D.C. Cir. 1999) ..................................................................54
Burgess v. United States, 553 U.S. 124 (2008)...............................................44
Catawba County, N.C. v. EPA,
571 F.3d 20 (D.C. Cir. 2009) ......................................................................34
Chevron USA, Inc. v. Nat. Res. Def. Council, Inc.,
467 U.S. 837 (1984) ....................................................................................25
Citizens to Preserve Overton Park, Inc. v. Volpe,
401 U.S. 402 (1971) ....................................................................................26
Constellation Energy Commodities Group, Inc. v.
FERC, 457 F.3d 14 (D.C. Cir. 2006) ..........................................................55
Consumer Electronics Ass’n v. FCC,
347 F.3d 291 (D.C. Cir. 2003) ....................................................................49
Corley v. United States, 129 S. Ct. 1558 (2009) ...................................... 44, 45
Entergy Corp. v. Riverkeeper, Inc.,
129 S. Ct. 1498 (2009) ................................................................................25
FCC v. AT&T Inc., 131 S. Ct. 1177 (2011) ....................................................44
FCC v. Florida Power Corp., 480 U.S. 245 (1987) .................................. 6, 46
FCC v. Fox Television Stations, Inc.,
129 S. Ct. 1800 (2009) ................................................................................51
iii
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 6 of 88
Federal Power Comm’n v. Texaco Inc.,
417 U.S. 380 (1974) ....................................................................................27
In re Permian Basin Area Rate Cases, 390 U.S. 747
(1968) ..........................................................................................................33
Monongahela Power Co. v. FCC,
655 F.2d 1254 (D.C. Cir. 1981) ....................................................................6
Nader v. FCC, 520 F.2d 182 (D.C. Cir. 1975)................................................28
Nat’l Ass’n of State Util. Consumer Advocates v.
FCC, 372 F.3d 454 (D.C. Cir. 2004)...........................................................33
Nat’l Cable & Telecomms. Ass’n v. Brand X
Internet Servs., 545 U.S. 967 (2005)........................................ 26, 29, 45, 50
Nat’l Cable & Telecomms. Ass’n v. FCC,
567 F.3d 659 (D.C. Cir. 2009) ....................................................................51
*
Nat’l Cable & Telecomms. Ass’n v. Gulf Power Co.,
534 U.S. 327 (2002) ............... 4, 9, 12, 13, 24, 29, 30, 42, 43, 46, 48, 50, 57
New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005) ..............................................29
Orloff v. FCC, 352 F.3d 415 (D.C. Cir. 2003),
cert. denied, 542 U.S. 937 (2004) ...............................................................47
Public Citizen v. Carlin,
184 F.3d 900 (D.C. Cir. 1999) ....................................................................50
Public Citizen, Inc. v. NHTSA,
374 F.3d 1251 (D.C. Cir. 2004) ..................................................................56
Recording Indus. Ass’n of Am., Inc. v. Verizon
Internet Servs., Inc.,
351 F.3d 1229 (D.C. Cir. 2003) ..................................................................45
Russello v. United States, 464 U.S. 16 (1983) ................................................29
*
Southern Co. v. FCC,
313 F.3d 574 (D.C. Cir. 2002) ....................................................... 40, 51, 56
Texas Utils. Elec. Co. v. FCC,
997 F.2d 925 (D.C. Cir. 1993) ....................................................................12
Time Warner Entm’t Co., L.P. v. FCC,
56 F.3d 151 (D.C. Cir. 1995) ......................................................................28
iv
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 7 of 88
*
Verizon Commc’ns, Inc. v. FCC,
535 U.S. 467 (2002) ....................................................................... 28, 35, 36
WorldCom, Inc. v. FCC,
238 F.3d 449 (D.C. Cir. 2001) ....................................................................31
Adoption of Rules for the Regulation of Cable
Television Pole Attachments, 68 FCC 2d 1585
(1978), on recon., 72 FCC 2d 59 (1979), on
further recon., 77 FCC 2d 187 (1980), rev.
denied, Monongahela Power Co. v. FCC, 655
F.2d 1254 (D.C. Cir. 1981) .............................................................. 6, 58, 59
Adoption of Rules for the Regulation of Cable
Television Pole Attachments,
72 FCC 2d 59 (1979).................................................................................6, 7
Amendment of Rules and Policies Governing Pole
Attachments, 12 FCC Rcd 7449 (1997) ........................................................7
Amendment of Rules and Policies Governing the
Attachment of Cable Television Hardware to
Utility Poles, 2 FCC Rcd 4387 (1987) ......................................................6, 7
Implementation of Section 703(e) of the
Telecommunications Act of 1996, 13 FCC Rcd
6777 (1998), aff’d, Nat’l Cable & Telecomms.
Ass’n v. Gulf Power Co., 534 U.S. 327 (2002) .......................... 9, 11, 12, 39
American Recovery and Reinvestment Act of 2009,
Pub. L. No. 111-5, 123 Stat. 115.................................................................14
Pole Attachments Act,
Pub. L. No. 95-234, § 6, 92 Stat. 33 (1978) ..................................................5
Telecommunications Act of 1996,
Pub. L. No. 104-104, 110 Stat. 56.................................................................8
5 U.S.C. § 706(2)(A) .......................................................................................26
28 U.S.C. § 2342(1) ..........................................................................................1
47 U.S.C. § 153(51) ................................................................................. 11, 43
v
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47 U.S.C. § 153(53) ........................................................................................43
47 U.S.C. § 202 ...............................................................................................47
47 U.S.C. § 224 .................... 4, 8, 10, 12, 23, 24, 27, 42, 43, 44, 45, 48, 49, 50
47 U.S.C. § 224(a)(1) ......................................................................... 10, 42, 45
47 U.S.C. § 224(a)(4) ................................... 3, 8, 10, 11, 19, 23, 41, 42, 43, 45
47 U.S.C. § 224(a)(5) ................................................................... 11, 19, 23, 43
47 U.S.C. § 224(b)........................................ 2, 3, 12, 15, 19, 20, 21, 23, 41, 47
47 U.S.C. § 224(b)(1)....................................................................... 5, 8, 24, 57
47 U.S.C. § 224(c).............................................................................................5
47 U.S.C. § 224(d)........................................................................ 22, 29, 34, 48
47 U.S.C. § 224(d)(1)....................................................................... 5, 7, 29, 38
47 U.S.C. § 224(d)(3)................................................................. 5, 9, 12, 29, 40
47 U.S.C. § 224(e).............................................. 3, 8, 18, 22, 26, 29, 35, 38, 48
47 U.S.C. § 224(e)(1) ................................................................................. 8, 44
47 U.S.C. § 224(e)(2) ............................................................... 8, 22, 27, 37, 38
47 U.S.C. § 224(e)(3) ........................................................... 8, 9, 22, 27, 37, 38
47 U.S.C. § 224(e)(4) ......................................................................................40
47 U.S.C. § 224(f)(1) ....................................................... 45, 46, 47, 48, 49, 57
47 U.S.C. § 251(b)(4)............................................................................... 48, 49
47 U.S.C. § 252(d)(1)......................................................................................35
47 U.S.C. § 402(a).............................................................................................1
47 U.S.C. § 405(a).............................................................................. 47, 57, 59
47 U.S.C. § 1302(a)........................................................................ 2, 11, 13, 30
47 U.S.C. § 1302(b) ........................................................................... 12, 13, 15
47 C.F.R. § 1.1409(e)(1) ...................................................................................7
47 C.F.R. § 1.1409(e)(2)(i) .............................................................................10
47 C.F.R. § 1.1409(f) ......................................................................................41
47 C.F.R. § 1.1410(c) ......................................................................................14
vi
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 9 of 88
H.R. Conf. Rep. No. 104-458 (1996) ..............................................................11
National Broadband Plan
(available at http://www.broadband.gov/plan/).................................... 14, 41
S. Rep. No. 95-580 (1977) ....................................................................... 17, 58
* Cases and other authorities principally relied upon are marked with
asterisks.
vii
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 10 of 88
Brief of Amicus Curiae Edison Electric Institute in
Support of Petitioners
EEI
Edison Electric Institute
ILEC
Incumbent local exchange carrier
Int. Br.
Brief of Intervenor Consumers Energy Company et
al. in Support of Petitioners
LEC Local
exchange
carrier
NCTA
National Cable & Telecommunications Association
Pet. Br.
Brief of Petitioners
USTA USTelecom
viii
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 11 of 88
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
NO. 11-1146
AMERICAN ELECTRIC POWER
SERVICE CORPORATION, ET AL.
PETITIONERS,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS.
ON PETITION FOR REVIEW OF AN ORDER OF THE
FEDERAL COMMUNICATIONS COMMISSION
BRIEF FOR RESPONDENTS
published a summary of the order on review in the Federal Register on May
9, 2011. 76 Fed. Reg. 26620. Petitioners filed their petition for review on
May 18, 2011. This Court’s jurisdiction rests on 47 U.S.C. § 402(a) and 28
U.S.C. § 2342(1).
including electric utility companies, assess when cable television operators,
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 12 of 88
telecommunications carriers, and others attach their lines to existing utility
poles. In the Communications Act, Congress directed the FCC to ensure that
pole-attachment rates are “just and reasonable.” 47 U.S.C. § 224(b).
Congress also has directed the FCC to “encourage the deployment . . . of
advanced telecommunications capability to all Americans” by removing
barriers to infrastructure development. 47 U.S.C. § 1302(a).
In the order on review,1 the Commission took three steps to promote
broadband deployment by improving access to utility poles at just and
reasonable rates. First, the Commission revised its formula for calculating
the maximum pole-attachment rate that utilities may impose on
telecommunications carriers, reducing that rate to minimize the disparity
between it and the maximum rate that may be imposed on cable operators.
Order ¶¶ 126-198 (J.A. __). Second, the Commission concluded that it may
regulate pole attachments by incumbent local exchange carriers (ILECs) to
ensure that the rates, terms, and conditions applicable to their attachments are
just and reasonable. Order ¶¶ 199-213 (J.A. __). Third, the Commission
allowed the prevailing party in a pole-attachment dispute to obtain a refund
1 Implementation of Section 224 of the Act, 26 FCC Rcd 5240 (2011) (Order)
(J.A.__).
2
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extending back “as far as the applicable statute of limitations allows.” Order
¶ 110 (J.A. __).
Petitioners, a group of electric utilities subject to § 224’s obligation to
allow third parties to attach wires, cables, and other equipment to their poles,
now petition for review.
The questions presented are:
(1) Whether the Commission lawfully exercised its rate-setting
authority under 47 U.S.C. §§ 224(b) and (e) when it modified a formula it
previously had used for computing the “cost” of providing space on a pole for
purposes of establishing a just and reasonable rate for telecommunications
attachments.
(2) Whether the Commission acted within its discretion in concluding
that ILECs are “provider[s] of telecommunications service” under 47 U.S.C.
§ 224(a)(4), such that the agency may regulate the rates, terms, and
conditions of their pole attachments pursuant to § 224(b).
(3) Whether the Commission acted within its discretion under 47
U.S.C. § 224(b) in concluding that a successful pole-attachment complainant
is entitled to refunds from the date specified in the applicable statute of
limitations and is not limited to refunds due from the date on which its
complaint was filed.
3
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 14 of 88
brief.
communications providers to deploy the lines, wires, and other network
equipment they need to reach potential customers. Concerned that owners of
utility poles – generally electric utilities or ILECs – were abusing their
market power by charging cable television companies “monopoly rents” to
attach cable television wires to their poles, see Nat’l Cable & Telecomms.
Ass’n v. Gulf Power Co., 534 U.S. 327, 330 (2002), Congress in 1978 added
§ 224 to the Communications Act, 47 U.S.C. § 224. That provision granted
the Commission the authority to “regulate the rates, terms, and conditions for
pole attachments to provide that such rates, terms, and conditions are just and
4
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 15 of 88
reasonable” and to “hear and resolve complaints concerning such rates, terms,
2
and conditions.” 47 U.S.C. § 224(b)(1).
As originally enacted, § 224 applied only to attachments by cable
operators. Pub. L. No. 95-234, § 6, 92 Stat. 33, 35 (1978). In § 224(d)(1),
which continues to govern cable attachments used “solely to provide cable
service,” 47 U.S.C. § 224(d)(3), Congress specified two alternative cost-
based standards for computing what is generally referred to as the “cable
rate” (i.e., the pole attachment rate paid by cable operators solely to provide
cable service). At the upper bound, that rate cannot be more than “the sum of
the operating expenses and actual capital costs of the utility attributable to the
entire pole” multiplied by “the percentage of the total usable space” occupied
by the attachment. 47 U.S.C. § 224(d)(1). At the lower bound, the cable rate
cannot be “less than the additional costs of providing pole attachments.”
Ibid. In other words, § 224(d)(1) establishes a “range of reasonableness” for
the cable rate that is between the cable operator’s share of the “fully allocated
cost of construction and operation of the pole” (at the upper end) and the
2 The Commission’s pole-attachment rules do not apply in 20 states and the
District of Columbia because those jurisdictions regulate pole attachments
pursuant to 47 U.S.C. § 224(c). See Order, App. C. (J.A. __).
5
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“marginal costs of attachments” (at the lower end). FCC v. Florida Power
3
Corp., 480 U.S. 245, 253 (1987).
In a series of orders, the Commission implemented a formula that
cable-television-system attachers and utilities could use to determine a
maximum just and reasonable pole attachment rate – referred to as the “cable-
rate formula” – and procedures for resolving rate complaints.4 The formula
“focus[es] on the upper end of the statutory range,” i.e., the fully-allocated-
cost limit. Amendment of Rules and Policies Governing the Attachment of
Cable Television Hardware to Utility Poles, 2 FCC Rcd 4387, 4394 ¶ 53
(1987) (1987 Order). “[B]y definition, fully allocated costs encompass all
pole-related costs,” id. at 4397 ¶ 74, including the utility’s operating expenses
(i.e., administrative and maintenance costs), as well as its capital costs for the
entire pole (i.e., depreciation expenses, a return on investment, and taxes), id.
at 4388 ¶ 5. Operating expenses and capital costs are also called “carrying
3 The cable rate has long been held to provide adequate compensation to pole
owners under the Fifth Amendment. See Florida Power Corp., 480 U.S. at
254; Alabama Power Co. v. FCC, 311 F.3d 1357, 1370-1371 (11th Cir.
2002), cert. denied, 540 U.S. 937 (2003).
4 See, e.g., Adoption of Rules for the Regulation of Cable Television Pole
Attachments, 68 FCC 2d 1585 (1978) (First Report and Order), on recon., 72
FCC 2d 59 (1979), on further recon., 77 FCC 2d 187 (1980), rev. denied,
Monongahela Power Co. v. FCC, 655 F.2d 1254 (D.C. Cir. 1981).
6
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 17 of 88
charges,” or, when expressed as a percentage of pole investment, the
5
“carrying charge rate.” Id. at 4388 ¶ 6.
The Commission has not adopted a formula for calculating the
minimum cable rate – the “additional costs of providing pole attachments,”
47 U.S.C. § 224(d)(1). See 1987 Order, 2 FCC Rcd at 4399 ¶ 87. If an
attachment imposes any “non-recurring costs” on the pole owner – including,
6
for example, costs for “make-ready” – those costs are “directly
reimbursable” by the cable operator. Adoption of Rules for the Regulation of
Cable Television Pole Attachments, 72 FCC 2d 59, 72-73 ¶¶ 29-30 (1979).
Make-ready costs are reimbursed in addition to the periodic charges (akin to
rent) recovered through the cable rate. See id. at 62-63 ¶¶ 8-9.
5 Under the Commission’s formula, the fully allocated cost of a pole is the
product of the utility’s pole investment (called the “net cost of a bare pole”)
and the carrying charge rate. This product is multiplied by a “space factor”
that represents the portion of total usable space occupied by the cable
attachment. Thus, the maximum cable rate equals:
Space Factor × Net Cost of a Bare Pole × Carrying Charge Rate
Where
Space Factor = Space Occupied by Attachment ÷ Total Usable
Space
47 C.F.R. § 1.1409(e)(1). The “total usable space is the space on the utility
pole above the minimum grade level that is usable for the attachment of
wires, cables, and related equipment.” Amendment of Rules and Policies
Governing Pole Attachments, 12 FCC Rcd 7449, 7453-7454 ¶ 7 (1997).
6 “ ‘Make-ready’ generally refers to the modification of poles or lines or the
installation of guys and anchors to accommodate additional facilities.” Order
n.42 (J.A. __).
7
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 18 of 88
competition, Congress expanded the reach of § 224 of the Communications
Act in the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.
56. Among other things, Congress added “provider[s] of telecommunications
service[s]” as a category of attacher entitled to pole attachments at just and
reasonable rates under § 224. 47 U.S.C. §§ 224(a)(4), (b)(1). Three aspects
of the 1996 Act are relevant to this case.
1. The telecom rate. The 1996 Act added a new provision – § 224(e) –
to govern attachments “used by telecommunications carriers to provide
telecommunications services.” 47 U.S.C. § 224(e)(1). For such attachments,
Congress instructed the Commission to “prescribe regulations” to “ensure
that a utility charges just, reasonable, and nondiscriminatory rates for pole
attachments.” Ibid. Section 224(e) provides for the determination of pole-
attachment rates based on the “cost” of providing space on a pole. 47 U.S.C.
§ 224(e)(2), (3). The statute directs how the costs should be allocated
between the pole owner and attacher, but does not specify how such costs
should be computed before allocation among the parties. Thus, § 224(e)(2)
provides that the “cost of providing space on a pole . . . other than the usable
space” is to be apportioned among “all attaching entities” so that each entity
8
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 19 of 88
is allocated two-thirds of the pro rata cost of such unusable space. Section
224(e)(3) states that the “cost of providing usable space” is to be apportioned
“among all entities according to the percentage of usable space required for
each entity.”
In constructing a new “telecom rate” formula in the wake of the 1996
Act, the Commission built upon its preexisting cable-rate formula (which
Congress left in place to govern attachments used “solely to provide cable
service,” 47 U.S.C. § 224(d)(3)). Accordingly, the measure of cost used to
calculate the maximum cable rate – fully allocated cost – became the measure
of cost used to calculate the telecom rate. See Implementation of Section
703(e) of the Telecommunications Act of 1996, 13 FCC Rcd 6777, 6822-6823
¶¶ 99-102 (1998) (1998 Order), aff’d, Gulf Power, 534 U.S. 327; Order ¶ 157
(J.A. __).
As initially implemented, the telecom-rate formula generally resulted
in higher pole rental rates than the cable-rate formula. The historical
discrepancy between the two rates largely stemmed from the different way in
which the two statutory formulas “allocate the costs associated with the
unusable portion of the pole” – i.e., the space on the pole (including the
portion underground) that “cannot be used for attachments.” Order n.397
(J.A. __) (emphasis added). While the cable-rate formula allocates such costs
9
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 20 of 88
“based on the fraction of the usable space that an attachment occupies,” the
telecom-rate formula apportions those costs based on the number of attachers.
7
Order n.397 (J.A. __). Thus, before the Order on review modified the
telecom-rate formula, this difference typically resulted in a higher telecom
rate except in instances involving an exceptionally high number of attachers
on a pole.
2. ILEC attachments. The 1996 Act also amended § 224’s definitions
of “pole attachment” and “utility,” and added a new definition of
“telecommunications carrier.” “Pole attachment” was redefined to include
attachments not only by a cable operator but also a “provider of
telecommunications service.” 47 U.S.C. § 224(a)(4). The term “utility” was
modified to mean, with certain exceptions, a “local exchange carrier” or
public utility that “owns or controls poles . . . used, in whole or in part, for
any wire communications.” 47 U.S.C. § 224(a)(1). “For purposes of” § 224,
7 “Under the telecom rate . . . , two-thirds of the costs of the unusable space is
allocated equally among the number of attachers, including the owner, and
the remaining one third of these costs is allocated solely to the pole owner.”
Order n.397 (J.A. __). The space factor (which apportions both usable and
unusable space) for the telecom rate is:
47 C.F.R. § 1.1409(e)(2)(i).
10
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 21 of 88
the “term ‘telecommunications carrier’ ” – which is otherwise defined as “any
provider of telecommunications services,” 47 U.S.C. § 153(51) – “does not
include any incumbent local exchange carrier,” id. § 224(a)(5).
In implementing the 1996 amendments, the Commission understood
that it had authority to regulate all “pole attachment[s]” as defined in
§ 224(a)(4). 1998 Order, 13 FCC Rcd at 6793 ¶ 30. In considering whether
to regulate attachments by ILECs, however, the Commission initially
concluded that, because ILECs are “utilit[ies] but [are] not . . .
telecommunications carrier[s],” they do not have rights “as pole attachers.”
Id. at 6781 ¶ 5. As we explain below, the Commission revisited that
conclusion in the Order on review.
3. Pole attachments and broadband policy. The 1996 Act was
designed to “accelerate rapidly private sector deployment of advanced
telecommunications and information technologies and services to all
Americans by opening all telecommunications markets to competition.” H.R.
Conf. Rep. No. 104-458, at 1 (1996). Consistent with that goal, § 706(a) of
the 1996 Act (later codified at 47 U.S.C. § 1302(a)) requires the Commission
to “encourage the deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans . . . by utilizing . . . regulating
methods that remove barriers to infrastructure investment.” If the FCC finds
11
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 22 of 88
that such “broadband” capability is not being sufficiently deployed, the
statute mandates that the FCC “shall take immediate action to accelerate
deployment of such capability by removing barriers to infrastructure
investment and by promoting competition in the telecommunications
market.” 47 U.S.C. § 1302(b).
Even before the 1996 Act, the Commission, with this Court’s approval,
had held that cable operators that offer broadband services along with cable
service do not lose the protection of the regulated cable rate. See Texas Utils.
Elec. Co. v. FCC, 997 F.2d 925, 936 (D.C. Cir. 1993). In implementing the
1996 Act, the Commission concluded that its rate-setting authority under
§ 224(b) applies to all pole attachments by cable operators, 1998 Order, 13
FCC Rcd at 6793-94 ¶ 30, even if the attachment itself is not used “solely to
provide cable service,” 47 U.S.C. § 224(d)(3).
The Supreme Court affirmed the Commission’s analysis in Gulf
Power, 534 U.S. 327. The Court explained that the cable- and telecom- rates
are not the “exclusive rates allowed” under § 224, id. at 335, and for
attachments that fall outside those specific standards, “the FCC must
prescribe just and reasonable rates” under § 224(b) “without necessary
reliance upon a specific statutory formula devised by Congress,” id. at 336.
The Court rejected the argument that “the straightforward language of
12
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[§ 224’s] subsections (d) and (e) directs the FCC to establish two specific just
and reasonable rates [and] no other rates are authorized.” Id. at 335 (internal
quotation marks omitted). The Court found the Commission’s decision to
regulate cable attachments used to provide broadband services to be “more
sensible” than the utilities’ view, under which a cable operator “subjects itself
to monopoly pricing” if it “attempts to innovate at all and provide anything
other than pure television.” Id. at 339. The utilities’ position, the Court
recognized, “would defeat Congress’ general instruction to the FCC to
‘encourage the deployment’ of broadband Internet capability and, if
necessary, ‘to accelerate deployment of such capability by removing barriers
to infrastructure investment.’ ” Ibid. (quoting 47 U.S.C. §§ 1302(a) & (b)).
A. In November 2007, the Commission issued a notice of proposed
rulemaking “to consider comprehensively the appropriate changes, if any,” to
the pole-attachment regime in light of “nearly a decade of experience” since
the 1996 Act. Implementation of Section 224 of the Act, 22 FCC Rcd 20195,
20196 ¶ 2 (2007) (NPRM) (J.A. __). In May 2010, the Commission issued a
further notice of proposed rulemaking to consider actions that would “lower
the costs of telecommunications, cable, and broadband deployment and to
promote competition, as recommended in the National Broadband Plan.”
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Implementation of Section 224 of the Act, 25 FCC Rcd 11864, 11865 ¶ 1
8
(2010) (FNPRM) (J.A. __). The Commission sought comment on
“reinterpret[ing] the section 224(e) telecom rate so as to yield pole rental rates
that reduce disputes [about which rate applies] and investment disincentives.”
Id. ¶ 122 (J.A. __). Although the FNPRM did not “propose specific rules” for
regulating ILEC attachments (an issue raised by the initial NPRM), it asked
commenters to “refresh the record” on that issue. Id. ¶¶ 143 (J.A. __). The
FNPRM also proposed to revise 47 C.F.R. § 1.1410(c). That provision, since
its adoption in 1978, had permitted successful pole-attachment complainants
to obtain refunds only as far back as the filing of the pole-attachment
complaint. The Commission proposed to eliminate that limitation and,
instead, provide relief that accrues on the date specified by the relevant
statute of limitations. FNPRM ¶ 88 (J.A. __).
8 The National Broadband Plan was developed pursuant to the American
Recovery and Reinvestment Act of 2009 (Recovery Act), Pub. L. No. 111-5,
123 Stat. 115, which required the FCC to develop a “national broadband
plan” for “ensur[ing] that all people of the United States have access to
broadband capability.” Id. § 6001(k), 123 Stat. at 515-516. In addressing the
issue of access to infrastructure, the Plan found that “[a]pplying different
[pole attachment] rates based on whether the attacher is classified as a ‘cable’
or a ‘telecommunications’ company distorts attachers’ deployment
decisions,” and “may be deterring broadband providers that pay lower pole
rates from extending their networks or adding capabilities (such as high-
capacity links to wireless towers).” National Broadband Plan 110 (available
at http://www.broadband.gov/plan/).
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B. On April 7, 2011, the Commission released the Order on review.
As relevant here, the Order established a new just and reasonable telecom
rate based upon a revised definition of “cost,” applied § 224(b) to ILEC
attachments, and extended the refund period.
1. Telecom rate. Citing Congress’s directive under 47 U.S.C.
§ 1302(b), the Commission explained that the Order was “designed to
promote competition and increase the availability of robust, affordable
telecommunications and advanced services to consumers throughout the
nation.” Order ¶ 1 (J.A. __). The Commission pointed out that “different
interpretations” of the ambiguous term “cost” in section 224(e) “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.” Id. ¶ 8 (J.A. __); see also id.
¶¶ 156-159 (J.A. __). Balancing the statutory goal of accelerating broadband
deployment against “the interest in continued pole investment,” the
Commission adopted “a definition of cost that yields a new ‘just and
reasonable’ telecommunications rate” that “generally will recover the same
portion of pole costs as the current cable rate.” Id. ¶ 8 (J.A. __).
The Commission found that “pole rental rates play a significant role in
the deployment and availability of voice, video, and data networks.” Order
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¶ 172 (J.A. __). The original telecom rate, the Commission explained, was
“sufficiently high that it hinder[ed these] important statutory objectives,” and
“lowering the telecom rate[] will better enable providers to compete on a
level playing field, will eliminate distortions in end-user choices between
technologies, and lead to provider behavior being driven more by underlying
economic costs than arbitrary price differentials.” Id. ¶ 147 (J.A. __). The
“new formula will minimize the difference in rental rates paid for attachments
that are used to provide voice, data, and video services, and thus will help
remove market distortions that affect attachers’ deployment decisions.” Id.
¶ 126 (J.A. __). “Removing these barriers to telecommunications and cable
deployment,” the Commission explained, “will enable consumers to benefit
through increased competition, affordability, and availability of advanced
communications services, including broadband,” while still enabling pole
owners to earn a fair return when they provide access. Ibid.
To that end, the Commission rejected continued use in the telecom
formula of the fully-allocated-cost approach it had imported from the cable-
rate formula. Under the Order, the new telecom-rate formula adopts two
alternative measures of cost, with utilities receiving the benefit of the measure
that produces the higher rate.
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First, the Commission recognized that telecommunications attachers
have historically contributed to the capital costs of the pole network (beyond
those costs recovered through make-ready fees), and it did not want the new
telecom rate to “unduly burden [utility] ratepayers.” Order ¶ 149 (J.A. __).
Balancing that concern against the statutory goal of promoting broadband
deployment, the Commission decided to “allow the pole owner to charge a
monthly pole rental rate that reflects some contribution to capital costs” (in
addition to those recovered through make-ready fees), while also reducing the
telecom rate so that it “will, in general, approximate the cable rate.” Ibid.
Heeding Congress’s direction that pole-attachment formulas should be
“ ‘simple and expeditious,’ ” the Commission settled on an approach that
defines costs “in terms of a percentage of the fully allocated costs” of the pole
– specifically, 66 percent of fully allocated costs in urban areas and 44
9
percent in non-urban areas. Ibid. (quoting S. Rep. No. 95-580, at 21 (1977)).
This measure of cost produces a rate that “will, in general, approximate the
9 This approach sets the telecom rate equal to:
Space
Factor × Cost, where Cost:
in Urbanized Service Areas = 0.66 × (Net Cost of a Bare Pole ×
Carrying Charge Rate)
in Non-Urbanized Service Areas = 0.44 × (Net Cost of a Bare Pole ×
Carrying Charge Rate)
Order, App. A (J.A. __).
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cable rate,” thereby promoting network investment and broadband
deployment. Ibid.
Second, although the measure of cost discussed above will produce a
higher telecom rate “in most cases,” Order ¶ 149 (J.A. __), the Commission
established an alternative measure of cost that utilities may use if it benefits
them to do so. The alternative approach is based on the principle of “cost
causation,” under which the “customer – the cost causer – pays a rate that
covers” the costs for which it is “causally responsible.” Order ¶ 143 (J.A.
__). Under this approach, a pole owner may recover its administrative and
maintenance costs through the telecom rate, but not capital costs other than
those associated with make-ready expenses (which are recovered directly
10
from the attacher). Administrative and maintenance expenses were
included because “it is likely that an attacher is causally responsible” for at
11
least some of those costs. Id. ¶ 145 (J.A. __). The Commission also noted
10 This approach sets the telecom rate equal to:
Space Factor × Net Cost of Bare Pole × Administrative and
Maintenance Carrying Charge Rate
Order, App. A (J.A. __).
11 The Commission recognized that an attacher “might not be the cost causer
with respect to all” administrative and maintenance costs. Order ¶ 145 (J.A.
__). As the agency explained, however, a pure cost-causation approach
(which would define costs as marginal costs) would be difficult to administer
and, because of § 224(e)’s apportionment rules, could produce a telecom rate
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that capital costs caused by a telecommunications attacher have long been
recovered through make-ready charges, id. ¶ 143 (J.A. __), which “the utility
itself sets” without regard to “any mandatory rate formula set by the
Commission,” id. ¶ 185 (J.A. __). The agency determined that other capital
costs (i.e., rate of return, taxes, and depreciation) are properly excluded under
a cost-causation approach because the pole owner would have incurred those
costs “regardless of the demand for attachments.” Id. ¶¶ 143-144 (J.A. __).
2. ILEC attachments. In concluding that it has authority under
§ 224(b) to regulate ILEC attachments, the Commission focused on the
definition of “pole attachment” in § 224(a)(4), as amended by the 1996 Act.
That definition, the Commission noted, encompasses “any attachment by a
. . . provider of telecommunications service to a pole.” Order ¶ 209 (J.A. __).
“Because incumbent LECs are ‘providers of telecommunications service,’
‘pole attachment’ as defined in section 224(a)(4) includes attachments of
incumbent LECs.” Id. ¶ 211 (J.A. __). The Commission acknowledged that
the definition of “telecommunications carrier” in § 224(a)(5) excludes ILECs,
but it explained that the relevant term “provider of telecommunications
below marginal cost. See Order ¶¶ 142-143 & n.428 (J.A. __). By contrast,
administrative and maintenance expenses associated with a pole are easily
ascertainable from existing regulatory accounts and include costs exceeding
the marginal cost of providing space to an attacher. See Order ¶ 145 & n.435
(J.A. __).
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service” is a “distinct” phrase that should be given its own interpretation. Id.
¶¶ 210 (J.A. __).
The Commission also noted significant changes in “market realities”
since it had concluded in 1998 that ILECs were not pole attachers entitled to
reasonable rates under § 224(b), which further supported the agency’s
rejection of its prior interpretation in the 1998 Order. See Order ¶¶ 206, 208
(J.A. __); see also page 11, supra. The Commission observed that ILECs “as
a whole” now “appear to own approximately 25-30 percent of poles and
electric utilities appear to own approximately 65-70 percent of poles,
compared to historical ownership levels that were closer to parity.” Order
¶ 206 (J.A. __). This disparity may leave ILECs in “an inferior bargaining
position,” in contrast with their approximate parity with electric utilities as a
historical matter, preventing “market forces and independent negotiations”
from producing just and reasonable rates for ILEC attachments to electric
poles. Id. ¶ 199 (J.A. __). The Commission concluded that regulating ILEC
attachments in this circumstance would “promote competition,” id. ¶ 206
(J.A. __), and encourage broadband deployment by “reduc[ing] input costs”
and “expand[ing] opportunities for investment,” id. ¶ 208 (J.A. __).
The Commission recognized that “the issues related to rates for pole
attachments by [ILECs] raise complex questions” because of ILECs’ status as
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pole owners and their historical use of “joint use” and other agreements to
obtain access to other utility poles. Order ¶ 214 (J.A. __). The Commission
accordingly declined to develop a rate formula for ILEC attachments.
Instead, the agency explained that it will evaluate pole-attachment complaints
brought by ILECs on “a case-by-case basis” to determine whether the rates,
terms, and conditions imposed on ILEC attachments are consistent with
§ 224(b). Ibid.
3. Refund period. Finally, the Commission adopted its proposal to
extend the refund period from the date on which the complaint is filed to the
date determined by the applicable statute of limitations. Order ¶ 111 (J.A.
__). The Commission rejected the argument that attachers would “attempt to
maximize their monetary recovery” by delaying the filing of a complaint,
finding no basis for concluding that attachers have “more incentive than any
other plaintiff to delay filing a complaint in order to make additional over-
payments that will later need to be refunded.” Ibid.
C. On June 7, 2011, petitioners sought a stay pending judicial review
of the new telecom-rate formula. This Court denied the stay motion on
August 5, 2011.
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§ 224, and granted the agency broad discretion to develop a methodology for
establishing just and reasonable pole-attachment rates. The Commission
reasonably exercised that discretion when it modified the telecom-rate
formula by interpreting the unadorned – and inherently ambiguous – term
“cost” in § 224(e) to develop a cost methodology that promotes federal policy
goals.
Contrary to petitioners’ contentions, §§ 224(e)(2) and (3) do not
compel use of fully allocated cost in the telecom rate. In contrast with
§ 224(d), which specifies two alternative definitions of cost for purposes of
the cable-rate formula, § 224(e) does not contain any definition of cost.
Sections 224(e)(2) and (3), by their terms, address the apportionment of costs
among attaching entities, but not the calculation of costs to be apportioned.
Petitioners make no attempt to show that the new telecom rate is
confiscatory or otherwise falls outside a range of reasonableness. That is
fatal to their claim. The Commission acted reasonably in allowing utilities to
recover a portion of their fully allocated cost from telecommunications
attachers in the majority of cases where doing so benefits the utility. The
Commission reasonably balanced the competing policies of promoting
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competition and broadband deployment, and protecting utility ratepayers
from undue costs. The Commission also acted reasonably in establishing
specific percentages of fully allocated cost in urban and non-urban areas so as
to cause the telecom rate to generally approximate the cable rate.
Petitioners attack the Commission’s decision to rely on cost-causation
principles in setting the alternative cost measure for the telecom rate, but the
Commission explained why the “cost of providing” space on a pole need not
include capital costs that the pole owner would incur even in the absence of
pole attachments. To the extent a pole owner incurs any capital costs in
providing space, the Commission explained that such costs have long been
directly recoverable in full from the attaching entity through make-ready fees.
II. The Commission reasonably concluded that it has authority under
47 U.S.C. § 224(b) to regulate ILEC pole attachments on electric utility
poles. Section 224(a)(4) defines “pole attachment” to include attachments by
a “provider of telecommunications service.” ILECs are “provider[s] of
telecommunications service,” so their attachments to utility poles are “pole
attachment[s]” for purposes of § 224.
Contrary to petitioners’ argument, the exclusion of ILECs from
§ 224(a)(5)’s definition of “telecommunications carrier” does not require the
Commission to interpret the term “provider of telecommunications service”
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to exclude ILECs. Congress used both terms in § 224, and, consistent with
basic canons of statutory construction, the Commission reasonably
interpreted the two distinct statutory terms to carry distinct meanings.
The Commission also provided sound policy reasons for its decision to
regulate ILEC attachments. The agency found that an increasing disparity in
pole ownership between ILECs and other pole owners could affect ILECs’
ability to negotiate just and reasonable attachment rates, which in turn could
frustrate federal competition and broadband deployment goals. Substantial
record evidence supports the Commission’s action, and its adoption of a case-
by-case approach ensures that regulation will be applied only where
necessary to ensure just and reasonable rates.
III. Petitioners likewise fail in their challenge to the Commission’s
extension of the refund period to the date determined by the applicable statute
of limitations. Petitioners’ challenge to the agency’s statutory authority is
waived (because it was never raised before the agency) and, in any event,
meritless. Section 224 confers on the Commission expansive authority to
fashion “necessary and appropriate” procedures for resolving pole attachment
complaints, 47 U.S.C. § 224(b)(1), and the statute’s silence regarding the
triggering date for refunds authorizes the agency to “fill [that] gap[],” Gulf
Power, 534 U.S. at 339. The new refund rule encourages pre-complaint
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negotiations, and thus represents a reasonable exercise of the Commission’s
statutory authority to adjudicate pole-attachment disputes.
STANDARDS OF REVIEW
Judicial review of the Commission’s interpretation of the
Communications Act is governed by Chevron USA, Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984). Under Chevron, if the intent of
Congress is clear, “the court, as well as the agency, must give effect to [that]
unambiguously expressed intent.” Id. at 842-843. If, however, “the statute is
silent or ambiguous with respect to the specific issue, the question for the
court is whether the agency’s answer is based on a permissible construction
of the statute.” Id. at 843. The agency’s “view governs if it is a reasonable
interpretation of the statute – not necessarily the only possible interpretation,
nor even the interpretation deemed most reasonable by the courts.” Entergy
Corp. v. Riverkeeper, Inc., 129 S. Ct. 1498, 1505 (2009); see also AT&T v.
Iowa Utils. Bd., 525 U.S. 366, 397 (1999) (“[T]he 1996 Act is not a model of
clarity. It is in many important respects a model of ambiguity or indeed even
self-contradiction. . . . But Congress is well aware that the ambiguities it
chooses to produce in a statute will be resolved by the implementing
agency.”).
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Under the Administrative Procedure Act, the Commission’s analysis
must be upheld unless it is “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). “[T]he
ultimate standard of review is a narrow one,” and the “court is not
empowered to substitute its judgment for that of the agency.” Citizens to
Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971). Judicial
deference to the Commission’s “expert policy judgment” is especially
appropriate where, as here, the “subject matter . . . is technical, complex, and
dynamic.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545
U.S. 967, 1002-1003 (2005) (internal quotation marks omitted).
availability of new broadband facilities and services that arose from disparate
rates,” Order ¶ 151 (J.A. __), the Commission revised the telecom-rate
formula so that the telecom rate more closely approximates the cable rate. In
place of the fully allocated cost of utility poles, the Commission adopted two
alternative measures of cost to calculate a just and reasonable telecom rate
under 47 U.S.C. § 224(e), and explained that pole owners are entitled to a
telecom rate defined by whichever of the two measures is more favorable to
them. Order ¶ 161 (J.A. __).
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Petitioners’ challenges to the new telecom-rate formula fall short.
Judicial review of the FCC’s rate-setting decisions is highly deferential, and
petitioners have not come close to demonstrating that the Commission has
abused its broad discretion in this case.
is “just, reasonable, and nondiscriminatory.” To achieve that result,
§§ 224(e)(2) and (3) describe how the Commission is to apportion among
attaching entities the “cost of providing usable space” (47 U.S.C. § 224(e)(3))
and the “cost of providing space on a pole . . . other than the usable space,”
47 U.S.C. § 224(e)(2). Section 224(b)(2) also authorizes the Commission to
“prescribe by rule regulations to carry out the provisions of” § 224. These
provisions vest in the Commission broad discretion to establish a
methodology for determining a just and reasonable rate that takes account of
important objectives of federal communications policy, including the
congressional mandate to promote broadband deployment to all Americans.
“Under the statutory standard of ‘just and reasonable,’ it is the result
reached not the method employed which is controlling.” Federal Power
Comm’n v. Texaco Inc., 417 U.S. 380, 388 (1974) (internal quotation marks
omitted). So long as the rate produced falls within a “zone of
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reasonableness,” “the Commission’s determination must be upheld.” Nader
v. FCC, 520 F.2d 182, 192 (D.C. Cir. 1975). Moreover, “[b]ecause agency
ratemaking is far from an exact science and involves ‘policy determinations
in which the agency is acknowledged to have expertise,’ [judicial] review
thereof is particularly deferential.” Time Warner Entm’t Co., L.P. v. FCC, 56
F.3d 151, 163 (D.C. Cir. 1995) (internal quotation marks omitted)).
As the Commission explained, although § 224(e) describes how “[a]
utility shall apportion the cost of providing space” on a pole, it does not
define the term “cost.” Order ¶ 156 (J.A. __) (emphasis added). Absent a
specific definition, “the word ‘cost’ . . . is a chameleon, . . . a virtually
meaningless term” whose use signifies an intent to “give rate-setting
commissions broad methodological leeway,” but “say[s] little about the
method employed to determine a particular rate.” Verizon Commc’ns, Inc. v.
FCC, 535 U.S. 467, 500-501 (2002) (internal quotation marks and citation
omitted). Thus, when the unadorned term “cost” is an element “in the
calculation of just and reasonable rates,” “regulatory bodies required to set
rates expressed in these terms have ample discretion to choose methodology.”
Id. at 499-500 (internal quotation marks omitted).
The structure of the statute confirms that Congress intended to
authorize the FCC to use its expertise in developing a cost methodology
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under § 224(e). In sharp contrast with § 224(d), which explicitly mandates
two alternative measures of cost for purposes of the cable rate (see 47 U.S.C.
§ 224(d)(1), (3)), § 224(e) leaves “cost” undefined, thereby leaving it to the
FCC to “fill [the] gap[] where the statute[] [is] silent,” Gulf Power, 534 U.S.
at 339. See Russello v. United States, 464 U.S. 16, 23 (1983) (“Where
Congress includes particular language in one section of a statute but omits it
in another section of the same Act, it is generally presumed that Congress
acts intentionally and purposely in the disparate inclusion or exclusion.”)
(brackets and internal quotation marks omitted).
balance multiple policy goals. Contrary to petitioners’ suggestion (Pet. Br.
15, 52-53), that is precisely what administrative agencies are supposed to do
when interpreting ambiguous statutory provisions. See Brand X, 545 U.S. at
980 (“[f]illing [statutory] gaps . . . involves difficult policy choices that
agencies are better equipped to make than courts”); see also New York v.
EPA, 413 F.3d 3, 25 (D.C. Cir. 2005) (“This policy choice, which reconciles
conflicting interests in accuracy and efficiency, based on years of regulatory
experience, is entitled to deference under Chevron Step 2”). Petitioners
deride this task as “results-oriented.” Pet. Br. 48. But the “result” is the one
29
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Congress sought: to “encourage the deployment . . . of advanced
telecommunications capability to all Americans . . . by utilizing . . . regulating
methods that remove barriers to infrastructure investment.” 47 U.S.C.
§ 1302(a). Indeed, “Congress has directed the FCC to make the major policy
decisions and to select the mix of regulatory and deregulatory tools the
Commission deems most appropriate in the public interest to facilitate
broadband deployment and competition.” Ad Hoc Telecomms. Users Comm.
v. FCC, 572 F.3d 903, 908 (D.C. Cir. 2009) (emphasis added). The
Commission thus may implement § 224 in light of “Congress’ general
instruction to the FCC to ‘encourage the deployment’ of broadband Internet
capability.” Gulf Power, 534 U.S. at 339 (quoting 47 U.S.C. § 1302(a)).
Consistent with its congressionally assigned mission, the Commission
found that, because “pole rental rates play a significant role in the deployment
and availability of voice, video, and data networks,” a new telecom rate was
necessary to “promote competitive and technological neutrality, and hence
more effective competition, resulting in more efficient investment,
innovation, and service provision.” Order ¶¶ 172-173 (J.A. __). As the
Commission explained, “cable operators have been arbitrarily deterred from
offering new, advanced services” because of the “financial impact” that could
result from application of a higher telecom rate. Id. ¶ 174 (J.A. __). The
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Commission also found that “implementing a low and more uniform rate”
will “eliminate competitive disadvantages that [telecommunications] carriers”
face, id. ¶ 176 (J.A. __), and will in turn “enable more efficient investment
decisions in network expansion and upgrades, most notably in the
deployment of modern broadband networks,” id. ¶ 181 (J.A. __).
At the same time, the Commission took account of the “legitimate
concerns of pole owners and other parties” (id. ¶ 6 (J.A. __)), by ensuring that
the new telecom rate adequately compensates pole owners (id. ¶¶ 182-198
(J.A. __)), preserves “appropriate incentives” for them “to invest in poles”
(id. ¶ 151 (J.A. __)), and avoids imposing an undue burden on utility
ratepayers, id. ¶ 149 (J.A. __).
Petitioners make no attempt to show that the new telecom-rate formula
produces a rate that is confiscatory or otherwise falls outside the “zone of
reasonableness” for a just and reasonable rate. See, e.g., WorldCom, Inc. v.
FCC, 238 F.3d 449, 461-462 (D.C. Cir. 2001) (“The relevant question is
whether the agency’s numbers are within a zone of reasonableness, not
whether its numbers are precisely right.”) (internal quotation marks omitted).
To the extent petitioners challenge the manner in which the Commission
balanced competing policy interests, they fail to overcome the deference due
to the Commission’s policymaking judgment. See Ad Hoc Telecomms. Users
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Comm., 572 F.3d at 908 (“[I]n matters such as this, which implicate
competing policy choices, technical expertise, and predictive market
judgments,” the Court’s review of the FCC’s policymaking decisions is
“particularly deferential.”).
1. Petitioners take issue with the Commission’s decision to allow
utilities to recover a portion (66% for urban areas and 44% for non-urban
areas) of their fully allocated costs in the majority of cases where it benefits
the utility to do so. See Pet. Br. 40-42. The Commission provided sound
reasons for its decision to rely on a percentage of fully allocated costs. The
agency explained that “permitting recovery of 100 percent of apportioned,
fully-allocated costs . . . could undermine furtherance of important statutory
objectives,” Order ¶ 148 (J.A. __), and is not statutorily required, id. ¶¶ 155-
166 (J.A. __). At the same time, however, the telecom rate should permit
some recovery of capital costs to minimize any undue burden on utility
ratepayers. Id. ¶ 149 (J.A. __). “Defining cost in terms of a percentage of
fully allocated costs” thus offered a “readily administrable approach” for
balancing these competing considerations, while honoring “Congress’s
direction that the Commission’s pole attachment rate regulations be ‘simple
and expeditious’ to implement.” Id. ¶ 149 (J.A. __).
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For similar reasons, petitioners’ attack on the specific percentages used
in the telecom-rate formula fails. Pet. Br. 49-51. The FCC adequately
explained the rationale for the specific numbers it chose: those percentages
“provide a reduction in the telecom rate” that will “in general, approximate
the cable rate” in both urban and rural areas. Order ¶ 149 (J.A. __).
Applying the urban rate to non-urban areas, by contrast, would impose
greater burdens on “providers of broadband and other communications
services” in such areas and would fail to account for the “increased
challenges” those areas face in terms of broadband deployment. Id. ¶ 150
(J.A. __) (finding that “cost characteristics [in rural areas] can be different,”
and “the availability of, and competition for, broadband services tends to be
less today [in rural areas] than in urban areas.”). The Commission also
observed that the cable rate had not produced a “shortage of pole capacity,”
and, therefore, approximating that rate in the telecom formula likely would
not diminish pole owners’ “incentives to invest in poles.” Id. ¶ 151 (J.A. __).
The Commission’s line-drawing to balance “congressional policies” is
“necessarily entitled to substantial deference,” Nat’l Ass’n of State Util.
Consumer Advocates v. FCC, 372 F.3d 454, 461 (D.C. Cir. 2004), and its
selection of percentages falls well within the agency’s discretion. See, e.g., In
re Permian Basin Area Rate Cases, 390 U.S. 747, 776-777 (1968) (because
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“legislative discretion implied in the rate making power . . . embrac[es] the
method used in reaching the legislative determination as well as that
determination itself,” “[i]t follows that rate-making agencies are not bound to
the service of any single regulatory formula.”).
2. Petitioners next challenge the alternative measure of the telecom
rate, which is based upon a cost-causation approach. Pet. Br. 49. They argue
that Congress would have used § 224(d)’s “additional cost” standard had it
“intended the Telecom Rate to be based on a cost causation theory.” Pet. Br.
46. That argument “overlooks the obvious difference between a statutory
requirement . . . and a statutory authorization.” Alaska Dept. of Envtl.
Conservation v. EPA, 540 U.S. 461, 491 (2004). A “congressional mandate
in one section and silence in another often suggests not a prohibition but
simply a decision not to mandate any solution in the second context, i.e., to
leave the question to agency discretion.” Catawba County, N.C. v. EPA, 571
F.3d 20, 36 (D.C. Cir. 2009) (internal quotation marks omitted). Here, the
Commission explained that the cost-causation approach provides a reasonable
basis for determining the “cost of providing” space on a pole, because it
excludes those costs (i.e., capital costs not recovered through make-ready
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fees) that “would have been incurred regardless of the demand for
12
attachments.” Order ¶¶ 143-144 (J.A. __); see also id. ¶ 185 (J.A. __).
Consumers Energy protests that “space is available on the pole to
provide to the attacher because the utility made the necessary capital
investment and incurred the necessary capital costs.” Int. Br. 22. In Verizon,
the Supreme Court rejected the argument that an entity’s past investment in
creating an asset must be considered part of the cost of providing that asset to
others. At issue in Verizon was a provision that required ILECs to provide
competitors access to elements of their networks at rates that were based on
the “cost . . . of providing the . . . network element.” 47 U.S.C. § 252(d)(1).
The ILECs argued that such cost “must be calculated using the incumbent’s
past investment in the element and the means of providing it.” Verizon, 535
U.S. at 498. The Court made clear, however, that the term “ ‘cost’ has no
such clear implication,” ibid., but allows the Commission to develop a rate
12 Amicus Edison Electric Institute (EEI) contends that the Commission’s
reading of § 224(e) is undermined by the statute’s use of the definite article
(“the cost”) in describing the cost of providing space. Amicus Br. 21. Not
so. The Order adopts two alternative measures of cost; under either measure,
the Commission’s methodology computes “the cost” of providing space for
purposes of the telecom-rate formula. For similar reasons, EEI is wrong in
suggesting (id. at 22) that the new telecom-rate formula produces a “range” of
rates; rather, the formula produces a single telecom rate based on whichever
of the two alternative measures of cost results in a higher rate – an approach
that benefits the utility.
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methodology without “reference to historical investment,” id. at 501. As the
Commission explained in this case, “a pole owner recovers the entire capital
cost of a new pole through make-ready charges from the new attacher when a
new pole is installed to enable the attachment.” Order ¶ 143 (J.A. __).
Consistent with Verizon, the Commission reasonably concluded that it was
not required to include other capital costs – not caused by the pole attachment
– in establishing its alternative measure of cost under the telecom rate.
3. Petitioners’ contention that the Commission did not “meaningfully
link[]” the rule change with “broadband deployment decisions,” Pet. Br. 48,
ignores ten paragraphs in the Order extensively addressing that question.
Order ¶¶ 172-181 (J.A. __). As the Commission explained, the record
showed that “reducing the current disparity in cable and telecom rates, which
distort investment decisions for telecommunications carriers and cable
operators, represents the most effective means of promoting broadband
deployment.” Id. ¶ 174 (J.A. __) (internal quotation marks omitted). For
instance, the National Cable and Telecommunications Association provided
evidence that rate differences could “amount to approximately $90 million
and $120 million per year, which could ultimately affect subscribers and
future infrastructure investment, including broadband deployment.” Id. ¶ 175
(J.A. __). The record also contained evidence that the new telecom rate “will
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reduce disputes and costly litigation about” the rate formula that applies to
broadband. Id. ¶ 174 (J.A. __). The Commission found, moreover, that
“implementing a low and more uniform rate” will “eliminate competitive
disadvantages that [telecommunications] carriers” face, id. ¶ 176 (J.A. __),
thereby “enabl[ing] more efficient investment decisions in network expansion
and upgrades, most notably in the deployment of modern broadband
13
networks,” id. ¶ 181 (J.A. __).
because §§ 224(e)(2) and (3) speak of the “cost of providing” usable and
unusable space on a pole. Nothing in the text of § 224(e), however, requires
the ambiguous term “cost” to be interpreted as “fully allocated cost.” Indeed,
as shown above, the statutory scheme strongly suggests the opposite:
Congress chose to “incorporat[e] a fully allocated cost methodology” (Order
13 EEI incorrectly asserts that the Commission ignored the view of its experts
that setting rates based on cost-causation principles would have little effect on
broadband deployment. EEI Br. 29-30. As noted, the new telecom formula
will, in most cases, generate a rate that is higher than the rate produced by the
cost-causation approach. See page 18, supra. Moreover, EEI’s own experts
conceded that “setting ‘uniform’ rates can enhance economic efficiency” by
“allow[ing] the competitors to compete with one another strictly on their own
merits.” Reply Comments of the Edison Electric Institute and the Utilities
Telecom Council, WC Docket No. 07-245 (Oct. 4, 2010), Exh. A,
Declaration of Jonathan Orszag and Allan Shampine at 5 ¶ 8 (J.A. __).
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¶ 159 (J.A. __)) into the maximum cable rate by referring to the “operating
expenses and actual capital costs of the utility attributable to the entire pole.”
47 U.S.C. § 224(d)(1). By contrast, § 224(e) uses the undefined term “cost.”
Nor does the word “space” in § 224(e) advance petitioners’ argument.
See Pet. Br. 42-43, 45. In petitioners’ view, by establishing rules for
apportioning the “costs of providing” both “usable space” and “other
than usable space” (47 U.S.C. §§ 224(e)(2) & (3)), Congress expressed an
intent that the “costs associated with the entire pole,” including capital costs,
be included in the telecom rate. Pet. Br. 42, 45, 47. Sections 224(e)(2) and
(3), however, speak only to the apportionment of costs, not the computation
of costs. See Order ¶ 161 (J.A. __). The computation of costs under § 224(e)
is an antecedent question that the statute leaves to the Commission’s
policymaking discretion.
Petitioners further maintain that Congress must have expected the
telecom-rate formula to use fully allocated cost because the cable-rate
formula did so when § 224(e) was enacted. See Pet. Br. 43-44; see also Int.
Br. 18-19, Amicus Br. 28. As noted above, nothing in the statutory language
compels that conclusion. The Commission, moreover, comprehensively
canvassed the legislative history of the 1996 Act, yet found no indication that
Congress intended to limit the Commission’s discretion to utilize a different
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measure of cost in the telecom rate. See Order ¶¶ 162-166 (J.A. __). “[M]ost
telling,” the Commission pointed out, “is that no express language requiring
fully allocated costs was made part of the final statute.” Order ¶ 163 (J.A.
__).
2. Petitioners contend that the telecom rate always must be higher than
the cable rate. Pet. Br. 36-38; see also Int. Br. 24-25, Amicus Br. 25-27. As
the Commission explained, the new telecom rate “could, in some
14
circumstances, be higher than the cable rate.” Order ¶ 168 (J.A. __).
Conversely, the new telecom rate could be lower than the cable rate (ibid.) – a
fact that also was true of the old rate formula, because “the rate for any single
14 As petitioners point out (Pet. Br. 38-39, 44), the Commission occasionally
made statements suggesting that this result flowed from the statute. In the
Order on review, however, the Commission explained that these statements
“were not based on any actual statutory analysis” and are “more properly
understood as flowing simply from the fact that, as the Commission initially
had implemented [§] 224(e), it generally resulted in a higher rate.” Order
n.527 (J.A. __) (citing 1998 Order, 13 FCC Rcd at 6795-96 ¶ 34)). The
Commission “reject[ed]” any contrary “dicta in prior Commission decisions”
as inconsistent with the statutory text. Order ¶ 171 (J.A. __).
For similar reasons, Petitioners read too much into the Eleventh Circuit’s
observation in Alabama Power that the telecom rate “ ‘provided in 47 U.S.C.
§ 224(e) yields a higher rate for telecommunications attachments than the
Cable Rate provides for cable attachments.’ ” See Pet. Br. 37-38 (quoting
Alabama Power Co., 311 F.3d at 1371 n.23). That observation merely
reflected that, under the Commission’s regulations at the time, the telecom
rate established in section 224(e) generally yielded a higher rate for
telecommunications attachments than the cable rate provided for cable
attachments. The Eleventh Circuit did not suggest that the statute
unambiguously compels different rates.
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‘attaching entity’ varies inversely with the total number of attachers.”
Southern Co. v. FCC, 313 F.3d 574, 580 (D.C. Cir. 2002); see also Order
¶ 171 (“even as initially implemented, the telecom rate theoretically could be
higher or lower than the cable rate”). Nothing in the statutory text compels
the Commission to adopt a cost measure for the telecom rate that produces a
rate that will always exceed the cable rate. See Order ¶ 168 (J.A. __).
Searching for support for their position, petitioners look to 47 U.S.C.
§§ 224(d)(3) and (e)(4). Together, those provisions apply the cable rate to
telecommunications attachments for the first five years after passage of the
1996 Act (47 U.S.C. § 224(d)(3)) and then, for the next five years, require a
phase-in period for “[a]ny increase in the rates for pole attachments,” 47
U.S.C. § 224(e)(4). As the Commission explained, the term “any increase”
simply covers those scenarios in which the resulting telecom rate in fact is
higher than the cable rate; Congress would not have referred to “any”
increase if such increases were invariably mandated. See Order ¶ 168 (J.A.
__). Indeed, the Commission’s rules have always “recognized that the
telecom rate could go down as well as up,” and thus sensibly provided that
“[t]he five year phase-in is to apply to rate increases only,” while “[r]ate
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reductions are to be implemented immediately.” Order ¶ 168 (J.A. __)
15
(quoting 47 C.F.R. § 1.1409(f)).
terms, and conditions for pole attachments to provide that such rates, terms,
and conditions are just and reasonable.” A “pole attachment,” in turn, is “any
attachment by a cable television system or provider of telecommunications
service to a pole . . . owned or controlled by a utility.” 47 U.S.C.
§ 224(a)(4). The Commission reasonably concluded that it may regulate pole
attachments by ILECs under § 224(b) because ILECs indisputably are
“provider[s] of telecommunications service.”
15 Petitioners argue that the National Broadband Plan suggested that only
Congress can remedy the disparity between the cable rate and the telecom
rate. See Pet. Br. 52. That is incorrect. In fact, the Plan recommended that
“[t]he FCC should establish rental rates for pole attachments that are as low
and close to uniform as possible, consistent with Section 224 . . . to promote
broadband deployment.” National Broadband Plan 110 (emphasis added);
see id. at 110-111 (Recommendation 6.1). The Plan separately called for
congressional action with respect to distinct pole-attachment issues: the
statutory exemptions for poles “in states that adopt their own system of
regulation” and for “poles owned by co-operatives, municipalities and non-
utilities.” Id. at 112.
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Commission’s regulatory authority under § 224. At issue in that case were
two types of pole attachments – attachments by cable television systems that
offer “comingled” video and broadband services and attachments by wireless
carriers. The Court held that the Commission has the authority to regulate
both types of attachments. In addressing cable attachments, the Court
explained that “what matters under the statute” is that the term “pole
attachment” is expressly defined to cover “an attachment ‘by a cable
television system.’ ” 534 U.S. at 333. As the Court explained, the definition
of “pole attachment” in § 224(a)(4) delineates “the theoretical coverage of
[§ 224] as a whole.” Id. at 336.
Looking to the definition of “pole attachment” for the “dispositive
text,” the Court also held that “[a] provider of wireless telecommunications
service is a ‘provider of telecommunications service,’ so its attachment is a
‘pole attachment.’ ” 534 U.S. at 340. The Court rejected the utilities’ attempt
to limit the scope of “pole attachment” by “seek[ing] refuge in other parts of
the statute,” in particular, the definition of “utility” in 47 U.S.C. § 224(a)(1).
Ibid. That definition, the Court explained, “concerns only whose poles are
covered, not which attachments are covered,” by § 224. Ibid.
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In challenging the Commission’s authority to regulate ILEC pole
attachments, petitioners ignore Gulf Power and, consequently, repeat the
same errors the utilities made in that case. In particular, petitioners attempt to
limit the scope of “pole attachment” by “seek[ing] refuge in other parts of the
statute.” Gulf Power, 534 U.S. at 340. That effort fails.
1. A “telecommunications service” is the “offering of
telecommunications for a fee directly to the public.” 47 U.S.C. § 153(53).
ILECs indisputably provide telecommunications services. Therefore, under
the “dispositive text” of § 224(a)(4), which delineates the “coverage of
[§ 224] as a whole,” an ILEC “is a ‘provider of telecommunications service,’
so its attachment is a ‘pole attachment’ ” subject to § 224. Gulf Power, 534
U.S. at 336, 340.
In an effort to escape this logic, petitioners focus on the definition of
“telecommunications carrier.” Pet. Br. 21. For most purposes, a
“telecommunications carrier” is defined as “any provider of
telecommunications services.” 47 U.S.C. § 153(51). “For purposes of
[§ 224],” however, “the term ‘telecommunications carrier’ (as defined in
[§ 153]) does not include” ILECs. 47 U.S.C. § 224(a)(5). In petitioners’
view, the undefined term “provider of telecommunications service” by
implication must also be read to exclude ILECs.
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“The short answer” to petitioners’ argument “is that Congress did not
write the statute that way.” Corley v. United States, 129 S. Ct. 1558, 1567
(2009) (internal quotation marks omitted). “When a statute does not define a
term, we typically give the phrase its ordinary meaning.” FCC v. AT&T Inc.,
131 S. Ct. 1177, 1182 (2011) (internal quotation marks omitted). The
ordinary meaning of “provider of telecommunications service” encompasses
ILECs, which is precisely why Congress found it necessary to exclude ILECs
from the definition of “telecommunications carrier” for purposes of § 224,
when it intended that exclusion.
Had Congress wanted to broadly exclude ILEC attachments from
§ 224, “it easily could have written” the definition of “pole attachment” to
refer to any attachment by a “telecommunications carrier.” Burgess v. United
States, 553 U.S. 124, 130 (2008). Indeed, Congress elsewhere in § 224 made
clear that it was conferring certain rights on “telecommunications carrier[s]”
rather than “provider[s] of telecommunications service.” Thus, Congress
limited application of the telecom rate to attachments used by
“telecommunications carriers to provide telecommunications services.” See
47 U.S.C. § 224(e)(1). Likewise, Congress conferred a statutory right to
nondiscriminatory access to utility poles on “cable televisions system[s]” and
“telecommunications carrier[s],” but not on ILECs, which are typically pole
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owners themselves. 47 U.S.C. § 224(f)(1); see page 46, infra. Congress’s
decision to use both “provider of telecommunications service” and
“telecommunications carrier” in § 224 to delineate separate statutory rights
and obligations should not be “ascribe[d] . . . to a simple mistake in
draftsmanship.” Corley, 129 S. Ct. at 1567 (2009) (internal quotation marks
omitted); see also Recording Indus. Ass’n of Am., Inc. v. Verizon Internet
Servs., Inc., 351 F.3d 1229, 1235 (D.C. Cir. 2003) (“Where different terms
are used in a single piece of legislation,” the courts “presume that Congress
intended the terms have different meanings.”) (brackets and internal quotation
16
marks omitted). The Commission reasonably interpreted the two terms to
have distinct meanings.
Petitioners mention in passing that ILECs that own poles fall within the
definition of “utility” in § 224(a)(1), Pet. Br. 20, 24, but they do not develop
any argument based on that definition. That is understandable. Although the
Commission once assumed that ILECs could not be both attaching entities
16 Petitioners wrongly assert that “numerous court decisions” foreclose the
Commission’s interpretation of § 224(a)(4). Pet. Br. 21-22. None of the
three cases petitioners cite holds that “providers of telecommunications
service” and “telecommunications carrier” must be construed as synonymous
terms for purposes of § 224. Indeed, one of those cases makes clear that
“[o]nly a judicial precedent holding that the statute unambiguously forecloses
the agency’s interpretation, and therefore contains no gap for the agency to
fill, displaces a conflicting agency construction.” Brand X, 545 U.S. at 982-
983 (emphasis added). As shown above, that is not the case here.
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and “utilities,” see page 11, supra, Gulf Power has since made clear that
“utility” defines “only whose poles are covered, not which attachments are
covered.” 534 U.S. at 340.
2. Petitioners incorrectly claim that regulating ILEC attachments
conflicts with other provisions of the statute.
a. Petitioners argue that it is “arbitrary” (Pet. Br. 35; see also Int. Br.
11, Amicus Br. 13) to regulate ILEC attachments because ILECs are not
entitled to “nondiscriminatory access” to utility poles under 47 U.S.C.
§ 224(f)(1). As the Commission explained, however, the regime that
petitioners contend is arbitrary is the same one that applied to cable operators
before the 1996 Act: “a regime of regulated rates without a statutory right of
access.” Order ¶ 212 (J.A. __); see also Florida Power, 480 U.S. at 251.
Petitioners have not shown that this congressionally and judicially approved
framework for regulating pole attachments was irrational. As the
Commission noted, moreover, regulating attachments in the absence of
statutory access rights makes sense in the context of ILEC attachments.
Given ILECs’ “continued pole ownership,” denying them a statutory right of
access “ensure[d] the continued incentives of [ILECs] to negotiate with other
utilities with respect to access to its poles.” Order ¶ 212 (J.A. __).
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Petitioners nonetheless assert that regulating ILEC attachments under
§ 224(b) “contradict[s]” (Pet. Br. 35) a portion of the Order that is not
challenged in this case, which interprets § 224(b) to require pole owners to
provide access to their poles on just and reasonable terms. See Order ¶ 93
(J.A. __). In petitioners’ view, § 224(b) “mean[s] something very different
for ILECs” because ILECs do not have § 224(f)(1) access rights and thus do
not benefit from this particular interpretation of § 224(b). Pet. Br. 35.
Petitioners contend that the resulting difference in treatment renders the
agency’s decision to regulate ILEC attachments arbitrary.
The Court need not decide this claim because it was not raised before
the Commission and therefore is not properly before this Court. See 47
U.S.C. § 405(a); BDPCS, Inc. v. FCC, 351 F.3d 1177, 1182 (D.C. Cir. 2003).
In any event, the claim is meritless. The “generality” of terms such as “just”
and “reasonable” “opens a rather large area for the free play of agency
discretion.” Orloff v. FCC, 352 F.3d 415, 420 (D.C. Cir. 2003), cert. denied,
542 U.S. 937 (2004). Accordingly, the Commission can apply the just-and-
reasonable standard to impose different requirements in different contexts.
See ibid. (holding that carriers subject to competitive forces may be regulated
differently from other carriers under the “unjust” and “unreasonable”
standard of 47 U.S.C. § 202). The Commission reasonably denied ILECs the
47
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right to demand access to utility poles on just-and-reasonable terms because
ILECs do not have statutory access rights. That other attachers with such
access rights may demand just and reasonable terms does not indicate
inconsistent treatment, but rather a rational tailoring of the just and reasonable
standard to the particular circumstances involved.
b. Amicus EEI calls it “absurd” that ILEC attachments may be
regulated even though they “do not fall within the very specific rate formula
for attachments by telecommunications carriers” in § 224(e). Amicus Br. 13;
see also Int. Br. 11. That argument cannot be reconciled with Gulf Power,
which held that the §§ 224(d) and (e) rates are not “the exclusive rates
allowed” under § 224 (534 U.S. at 335) and that the Commission may
“prescribe just and reasonable rates” in other cases “without necessary
reliance upon a specific statutory formula devised by Congress,” id. at 336.
EEI further contends that regulation of ILEC attachments is
inconsistent with 47 U.S.C. § 251(b)(4), which imposes a duty on local
exchange carriers to “afford access to [their] poles . . . to competing providers
of telecommunications services on rates, terms, and conditions that are
consistent with section 224.” EEI argues that, if ILECs are viewed as
“providers of telecommunications services,” § 251(b)(4) would grant access
rights to ILECs that § 224(f)(1) does not. Amicus Br. 14. The Commission
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made clear, however, that ILECs “cannot use section 251(b)(4) as a means of
gaining access to the facilities or property” of a local exchange carrier
because the agency has long interpreted the “more general access provisions”
of § 251(b)(4) in light of “the specific denial of access under section 224.”
Order n.643 (J.A. __) (internal quotation marks omitted). Accordingly, EEI
is incorrect to characterize § 251(b)(4) and § 224(f)(1) as “inconsistent with
each other.” Amicus Br. 14.
3. Finding nothing in the text of § 224 to support their argument,
petitioners resort to the statute’s legislative history and its “essential
purpose.” Pet. Br. 24; see also Amicus Br. 15-16. That argument fares no
better. Notably, petitioners do not cite any legislative history that “compels
(or even suggests) the conclusion that Congress intended to limit” the
Commission’s authority to regulate ILEC attachments. Consumer
Electronics Ass’n v. FCC, 347 F.3d 291, 298-299 (D.C. Cir. 2003). Instead,
they contend that the legislative history generally reveals an intent to provide
only “new entrants” with access to utility poles at regulated rates. Pet. Br.
25-26; see also Amicus Br. 15. The Supreme Court rejected a similar
argument in Gulf Power, holding that the “economic rationale” of regulating
poles solely to the extent they are a “bottleneck facility” found “no support in
the text” of the statute and, hence, could not limit the Commission’s
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regulatory authority. 534 U.S. at 341. The Court’s analysis is consistent with
the general understanding that “statutes often go beyond the principal evil to
cover reasonably comparable evils, and it is ultimately the provisions of our
laws rather than the principal concerns of our legislators by which we are
governed.” Public Citizen v. Carlin, 184 F.3d 900, 904 (D.C. Cir. 1999)
(internal quotation marks omitted). Accordingly, even if petitioners had
provided support for their reading of the legislative history (and they have
not), the ordinary meaning of the term “provider of telecommunications
service” does not distinguish between new providers and old, and the
meaning of that term “is what matters under the statute.” Gulf Power, 534
U.S. at 333.
acknowledged that it was departing from its previous interpretation of the
statute. See Order ¶ 208 (J.A. __). Such “change is not invalidating, since
the whole point of Chevron is to leave the discretion provided by the
ambiguities of a statute with the implementing agency.” Brand X, 545 U.S. at
981 (internal quotation marks omitted). The Commission must explain the
reasons for the change, 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;
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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.” Nat’l Cable
& Telecomms. Ass’n v. FCC, 567 F.3d 659, 669 (D.C. Cir. 2009) (quoting
FCC v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1811 (2009)).
The Commission provided a sufficient reason for its “decision to
change from a narrow to a broader definition” of “provider of
telecommunications service,” namely, that “the broader definition better
serve[s] the goals of the Act.” Southern Co., 313 F.3d at 581. As the
Commission explained, ILECs may no longer “be in an equivalent bargaining
position with electric utilities in pole attachment negotiations” as they
typically were in the past. Order ¶ 206 (J.A. __). The Commission found
that ILECs now “as a whole appear to own approximately 25-30 percent of
poles and electric utilities appear to own approximately 65-70 percent of
poles, compared to historical ownership levels that were closer to parity.”
Ibid. As a result, the Commission reasonably concluded that “market forces
and independent negotiations may not be alone sufficient to ensure just and
reasonable rates, terms and conditions” for ILEC attachments to electric
poles. Order ¶ 199 (J.A. __).
The Commission also predicted that regulating ILEC attachments
would advance the goal of “promot[ing] competition,” particularly with
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respect to “new services,” such as video and broadband services, that ILECs
have begun to offer “subsequent to the 1996 Act.” Order ¶¶ 206, 208 (J.A.
__). Specifically, ensuring that ILECs can obtain just and reasonable pole-
attachment rates would “reduce input costs, such as pole rental rates, [which]
can expand opportunities for investment” in broadband services. Order ¶ 208
(J.A. __).
Recognizing, however, that “the issues related to rates for pole
attachments by [ILECs] raise complex questions,” the Commission proceeded
cautiously. Order ¶ 214 (J.A. __). It noted that “not all incumbent LECs are
similarly situated in terms of their bargaining position relative to other pole
owners,” id. ¶ 215 (J.A. __), and it “question[ed] the need to second guess
the negotiated resolution of arrangements entered into [in situations where the
parties have] relatively equivalent bargaining power,” id. ¶ 216 (J.A. __).
Accordingly, the Commission sensibly concluded that it would “proceed on a
case-by-case basis,” id. ¶ 214 (J.A. __), which would allow it to consider
evidence of particular ILECs’ “inferior bargaining position,” id. ¶ 215 (J.A.
__), and other relevant evidence in evaluating whether the rates, terms, and
conditions for an ILEC attachment are just and reasonable.
1. Petitioners question the existence of a growing gap in pole
ownership, Pet. Br. 28, but substantial record evidence supports the
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Commission’s findings. The Commission cited evidence by ILECs that
showed a significant disparity in pole ownership. See Order ¶ 206 & n.617
(J.A. __); see also Comments of Verizon, WC Docket No. 07-245 (Aug. 16,
2010), Att., Declaration of James Slavin and Steven R. Frisbie, at 4 ¶ 13 (J.A.
__) (“The number of poles that are solely owned by electric utilities in
municipalities continues to grow faster than the number of poles that are
solely owned by Verizon.”); Comments of AT&T, Inc., WC Docket No. 07-
245 (Aug, 16, 2010), at 18 (J.A. __) (“the ownership of poles is roughly 25-
30% ILEC” and 70-75% electric company.).
Indeed, even utility companies acknowledged the increasing disparity
in pole ownership since the mid-1990s. For example, petitioners Florida
Power & Light and Tampa Electric informed the Commission that “actual
relative ownership percentages with all ILECs are 69% FPL and 31% ILEC,”
with “ILEC pole ownership . . . declin[ing] slightly” since 1994 in Florida
Power’s territory at an average of “less than 1/2% per year.” Initial
Comments of Florida Power & Light and Tampa Electric regarding ILECs
and Pole Attachment Rates, WC Docket No. 07-245 (Mar. 7, 2008), at 7 (J.A.
__). Notably, petitioners fail to identify any record evidence contradicting
the Commission’s finding of a significant and growing disparity in pole
ownership nationwide.
53
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 64 of 88
The Commission’s cautious case-by-case approach answers
petitioners’ concerns that “circumstances can vary considerably from location
to location,” Pet. Br. 28 (quoting Order ¶ 215 (J.A. __)), and that ILECs may
not lack bargaining power in all circumstances (in which cases petitioners
question the need for regulation), id. at 29-30. Further, petitioners miss the
mark when they argue that ILECs will always have equal bargaining power to
electric utilities because electric utilities need access to ILEC poles. Pet. Br.
29-30 (citing Order nn. 618 & 655 (J.A. __)). As the Commission explained
in the Order, the effect of disparity in pole ownership manifests itself, not in
the likelihood that the two sides will fail to reach agreement on access, but in
the potential that the rates, terms, and conditions upon which ILECs obtain
access to poles may not be just and reasonable. See Order ¶ 206 & n.618
(J.A. __).
2. Petitioners also dispute the Commission’s prediction that ensuring
just and reasonable rates for ILEC attachments will benefit consumers and
encourage broadband deployment. Pet. Br. 30-32. They face a high hurdle,
because “to the extent that the FCC’s decision is based upon a predictive
judgment, the court’s review is particularly deferential.” BellSouth Corp. v.
FCC, 162 F.3d 1215, 1222 (D.C. Cir. 1999) (citation and internal quotation
marks omitted). “[I]t is within the scope of the agency’s expertise to
54
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 65 of 88
make . . . a prediction about the market it regulates, and a reasonable
prediction deserves [judicial] deference notwithstanding that there might also
be another reasonable view.” Constellation Energy Commodities Group, Inc.
v. FERC, 457 F.3d 14, 24 (D.C. Cir. 2006) (internal quotation marks
omitted).
In this case, the Commission had a sound basis for predicting that
regulating ILEC attachments would benefit consumers. Although petitioners
dismiss the “ex parte letter from USTA” (Pet. Br. 30) that the Commission
cited (Order ¶ 208 (J.A. __)), that letter (filed on behalf of USTelecom’s
many ILEC members) confirms that “one of the major hurdles facing ILECs
is access to the capital necessary to meet the competitive challenges presented
by next generation broadband networks that have been deployed by cable
companies who enjoy the benefit of lower attachment rates today.” Letter
from Walter B. McCormick, Jr., USTelecom, to Marlene H. Dortch,
Secretary, FCC, WC Docket No. 07-245 (Mar. 31, 2011), at 6 (J.A. __). The
letter shows (and petitioners do not dispute) that ILECs pay significantly
more for pole attachments than their cable competitors – in the aggregate
between “$320 to $350 million [more each year] than they would pay at the
55
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 66 of 88
17
cable rate.” See Order ¶ 208 (J.A. __). The Commission explained that
such substantial differences may affect “the extent to which investment and
deployment choices by such providers, and competition more generally, are
distorted based on regulatory classifications.” Order ¶ 181 (J.A. __); see also
Order ¶ 208 & n.629 (J.A. __). Moreover, the Commission explained that
“reduc[ing] input costs, such as pole rental rates, can expand opportunities for
investment” in broadband services. Order ¶ 208 (J.A. __); see also id. ¶ 179
(J.A. __). The “broader definition” of “provider of telecommunications
service” is thus “justified because it limits the financial burden on
telecommunications providers and therefore encourages growth and
competition in the industry.” Southern Co., 313 F.3d at 581. This sort of
prediction “regarding the actions of regulated entities” is “precisely the type
of policy judgment[] that courts routinely and quite correctly leave to
administrative agencies.” Public Citizen, Inc. v. NHTSA, 374 F.3d 1251,
1260-1261 (D.C. Cir. 2004) (internal quotation marks omitted).
17 Petitioners mistakenly claim that the Commission ignored comments by the
National Cable & Telecommunications Association (NCTA) that regulating
ILEC attachments would harm consumers. Pet. Br. 31. In fact, NCTA’s
comments were directed at an unadopted proposal in the FCC’s NPRM to
increase the cable rate – a proposal that NCTA believed would unduly benefit
ILECs as pole owners and thereby harm broadband deployment. See
Comments of the National Cable & Telecommunications Association, WC
Docket No. 07-245 (Mar. 7, 2008), at ii (J.A. __).
56
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 67 of 88
pole-attachment complaint violates § 224 because the Commission’s
authority to adjudicate disputes is triggered by the filing of the complaint.
Pet. Br. 53-54. This argument, like petitioners’ claim of conflict under
§ 224(b) and (f)(1) (see page 47, supra), is barred by 47 U.S.C. § 405(a)
because petitioners did not raise it before the agency. BDPCS, Inc., 351 F.3d
at 1182.
Even if not waived, the argument fails. Section 224(b) grants the
Commission broad authority to “adopt procedures necessary and appropriate
to hear and resolve complaints” concerning pole-attachment rates, terms, and
conditions, and “enforc[e] any determinations resulting from complaint
procedures” by “tak[ing] such action as it deems appropriate and necessary.”
47 U.S.C. § 224(b)(1). Section 224(b) is silent on how the Commission is to
carry out those responsibilities by fashioning remedies (including providing
for refunds), and “agencies have authority to fill gaps where the statutes are
silent.” Gulf Power, 534 U.S. at 339. The ability to award refunds has been a
critical – and lawful – component of the Commission’s implementation of
57
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 68 of 88
§ 224 since its inception. See First Report and Order, 68 FCC 2d at 1599-
1600 ¶ 44.
Moreover, even assuming the premise of petitioners’ argument that the
Commission’s “jurisdiction” can only be “trigger[ed]” by the filing of a
complaint (Pet. Br. 53-54), it does not follow that the Commission’s authority
to award redress is constrained by the date of such a filing. For example, a
district court’s jurisdiction is typically also triggered by the filing of a
complaint, but it has never been thought that a court may award relief only
for post-complaint damages. As the Commission concluded, “[t]here does
not appear to be a justification for treating pole attachment disputes
18
differently.” FNPRM ¶ 88 (J.A. __).
Petitioners’ claim that the new refund rule is arbitrary is likewise
baseless. According to petitioners, the Commission failed to support its
conclusion that the date-of-complaint limitation on refunds acted as a
“disincentive to engage in pre-complaint negotiation.” Pet. Br. 55 (quoting
Order n.345 (J.A. __)). The original rule itself, however, was premised on
18 Contrary to petitioners’ claim that the legislative history suggests an intent
“to grant only prospective regulatory authority,” Pet. Br. 54, the Senate
Report on which petitioners rely merely states that the Commission’s
jurisdiction over electric utility companies – “entities not otherwise subject to
FCC jurisdiction” – is “strictly circumscribed” in that it does not extend to
matters unrelated to pole attachments. S. Rep. No. 95-580, at 15.
58
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 69 of 88
the policy of “encourag[ing] early filing [of complaints] when rates are
considered objectionable.” First Report and Order, 68 FCC 2d at 1600 ¶ 45
(emphasis added). It was reasonable for the Commission to conclude that a
policy of encouraging early filing of complaints may, in practice, create a
disincentive for “pre-complaint negotiation.” Order n.345 (J.A. __); see also
Comments of Time Warner Cable, Inc., WC Docket No. 07-245 (Aug. 16,
2010), at 28 (J.A. __) (new rule “will facilitate informal dispute resolution
and reduce litigation before the Commission, because attachers will not be
compelled immediately to file a complaint in order to preserve their damages
claims.”).
Finally, petitioners contend that extending the refund period is
unnecessary because the sign-and-sue rule – “which allows an attacher to
challenge the lawfulness of terms in an executed pole attachment agreement
that the attacher claims it was coerced to accept in order to gain access to
utility poles” (Order ¶ 119 (J.A. __)) – will obviate any pre-complaint
refunds. Pet. Br. 55-56. That argument is barred by § 405(a) because
petitioners did not raise it before the agency. In any event, the sign-and-sue
approach is unlikely to be followed by every pole-attachment complainant; to
the extent an aggrieved attacher has made unjust or unreasonable payments
59
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 70 of 88
prior to the filing of its complaint, the Commission’s new refund rule is
necessary “to make injured attachers whole.” Order ¶ 110 (J.A.__).
Respectfully
submitted,
SHARIS A. POZEN
AUSTIN C. SCHLICK
ACTING ASSISTANT ATTORNEY
GENERAL COUNSEL
GENERAL
PETER KARANJIA
ROBERT B. NICHOLSON
DEPUTY GENERAL COUNSEL
KRISTEN C. LIMARZI
ATTORNEYS
RICHARD K. WELCH
DEPUTY ASSOCIATE GENERAL
UNITED STATES
COUNSEL
DEPARTMENT OF JUSTICE
WASHINGTON, D.C. 20530
/s/ Nandan M. Joshi
NANDAN M. JOSHI
COUNSEL
FEDERAL COMMUNICATIONS
COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
February 17, 2012
60
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 71 of 88
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
AMERICAN ELECTRIC POWER
SERVICE CORPORATION, ET AL.
PETITIONERS,
v.
NO. 11-1146
FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS.
CERTIFICATE OF COMPLIANCE
Pursuant to the requirements of Fed. R. App. P. 32(a)(7), I hereby
certify that the accompanying Brief for Respondents in the captioned case
contains 13,097 words.
/s/ Nandan M. Joshi
Nandan M. Joshi
Counsel
Federal Communications Commission
Washington, D.C. 20554
(202) 418-1740 (Telephone)
(202) 418-2819 (Fax)
February 17, 2012
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 72 of 88
Page
47 U.S.C. § 224 ...................................................................................... 1
47 U.S.C. § 405 ...................................................................................... 3
47 U.S.C. § 1302 .................................................................................... 5
47 C.F.R. § 1.1409 (2011)...................................................................... 7
47 C.F.R. § 1.1410 (2011)...................................................................... 9
47 C.F.R. § 1.1409 (2010)....................................................................10
47 C.F.R. § 1.1410 (2010)....................................................................12
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 73 of 88
§ 224
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
Page 58
Act of 1934 [this section] which are pending on the date
sider and does consider the interests of the
of the enactment of this Act [Dec. 8, 1983] within ninety
subscribers of the services offered via such at-
days of such date of enactment.’’
tachments, as well as the interests of the con-
§ 224. Pole attachments
sumers of the utility services.
(a) Definitions
(3) For purposes of this subsection, a State
shall not be considered to regulate the rates,
As used in this section:
terms, and conditions for pole attachments—
(1) The term ‘‘utility’’ means any person who
(A) unless the State has issued and made ef-
is a local exchange carrier or an electric, gas,
fective rules and regulations implementing
water, steam, or other public utility, and who
the State’s regulatory authority over pole at-
owns or controls poles, ducts, conduits, or
tachments; and
rights-of-way used, in whole or in part, for any
(B) with respect to any individual matter,
wire communications. Such term does not in-
unless the State takes final action on a com-
clude any railroad, any person who is coopera-
plaint regarding such matter—
tively organized, or any person owned by the
(i) within 180 days after the complaint is
Federal Government or any State.
filed with the State, or
(2) The term ‘‘Federal Government’’ means the
(ii) within the applicable period prescribed
Government of the United States or any agency
for such final action in such rules and regu-
or instrumentality thereof.
lations of the State, if the prescribed period
(3) The term ‘‘State’’ means any State, terri-
does not extend beyond 360 days after the fil-
tory, or possession of the United States, the Dis-
ing of such complaint.
trict of Columbia, or any political subdivision,
(d) Determination of just and reasonable rates;
agency, or instrumentality thereof.
‘‘usable space’’ defined
(4) The term ‘‘pole attachment’’ means any at-
(1) For purposes of subsection (b) of this sec-
tachment by a cable television system or pro-
tion, a rate is just and reasonable if it assures a
vider of telecommunications service to a pole,
utility the recovery of not less than the addi-
duct, conduit, or right-of-way owned or con-
tional costs of providing pole attachments, nor
trolled by a utility.
(5) For purposes of this section, the term more than an amount determined by multiply-
‘‘telecommunications carrier’’ (as defined in sec-
ing the percentage of the total usable space, or
tion 153 of this title) does not include any in-
the percentage of the total duct or conduit ca-
cumbent local exchange carrier as defined in pacity, which is occupied by the pole attach-
section 251(h) of this title.
ment by the sum of the operating expenses and
actual capital costs of the utility attributable
(b) Authority of Commission to regulate rates, to the entire pole, duct, conduit, or right-of-
terms, and conditions; enforcement powers; way.
promulgation of regulations
(2) As used in this subsection, the term ‘‘usa-
(1) Subject to the provisions of subsection (c)
ble space’’ means the space above the minimum
of this section, the Commission shall regulate
grade level which can be used for the attach-
the rates, terms, and conditions for pole attach-
ment of wires, cables, and associated equipment.
ments to provide that such rates, terms, and
(3) This subsection shall apply to the rate for
conditions are just and reasonable, and shall any pole attachment used by a cable television
adopt procedures necessary and appropriate to
system solely to provide cable service. Until the
hear and resolve complaints concerning such effective date of the regulations required under
rates, terms, and conditions. For purposes of en-
subsection (e) of this section, this subsection
forcing any determinations resulting from com-
shall also apply to the rate for any pole attach-
plaint procedures established pursuant to this ment used by a cable system or any tele-
subsection, the Commission shall take such ac-
communications carrier (to the extent such car-
tion as it deems appropriate and necessary, in-
rier is not a party to a pole attachment agree-
cluding issuing cease and desist orders, as au-
ment) to provide any telecommunications serv-
thorized by section 312(b) of this title.
ice.
(2) The Commission shall prescribe by rule (e) Regulations governing charges; apportion-
regulations to carry out the provisions of this
ment of costs of providing space
section.
(1) The Commission shall, no later than 2
(c) State regulatory authority over rates, terms,
years after February 8, 1996, prescribe regula-
and conditions; preemption; certification; tions in accordance with this subsection to gov-
circumstances constituting State regulation
ern the charges for pole attachments used by
(1) Nothing in this section shall be construed
telecommunications carriers to provide tele-
to apply to, or to give the Commission jurisdic-
communications services, when the parties fail
tion with respect to rates, terms, and condi-
to resolve a dispute over such charges. Such reg-
tions, or access to poles, ducts, conduits, and ulations shall ensure that a utility charges just,
rights-of-way as provided in subsection (f) of reasonable, and nondiscriminatory rates for pole
this section, for pole attachments in any case
attachments.
where such matters are regulated by a State.
(2) A utility shall apportion the cost of provid-
(2) Each State which regulates the rates, ing space on a pole, duct, conduit, or right-of-
terms, and conditions for pole attachments shall
way other than the usable space among entities
certify to the Commission that—
so that such apportionment equals two-thirds of
(A) it regulates such rates, terms, and condi-
the costs of providing space other than the usa-
tions; and
ble space that would be allocated to such entity
(B) in so regulating such rates, terms, and
under an equal apportionment of such costs
conditions, the State has the authority to con-
among all attaching entities.
1
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 74 of 88
Page 59
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
§ 225
(3) A utility shall apportion the cost of provid-
AMENDMENTS
ing usable space among all entities according to
1996—Subsec. (a)(1). Pub. L. 104–104, § 703(1), inserted
the percentage of usable space required for each
first sentence and struck out former first sentence
entity.
which read as follows: ‘‘The term ‘utility’ means any
(4) The regulations required under paragraph
person whose rates or charges are regulated by the Fed-
(1) shall become effective 5 years after February
eral Government or a State and who owns or controls
8, 1996. Any increase in the rates for pole attach-
poles, ducts, conduits, or rights-of-way used, in whole
or in part, for wire communication.’’
ments that result from the adoption of the regu-
Subsec. (a)(4). Pub. L. 104–104, § 703(2), inserted ‘‘or
lations required by this subsection shall be provider of telecommunications service’’ after ‘‘sys-
phased in equal annual increments over a period
tem’’.
of 5 years beginning on the effective date of such
Subsec. (a)(5). Pub. L. 104–104, § 703(3), added par. (5).
regulations.
Subsec. (c)(1). Pub. L. 104–104, § 703(4), inserted ‘‘, or
(f) Nondiscriminatory access
access to poles, ducts, conduits, and rights-of-way as
provided in subsection (f) of this section,’’ after ‘‘condi-
(1) A utility shall provide a cable television
tions’’.
system or any telecommunications carrier with
Subsec. (c)(2)(B). Pub. L. 104–104, § 703(5), substituted
nondiscriminatory access to any pole, duct, con-
‘‘the services offered via such attachments’’ for ‘‘cable
duit, or right-of-way owned or controlled by it.
television services’’.
(2) Notwithstanding paragraph (1), a utility
Subsec. (d)(3). Pub. L. 104–104, § 703(6), added par. (3).
providing electric service may deny a cable tele-
Subsecs. (e) to (i). Pub. L. 104–104, § 703(7), added sub-
secs. (e) to (i).
vision system or any telecommunications car-
1994—Subsec. (b)(2). Pub. L. 103–414 substituted ‘‘The
rier access to its poles, ducts, conduits, or Commission’’ for ‘‘Within 180 days from February 21,
rights-of-way, on a non-discriminatory 1 basis
1978, the Commission’’.
where there is insufficient capacity and for rea-
1984—Subsec. (c)(3). Pub. L. 98–549 added par. (3).
sons of safety, reliability and generally applica-
1982—Subsec. (e). Pub. L. 97–259 struck out subsec. (e)
ble engineering purposes.
which provided that, upon expiration of 5-year period
(g) Imputation to costs of pole attachment rate
that began on Feb. 21, 1978, provisions of subsec. (d) of
this section would cease to have any effect.
A utility that engages in the provision of tele-
communications services or cable services shall
EFFECTIVE DATE OF 1984 AMENDMENT
impute to its costs of providing such services
Amendment by Pub. L. 98–549 effective 60 days after
(and charge any affiliate, subsidiary, or associ-
Oct. 30, 1984, except where otherwise expressly pro-
ate company engaged in the provision of such
vided, see section 9(a) of Pub. L. 98–549, set out as a
services) an equal amount to the pole attach-
note under section 521 of this title.
ment rate for which such company would be lia-
EFFECTIVE DATE
ble under this section.
Section effective on thirtieth day after Feb. 21, 1978,
(h) Modification or alteration of pole, duct, con-
see section 7 of Pub. L. 95–234, set out as an Effective
duit, or right-of-way
Date of 1978 Amendment note under section 152 of this
Whenever the owner of a pole, duct, conduit,
title.
or right-of-way intends to modify or alter such
§ 225. Telecommunications services for hearing-
pole, duct, conduit, or right-of-way, the owner
impaired and speech-impaired individuals
shall provide written notification of such action
to any entity that has obtained an attachment
(a) Definitions
to such conduit or right-of-way so that such en-
As used in this section—
tity may have a reasonable opportunity to add
(1) Common carrier or carrier
to or modify its existing attachment. Any entity
that adds to or modifies its existing attachment
The term ‘‘common carrier’’ or ‘‘carrier’’ in-
after receiving such notification shall bear a
cludes any common carrier engaged in inter-
proportionate share of the costs incurred by the
state communication by wire or radio as de-
owner in making such pole, duct, conduit, or
fined in section 153 of this title and any com-
right-of-way accessible.
mon carrier engaged in intrastate communica-
(i) Costs of rearranging or replacing attachment
tion by wire or radio, notwithstanding sec-
tions 152(b) and 221(b) of this title.
An entity that obtains an attachment to a
pole, conduit, or right-of-way shall not be re-
(2) TDD
quired to bear any of the costs of rearranging or
The term ‘‘TDD’’ means a Telecommunica-
replacing its attachment, if such rearrangement
tions Device for the Deaf, which is a machine
or replacement is required as a result of an addi-
that employs graphic communication in the
tional attachment or the modification of an ex-
transmission of coded signals through a wire
isting attachment sought by any other entity
or radio communication system.
(including the owner of such pole, duct, conduit,
(3) Telecommunications relay services
or right-of-way).
The term ‘‘telecommunications relay serv-
(June 19, 1934, ch. 652, title II, § 224, as added
ices’’ means telephone transmission services
Pub. L. 95–234, § 6, Feb. 21, 1978, 92 Stat. 35;
that provide the ability for an individual who
amended Pub. L. 97–259, title I, § 106, Sept. 13,
has a hearing impairment or speech impair-
1982, 96 Stat. 1091; Pub. L. 98–549, § 4, Oct. 30, 1984,
ment to engage in communication by wire or
98 Stat. 2801; Pub. L. 103–414, title III, § 304(a)(7),
radio with a hearing individual in a manner
Oct. 25, 1994, 108 Stat. 4297; Pub. L. 104–104, title
that is functionally equivalent to the ability
VII, § 703, Feb. 8, 1996, 110 Stat. 149.)
of an individual who does not have a hearing
impairment or speech impairment to commu-
1 So in original. Probably should be ‘‘nondiscriminatory’’.
nicate using voice communication services by
2
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 75 of 88
Page 217
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
§ 405
sions of this chapter, or relating to the enforce-
may be appropriate: Provided, That in any case
ment of any of the provisions of this chapter.
where such petition relates to an instrument of
The Commission shall have the same powers and
authorization granted without a hearing, the
authority to proceed with any inquiry instituted
Commission, or designated authority within the
on its own motion as though it had been ap-
Commission, shall take such action within nine-
pealed to by complaint or petition under any of
ty days of the filing of such petition. Reconsid-
the provisions of this chapter, including the erations shall be governed by such general rules
power to make and enforce any order or orders
as the Commission may establish, except that
in the case, or relating to the matter or thing
no evidence other than newly discovered evi-
concerning which the inquiry is had, excepting
dence, evidence which has become available only
orders for the payment of money.
since the original taking of evidence, or evi-
dence which the Commission or designated au-
(June 19, 1934, ch. 652, title IV, § 403, 48 Stat. thority within the Commission believes should
1094.)
have been taken in the original proceeding shall
§ 404. Reports of investigations
be taken on any reconsideration. The time with-
in which a petition for review must be filed in a
Whenever an investigation shall be made by
proceeding to which section 402(a) of this title
the Commission it shall be its duty to make a
applies, or within which an appeal must be
report in writing in respect thereto, which shall
taken under section 402(b) of this title in any
state the conclusions of the Commission, to-
case, shall be computed from the date upon
gether with its decision, order, or requirement
which the Commission gives public notice of the
in the premises; and in case damages are award-
order, decision, report, or action complained of.
ed such report shall include the findings of fact
(b)(1) Within 90 days after receiving a petition
on which the award is made.
for reconsideration of an order concluding a
(June 19, 1934, ch. 652, title IV, § 404, 48 Stat. hearing under section 204(a) of this title or con-
1094.)
cluding an investigation under section 208(b) of
this title, the Commission shall issue an order
§ 405. Petition for reconsideration; procedure; granting or denying such petition.
disposition; time of filing; additional evi-
(2) Any order issued under paragraph (1) shall
dence; time for disposition of petition for re-
be a final order and may be appealed under sec-
consideration of order concluding hearing or
tion 402(a) of this title.
investigation; appeal of order
(June 19, 1934, ch. 652, title IV, § 405, 48 Stat. 1095;
(a) After an order, decision, report, or action
July 16, 1952, ch. 879, § 15, 66 Stat. 720; Pub. L.
has been made or taken in any proceeding by
86–752, § 4(c), Sept. 13, 1960, 74 Stat. 892; Pub. L.
the Commission, or by any designated authority
87–192, § 3, Aug. 31, 1961, 75 Stat. 421; Pub. L.
within the Commission pursuant to a delegation
97–259, title I, §§ 122, 127(c), Sept. 13, 1982, 96 Stat.
under section 155(c)(1) of this title, any party 1097, 1099; Pub. L. 100–594, § 8(d), Nov. 3, 1988, 102
thereto, or any other person aggrieved or whose
Stat. 3023.)
interests are adversely affected thereby, may pe-
tition for reconsideration only to the authority
CODIFICATION
making or taking the order, decision, report, or
‘‘Reconsiderations’’ substituted in text for ‘‘Rehear-
action; and it shall be lawful for such authority,
ings’’ as the probable intent of Congress, in view of
whether it be the Commission or other author-
amendment by section 127(c)(1) of Pub. L. 97–259, which
ity designated under section 155(c)(1) of this substituted ‘‘reconsideration’’ for ‘‘rehearing’’ wher-
title, in its discretion, to grant such a reconsid-
ever appearing in this section.
eration if sufficient reason therefor be made to
AMENDMENTS
appear. A petition for reconsideration must be
filed within thirty days from the date upon
1988—Pub. L. 100–594 designated existing provisions as
which public notice is given of the order, deci-
subsec. (a), substituted ‘‘section 155(c)(1)’’ for ‘‘section
155(d)(1)’’ in two places, and added subsec. (b).
sion, report, or action complained of. No such
1982—Pub. L. 97–259 substituted ‘‘reconsideration’’ for
application shall excuse any person from com-
‘‘rehearing’’ wherever appearing and ‘‘the Commission
plying with or obeying any order, decision, re-
gives public notice of the order, decision, report, or ac-
port, or action of the Commission, or operate in
tion complained of’’ for ‘‘public notice is given of or-
any manner to stay or postpone the enforcement
ders disposing of all petitions for rehearing filed with
thereof, without the special order of the Com-
the Commission in such proceeding or case, but any
mission. The filing of a petition for reconsider-
order, decision, report, or action made or taken after
ation shall not be a condition precedent to judi-
such rehearing reversing, changing, or modifying the
original order shall be subject to the same provisions
cial review of any such order, decision, report,
with respect to rehearing as an original order’’.
or action, except where the party seeking such
1961—Pub. L. 87–192 provided for petition for rehear-
review (1) was not a party to the proceedings re-
ing to the authority making or taking the order, deci-
sulting in such order, decision, report, or action,
sion, report, or action, substituted references to report
or (2) relies on questions of fact or law upon and action for requirement, wherever else appearing,
which the Commission, or designated authority
and inserted references to proceeding by any des-
within the Commission, has been afforded no op-
ignated authority within the Commission, wherever ap-
portunity to pass. The Commission, or des-
pearing.
1960—Pub. L. 86–752 substituted ‘‘any party’’ for ‘‘and
ignated authority within the Commission, shall
party’’ in first sentence, and inserted sentence dealing
enter an order, with a concise statement of the
with disposition of petitions for rehearing.
reasons therefor, denying a petition for recon-
1952—Act July 16, 1952, provided for taking of newly
sideration or granting such petition, in whole or
discovered evidence and evidence which should have
in part, and ordering such further proceedings as
been taken in original hearing.
3
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 76 of 88
§ 406
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
Page 218
EFFECTIVE DATE OF 1960 AMENDMENT
(June 19, 1934, ch. 652, title IV, § 407, 48 Stat.
Section 4(d)(4) of Pub. L. 86–752 provided that: ‘‘The
1095.)
amendment made by paragraph (2) of subsection (c) of
this section [amending this section] shall only apply to
§ 408. Order not for payment of money; when ef-
petitions for rehearing filed on or after the date of the
fective
enactment of this Act [Sept. 13, 1960].’’
Except as otherwise provided in this chapter,
§ 406. Compelling furnishing of facilities; manda-
all orders of the Commission, other than orders
mus; jurisdiction
for the payment of money, shall take effect thir-
ty calendar days from the date upon which pub-
The district courts of the United States shall
lic notice of the order is given, unless the Com-
have jurisdiction upon the relation of any per-
mission designates a different effective date. All
son alleging any violation, by a carrier subject
such orders shall continue in force for the period
to this chapter, of any of the provisions of this
of time specified in the order or until the Com-
chapter which prevent the relator from receiv-
mission or a court of competent jurisdiction is-
ing service in interstate or foreign communica-
sues a superseding order.
tion by wire or radio, or in interstate or foreign
transmission of energy by radio, from said car-
(June 19, 1934, ch. 652, title IV, § 408, 48 Stat. 1096;
rier at the same charges, or upon terms or con-
Pub. L. 97–259, title I, § 123, Sept. 13, 1982, 96 Stat.
ditions as favorable as those given by said car-
1098.)
rier for like communication or transmission
AMENDMENTS
under similar conditions to any other person, to
issue a writ or writs of mandamus against said
1982—Pub. L. 97–259 substituted provision that all or-
carrier commanding such carrier to furnish fa-
ders of the Commission but for payment of money shall
take effect thirty calendar days from the date upon
cilities for such communication or transmission
which public notice of the order is given, unless the
to the party applying for the writ: Provided,
Commission designates a different effective date, and
That if any question of fact as to the proper that such orders shall continue in force for the period
compensation to the carrier for the service to be
of time specified in the order or until the Commission
enforced by the writ is raised by the pleadings,
or a court of competent jurisdiction issues a supersed-
the writ of peremptory mandamus may issue, ing order, for provision that such orders would take ef-
notwithstanding such question of fact is unde-
fect within such reasonable time, not less than thirty
termined, upon such terms as to security, pay-
days after service of the order, and would continue in
force until its further order, or for a specified period of
ment of money into the court, or otherwise, as
time, as prescribed in the order, unless the same were
the court may think proper pending the deter-
suspended or modified or set aside by the Commission,
mination of the question of fact: Provided fur-
or suspended or set aside by a court of competent juris-
ther, That the remedy given by writ of manda-
diction.
mus shall be cumulative and shall not be held to
exclude or interfere with other remedies pro-
§ 409. Hearings
vided by this chapter.
(a) Filing of initial decisions; exceptions
(June 19, 1934, ch. 652, title IV, § 406, 48 Stat.
In every case of adjudication (as defined in
1095.)
section 551 of title 5) which has been designated
§ 407. Order for payment of money; petition for
by the Commission for hearing, the person or
enforcement; procedure; order of Commis-
persons conducting the hearing shall prepare
sion as prima facie evidence; costs; attorneys’
and file an initial, tentative, or recommended
fees
decision, except where such person or persons
become unavailable to the Commission or where
If a carrier does not comply with an order for
the Commission finds upon the record that due
the payment of money within the time limit in
and timely execution of its functions impera-
such order, the complainant, or any person for
tively and unavoidably require that the record
whose benefit such order was made, may file in
be certified to the Commission for initial or
the district court of the United States for the
final decision.
district in which he resides or in which is lo-
(b) Exceptions to initial decisions; memoranda;
cated the principal operating office of the car-
determination of Commission or authority
rier, or through which the line of the carrier
within Commission; prohibition against con-
runs, or in any State court of general jurisdic-
sideration of own decision
tion having jurisdiction of the parties, a peti-
tion setting forth briefly the causes for which he
In every case of adjudication (as defined in
claims damages, and the order of the Commis-
section 551 of title 5) which has been designated
sion in the premises. Such suit in the district
by the Commission for hearing, any party to the
court of the United States shall proceed in all
proceeding shall be permitted to file exceptions
respects like other civil suits for damages, ex-
and memoranda in support thereof to the initial,
cept that on the trial of such suits the findings
tentative, or recommended decision, which shall
and order of the Commission shall be prima be passed upon by the Commission or by the au-
facie evidence of the facts therein stated, except
thority within the Commission, if any, to whom
that the petitioner shall not be liable for costs
the function of passing upon the exceptions is
in the district court nor for costs at any subse-
delegated under section 155(d)(1) 1 of this title:
quent stage of the proceedings unless they ac-
Provided, however, That such authority shall not
crue upon his appeal. If the petitioner shall fi-
be the same authority which made the decision
nally prevail, he shall be allowed a reasonable
to which the exception is taken.
attorney’s fee, to be taxed and collected as a
1
part of the costs of the suit.
See References in Text note below.
4
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 77 of 88
§ 1205
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
Page 340
§ 1205. Funding
munities across the Nation, improved health
(a) In general
care and educational opportunities, and a bet-
ter quality of life for all Americans.
In addition to any amounts provided by appro-
(2) Continued progress in the deployment
priation Acts, funding for this chapter shall be
and adoption of broadband technology is vital
provided from the Digital Transition and Public
to ensuring that our Nation remains competi-
Safety Fund in accordance with section 3010 of
tive and continues to create business and job
the Digital Television Transition and Public
growth.
Safety Act of 2005 (47 U.S.C. 309 note).
(3) Improving Federal data on the deploy-
(b) Compensation
ment and adoption of broadband service will
assist in the development of broadband tech-
The Assistant Secretary of Commerce for
nology across all regions of the Nation.
Communications and Information shall com-
(4) The Federal Government should also rec-
pensate any such broadcast station licensee or
ognize and encourage complementary State ef-
permittee for reasonable costs incurred in com-
forts to improve the quality and usefulness of
plying with the requirements imposed pursuant
broadband data and should encourage and sup-
to section 1201(c) of this title from funds made
port the partnership of the public and private
available under this section. The Assistant Sec-
sectors in the continued growth of broadband
retary shall ensure that sufficient funds are
services and information technology for the
made available to effectuate geographically tar-
residents and businesses of the Nation.
geted alerts.
(c) Credit
(Pub. L. 110–385, title I, § 102, Oct. 10, 2008, 122
Stat. 4096.)
The Assistant Secretary of Commerce for
Communications and Information, in consulta-
SHORT TITLE
tion with the Under Secretary of Homeland Se-
Pub. L. 110–385, title I, § 101, Oct. 10, 2008, 122 Stat.
curity for Science and Technology and the 4096, provided that: ‘‘This title [enacting this chapter
Under Secretary of Commerce for Oceans and and amending section 1302 of this title] may be cited as
Atmosphere, may borrow from the Treasury be-
the ‘Broadband Data Improvement Act’.’’
ginning on October 1, 2006, such sums as may be
§ 1302. Advanced telecommunications incentives
necessary, but not to exceed $106,000,000, to im-
(a) In general
plement this chapter. The Assistant Secretary
of Commerce for Communications and Informa-
The Commission and each State commission
tion shall ensure that the Under Secretary of
with regulatory jurisdiction over telecommuni-
Homeland Security for Science and Technology
cations services shall encourage the deployment
and the Under Secretary of Commerce for on a reasonable and timely basis of advanced
Oceans and Atmosphere are provided adequate
telecommunications capability to all Americans
funds to carry out their responsibilities under
(including, in particular, elementary and sec-
sections 1203 and 1204 of this title. The Treasury
ondary schools and classrooms) by utilizing, in a
shall be reimbursed, without interest, from manner consistent with the public interest, con-
amounts in the Digital Television Transition venience, and necessity, price cap regulation,
and Public Safety Fund as funds are deposited
regulatory forbearance, measures that promote
into the Fund.
competition in the local telecommunications
market, or other regulating methods that re-
(Pub. L. 109–347, title VI, § 606, Oct. 13, 2006, 120
move barriers to infrastructure investment.
Stat. 1941.)
(b) Inquiry
REFERENCES IN TEXT
The Commission shall, within 30 months after
This chapter, referred to in subsecs. (a) and (c), was
February 8, 1996, and annually thereafter, initi-
in the original ‘‘this title’’, meaning title VI of Pub. L.
ate a notice of inquiry concerning the availabil-
109–347, Oct. 13, 2006, 120 Stat. 1936, which is classified
ity of advanced telecommunications capability
principally to this chapter. For complete classification
to all Americans (including, in particular, ele-
of title VI to the Code, see Short Title note set out
mentary and secondary schools and classrooms)
under section 1201 of this title and Tables.
Section 3010 of the Digital Television Transition and
and shall complete the inquiry within 180 days
Public Safety Act of 2005, referred to in subsec. (a), is
after its initiation. In the inquiry, the Commis-
section 3010 of Pub. L. 109–171, which is set out in a note
sion shall determine whether advanced tele-
under section 309 of this title.
communications capability is being deployed to
all Americans in a reasonable and timely fash-
Sec.
tive, it shall take immediate action to acceler-
1301. Findings.
ate deployment of such capability by removing
1302.
Advanced telecommunications incentives.
barriers to infrastructure investment and by
1303.
Improving Federal data on broadband.
promoting competition in the telecommunica-
1304.
Encouraging State initiatives to improve tions market.
broadband.
(c) Demographic information for unserved areas
1305.
Broadband Technology Opportunities Pro-
gram.
As part of the inquiry required by subsection
(b), the Commission shall compile a list of geo-
§ 1301. Findings
graphical areas that are not served by any pro-
The Congress finds the following:
vider of advanced telecommunications capabil-
(1) The deployment and adoption of broad-
ity (as defined by subsection (d)(1)) 1 and to the
band technology has resulted in enhanced eco-
1
nomic development and public safety for com-
See References in Text note below.
5
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 78 of 88
Page 341
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
§ 1303
extent that data from the Census Bureau is
Communications Commission shall include in-
available, determine, for each such unserved
formation comparing the extent of broadband
area—
service capability (including data trans-
(1) the population;
mission speeds and price for broadband service
(2) the population density; and
capability) in a total of 75 communities in at
(3) the average per capita income.
least 25 countries abroad for each of the data
(d) Definitions
rate benchmarks for broadband service uti-
For purposes of this subsection: 2
lized by the Commission to reflect different
(1) Advanced telecommunications capability
speed tiers.
The term ‘‘advanced telecommunications ca-
(2) Contents
pability’’ is defined, without regard to any
The Commission shall choose communities
transmission media or technology, as high-
for the comparison under this subsection in a
speed, switched, broadband telecommunica-
manner that will offer, to the extent possible,
tions capability that enables users to origi-
communities of a population size, population
nate and receive high-quality voice, data,
density, topography, and demographic profile
graphics, and video telecommunications using
that are comparable to the population size,
any technology.
population density, topography, and demo-
(2) Elementary and secondary schools
graphic profile of various communities within
The term ‘‘elementary and secondary
the United States. The Commission shall in-
schools’’ means elementary and secondary
clude in the comparison under this sub-
schools, as defined in section 7801 of title 20.
section—
(A) a geographically diverse selection of
(Pub. L. 104–104, title VII, § 706, Feb. 8, 1996, 110
countries; and
Stat. 153; Pub. L. 107–110, title X, § 1076(gg), Jan.
(B) communities including the capital cit-
8, 2002, 115 Stat. 2093; Pub. L. 110–385, title I,
ies of such countries.
§ 103(a), Oct. 10, 2008, 122 Stat. 4096.)
(3) Similarities and differences
REFERENCES IN TEXT
The Commission shall identify relevant sim-
Subsection (d)(1), referred to in subsec. (c), was in the
original ‘‘section 706(c)(1) of the Telecommunications
ilarities and differences in each community,
Act of 1996’’ and was translated as reading ‘‘section
including their market structures, the number
706(d)(1) of the Telecommunications Act of 1996’’, which
of competitors, the number of facilities-based
is classified to subsection (d)(1) of this section, to re-
providers, the types of technologies deployed
flect the probable intent of Congress and the redesigna-
by such providers, the applications and serv-
tion of subsec. (c) as (d) by Pub. L. 110–385, title I,
ices those technologies enable, the regulatory
§ 103(a)(2), Oct. 10, 2008, 122 Stat. 4096.
model under which broadband service capabil-
CODIFICATION
ity is provided, the types of applications and
Section was formerly set out as a note under section
services used, business and residential use of
157 of this title.
such services, and other media available to
Section was enacted as part of the Telecommunica-
consumers.
tions Act of 1996, and not as part of the Broadband Data
(c) Consumer survey of broadband service capa-
Improvement Act which comprises this chapter.
bility
AMENDMENTS
(1) In general
2008—Subsec. (b). Pub. L. 110–385, § 103(a)(1), sub-
stituted ‘‘annually’’ for ‘‘regularly’’.
For the purpose of evaluating, on a statis-
Subsecs. (c), (d). Pub. L. 110–385, § 103(a)(2), (3), added
tically significant basis, the national charac-
subsec. (c) and redesignated former subsec. (c) as (d).
teristics of the use of broadband service capa-
2002—Subsec. (c)(2). Pub. L. 107–110 substituted ‘‘sec-
bility, the Commission shall conduct and
tion 7801 of title 20’’ for ‘‘paragraphs (14) and (25), re-
make public periodic surveys of consumers in
spectively, of section 14101 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 8801)’’.
urban, suburban, and rural areas in the large
business, small business, and residential con-
EFFECTIVE DATE OF 2002 AMENDMENT
sumer markets to determine—
Amendment by Pub. L. 107–110 effective Jan. 8, 2002,
(A) the types of technology used to provide
except with respect to certain noncompetitive pro-
the broadband service capability to which
grams and competitive programs, see section 5 of Pub.
consumers subscribe;
L. 107–110, set out as an Effective Date note under sec-
(B) the amounts consumers pay per month
tion 6301 of Title 20, Education.
for such capability;
DEFINITIONS
(C) the actual data transmission speeds of
For definitions of terms used in this section, see sec-
such capability;
tion 3(b) of Pub. L. 104–104, set out as a Common Termi-
(D) the types of applications and services
nology note under section 153 of this title.
consumers most frequently use in conjunc-
tion with such capability;
§ 1303. Improving Federal data on broadband
(E) for consumers who have declined to
(a) Omitted
subscribe to broadband service capability,
the reasons given by such consumers for de-
(b) International comparison
clining such capability;
(1) In general
(F) other sources of broadband service ca-
As part of the assessment and report re-
pability which consumers regularly use or
quired by section 1302 of this title, the Federal
on which they rely; and
(G) any other information the Commission
2 So in original. Probably should be ‘‘section:’’.
deems appropriate for such purpose.
6
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 79 of 88
Federal Communications Commission
§ 1.1409
or condition alleged in the complaint
case that the rate, term, or condition
not to be just and reasonable. Factual
is not just and reasonable or that the
allegations shall be supported by affi-
denial of access violates 47 U.S.C.
davit of a person or persons with actual
§ 224(f). If, however, a utility argues
knowledge of the facts and exhibits that the proposed rate is lower than its
shall be verified by the person who pre-
incremental costs, the utility has the
pares them. The response, reply, and burden of establishing that such rate is
other pleadings may be signed by coun-
below the statutory minimum just and
sel.
reasonable rate. In a case involving a
(b) The response shall be served on denial of access, the utility shall have
the complainant and all parties listed
the burden of proving that the denial
in complainant’s certificate of service.
was lawful, once a prima facie case is
(c) The reply shall be served on the
established by the complainant.
respondent and all parties listed in re-
spondent’s certificate of service.
(c) The Commission shall determine
(d) Failure to respond may be deemed
whether the rate, term or condition
an admission of the material factual complained of is just and reasonable.
allegations contained in the complaint.
For the purposes of this paragraph, a
rate is just and reasonable if it assures
[44 FR 31650, June 1, 1979]
a utility the recovery of not less than
§ 1.1408
pleadings.
attachments, nor more than an amount
determined by multiplying the per-
(a) An original and three copies of centage of the total usable space, or
the complaint, response, and reply the percentage of the total duct or con-
shall be filed with the Commission.
(b) All papers filed in the complaint
duit capacity, which is occupied by the
proceeding must be drawn in con-
pole attachment by the sum of the op-
formity with the requirements of erating expenses and actual capital
§§ 1.49, 1.50 and 1.52.
costs of the utility attributable to the
entire pole, duct, conduit, or right-of-
§ 1.1409
the complaint.
(d) The Commission shall deny the
(a) In its consideration of the com-
complaint if it determines that the
plaint, response, and reply, the Com-
complainant has not established a
mission may take notice of any infor-
prima facie case, or that the rate, term
mation contained in publicly available
or condition is just and reasonable, or
filings made by the parties and may ac-
that the denial of access was lawful.
cept, subject to rebuttal, studies that
(e) When parties fail to resolve a dis-
have been conducted. The Commission
pute regarding charges for pole attach-
may also request that one or more of
ments and the Commission’s complaint
the parties make additional filings or
procedures under Section 1.1404 are in-
provide additional information. Where
voked, the Commission will apply the
one of the parties has failed to provide
following formulas for determining a
information required to be provided by
maximum just and reasonable rate:
these rules or requested by the Com-
mission, or where costs, values or
(1) The following formula shall apply
amounts are disputed, the Commission
to attachments to poles by cable opera-
may estimate such costs, values or tors providing cable services. This for-
amounts it considers reasonable, or mula shall also apply to attachments
may decide adversely to a party who
to poles by any telecommunications
has failed to supply requested informa-
carrier (to the extent such carrier is
tion which is readily available to it, or
not a party to a pole attachment agree-
both.
ment) or cable operator providing tele-
(b) The complainant shall have the communications services until Feb-
burden of establishing a prima facie ruary 8, 2001:
317
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 80 of 88
§ 1.1409
47 CFR Ch. I (10–1–11 Edition)
Maximum
Net Cost of
Carrying
= Space Factor ×
×
Rate
a Bare Pole
Ch
e Rate
arg
Where
Space = Space Occupied by Attachment
Factor
Total Usable Space
(2) With respect to attachments to than that yielded by the applicable for-
poles by any telecommunications car-
mula in paragraph 1.1409(e)(2)(ii) of this
rier or cable operator providing tele-
section:
communications services, the max-
Rate = Space Factor × Cost
imum just and reasonable rate shall be
Where Cost
the higher of the rate yielded by para-
in Urbanized Service Areas = 0.66 × (Net Cost
graphs (e)(2)(i) or (e)(2)(ii) of this sec-
of a Bare Pole × Carrying Charge Rate)
tion.
in Non-Urbanized Service Areas = 0.44 × (Net
(i) The following formula applies to
Cost of a Bare Pole × Carrying Charge
the extent that it yields a rate higher
Rate).
(ii) The following formula applies to
mula in paragraph 1.1409(e)(2)(i) of this
the extent that it yields a rate higher
section:
than that yielded by the applicable for-
ER09MY11.025</GPH>
(3) The following formula shall apply
erators and telecommunications car-
to attachments to conduit by cable op-
riers:
ER09MY11.024</GPH>
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 81 of 88
Federal Communications Commission
§ 1.1411
Maximum
1
Duct
Carrying
⎡
1
⎤
⎡No. of
Net Conduit Investment
⎤
Rate per
=
×
Charge
⎢ Ducts
⎥ ×
Linear ft.
⎣
⎢Number of
No
/m.
Ducts
. of Inner Ducts ⎦⎥ ×
× System Duct Length (ft./m.)
⎣
⎦
Rate
(Percentage of Conduit Capacity) (Net Linear Cost of a Conduit)
simplified as:
Carrying
Maximum Rate
Duct
1
Net Conduit Investment
=
×
× Charge
Per Linear ft./m.
No. of Inner Ducts
System Duct Length (ft./m.)
Rate
If no inner-duct is installed the frac-
(3) Order a refund, or payment, if ap-
tion, ‘‘1 Duct divided by the No. of propriate. The refund or payment will
Inner-Ducts’’ is presumed to be 1⁄2.
normally be the difference between the
(f) Paragraph (e)(2) of this section amount paid under the unjust and/or
shall become effective February 8, 2001
unreasonable rate, term, or condition
(i.e., five years after the effective date
and the amount that would have been
of the Telecommunications Act of paid under the rate, term, or condition
1996). Any increase in the rates for pole
established by the Commission, plus in-
attachments that results from the terest, consistent with the applicable
adoption of such regulations shall be statute of limitations; and
phased in over a period of five years be-
(b) If the Commission determines
ginning on the effective date of such that access to a pole, duct, conduit, or
regulations in equal annual incre-
right-of-way has been unlawfully de-
ments. The five-year phase-in is to nied or delayed, it may order that ac-
apply to rate increases only. Rate re-
ductions are to be implemented imme-
cess be permitted within a specified
diately. The determination of any rate
time frame and in accordance with
increase shall be based on data cur-
specified rates, terms, and conditions.
rently available at the time of the cal-
(c) Order a refund, or payment, if ap-
culation of the rate increase.
propriate. The refund or payment will
normally be the difference between the
[43 FR 36094, Aug. 15, 1978, as amended at 52
amount paid under the unjust and/or
FR 31770, Aug. 24, 1987; 61 FR 43025, Aug. 20,
1996; 61 FR 45619, Aug. 29, 1996; 63 FR 12025,
unreasonable rate, term, or condition
Mar. 12, 1998; 65 FR 31282, May 17, 2000; 66 FR
and the amount that would have been
34580, June 29, 2001; 76 FR 26639, May 9, 2011]
paid under the rate, term, or condition
established by the Commission from
§ 1.1410
If the Commission determines that able, was filed, plus interest.
the rate, term, or condition complained
[44 FR 31650, June 1, 1979, as amended at 76
of is not just and reasonable, it may
FR 26639, May 9, 2011]
prescribe a just and reasonable rate,
term, or condition and may:
§ 1.1411
that the rate, term, or condition com-
The Commission may decide each
plained of is not just and reasonable, it
complaint upon the filings and infor-
may prescribe a just and reasonable mation before it, may require one or
rate, term, or condition and may:
more informal meetings with the par-
(1) Terminate the unjust and/or un-
ties to clarify the issues or to consider
reasonable rate, term, or condition;
settlement of the dispute, or may, in
(2) Substitute in the pole attachment
its discretion, order evidentiary proce-
agreement the just and reasonable dures upon any issues it finds to have
rate, term, or condition established by
been raised by the filings.
the Commission;
319
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 82 of 88
§ 1.1408
47 CFR Ch. I (10–1–10 Edition)
(b) The response shall be served on that the proposed rate is lower than its
the complainant and all parties listed
incremental costs, the utility has the
in complainant’s certificate of service.
burden of establishing that such rate is
(c) The reply shall be served on the
below the statutory minimum just and
respondent and all parties listed in re-
reasonable rate. In a case involving a
spondent’s certificate of service.
denial of access, the utility shall have
(d) Failure to respond may be deemed
the burden of proving that the denial
an admission of the material factual was lawful, once a prima facie case is
allegations contained in the complaint.
established by the complainant.
[44 FR 31650, June 1, 1979]
(c) The Commission shall determine
whether the rate, term or condition
§ 1.1408
pleadings.
For the purposes of this paragraph, a
(a) An original and three copies of rate is just and reasonable if it assures
the complaint, response, and reply a utility the recovery of not less than
shall be filed with the Commission.
the additional costs of providing pole
(b) All papers filed in the complaint
attachments, nor more than an amount
proceeding must be drawn in con-
determined by multiplying the per-
formity with the requirements of centage of the total usable space, or
§§ 1.49, 1.50 and 1.52.
the percentage of the total duct or con-
duit capacity, which is occupied by the
§ 1.1409
the complaint.
erating expenses and actual capital
(a) In its consideration of the com-
costs of the utility attributable to the
plaint, response, and reply, the Com-
entire pole, duct, conduit, or right-of-
mission may take notice of any infor-
way.
mation contained in publicly available
(d) The Commission shall deny the
filings made by the parties and may ac-
complaint if it determines that the
cept, subject to rebuttal, studies that
complainant has not established a
have been conducted. The Commission
prima facie case, or that the rate, term
may also request that one or more of
or condition is just and reasonable, or
the parties make additional filings or
that the denial of access was lawful.
provide additional information. Where
(e) When parties fail to resolve a dis-
one of the parties has failed to provide
pute regarding charges for pole attach-
information required to be provided by
ments and the Commission’s complaint
these rules or requested by the Com-
mission, or where costs, values or procedures under Section 1.1404 are in-
amounts are disputed, the Commission
voked, the Commission will apply the
may estimate such costs, values or following formulas for determining a
amounts it considers reasonable, or maximum just and reasonable rate:
may decide adversely to a party who
(1) The following formula shall apply
has failed to supply requested informa-
to attachments to poles by cable opera-
tion which is readily available to it, or
tors providing cable services. This for-
both.
mula shall also apply to attachments
(b) The complainant shall have the to poles by any telecommunications
burden of establishing a prima facie carrier (to the extent such carrier is
case that the rate, term, or condition
not a party to a pole attachment agree-
is not just and reasonable or that the
ment) or cable operator providing tele-
denial of access violates 47 U.S.C. communications services until Feb-
§ 224(f). If, however, a utility argues ruary 8, 2001:
Maximum
Net Cost of
Carrying
= Space Factor ×
×
Rate
a Bare Pole
Ch
e Rate
arg
312
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 83 of 88
Federal Communications Commission
§ 1.1409
Where
Space = Space Occupied by Attachment
Factor
Total Usable Space
(2) Subject to paragraph (f) of this pole attachment agreement) or cable
section the following formula shall operator providing telecommuni-
apply to attachments to poles by any
cations services beginning February 8,
telecommunications carrier (to the ex-
2001:
tent such carrier is not a party to a
⎡Carrying⎤
Maximum Rate = Space Factor × Net Cost of a Bare Pole × ⎢ Charge ⎥
⎢ Rate
⎣
⎦
⎥
⎡ Space
⎛ 2
pace
⎛
⎞
Unusable S
⎞ ⎤
⎢⎝Occupied⎠ +
×
⎝
⎜
⎥
3
No. of Attaching Entities⎠⎟
e Factor
Where Spac
= ⎢
⎥
⎢
t
Pole Heigh
⎥
⎢
⎥
⎣
⎢
⎦
⎥
(3) The following formula shall apply
erators and telecommunications car-
to attachments to conduit by cable op-
riers:
Maximum
1
Duct
Carrying
⎡
1
⎤
⎡No. of
Net Conduit Investment
⎤
Rate per
=
×
Charge
⎢ Ducts
⎥ ×
Linear ft.
⎣
⎢Number of
No
/m.
Ducts
. of Inner Ducts ⎦⎥ ×
× System Duct Length (ft./m.)
⎣
⎦
Rate
(Percentage of Conduit Capacity) (Net Linear Cost of a Conduit)
simplified as:
Carrying
Maximum Rate
Duct
1
Net Conduit Investment
=
×
× Charge
Per Linear ft./m.
No. of Inner Ducts
System Duct Length (ft./m.)
Rate
If no inner-duct is installed the frac-
ginning on the effective date of such
tion, ‘‘1 Duct divided by the No. of regulations in equal annual incre-
Inner-Ducts’’ is presumed to be 1⁄
ER29JN01.015</MATH>
2.
ments. The five-year phase-in is to
(f) Paragraph (e)(2) of this section apply to rate increases only. Rate re-
shall become effective February 8, 2001
ductions are to be implemented imme-
(i.e., five years after the effective date
diately. The determination of any rate
of the Telecommunications Act of
1996). Any increase in the rates for pole
ER29JN01.014</MATH>
attachments that results from the
adoption of such regulations shall be
phased in over a period of five years be-
313
ER29JN01.013</MATH>
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 84 of 88
§ 1.1410
47 CFR Ch. I (10–1–10 Edition)
increase shall be based on data cur-
(b) If any person shall in any written
rently available at the time of the cal-
response to Commission correspond-
culation of the rate increase.
ence or inquiry or in any application,
pleading, report, or any other written
[43 FR 36094, Aug. 15, 1978, as amended at 52
statement submitted to the Commis-
FR 31770, Aug. 24, 1987; 61 FR 43025, Aug. 20,
1996; 61 FR 45619, Aug. 29, 1996; 63 FR 12025,
sion pursuant to this subpart make any
Mar. 12, 1998; 65 FR 31282, May 17, 2000; 66 FR
misrepresentation bearing on any mat-
34580, June 29, 2001]
ter within the jurisdiction of the Com-
mission, the Commission may, in addi-
§ 1.1410
If the Commission determines that criminal penalties under section 1001 of
the rate, term, or condition complained
Title 18 of the United States Code, im-
of is not just and reasonable, it may
pose a forfeiture pursuant to section
prescribe a just and reasonable rate, 503(b) of the Communications Act, 47
term, or condition and may:
U.S.C. 503(b).
(a) Terminate the unjust and unrea-
§ 1.1414
(b) Substitute in the pole attachment
(a) If the Commission does not re-
agreement the just and reasonable ceive certification from a state that:
rate, term, or condition established by
(1) It regulates rates, terms and con-
the Commission; and
ditions for pole attachments;
(c) Order a refund, or payment, if ap-
(2) In so regulating such rates, terms
propriate. The refund or payment will
and conditions, the state has the au-
normally be the difference between the
thority to consider and does consider
amount paid under the unjust and/or the interests of the subscribers of cable
unreasonable rate, term, or condition television services as well as the inter-
and the amount that would have been
ests of the consumers of the utility
paid under the rate, term, or condition
services; and,
established by the Commission from
(3) It has issued and made effective
the date that the complaint, as accept-
rules and regulations implementing the
able, was filed, plus interest.
state’s regulatory authority over pole
attachments (including a specific
[44 FR 31650, June 1, 1979]
methodology for such regulation which
§ 1.1411
state), it will be rebuttably presumed
The Commission may decide each that the state is not regulating pole at-
complaint upon the filings and infor-
tachments.
mation before it, may require one or
(b) Upon receipt of such certification,
more informal meetings with the par-
the Commission shall give public no-
ties to clarify the issues or to consider
tice. In addition, the Commission shall
settlement of the dispute, or may, in
compile and publish from time to time,
its discretion, order evidentiary proce-
a listing of states which have provided
dures upon any issues it finds to have
certification.
been raised by the filings.
(c) Upon receipt of such certification,
the Commission shall forward any
§ 1.1412
If the respondent fails to obey any state regulatory authority, shall so no-
order imposed under this subpart, the
tify the parties involved and shall give
Commission on its own motion or by
public notice thereof.
motion of the complainant may order
(d) Certification shall be by order of
the respondent to show cause why it the state regulatory body or by a per-
should not cease and desist from vio-
son having lawful delegated authority
lating the Commission’s order.
under provisions of state law to submit
such certification. Said person shall
§ 1.1413
(a) If any person willfully fails to or she has such authority and shall cite
obey any order imposed under this sub-
the law, regulation or other instru-
part, or any Commission rule, or
ment conferring such authority.
314
12
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 85 of 88
11-1146
filed the foregoing Brief for Respondents with the Clerk of the Court for the
United States Court of Appeals for the D.C. Circuit by using the CM/ECF
system. Participants in the case who are registered CM/ECF users will be
served by the CM/ECF system.
Some of the participants in the case, denoted with asterisks below, are not
CM/ECF users. I certify further that I have directed that copies of the
foregoing document (without attachments) be mailed by First-Class Mail to
those persons, unless another attorney at the same mailing address is
receiving electronic service.
Eric B. Langley
Sean Branley Cunningham
J. Russell Campbell
Hunton & Williams LLP
Jason Tompkins
2200 Pennsylvania Avenue, N.W.
Balch & Bingham LLP
Washington, D.C. 20037
1901 Sixth Avenue North
Counsel for: Petitioner
Suite 1500
Birmingham, Alabama 35203
Counsel for Petitioner
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 86 of 88
Kristen C. Limarzi
David P. Murray
Robert B. Nicholson
*Thomas Jones
U.S. Department of Justice
Willkie Farr & Gallagher LLP
Antitrust Division, Apellate Section
1875 K Street, N.W.
Room 3224
Washington, D.C. 20006
950 Pennsylvania Avenue, N.W.
Counsel for: Intervenor tw telecom
Washington, D.C. 20530
inc.
Counsel for: USA
Michael E. Glover
Helgi C. Walker
Edward Shakin
*Bennett L. Ross
Katharine R. Saunders
Brendan T. Carr
Verizon
Wiley Rein LLP
1320 North Courthouse Road
1776 K Street, N.W.
Ninth Floor
Washington, DC 20006
Arlington, VA 22201
Counsel for: Intervenor Verizon,
Counsel for: Intervenor Verizon
USTelecom, CenturyLink and AT&T
Daniel L. Brenner
Michael Fitch
Hogan Lovells US LLP
PCIA-The Wireless Infrastructure
Columbia Square
Association
555 Thirteenth Street, N.W.
901 N. Washington Street
Washington, D.C. 20004-1109
Suite 600
Counsel for: Intervenor Bright
Alexandria, VA 22314
House Networks, LLC
Counsel for: Intervenor PCIA-The
Wireless Infrastructure Association
Craig E. Gilmore
Gardner F. Gillespie
Wilkinson Barker Knauer, LLP
Paul A. Werner, III
2300 N Street, N.W.
Hogan Lovells US LLP
Suite 700
Columbia Square
Washington, D.C. 20036
555 Thirteenth Street, N.W.
Counsel for: Intervenor PCIA-The
Washington, D.C. 20004-1109
Wireless Infrastructure Association
Counsel for: Intervenor Time
Warner Cable Inc.
2
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 87 of 88
Michael F. Altschul
Jonathan D. Hacker
*Brian M. Josef
Loren L. AliKhan
CTIA-The Wireless Association
O’Melveny & Myers LLP
1400 16th Street, N.W.
1625 Eye Street, N.W.
Suite 600
Washington, D.C. 20006-4001
Washington, D.C. 20036
Counsel for: Intervenor CTIA
Counsel for: Intervenor CTIA
John B. Richards
Christopher A. Fedeli
Thomas B. Magee
Judicial Watch, Inc.
Keller and Heckman, LLP
425 Third Street, S.W., Suite 800
1001 G Street, N.W.
Washington, DC 20024
Suite 500 West
Counsel for: Intervenor Mediacom
Washington, D.C. 20001
Communications Corporation
Counsel for: Intervenors Consumers
Energy Company, et al.
Lynn Charytan
*Jeffrey E. Rummel
Comcast Corporation
Adam D. Bowser
300 New Jersey Avenue, N.W.
Arent Fox LLP
Suite 700
1050 Connecticut Avenue, N.W.
Washington, D.C. 20001
Washington, D.C. 20036
Counsel for: Intervenor Comcast
Counsel for: Intervenor Sunesys,
LLC
Wesley R. Heppler
Neal Morse Goldberg
Paul Glist
NCTA
John D. Seiver
25 Massachusetts Avenue, N.W.
T. Scott Thompson
Suite 1000
Davis Wright Tremaine LLP
Washington, DC 20001-1431
1919 Pennsylvania Avenue, N.W.
Counsel for: Intervenor NCTA
Suite 800
Washington, D.C. 20006
Counsel for: Intervenors Comcast,
Charter Communications, Inc.,
Mediacom Communications
Corporation, and NextG Networks,
Inc.
3
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 88 of 88
John E. Benedict
Christopher M. Heimann
1099 New York Avenue, N.W.
Gary Liman Phillips
Suite 250
AT&T
Washington, D.C. 20001
1120 20th Street, N.W.
Counsel for: Intervenor CenturyLink Suite 1000
Local Operating Companies
Washington, D.C. 20036
Counsel for: Intervenor AT&T
*William Aubrey Brown
Jonathan E. Nuechterlein
AT&T Inc.
Heather M. Zachary
1120 20th Street, N.W.
Wilmer Cutler Pickering Hale and
Suite 1000
Dorr LLP
Washington, D.C. 20036
1875 Pennsylvania Avenue, N.W.
Counsel for: Intervenor AT&T
Washington, D.C. 20006-1420
Counsel for: Intervenor NCTA and
Comcast
Shirley S. Fujimoto
*Aryeh B. Fishman
Kevin M. Cookler
Edward Comer
*Jeffrey L. Sheldon
Edison Electric Institute
Fish & Richardson P.C.
701 Pennsylvania Avenue
1425 K Street, N.W. 11th Floor
Washington, D.C. 20004
Washington, D.C. 20005
Counsel for: Amicus Curiae Edison
Counsel for: Amicus Curiae Edison
Electric Institute
Electric Institute
/s/ Nandan M. Joshi
4
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 1 of 88
BRIEF FOR RESPONDENTS
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
NO. 11-1146
AMERICAN ELECTRIC POWER
SERVICE CORPORATION, ET AL.
PETITIONERS,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS.
ON PETITION FOR REVIEW OF AN ORDER OF THE
FEDERAL COMMUNICATIONS COMMISSION
SHARIS A. POZEN
AUSTIN C. SCHLICK
ACTING ASSISTANT ATTORNEY GENERAL
GENERAL COUNSEL
ROBERT B. NICHOLSON
PETER KARANJIA
KRISTEN C. LIMARZI
DEPUTY GENERAL COUNSEL
ATTORNEYS
RICHARD K. WELCH
UNITED STATES
DEPUTY ASSOCIATE GENERAL COUNSEL
DEPARTMENT OF JUSTICE
WASHINGTON, D.C. 20530
NANDAN M. JOSHI
COUNSEL
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 2 of 88
CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES
1. Parties.
All parties appearing in this Court are listed in petitioners’ brief.
2. Rulings under review.
Implementation of Section 224 of the Act, Report and Order and Order
on Reconsideration, 26 FCC Rcd 5240 (2011) (J.A. __).
3. Related cases.
The order on review has not previously been before this Court or any
other court. We are not aware of any related cases pending in this Court or in
any other court.
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 3 of 88
TABLE OF CONTENTS
Table of Authorities......................................................................................... iii
Glossary......................................................................................................... viii
Jurisdiction ........................................................................................................1
Introduction and Questions Presented...............................................................1
Statutes and Regulations ...................................................................................4
Counterstatement...............................................................................................4
I.
The Commission’s Authority to Regulate Pole Attachments....................4
A. Regulation Prior to the 1996 Act...........................................................4
B. Regulation After the 1996 Act ..............................................................8
II. The Order on Review ..............................................................................13
Summary of Argument....................................................................................22
Argument.........................................................................................................25
I.
The Order is Subject to Deferential Standards of Review ......................25
II. The Commission Lawfully Modified the Telecom-Rate
Formula ....................................................................................................26
A. The Commission Has Broad Rate-setting Authority
Under § 224 .........................................................................................27
B. The New Telecom-Rate Formula Represents a
Reasonable Exercise of the FCC’s Rate-setting Authority.................29
C. Section 224(e) Does Not Require Use of a Fully
Allocated Cost Measure ......................................................................37
III. The Commission Has Authority under § 224(b) to Regulate
Pole Attachments by ILECs .....................................................................41
i
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 4 of 88
A. The Commission Reasonably Determined That § 224
Authorizes the FCC to Regulate ILEC Attachments ..........................42
B. The Commission Adequately Explained its Change in
Policy...................................................................................................50
IV. Petitioners’ Challenge to the Commission’s Decision to
Extend the Refund Period is Meritless.....................................................57
Conclusion.......................................................................................................60
ii
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 5 of 88
TABLE OF AUTHORITIES
CASES
Ad Hoc Telecomms. Users Comm. v. FCC,
572 F.3d 903 (D.C. Cir. 2009) ............................................................. 30, 32
Alabama Power Co. v. FCC,
311 F.3d 1357 (11th Cir. 2002),
cert. denied, 540 U.S. 937 (2003) .......................................................... 6, 39
Alaska Dept. of Envtl. Conservation v. EPA,
540 U.S. 461 (2004) ....................................................................................34
AT&T v. Iowa Utils. Bd., 525 U.S. 366 (1999) ...............................................25
BDPCS, Inc. v. FCC,
351 F.3d 1177 (D.C. Cir. 2003) ........................................................... 47, 57
BellSouth Corp. v. FCC,
162 F.3d 1215 (D.C. Cir. 1999) ..................................................................54
Burgess v. United States, 553 U.S. 124 (2008)...............................................44
Catawba County, N.C. v. EPA,
571 F.3d 20 (D.C. Cir. 2009) ......................................................................34
Chevron USA, Inc. v. Nat. Res. Def. Council, Inc.,
467 U.S. 837 (1984) ....................................................................................25
Citizens to Preserve Overton Park, Inc. v. Volpe,
401 U.S. 402 (1971) ....................................................................................26
Constellation Energy Commodities Group, Inc. v.
FERC, 457 F.3d 14 (D.C. Cir. 2006) ..........................................................55
Consumer Electronics Ass’n v. FCC,
347 F.3d 291 (D.C. Cir. 2003) ....................................................................49
Corley v. United States, 129 S. Ct. 1558 (2009) ...................................... 44, 45
Entergy Corp. v. Riverkeeper, Inc.,
129 S. Ct. 1498 (2009) ................................................................................25
FCC v. AT&T Inc., 131 S. Ct. 1177 (2011) ....................................................44
FCC v. Florida Power Corp., 480 U.S. 245 (1987) .................................. 6, 46
FCC v. Fox Television Stations, Inc.,
129 S. Ct. 1800 (2009) ................................................................................51
iii
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 6 of 88
Federal Power Comm’n v. Texaco Inc.,
417 U.S. 380 (1974) ....................................................................................27
In re Permian Basin Area Rate Cases, 390 U.S. 747
(1968) ..........................................................................................................33
Monongahela Power Co. v. FCC,
655 F.2d 1254 (D.C. Cir. 1981) ....................................................................6
Nader v. FCC, 520 F.2d 182 (D.C. Cir. 1975)................................................28
Nat’l Ass’n of State Util. Consumer Advocates v.
FCC, 372 F.3d 454 (D.C. Cir. 2004)...........................................................33
Nat’l Cable & Telecomms. Ass’n v. Brand X
Internet Servs., 545 U.S. 967 (2005)........................................ 26, 29, 45, 50
Nat’l Cable & Telecomms. Ass’n v. FCC,
567 F.3d 659 (D.C. Cir. 2009) ....................................................................51
*
Nat’l Cable & Telecomms. Ass’n v. Gulf Power Co.,
534 U.S. 327 (2002) ............... 4, 9, 12, 13, 24, 29, 30, 42, 43, 46, 48, 50, 57
New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005) ..............................................29
Orloff v. FCC, 352 F.3d 415 (D.C. Cir. 2003),
cert. denied, 542 U.S. 937 (2004) ...............................................................47
Public Citizen v. Carlin,
184 F.3d 900 (D.C. Cir. 1999) ....................................................................50
Public Citizen, Inc. v. NHTSA,
374 F.3d 1251 (D.C. Cir. 2004) ..................................................................56
Recording Indus. Ass’n of Am., Inc. v. Verizon
Internet Servs., Inc.,
351 F.3d 1229 (D.C. Cir. 2003) ..................................................................45
Russello v. United States, 464 U.S. 16 (1983) ................................................29
*
Southern Co. v. FCC,
313 F.3d 574 (D.C. Cir. 2002) ....................................................... 40, 51, 56
Texas Utils. Elec. Co. v. FCC,
997 F.2d 925 (D.C. Cir. 1993) ....................................................................12
Time Warner Entm’t Co., L.P. v. FCC,
56 F.3d 151 (D.C. Cir. 1995) ......................................................................28
iv
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 7 of 88
*
Verizon Commc’ns, Inc. v. FCC,
535 U.S. 467 (2002) ....................................................................... 28, 35, 36
WorldCom, Inc. v. FCC,
238 F.3d 449 (D.C. Cir. 2001) ....................................................................31
ADMINISTRATIVE DECISIONS
Adoption of Rules for the Regulation of Cable
Television Pole Attachments, 68 FCC 2d 1585
(1978), on recon., 72 FCC 2d 59 (1979), on
further recon., 77 FCC 2d 187 (1980), rev.
denied, Monongahela Power Co. v. FCC, 655
F.2d 1254 (D.C. Cir. 1981) .............................................................. 6, 58, 59
Adoption of Rules for the Regulation of Cable
Television Pole Attachments,
72 FCC 2d 59 (1979).................................................................................6, 7
Amendment of Rules and Policies Governing Pole
Attachments, 12 FCC Rcd 7449 (1997) ........................................................7
Amendment of Rules and Policies Governing the
Attachment of Cable Television Hardware to
Utility Poles, 2 FCC Rcd 4387 (1987) ......................................................6, 7
Implementation of Section 703(e) of the
Telecommunications Act of 1996, 13 FCC Rcd
6777 (1998), aff’d, Nat’l Cable & Telecomms.
Ass’n v. Gulf Power Co., 534 U.S. 327 (2002) .......................... 9, 11, 12, 39
STATUTES AND REGULATIONS
American Recovery and Reinvestment Act of 2009,
Pub. L. No. 111-5, 123 Stat. 115.................................................................14
Pole Attachments Act,
Pub. L. No. 95-234, § 6, 92 Stat. 33 (1978) ..................................................5
Telecommunications Act of 1996,
Pub. L. No. 104-104, 110 Stat. 56.................................................................8
5 U.S.C. § 706(2)(A) .......................................................................................26
28 U.S.C. § 2342(1) ..........................................................................................1
47 U.S.C. § 153(51) ................................................................................. 11, 43
v
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 8 of 88
47 U.S.C. § 153(53) ........................................................................................43
47 U.S.C. § 202 ...............................................................................................47
47 U.S.C. § 224 .................... 4, 8, 10, 12, 23, 24, 27, 42, 43, 44, 45, 48, 49, 50
47 U.S.C. § 224(a)(1) ......................................................................... 10, 42, 45
47 U.S.C. § 224(a)(4) ................................... 3, 8, 10, 11, 19, 23, 41, 42, 43, 45
47 U.S.C. § 224(a)(5) ................................................................... 11, 19, 23, 43
47 U.S.C. § 224(b)........................................ 2, 3, 12, 15, 19, 20, 21, 23, 41, 47
47 U.S.C. § 224(b)(1)....................................................................... 5, 8, 24, 57
47 U.S.C. § 224(c).............................................................................................5
47 U.S.C. § 224(d)........................................................................ 22, 29, 34, 48
47 U.S.C. § 224(d)(1)....................................................................... 5, 7, 29, 38
47 U.S.C. § 224(d)(3)................................................................. 5, 9, 12, 29, 40
47 U.S.C. § 224(e).............................................. 3, 8, 18, 22, 26, 29, 35, 38, 48
47 U.S.C. § 224(e)(1) ................................................................................. 8, 44
47 U.S.C. § 224(e)(2) ............................................................... 8, 22, 27, 37, 38
47 U.S.C. § 224(e)(3) ........................................................... 8, 9, 22, 27, 37, 38
47 U.S.C. § 224(e)(4) ......................................................................................40
47 U.S.C. § 224(f)(1) ....................................................... 45, 46, 47, 48, 49, 57
47 U.S.C. § 251(b)(4)............................................................................... 48, 49
47 U.S.C. § 252(d)(1)......................................................................................35
47 U.S.C. § 402(a).............................................................................................1
47 U.S.C. § 405(a).............................................................................. 47, 57, 59
47 U.S.C. § 1302(a)........................................................................ 2, 11, 13, 30
47 U.S.C. § 1302(b) ........................................................................... 12, 13, 15
47 C.F.R. § 1.1409(e)(1) ...................................................................................7
47 C.F.R. § 1.1409(e)(2)(i) .............................................................................10
47 C.F.R. § 1.1409(f) ......................................................................................41
47 C.F.R. § 1.1410(c) ......................................................................................14
vi
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 9 of 88
OTHERS
H.R. Conf. Rep. No. 104-458 (1996) ..............................................................11
National Broadband Plan
(available at http://www.broadband.gov/plan/).................................... 14, 41
S. Rep. No. 95-580 (1977) ....................................................................... 17, 58
* Cases and other authorities principally relied upon are marked with
asterisks.
vii
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GLOSSARY
Amicus Br.Brief of Amicus Curiae Edison Electric Institute in
Support of Petitioners
EEI
Edison Electric Institute
ILEC
Incumbent local exchange carrier
Int. Br.
Brief of Intervenor Consumers Energy Company et
al. in Support of Petitioners
LEC Local
exchange
carrier
NCTA
National Cable & Telecommunications Association
Pet. Br.
Brief of Petitioners
USTA USTelecom
viii
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 11 of 88
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
NO. 11-1146
AMERICAN ELECTRIC POWER
SERVICE CORPORATION, ET AL.
PETITIONERS,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS.
ON PETITION FOR REVIEW OF AN ORDER OF THE
FEDERAL COMMUNICATIONS COMMISSION
BRIEF FOR RESPONDENTS
JURISDICTION
The Federal Communications Commission (Commission or FCC)published a summary of the order on review in the Federal Register on May
9, 2011. 76 Fed. Reg. 26620. Petitioners filed their petition for review on
May 18, 2011. This Court’s jurisdiction rests on 47 U.S.C. § 402(a) and 28
U.S.C. § 2342(1).
INTRODUCTION AND QUESTIONS PRESENTED
Pole attachment rates are the charges that owners of utility poles,including electric utility companies, assess when cable television operators,
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 12 of 88
telecommunications carriers, and others attach their lines to existing utility
poles. In the Communications Act, Congress directed the FCC to ensure that
pole-attachment rates are “just and reasonable.” 47 U.S.C. § 224(b).
Congress also has directed the FCC to “encourage the deployment . . . of
advanced telecommunications capability to all Americans” by removing
barriers to infrastructure development. 47 U.S.C. § 1302(a).
In the order on review,1 the Commission took three steps to promote
broadband deployment by improving access to utility poles at just and
reasonable rates. First, the Commission revised its formula for calculating
the maximum pole-attachment rate that utilities may impose on
telecommunications carriers, reducing that rate to minimize the disparity
between it and the maximum rate that may be imposed on cable operators.
Order ¶¶ 126-198 (J.A. __). Second, the Commission concluded that it may
regulate pole attachments by incumbent local exchange carriers (ILECs) to
ensure that the rates, terms, and conditions applicable to their attachments are
just and reasonable. Order ¶¶ 199-213 (J.A. __). Third, the Commission
allowed the prevailing party in a pole-attachment dispute to obtain a refund
1 Implementation of Section 224 of the Act, 26 FCC Rcd 5240 (2011) (Order)
(J.A.__).
2
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extending back “as far as the applicable statute of limitations allows.” Order
¶ 110 (J.A. __).
Petitioners, a group of electric utilities subject to § 224’s obligation to
allow third parties to attach wires, cables, and other equipment to their poles,
now petition for review.
The questions presented are:
(1) Whether the Commission lawfully exercised its rate-setting
authority under 47 U.S.C. §§ 224(b) and (e) when it modified a formula it
previously had used for computing the “cost” of providing space on a pole for
purposes of establishing a just and reasonable rate for telecommunications
attachments.
(2) Whether the Commission acted within its discretion in concluding
that ILECs are “provider[s] of telecommunications service” under 47 U.S.C.
§ 224(a)(4), such that the agency may regulate the rates, terms, and
conditions of their pole attachments pursuant to § 224(b).
(3) Whether the Commission acted within its discretion under 47
U.S.C. § 224(b) in concluding that a successful pole-attachment complainant
is entitled to refunds from the date specified in the applicable statute of
limitations and is not limited to refunds due from the date on which its
complaint was filed.
3
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STATUTES AND REGULATIONS
Pertinent statutes and regulations are reproduced in the appendix to thisbrief.
COUNTERSTATEMENT
I.
THE COMMISSION’S AUTHORITY TO REGULATE
POLE ATTACHMENTS
A. Regulation Prior to the 1996 Act
Utility poles provide a convenient and often essential means forcommunications providers to deploy the lines, wires, and other network
equipment they need to reach potential customers. Concerned that owners of
utility poles – generally electric utilities or ILECs – were abusing their
market power by charging cable television companies “monopoly rents” to
attach cable television wires to their poles, see Nat’l Cable & Telecomms.
Ass’n v. Gulf Power Co., 534 U.S. 327, 330 (2002), Congress in 1978 added
§ 224 to the Communications Act, 47 U.S.C. § 224. That provision granted
the Commission the authority to “regulate the rates, terms, and conditions for
pole attachments to provide that such rates, terms, and conditions are just and
4
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reasonable” and to “hear and resolve complaints concerning such rates, terms,
2
and conditions.” 47 U.S.C. § 224(b)(1).
As originally enacted, § 224 applied only to attachments by cable
operators. Pub. L. No. 95-234, § 6, 92 Stat. 33, 35 (1978). In § 224(d)(1),
which continues to govern cable attachments used “solely to provide cable
service,” 47 U.S.C. § 224(d)(3), Congress specified two alternative cost-
based standards for computing what is generally referred to as the “cable
rate” (i.e., the pole attachment rate paid by cable operators solely to provide
cable service). At the upper bound, that rate cannot be more than “the sum of
the operating expenses and actual capital costs of the utility attributable to the
entire pole” multiplied by “the percentage of the total usable space” occupied
by the attachment. 47 U.S.C. § 224(d)(1). At the lower bound, the cable rate
cannot be “less than the additional costs of providing pole attachments.”
Ibid. In other words, § 224(d)(1) establishes a “range of reasonableness” for
the cable rate that is between the cable operator’s share of the “fully allocated
cost of construction and operation of the pole” (at the upper end) and the
2 The Commission’s pole-attachment rules do not apply in 20 states and the
District of Columbia because those jurisdictions regulate pole attachments
pursuant to 47 U.S.C. § 224(c). See Order, App. C. (J.A. __).
5
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“marginal costs of attachments” (at the lower end). FCC v. Florida Power
3
Corp., 480 U.S. 245, 253 (1987).
In a series of orders, the Commission implemented a formula that
cable-television-system attachers and utilities could use to determine a
maximum just and reasonable pole attachment rate – referred to as the “cable-
rate formula” – and procedures for resolving rate complaints.4 The formula
“focus[es] on the upper end of the statutory range,” i.e., the fully-allocated-
cost limit. Amendment of Rules and Policies Governing the Attachment of
Cable Television Hardware to Utility Poles, 2 FCC Rcd 4387, 4394 ¶ 53
(1987) (1987 Order). “[B]y definition, fully allocated costs encompass all
pole-related costs,” id. at 4397 ¶ 74, including the utility’s operating expenses
(i.e., administrative and maintenance costs), as well as its capital costs for the
entire pole (i.e., depreciation expenses, a return on investment, and taxes), id.
at 4388 ¶ 5. Operating expenses and capital costs are also called “carrying
3 The cable rate has long been held to provide adequate compensation to pole
owners under the Fifth Amendment. See Florida Power Corp., 480 U.S. at
254; Alabama Power Co. v. FCC, 311 F.3d 1357, 1370-1371 (11th Cir.
2002), cert. denied, 540 U.S. 937 (2003).
4 See, e.g., Adoption of Rules for the Regulation of Cable Television Pole
Attachments, 68 FCC 2d 1585 (1978) (First Report and Order), on recon., 72
FCC 2d 59 (1979), on further recon., 77 FCC 2d 187 (1980), rev. denied,
Monongahela Power Co. v. FCC, 655 F.2d 1254 (D.C. Cir. 1981).
6
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charges,” or, when expressed as a percentage of pole investment, the
5
“carrying charge rate.” Id. at 4388 ¶ 6.
The Commission has not adopted a formula for calculating the
minimum cable rate – the “additional costs of providing pole attachments,”
47 U.S.C. § 224(d)(1). See 1987 Order, 2 FCC Rcd at 4399 ¶ 87. If an
attachment imposes any “non-recurring costs” on the pole owner – including,
6
for example, costs for “make-ready” – those costs are “directly
reimbursable” by the cable operator. Adoption of Rules for the Regulation of
Cable Television Pole Attachments, 72 FCC 2d 59, 72-73 ¶¶ 29-30 (1979).
Make-ready costs are reimbursed in addition to the periodic charges (akin to
rent) recovered through the cable rate. See id. at 62-63 ¶¶ 8-9.
5 Under the Commission’s formula, the fully allocated cost of a pole is the
product of the utility’s pole investment (called the “net cost of a bare pole”)
and the carrying charge rate. This product is multiplied by a “space factor”
that represents the portion of total usable space occupied by the cable
attachment. Thus, the maximum cable rate equals:
Space Factor × Net Cost of a Bare Pole × Carrying Charge Rate
Where
Space Factor = Space Occupied by Attachment ÷ Total Usable
Space
47 C.F.R. § 1.1409(e)(1). The “total usable space is the space on the utility
pole above the minimum grade level that is usable for the attachment of
wires, cables, and related equipment.” Amendment of Rules and Policies
Governing Pole Attachments, 12 FCC Rcd 7449, 7453-7454 ¶ 7 (1997).
6 “ ‘Make-ready’ generally refers to the modification of poles or lines or the
installation of guys and anchors to accommodate additional facilities.” Order
n.42 (J.A. __).
7
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B. Regulation After the 1996 Act
As part of its broader effort to promote infrastructure investment andcompetition, Congress expanded the reach of § 224 of the Communications
Act in the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.
56. Among other things, Congress added “provider[s] of telecommunications
service[s]” as a category of attacher entitled to pole attachments at just and
reasonable rates under § 224. 47 U.S.C. §§ 224(a)(4), (b)(1). Three aspects
of the 1996 Act are relevant to this case.
1. The telecom rate. The 1996 Act added a new provision – § 224(e) –
to govern attachments “used by telecommunications carriers to provide
telecommunications services.” 47 U.S.C. § 224(e)(1). For such attachments,
Congress instructed the Commission to “prescribe regulations” to “ensure
that a utility charges just, reasonable, and nondiscriminatory rates for pole
attachments.” Ibid. Section 224(e) provides for the determination of pole-
attachment rates based on the “cost” of providing space on a pole. 47 U.S.C.
§ 224(e)(2), (3). The statute directs how the costs should be allocated
between the pole owner and attacher, but does not specify how such costs
should be computed before allocation among the parties. Thus, § 224(e)(2)
provides that the “cost of providing space on a pole . . . other than the usable
space” is to be apportioned among “all attaching entities” so that each entity
8
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 19 of 88
is allocated two-thirds of the pro rata cost of such unusable space. Section
224(e)(3) states that the “cost of providing usable space” is to be apportioned
“among all entities according to the percentage of usable space required for
each entity.”
In constructing a new “telecom rate” formula in the wake of the 1996
Act, the Commission built upon its preexisting cable-rate formula (which
Congress left in place to govern attachments used “solely to provide cable
service,” 47 U.S.C. § 224(d)(3)). Accordingly, the measure of cost used to
calculate the maximum cable rate – fully allocated cost – became the measure
of cost used to calculate the telecom rate. See Implementation of Section
703(e) of the Telecommunications Act of 1996, 13 FCC Rcd 6777, 6822-6823
¶¶ 99-102 (1998) (1998 Order), aff’d, Gulf Power, 534 U.S. 327; Order ¶ 157
(J.A. __).
As initially implemented, the telecom-rate formula generally resulted
in higher pole rental rates than the cable-rate formula. The historical
discrepancy between the two rates largely stemmed from the different way in
which the two statutory formulas “allocate the costs associated with the
unusable portion of the pole” – i.e., the space on the pole (including the
portion underground) that “cannot be used for attachments.” Order n.397
(J.A. __) (emphasis added). While the cable-rate formula allocates such costs
9
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 20 of 88
“based on the fraction of the usable space that an attachment occupies,” the
telecom-rate formula apportions those costs based on the number of attachers.
7
Order n.397 (J.A. __). Thus, before the Order on review modified the
telecom-rate formula, this difference typically resulted in a higher telecom
rate except in instances involving an exceptionally high number of attachers
on a pole.
2. ILEC attachments. The 1996 Act also amended § 224’s definitions
of “pole attachment” and “utility,” and added a new definition of
“telecommunications carrier.” “Pole attachment” was redefined to include
attachments not only by a cable operator but also a “provider of
telecommunications service.” 47 U.S.C. § 224(a)(4). The term “utility” was
modified to mean, with certain exceptions, a “local exchange carrier” or
public utility that “owns or controls poles . . . used, in whole or in part, for
any wire communications.” 47 U.S.C. § 224(a)(1). “For purposes of” § 224,
7 “Under the telecom rate . . . , two-thirds of the costs of the unusable space is
allocated equally among the number of attachers, including the owner, and
the remaining one third of these costs is allocated solely to the pole owner.”
Order n.397 (J.A. __). The space factor (which apportions both usable and
unusable space) for the telecom rate is:
47 C.F.R. § 1.1409(e)(2)(i).
10
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 21 of 88
the “term ‘telecommunications carrier’ ” – which is otherwise defined as “any
provider of telecommunications services,” 47 U.S.C. § 153(51) – “does not
include any incumbent local exchange carrier,” id. § 224(a)(5).
In implementing the 1996 amendments, the Commission understood
that it had authority to regulate all “pole attachment[s]” as defined in
§ 224(a)(4). 1998 Order, 13 FCC Rcd at 6793 ¶ 30. In considering whether
to regulate attachments by ILECs, however, the Commission initially
concluded that, because ILECs are “utilit[ies] but [are] not . . .
telecommunications carrier[s],” they do not have rights “as pole attachers.”
Id. at 6781 ¶ 5. As we explain below, the Commission revisited that
conclusion in the Order on review.
3. Pole attachments and broadband policy. The 1996 Act was
designed to “accelerate rapidly private sector deployment of advanced
telecommunications and information technologies and services to all
Americans by opening all telecommunications markets to competition.” H.R.
Conf. Rep. No. 104-458, at 1 (1996). Consistent with that goal, § 706(a) of
the 1996 Act (later codified at 47 U.S.C. § 1302(a)) requires the Commission
to “encourage the deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans . . . by utilizing . . . regulating
methods that remove barriers to infrastructure investment.” If the FCC finds
11
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 22 of 88
that such “broadband” capability is not being sufficiently deployed, the
statute mandates that the FCC “shall take immediate action to accelerate
deployment of such capability by removing barriers to infrastructure
investment and by promoting competition in the telecommunications
market.” 47 U.S.C. § 1302(b).
Even before the 1996 Act, the Commission, with this Court’s approval,
had held that cable operators that offer broadband services along with cable
service do not lose the protection of the regulated cable rate. See Texas Utils.
Elec. Co. v. FCC, 997 F.2d 925, 936 (D.C. Cir. 1993). In implementing the
1996 Act, the Commission concluded that its rate-setting authority under
§ 224(b) applies to all pole attachments by cable operators, 1998 Order, 13
FCC Rcd at 6793-94 ¶ 30, even if the attachment itself is not used “solely to
provide cable service,” 47 U.S.C. § 224(d)(3).
The Supreme Court affirmed the Commission’s analysis in Gulf
Power, 534 U.S. 327. The Court explained that the cable- and telecom- rates
are not the “exclusive rates allowed” under § 224, id. at 335, and for
attachments that fall outside those specific standards, “the FCC must
prescribe just and reasonable rates” under § 224(b) “without necessary
reliance upon a specific statutory formula devised by Congress,” id. at 336.
The Court rejected the argument that “the straightforward language of
12
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 23 of 88
[§ 224’s] subsections (d) and (e) directs the FCC to establish two specific just
and reasonable rates [and] no other rates are authorized.” Id. at 335 (internal
quotation marks omitted). The Court found the Commission’s decision to
regulate cable attachments used to provide broadband services to be “more
sensible” than the utilities’ view, under which a cable operator “subjects itself
to monopoly pricing” if it “attempts to innovate at all and provide anything
other than pure television.” Id. at 339. The utilities’ position, the Court
recognized, “would defeat Congress’ general instruction to the FCC to
‘encourage the deployment’ of broadband Internet capability and, if
necessary, ‘to accelerate deployment of such capability by removing barriers
to infrastructure investment.’ ” Ibid. (quoting 47 U.S.C. §§ 1302(a) & (b)).
II.
THE ORDER
ON REVIEWA. In November 2007, the Commission issued a notice of proposed
rulemaking “to consider comprehensively the appropriate changes, if any,” to
the pole-attachment regime in light of “nearly a decade of experience” since
the 1996 Act. Implementation of Section 224 of the Act, 22 FCC Rcd 20195,
20196 ¶ 2 (2007) (NPRM) (J.A. __). In May 2010, the Commission issued a
further notice of proposed rulemaking to consider actions that would “lower
the costs of telecommunications, cable, and broadband deployment and to
promote competition, as recommended in the National Broadband Plan.”
13
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 24 of 88
Implementation of Section 224 of the Act, 25 FCC Rcd 11864, 11865 ¶ 1
8
(2010) (FNPRM) (J.A. __). The Commission sought comment on
“reinterpret[ing] the section 224(e) telecom rate so as to yield pole rental rates
that reduce disputes [about which rate applies] and investment disincentives.”
Id. ¶ 122 (J.A. __). Although the FNPRM did not “propose specific rules” for
regulating ILEC attachments (an issue raised by the initial NPRM), it asked
commenters to “refresh the record” on that issue. Id. ¶¶ 143 (J.A. __). The
FNPRM also proposed to revise 47 C.F.R. § 1.1410(c). That provision, since
its adoption in 1978, had permitted successful pole-attachment complainants
to obtain refunds only as far back as the filing of the pole-attachment
complaint. The Commission proposed to eliminate that limitation and,
instead, provide relief that accrues on the date specified by the relevant
statute of limitations. FNPRM ¶ 88 (J.A. __).
8 The National Broadband Plan was developed pursuant to the American
Recovery and Reinvestment Act of 2009 (Recovery Act), Pub. L. No. 111-5,
123 Stat. 115, which required the FCC to develop a “national broadband
plan” for “ensur[ing] that all people of the United States have access to
broadband capability.” Id. § 6001(k), 123 Stat. at 515-516. In addressing the
issue of access to infrastructure, the Plan found that “[a]pplying different
[pole attachment] rates based on whether the attacher is classified as a ‘cable’
or a ‘telecommunications’ company distorts attachers’ deployment
decisions,” and “may be deterring broadband providers that pay lower pole
rates from extending their networks or adding capabilities (such as high-
capacity links to wireless towers).” National Broadband Plan 110 (available
at http://www.broadband.gov/plan/).
14
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 25 of 88
B. On April 7, 2011, the Commission released the Order on review.
As relevant here, the Order established a new just and reasonable telecom
rate based upon a revised definition of “cost,” applied § 224(b) to ILEC
attachments, and extended the refund period.
1. Telecom rate. Citing Congress’s directive under 47 U.S.C.
§ 1302(b), the Commission explained that the Order was “designed to
promote competition and increase the availability of robust, affordable
telecommunications and advanced services to consumers throughout the
nation.” Order ¶ 1 (J.A. __). The Commission pointed out that “different
interpretations” of the ambiguous term “cost” in section 224(e) “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.” Id. ¶ 8 (J.A. __); see also id.
¶¶ 156-159 (J.A. __). Balancing the statutory goal of accelerating broadband
deployment against “the interest in continued pole investment,” the
Commission adopted “a definition of cost that yields a new ‘just and
reasonable’ telecommunications rate” that “generally will recover the same
portion of pole costs as the current cable rate.” Id. ¶ 8 (J.A. __).
The Commission found that “pole rental rates play a significant role in
the deployment and availability of voice, video, and data networks.” Order
15
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 26 of 88
¶ 172 (J.A. __). The original telecom rate, the Commission explained, was
“sufficiently high that it hinder[ed these] important statutory objectives,” and
“lowering the telecom rate[] will better enable providers to compete on a
level playing field, will eliminate distortions in end-user choices between
technologies, and lead to provider behavior being driven more by underlying
economic costs than arbitrary price differentials.” Id. ¶ 147 (J.A. __). The
“new formula will minimize the difference in rental rates paid for attachments
that are used to provide voice, data, and video services, and thus will help
remove market distortions that affect attachers’ deployment decisions.” Id.
¶ 126 (J.A. __). “Removing these barriers to telecommunications and cable
deployment,” the Commission explained, “will enable consumers to benefit
through increased competition, affordability, and availability of advanced
communications services, including broadband,” while still enabling pole
owners to earn a fair return when they provide access. Ibid.
To that end, the Commission rejected continued use in the telecom
formula of the fully-allocated-cost approach it had imported from the cable-
rate formula. Under the Order, the new telecom-rate formula adopts two
alternative measures of cost, with utilities receiving the benefit of the measure
that produces the higher rate.
16
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 27 of 88
First, the Commission recognized that telecommunications attachers
have historically contributed to the capital costs of the pole network (beyond
those costs recovered through make-ready fees), and it did not want the new
telecom rate to “unduly burden [utility] ratepayers.” Order ¶ 149 (J.A. __).
Balancing that concern against the statutory goal of promoting broadband
deployment, the Commission decided to “allow the pole owner to charge a
monthly pole rental rate that reflects some contribution to capital costs” (in
addition to those recovered through make-ready fees), while also reducing the
telecom rate so that it “will, in general, approximate the cable rate.” Ibid.
Heeding Congress’s direction that pole-attachment formulas should be
“ ‘simple and expeditious,’ ” the Commission settled on an approach that
defines costs “in terms of a percentage of the fully allocated costs” of the pole
– specifically, 66 percent of fully allocated costs in urban areas and 44
9
percent in non-urban areas. Ibid. (quoting S. Rep. No. 95-580, at 21 (1977)).
This measure of cost produces a rate that “will, in general, approximate the
9 This approach sets the telecom rate equal to:
Space
Factor × Cost, where Cost:
in Urbanized Service Areas = 0.66 × (Net Cost of a Bare Pole ×
Carrying Charge Rate)
in Non-Urbanized Service Areas = 0.44 × (Net Cost of a Bare Pole ×
Carrying Charge Rate)
Order, App. A (J.A. __).
17
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 28 of 88
cable rate,” thereby promoting network investment and broadband
deployment. Ibid.
Second, although the measure of cost discussed above will produce a
higher telecom rate “in most cases,” Order ¶ 149 (J.A. __), the Commission
established an alternative measure of cost that utilities may use if it benefits
them to do so. The alternative approach is based on the principle of “cost
causation,” under which the “customer – the cost causer – pays a rate that
covers” the costs for which it is “causally responsible.” Order ¶ 143 (J.A.
__). Under this approach, a pole owner may recover its administrative and
maintenance costs through the telecom rate, but not capital costs other than
those associated with make-ready expenses (which are recovered directly
10
from the attacher). Administrative and maintenance expenses were
included because “it is likely that an attacher is causally responsible” for at
11
least some of those costs. Id. ¶ 145 (J.A. __). The Commission also noted
10 This approach sets the telecom rate equal to:
Space Factor × Net Cost of Bare Pole × Administrative and
Maintenance Carrying Charge Rate
Order, App. A (J.A. __).
11 The Commission recognized that an attacher “might not be the cost causer
with respect to all” administrative and maintenance costs. Order ¶ 145 (J.A.
__). As the agency explained, however, a pure cost-causation approach
(which would define costs as marginal costs) would be difficult to administer
and, because of § 224(e)’s apportionment rules, could produce a telecom rate
18
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that capital costs caused by a telecommunications attacher have long been
recovered through make-ready charges, id. ¶ 143 (J.A. __), which “the utility
itself sets” without regard to “any mandatory rate formula set by the
Commission,” id. ¶ 185 (J.A. __). The agency determined that other capital
costs (i.e., rate of return, taxes, and depreciation) are properly excluded under
a cost-causation approach because the pole owner would have incurred those
costs “regardless of the demand for attachments.” Id. ¶¶ 143-144 (J.A. __).
2. ILEC attachments. In concluding that it has authority under
§ 224(b) to regulate ILEC attachments, the Commission focused on the
definition of “pole attachment” in § 224(a)(4), as amended by the 1996 Act.
That definition, the Commission noted, encompasses “any attachment by a
. . . provider of telecommunications service to a pole.” Order ¶ 209 (J.A. __).
“Because incumbent LECs are ‘providers of telecommunications service,’
‘pole attachment’ as defined in section 224(a)(4) includes attachments of
incumbent LECs.” Id. ¶ 211 (J.A. __). The Commission acknowledged that
the definition of “telecommunications carrier” in § 224(a)(5) excludes ILECs,
but it explained that the relevant term “provider of telecommunications
below marginal cost. See Order ¶¶ 142-143 & n.428 (J.A. __). By contrast,
administrative and maintenance expenses associated with a pole are easily
ascertainable from existing regulatory accounts and include costs exceeding
the marginal cost of providing space to an attacher. See Order ¶ 145 & n.435
(J.A. __).
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service” is a “distinct” phrase that should be given its own interpretation. Id.
¶¶ 210 (J.A. __).
The Commission also noted significant changes in “market realities”
since it had concluded in 1998 that ILECs were not pole attachers entitled to
reasonable rates under § 224(b), which further supported the agency’s
rejection of its prior interpretation in the 1998 Order. See Order ¶¶ 206, 208
(J.A. __); see also page 11, supra. The Commission observed that ILECs “as
a whole” now “appear to own approximately 25-30 percent of poles and
electric utilities appear to own approximately 65-70 percent of poles,
compared to historical ownership levels that were closer to parity.” Order
¶ 206 (J.A. __). This disparity may leave ILECs in “an inferior bargaining
position,” in contrast with their approximate parity with electric utilities as a
historical matter, preventing “market forces and independent negotiations”
from producing just and reasonable rates for ILEC attachments to electric
poles. Id. ¶ 199 (J.A. __). The Commission concluded that regulating ILEC
attachments in this circumstance would “promote competition,” id. ¶ 206
(J.A. __), and encourage broadband deployment by “reduc[ing] input costs”
and “expand[ing] opportunities for investment,” id. ¶ 208 (J.A. __).
The Commission recognized that “the issues related to rates for pole
attachments by [ILECs] raise complex questions” because of ILECs’ status as
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pole owners and their historical use of “joint use” and other agreements to
obtain access to other utility poles. Order ¶ 214 (J.A. __). The Commission
accordingly declined to develop a rate formula for ILEC attachments.
Instead, the agency explained that it will evaluate pole-attachment complaints
brought by ILECs on “a case-by-case basis” to determine whether the rates,
terms, and conditions imposed on ILEC attachments are consistent with
§ 224(b). Ibid.
3. Refund period. Finally, the Commission adopted its proposal to
extend the refund period from the date on which the complaint is filed to the
date determined by the applicable statute of limitations. Order ¶ 111 (J.A.
__). The Commission rejected the argument that attachers would “attempt to
maximize their monetary recovery” by delaying the filing of a complaint,
finding no basis for concluding that attachers have “more incentive than any
other plaintiff to delay filing a complaint in order to make additional over-
payments that will later need to be refunded.” Ibid.
C. On June 7, 2011, petitioners sought a stay pending judicial review
of the new telecom-rate formula. This Court denied the stay motion on
August 5, 2011.
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SUMMARY OF ARGUMENT
I. Congress delegated authority to the FCC to implement and interpret§ 224, and granted the agency broad discretion to develop a methodology for
establishing just and reasonable pole-attachment rates. The Commission
reasonably exercised that discretion when it modified the telecom-rate
formula by interpreting the unadorned – and inherently ambiguous – term
“cost” in § 224(e) to develop a cost methodology that promotes federal policy
goals.
Contrary to petitioners’ contentions, §§ 224(e)(2) and (3) do not
compel use of fully allocated cost in the telecom rate. In contrast with
§ 224(d), which specifies two alternative definitions of cost for purposes of
the cable-rate formula, § 224(e) does not contain any definition of cost.
Sections 224(e)(2) and (3), by their terms, address the apportionment of costs
among attaching entities, but not the calculation of costs to be apportioned.
Petitioners make no attempt to show that the new telecom rate is
confiscatory or otherwise falls outside a range of reasonableness. That is
fatal to their claim. The Commission acted reasonably in allowing utilities to
recover a portion of their fully allocated cost from telecommunications
attachers in the majority of cases where doing so benefits the utility. The
Commission reasonably balanced the competing policies of promoting
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competition and broadband deployment, and protecting utility ratepayers
from undue costs. The Commission also acted reasonably in establishing
specific percentages of fully allocated cost in urban and non-urban areas so as
to cause the telecom rate to generally approximate the cable rate.
Petitioners attack the Commission’s decision to rely on cost-causation
principles in setting the alternative cost measure for the telecom rate, but the
Commission explained why the “cost of providing” space on a pole need not
include capital costs that the pole owner would incur even in the absence of
pole attachments. To the extent a pole owner incurs any capital costs in
providing space, the Commission explained that such costs have long been
directly recoverable in full from the attaching entity through make-ready fees.
II. The Commission reasonably concluded that it has authority under
47 U.S.C. § 224(b) to regulate ILEC pole attachments on electric utility
poles. Section 224(a)(4) defines “pole attachment” to include attachments by
a “provider of telecommunications service.” ILECs are “provider[s] of
telecommunications service,” so their attachments to utility poles are “pole
attachment[s]” for purposes of § 224.
Contrary to petitioners’ argument, the exclusion of ILECs from
§ 224(a)(5)’s definition of “telecommunications carrier” does not require the
Commission to interpret the term “provider of telecommunications service”
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to exclude ILECs. Congress used both terms in § 224, and, consistent with
basic canons of statutory construction, the Commission reasonably
interpreted the two distinct statutory terms to carry distinct meanings.
The Commission also provided sound policy reasons for its decision to
regulate ILEC attachments. The agency found that an increasing disparity in
pole ownership between ILECs and other pole owners could affect ILECs’
ability to negotiate just and reasonable attachment rates, which in turn could
frustrate federal competition and broadband deployment goals. Substantial
record evidence supports the Commission’s action, and its adoption of a case-
by-case approach ensures that regulation will be applied only where
necessary to ensure just and reasonable rates.
III. Petitioners likewise fail in their challenge to the Commission’s
extension of the refund period to the date determined by the applicable statute
of limitations. Petitioners’ challenge to the agency’s statutory authority is
waived (because it was never raised before the agency) and, in any event,
meritless. Section 224 confers on the Commission expansive authority to
fashion “necessary and appropriate” procedures for resolving pole attachment
complaints, 47 U.S.C. § 224(b)(1), and the statute’s silence regarding the
triggering date for refunds authorizes the agency to “fill [that] gap[],” Gulf
Power, 534 U.S. at 339. The new refund rule encourages pre-complaint
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negotiations, and thus represents a reasonable exercise of the Commission’s
statutory authority to adjudicate pole-attachment disputes.
ARGUMENT
I.
THE ORDER
IS SUBJECT TO DEFERENTIALSTANDARDS OF REVIEW
Judicial review of the Commission’s interpretation of the
Communications Act is governed by Chevron USA, Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984). Under Chevron, if the intent of
Congress is clear, “the court, as well as the agency, must give effect to [that]
unambiguously expressed intent.” Id. at 842-843. If, however, “the statute is
silent or ambiguous with respect to the specific issue, the question for the
court is whether the agency’s answer is based on a permissible construction
of the statute.” Id. at 843. The agency’s “view governs if it is a reasonable
interpretation of the statute – not necessarily the only possible interpretation,
nor even the interpretation deemed most reasonable by the courts.” Entergy
Corp. v. Riverkeeper, Inc., 129 S. Ct. 1498, 1505 (2009); see also AT&T v.
Iowa Utils. Bd., 525 U.S. 366, 397 (1999) (“[T]he 1996 Act is not a model of
clarity. It is in many important respects a model of ambiguity or indeed even
self-contradiction. . . . But Congress is well aware that the ambiguities it
chooses to produce in a statute will be resolved by the implementing
agency.”).
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Under the Administrative Procedure Act, the Commission’s analysis
must be upheld unless it is “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). “[T]he
ultimate standard of review is a narrow one,” and the “court is not
empowered to substitute its judgment for that of the agency.” Citizens to
Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971). Judicial
deference to the Commission’s “expert policy judgment” is especially
appropriate where, as here, the “subject matter . . . is technical, complex, and
dynamic.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545
U.S. 967, 1002-1003 (2005) (internal quotation marks omitted).
II.
THE COMMISSION LAWFULLY MODIFIED THE
TELECOM-RATE FORMULA
availability of new broadband facilities and services that arose from disparate
rates,” Order ¶ 151 (J.A. __), the Commission revised the telecom-rate
formula so that the telecom rate more closely approximates the cable rate. In
place of the fully allocated cost of utility poles, the Commission adopted two
alternative measures of cost to calculate a just and reasonable telecom rate
under 47 U.S.C. § 224(e), and explained that pole owners are entitled to a
telecom rate defined by whichever of the two measures is more favorable to
them. Order ¶ 161 (J.A. __).
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Petitioners’ challenges to the new telecom-rate formula fall short.
Judicial review of the FCC’s rate-setting decisions is highly deferential, and
petitioners have not come close to demonstrating that the Commission has
abused its broad discretion in this case.
A. The Commission Has Broad Rate-setting Authority
Under § 224
Section 224(e)(1) requires the Commission to adopt a telecom rate thatis “just, reasonable, and nondiscriminatory.” To achieve that result,
§§ 224(e)(2) and (3) describe how the Commission is to apportion among
attaching entities the “cost of providing usable space” (47 U.S.C. § 224(e)(3))
and the “cost of providing space on a pole . . . other than the usable space,”
47 U.S.C. § 224(e)(2). Section 224(b)(2) also authorizes the Commission to
“prescribe by rule regulations to carry out the provisions of” § 224. These
provisions vest in the Commission broad discretion to establish a
methodology for determining a just and reasonable rate that takes account of
important objectives of federal communications policy, including the
congressional mandate to promote broadband deployment to all Americans.
“Under the statutory standard of ‘just and reasonable,’ it is the result
reached not the method employed which is controlling.” Federal Power
Comm’n v. Texaco Inc., 417 U.S. 380, 388 (1974) (internal quotation marks
omitted). So long as the rate produced falls within a “zone of
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reasonableness,” “the Commission’s determination must be upheld.” Nader
v. FCC, 520 F.2d 182, 192 (D.C. Cir. 1975). Moreover, “[b]ecause agency
ratemaking is far from an exact science and involves ‘policy determinations
in which the agency is acknowledged to have expertise,’ [judicial] review
thereof is particularly deferential.” Time Warner Entm’t Co., L.P. v. FCC, 56
F.3d 151, 163 (D.C. Cir. 1995) (internal quotation marks omitted)).
As the Commission explained, although § 224(e) describes how “[a]
utility shall apportion the cost of providing space” on a pole, it does not
define the term “cost.” Order ¶ 156 (J.A. __) (emphasis added). Absent a
specific definition, “the word ‘cost’ . . . is a chameleon, . . . a virtually
meaningless term” whose use signifies an intent to “give rate-setting
commissions broad methodological leeway,” but “say[s] little about the
method employed to determine a particular rate.” Verizon Commc’ns, Inc. v.
FCC, 535 U.S. 467, 500-501 (2002) (internal quotation marks and citation
omitted). Thus, when the unadorned term “cost” is an element “in the
calculation of just and reasonable rates,” “regulatory bodies required to set
rates expressed in these terms have ample discretion to choose methodology.”
Id. at 499-500 (internal quotation marks omitted).
The structure of the statute confirms that Congress intended to
authorize the FCC to use its expertise in developing a cost methodology
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under § 224(e). In sharp contrast with § 224(d), which explicitly mandates
two alternative measures of cost for purposes of the cable rate (see 47 U.S.C.
§ 224(d)(1), (3)), § 224(e) leaves “cost” undefined, thereby leaving it to the
FCC to “fill [the] gap[] where the statute[] [is] silent,” Gulf Power, 534 U.S.
at 339. See Russello v. United States, 464 U.S. 16, 23 (1983) (“Where
Congress includes particular language in one section of a statute but omits it
in another section of the same Act, it is generally presumed that Congress
acts intentionally and purposely in the disparate inclusion or exclusion.”)
(brackets and internal quotation marks omitted).
B. The New Telecom-Rate Formula Represents a
Reasonable Exercise of the FCC’s Rate-setting Authority
In developing the new telecom-rate formula, the Commission sought tobalance multiple policy goals. Contrary to petitioners’ suggestion (Pet. Br.
15, 52-53), that is precisely what administrative agencies are supposed to do
when interpreting ambiguous statutory provisions. See Brand X, 545 U.S. at
980 (“[f]illing [statutory] gaps . . . involves difficult policy choices that
agencies are better equipped to make than courts”); see also New York v.
EPA, 413 F.3d 3, 25 (D.C. Cir. 2005) (“This policy choice, which reconciles
conflicting interests in accuracy and efficiency, based on years of regulatory
experience, is entitled to deference under Chevron Step 2”). Petitioners
deride this task as “results-oriented.” Pet. Br. 48. But the “result” is the one
29
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Congress sought: to “encourage the deployment . . . of advanced
telecommunications capability to all Americans . . . by utilizing . . . regulating
methods that remove barriers to infrastructure investment.” 47 U.S.C.
§ 1302(a). Indeed, “Congress has directed the FCC to make the major policy
decisions and to select the mix of regulatory and deregulatory tools the
Commission deems most appropriate in the public interest to facilitate
broadband deployment and competition.” Ad Hoc Telecomms. Users Comm.
v. FCC, 572 F.3d 903, 908 (D.C. Cir. 2009) (emphasis added). The
Commission thus may implement § 224 in light of “Congress’ general
instruction to the FCC to ‘encourage the deployment’ of broadband Internet
capability.” Gulf Power, 534 U.S. at 339 (quoting 47 U.S.C. § 1302(a)).
Consistent with its congressionally assigned mission, the Commission
found that, because “pole rental rates play a significant role in the deployment
and availability of voice, video, and data networks,” a new telecom rate was
necessary to “promote competitive and technological neutrality, and hence
more effective competition, resulting in more efficient investment,
innovation, and service provision.” Order ¶¶ 172-173 (J.A. __). As the
Commission explained, “cable operators have been arbitrarily deterred from
offering new, advanced services” because of the “financial impact” that could
result from application of a higher telecom rate. Id. ¶ 174 (J.A. __). The
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Commission also found that “implementing a low and more uniform rate”
will “eliminate competitive disadvantages that [telecommunications] carriers”
face, id. ¶ 176 (J.A. __), and will in turn “enable more efficient investment
decisions in network expansion and upgrades, most notably in the
deployment of modern broadband networks,” id. ¶ 181 (J.A. __).
At the same time, the Commission took account of the “legitimate
concerns of pole owners and other parties” (id. ¶ 6 (J.A. __)), by ensuring that
the new telecom rate adequately compensates pole owners (id. ¶¶ 182-198
(J.A. __)), preserves “appropriate incentives” for them “to invest in poles”
(id. ¶ 151 (J.A. __)), and avoids imposing an undue burden on utility
ratepayers, id. ¶ 149 (J.A. __).
Petitioners make no attempt to show that the new telecom-rate formula
produces a rate that is confiscatory or otherwise falls outside the “zone of
reasonableness” for a just and reasonable rate. See, e.g., WorldCom, Inc. v.
FCC, 238 F.3d 449, 461-462 (D.C. Cir. 2001) (“The relevant question is
whether the agency’s numbers are within a zone of reasonableness, not
whether its numbers are precisely right.”) (internal quotation marks omitted).
To the extent petitioners challenge the manner in which the Commission
balanced competing policy interests, they fail to overcome the deference due
to the Commission’s policymaking judgment. See Ad Hoc Telecomms. Users
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Comm., 572 F.3d at 908 (“[I]n matters such as this, which implicate
competing policy choices, technical expertise, and predictive market
judgments,” the Court’s review of the FCC’s policymaking decisions is
“particularly deferential.”).
1. Petitioners take issue with the Commission’s decision to allow
utilities to recover a portion (66% for urban areas and 44% for non-urban
areas) of their fully allocated costs in the majority of cases where it benefits
the utility to do so. See Pet. Br. 40-42. The Commission provided sound
reasons for its decision to rely on a percentage of fully allocated costs. The
agency explained that “permitting recovery of 100 percent of apportioned,
fully-allocated costs . . . could undermine furtherance of important statutory
objectives,” Order ¶ 148 (J.A. __), and is not statutorily required, id. ¶¶ 155-
166 (J.A. __). At the same time, however, the telecom rate should permit
some recovery of capital costs to minimize any undue burden on utility
ratepayers. Id. ¶ 149 (J.A. __). “Defining cost in terms of a percentage of
fully allocated costs” thus offered a “readily administrable approach” for
balancing these competing considerations, while honoring “Congress’s
direction that the Commission’s pole attachment rate regulations be ‘simple
and expeditious’ to implement.” Id. ¶ 149 (J.A. __).
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For similar reasons, petitioners’ attack on the specific percentages used
in the telecom-rate formula fails. Pet. Br. 49-51. The FCC adequately
explained the rationale for the specific numbers it chose: those percentages
“provide a reduction in the telecom rate” that will “in general, approximate
the cable rate” in both urban and rural areas. Order ¶ 149 (J.A. __).
Applying the urban rate to non-urban areas, by contrast, would impose
greater burdens on “providers of broadband and other communications
services” in such areas and would fail to account for the “increased
challenges” those areas face in terms of broadband deployment. Id. ¶ 150
(J.A. __) (finding that “cost characteristics [in rural areas] can be different,”
and “the availability of, and competition for, broadband services tends to be
less today [in rural areas] than in urban areas.”). The Commission also
observed that the cable rate had not produced a “shortage of pole capacity,”
and, therefore, approximating that rate in the telecom formula likely would
not diminish pole owners’ “incentives to invest in poles.” Id. ¶ 151 (J.A. __).
The Commission’s line-drawing to balance “congressional policies” is
“necessarily entitled to substantial deference,” Nat’l Ass’n of State Util.
Consumer Advocates v. FCC, 372 F.3d 454, 461 (D.C. Cir. 2004), and its
selection of percentages falls well within the agency’s discretion. See, e.g., In
re Permian Basin Area Rate Cases, 390 U.S. 747, 776-777 (1968) (because
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“legislative discretion implied in the rate making power . . . embrac[es] the
method used in reaching the legislative determination as well as that
determination itself,” “[i]t follows that rate-making agencies are not bound to
the service of any single regulatory formula.”).
2. Petitioners next challenge the alternative measure of the telecom
rate, which is based upon a cost-causation approach. Pet. Br. 49. They argue
that Congress would have used § 224(d)’s “additional cost” standard had it
“intended the Telecom Rate to be based on a cost causation theory.” Pet. Br.
46. That argument “overlooks the obvious difference between a statutory
requirement . . . and a statutory authorization.” Alaska Dept. of Envtl.
Conservation v. EPA, 540 U.S. 461, 491 (2004). A “congressional mandate
in one section and silence in another often suggests not a prohibition but
simply a decision not to mandate any solution in the second context, i.e., to
leave the question to agency discretion.” Catawba County, N.C. v. EPA, 571
F.3d 20, 36 (D.C. Cir. 2009) (internal quotation marks omitted). Here, the
Commission explained that the cost-causation approach provides a reasonable
basis for determining the “cost of providing” space on a pole, because it
excludes those costs (i.e., capital costs not recovered through make-ready
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fees) that “would have been incurred regardless of the demand for
12
attachments.” Order ¶¶ 143-144 (J.A. __); see also id. ¶ 185 (J.A. __).
Consumers Energy protests that “space is available on the pole to
provide to the attacher because the utility made the necessary capital
investment and incurred the necessary capital costs.” Int. Br. 22. In Verizon,
the Supreme Court rejected the argument that an entity’s past investment in
creating an asset must be considered part of the cost of providing that asset to
others. At issue in Verizon was a provision that required ILECs to provide
competitors access to elements of their networks at rates that were based on
the “cost . . . of providing the . . . network element.” 47 U.S.C. § 252(d)(1).
The ILECs argued that such cost “must be calculated using the incumbent’s
past investment in the element and the means of providing it.” Verizon, 535
U.S. at 498. The Court made clear, however, that the term “ ‘cost’ has no
such clear implication,” ibid., but allows the Commission to develop a rate
12 Amicus Edison Electric Institute (EEI) contends that the Commission’s
reading of § 224(e) is undermined by the statute’s use of the definite article
(“the cost”) in describing the cost of providing space. Amicus Br. 21. Not
so. The Order adopts two alternative measures of cost; under either measure,
the Commission’s methodology computes “the cost” of providing space for
purposes of the telecom-rate formula. For similar reasons, EEI is wrong in
suggesting (id. at 22) that the new telecom-rate formula produces a “range” of
rates; rather, the formula produces a single telecom rate based on whichever
of the two alternative measures of cost results in a higher rate – an approach
that benefits the utility.
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methodology without “reference to historical investment,” id. at 501. As the
Commission explained in this case, “a pole owner recovers the entire capital
cost of a new pole through make-ready charges from the new attacher when a
new pole is installed to enable the attachment.” Order ¶ 143 (J.A. __).
Consistent with Verizon, the Commission reasonably concluded that it was
not required to include other capital costs – not caused by the pole attachment
– in establishing its alternative measure of cost under the telecom rate.
3. Petitioners’ contention that the Commission did not “meaningfully
link[]” the rule change with “broadband deployment decisions,” Pet. Br. 48,
ignores ten paragraphs in the Order extensively addressing that question.
Order ¶¶ 172-181 (J.A. __). As the Commission explained, the record
showed that “reducing the current disparity in cable and telecom rates, which
distort investment decisions for telecommunications carriers and cable
operators, represents the most effective means of promoting broadband
deployment.” Id. ¶ 174 (J.A. __) (internal quotation marks omitted). For
instance, the National Cable and Telecommunications Association provided
evidence that rate differences could “amount to approximately $90 million
and $120 million per year, which could ultimately affect subscribers and
future infrastructure investment, including broadband deployment.” Id. ¶ 175
(J.A. __). The record also contained evidence that the new telecom rate “will
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reduce disputes and costly litigation about” the rate formula that applies to
broadband. Id. ¶ 174 (J.A. __). The Commission found, moreover, that
“implementing a low and more uniform rate” will “eliminate competitive
disadvantages that [telecommunications] carriers” face, id. ¶ 176 (J.A. __),
thereby “enabl[ing] more efficient investment decisions in network expansion
and upgrades, most notably in the deployment of modern broadband
13
networks,” id. ¶ 181 (J.A. __).
C. Section 224(e) Does Not Require Use of a Fully Allocated
Cost Measure
1. Petitioners attempt to dismiss Congress’s policy goals as irrelevantbecause §§ 224(e)(2) and (3) speak of the “cost of providing” usable and
unusable space on a pole. Nothing in the text of § 224(e), however, requires
the ambiguous term “cost” to be interpreted as “fully allocated cost.” Indeed,
as shown above, the statutory scheme strongly suggests the opposite:
Congress chose to “incorporat[e] a fully allocated cost methodology” (Order
13 EEI incorrectly asserts that the Commission ignored the view of its experts
that setting rates based on cost-causation principles would have little effect on
broadband deployment. EEI Br. 29-30. As noted, the new telecom formula
will, in most cases, generate a rate that is higher than the rate produced by the
cost-causation approach. See page 18, supra. Moreover, EEI’s own experts
conceded that “setting ‘uniform’ rates can enhance economic efficiency” by
“allow[ing] the competitors to compete with one another strictly on their own
merits.” Reply Comments of the Edison Electric Institute and the Utilities
Telecom Council, WC Docket No. 07-245 (Oct. 4, 2010), Exh. A,
Declaration of Jonathan Orszag and Allan Shampine at 5 ¶ 8 (J.A. __).
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¶ 159 (J.A. __)) into the maximum cable rate by referring to the “operating
expenses and actual capital costs of the utility attributable to the entire pole.”
47 U.S.C. § 224(d)(1). By contrast, § 224(e) uses the undefined term “cost.”
Nor does the word “space” in § 224(e) advance petitioners’ argument.
See Pet. Br. 42-43, 45. In petitioners’ view, by establishing rules for
apportioning the “costs of providing” both “usable space” and “other
than usable space” (47 U.S.C. §§ 224(e)(2) & (3)), Congress expressed an
intent that the “costs associated with the entire pole,” including capital costs,
be included in the telecom rate. Pet. Br. 42, 45, 47. Sections 224(e)(2) and
(3), however, speak only to the apportionment of costs, not the computation
of costs. See Order ¶ 161 (J.A. __). The computation of costs under § 224(e)
is an antecedent question that the statute leaves to the Commission’s
policymaking discretion.
Petitioners further maintain that Congress must have expected the
telecom-rate formula to use fully allocated cost because the cable-rate
formula did so when § 224(e) was enacted. See Pet. Br. 43-44; see also Int.
Br. 18-19, Amicus Br. 28. As noted above, nothing in the statutory language
compels that conclusion. The Commission, moreover, comprehensively
canvassed the legislative history of the 1996 Act, yet found no indication that
Congress intended to limit the Commission’s discretion to utilize a different
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measure of cost in the telecom rate. See Order ¶¶ 162-166 (J.A. __). “[M]ost
telling,” the Commission pointed out, “is that no express language requiring
fully allocated costs was made part of the final statute.” Order ¶ 163 (J.A.
__).
2. Petitioners contend that the telecom rate always must be higher than
the cable rate. Pet. Br. 36-38; see also Int. Br. 24-25, Amicus Br. 25-27. As
the Commission explained, the new telecom rate “could, in some
14
circumstances, be higher than the cable rate.” Order ¶ 168 (J.A. __).
Conversely, the new telecom rate could be lower than the cable rate (ibid.) – a
fact that also was true of the old rate formula, because “the rate for any single
14 As petitioners point out (Pet. Br. 38-39, 44), the Commission occasionally
made statements suggesting that this result flowed from the statute. In the
Order on review, however, the Commission explained that these statements
“were not based on any actual statutory analysis” and are “more properly
understood as flowing simply from the fact that, as the Commission initially
had implemented [§] 224(e), it generally resulted in a higher rate.” Order
n.527 (J.A. __) (citing 1998 Order, 13 FCC Rcd at 6795-96 ¶ 34)). The
Commission “reject[ed]” any contrary “dicta in prior Commission decisions”
as inconsistent with the statutory text. Order ¶ 171 (J.A. __).
For similar reasons, Petitioners read too much into the Eleventh Circuit’s
observation in Alabama Power that the telecom rate “ ‘provided in 47 U.S.C.
§ 224(e) yields a higher rate for telecommunications attachments than the
Cable Rate provides for cable attachments.’ ” See Pet. Br. 37-38 (quoting
Alabama Power Co., 311 F.3d at 1371 n.23). That observation merely
reflected that, under the Commission’s regulations at the time, the telecom
rate established in section 224(e) generally yielded a higher rate for
telecommunications attachments than the cable rate provided for cable
attachments. The Eleventh Circuit did not suggest that the statute
unambiguously compels different rates.
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‘attaching entity’ varies inversely with the total number of attachers.”
Southern Co. v. FCC, 313 F.3d 574, 580 (D.C. Cir. 2002); see also Order
¶ 171 (“even as initially implemented, the telecom rate theoretically could be
higher or lower than the cable rate”). Nothing in the statutory text compels
the Commission to adopt a cost measure for the telecom rate that produces a
rate that will always exceed the cable rate. See Order ¶ 168 (J.A. __).
Searching for support for their position, petitioners look to 47 U.S.C.
§§ 224(d)(3) and (e)(4). Together, those provisions apply the cable rate to
telecommunications attachments for the first five years after passage of the
1996 Act (47 U.S.C. § 224(d)(3)) and then, for the next five years, require a
phase-in period for “[a]ny increase in the rates for pole attachments,” 47
U.S.C. § 224(e)(4). As the Commission explained, the term “any increase”
simply covers those scenarios in which the resulting telecom rate in fact is
higher than the cable rate; Congress would not have referred to “any”
increase if such increases were invariably mandated. See Order ¶ 168 (J.A.
__). Indeed, the Commission’s rules have always “recognized that the
telecom rate could go down as well as up,” and thus sensibly provided that
“[t]he five year phase-in is to apply to rate increases only,” while “[r]ate
40
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reductions are to be implemented immediately.” Order ¶ 168 (J.A. __)
15
(quoting 47 C.F.R. § 1.1409(f)).
III. THE COMMISSION HAS AUTHORITY UNDER § 224(b)
TO REGULATE POLE ATTACHMENTS BY ILECS
Section 224(b) provides 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.” A “pole attachment,” in turn, is “any
attachment by a cable television system or provider of telecommunications
service to a pole . . . owned or controlled by a utility.” 47 U.S.C.
§ 224(a)(4). The Commission reasonably concluded that it may regulate pole
attachments by ILECs under § 224(b) because ILECs indisputably are
“provider[s] of telecommunications service.”
15 Petitioners argue that the National Broadband Plan suggested that only
Congress can remedy the disparity between the cable rate and the telecom
rate. See Pet. Br. 52. That is incorrect. In fact, the Plan recommended that
“[t]he FCC should establish rental rates for pole attachments that are as low
and close to uniform as possible, consistent with Section 224 . . . to promote
broadband deployment.” National Broadband Plan 110 (emphasis added);
see id. at 110-111 (Recommendation 6.1). The Plan separately called for
congressional action with respect to distinct pole-attachment issues: the
statutory exemptions for poles “in states that adopt their own system of
regulation” and for “poles owned by co-operatives, municipalities and non-
utilities.” Id. at 112.
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A. The Commission Reasonably Determined That § 224
Authorizes the FCC to Regulate ILEC Attachments
In Gulf Power, the Supreme Court addressed the scope of theCommission’s regulatory authority under § 224. At issue in that case were
two types of pole attachments – attachments by cable television systems that
offer “comingled” video and broadband services and attachments by wireless
carriers. The Court held that the Commission has the authority to regulate
both types of attachments. In addressing cable attachments, the Court
explained that “what matters under the statute” is that the term “pole
attachment” is expressly defined to cover “an attachment ‘by a cable
television system.’ ” 534 U.S. at 333. As the Court explained, the definition
of “pole attachment” in § 224(a)(4) delineates “the theoretical coverage of
[§ 224] as a whole.” Id. at 336.
Looking to the definition of “pole attachment” for the “dispositive
text,” the Court also held that “[a] provider of wireless telecommunications
service is a ‘provider of telecommunications service,’ so its attachment is a
‘pole attachment.’ ” 534 U.S. at 340. The Court rejected the utilities’ attempt
to limit the scope of “pole attachment” by “seek[ing] refuge in other parts of
the statute,” in particular, the definition of “utility” in 47 U.S.C. § 224(a)(1).
Ibid. That definition, the Court explained, “concerns only whose poles are
covered, not which attachments are covered,” by § 224. Ibid.
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In challenging the Commission’s authority to regulate ILEC pole
attachments, petitioners ignore Gulf Power and, consequently, repeat the
same errors the utilities made in that case. In particular, petitioners attempt to
limit the scope of “pole attachment” by “seek[ing] refuge in other parts of the
statute.” Gulf Power, 534 U.S. at 340. That effort fails.
1. A “telecommunications service” is the “offering of
telecommunications for a fee directly to the public.” 47 U.S.C. § 153(53).
ILECs indisputably provide telecommunications services. Therefore, under
the “dispositive text” of § 224(a)(4), which delineates the “coverage of
[§ 224] as a whole,” an ILEC “is a ‘provider of telecommunications service,’
so its attachment is a ‘pole attachment’ ” subject to § 224. Gulf Power, 534
U.S. at 336, 340.
In an effort to escape this logic, petitioners focus on the definition of
“telecommunications carrier.” Pet. Br. 21. For most purposes, a
“telecommunications carrier” is defined as “any provider of
telecommunications services.” 47 U.S.C. § 153(51). “For purposes of
[§ 224],” however, “the term ‘telecommunications carrier’ (as defined in
[§ 153]) does not include” ILECs. 47 U.S.C. § 224(a)(5). In petitioners’
view, the undefined term “provider of telecommunications service” by
implication must also be read to exclude ILECs.
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“The short answer” to petitioners’ argument “is that Congress did not
write the statute that way.” Corley v. United States, 129 S. Ct. 1558, 1567
(2009) (internal quotation marks omitted). “When a statute does not define a
term, we typically give the phrase its ordinary meaning.” FCC v. AT&T Inc.,
131 S. Ct. 1177, 1182 (2011) (internal quotation marks omitted). The
ordinary meaning of “provider of telecommunications service” encompasses
ILECs, which is precisely why Congress found it necessary to exclude ILECs
from the definition of “telecommunications carrier” for purposes of § 224,
when it intended that exclusion.
Had Congress wanted to broadly exclude ILEC attachments from
§ 224, “it easily could have written” the definition of “pole attachment” to
refer to any attachment by a “telecommunications carrier.” Burgess v. United
States, 553 U.S. 124, 130 (2008). Indeed, Congress elsewhere in § 224 made
clear that it was conferring certain rights on “telecommunications carrier[s]”
rather than “provider[s] of telecommunications service.” Thus, Congress
limited application of the telecom rate to attachments used by
“telecommunications carriers to provide telecommunications services.” See
47 U.S.C. § 224(e)(1). Likewise, Congress conferred a statutory right to
nondiscriminatory access to utility poles on “cable televisions system[s]” and
“telecommunications carrier[s],” but not on ILECs, which are typically pole
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owners themselves. 47 U.S.C. § 224(f)(1); see page 46, infra. Congress’s
decision to use both “provider of telecommunications service” and
“telecommunications carrier” in § 224 to delineate separate statutory rights
and obligations should not be “ascribe[d] . . . to a simple mistake in
draftsmanship.” Corley, 129 S. Ct. at 1567 (2009) (internal quotation marks
omitted); see also Recording Indus. Ass’n of Am., Inc. v. Verizon Internet
Servs., Inc., 351 F.3d 1229, 1235 (D.C. Cir. 2003) (“Where different terms
are used in a single piece of legislation,” the courts “presume that Congress
intended the terms have different meanings.”) (brackets and internal quotation
16
marks omitted). The Commission reasonably interpreted the two terms to
have distinct meanings.
Petitioners mention in passing that ILECs that own poles fall within the
definition of “utility” in § 224(a)(1), Pet. Br. 20, 24, but they do not develop
any argument based on that definition. That is understandable. Although the
Commission once assumed that ILECs could not be both attaching entities
16 Petitioners wrongly assert that “numerous court decisions” foreclose the
Commission’s interpretation of § 224(a)(4). Pet. Br. 21-22. None of the
three cases petitioners cite holds that “providers of telecommunications
service” and “telecommunications carrier” must be construed as synonymous
terms for purposes of § 224. Indeed, one of those cases makes clear that
“[o]nly a judicial precedent holding that the statute unambiguously forecloses
the agency’s interpretation, and therefore contains no gap for the agency to
fill, displaces a conflicting agency construction.” Brand X, 545 U.S. at 982-
983 (emphasis added). As shown above, that is not the case here.
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and “utilities,” see page 11, supra, Gulf Power has since made clear that
“utility” defines “only whose poles are covered, not which attachments are
covered.” 534 U.S. at 340.
2. Petitioners incorrectly claim that regulating ILEC attachments
conflicts with other provisions of the statute.
a. Petitioners argue that it is “arbitrary” (Pet. Br. 35; see also Int. Br.
11, Amicus Br. 13) to regulate ILEC attachments because ILECs are not
entitled to “nondiscriminatory access” to utility poles under 47 U.S.C.
§ 224(f)(1). As the Commission explained, however, the regime that
petitioners contend is arbitrary is the same one that applied to cable operators
before the 1996 Act: “a regime of regulated rates without a statutory right of
access.” Order ¶ 212 (J.A. __); see also Florida Power, 480 U.S. at 251.
Petitioners have not shown that this congressionally and judicially approved
framework for regulating pole attachments was irrational. As the
Commission noted, moreover, regulating attachments in the absence of
statutory access rights makes sense in the context of ILEC attachments.
Given ILECs’ “continued pole ownership,” denying them a statutory right of
access “ensure[d] the continued incentives of [ILECs] to negotiate with other
utilities with respect to access to its poles.” Order ¶ 212 (J.A. __).
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Petitioners nonetheless assert that regulating ILEC attachments under
§ 224(b) “contradict[s]” (Pet. Br. 35) a portion of the Order that is not
challenged in this case, which interprets § 224(b) to require pole owners to
provide access to their poles on just and reasonable terms. See Order ¶ 93
(J.A. __). In petitioners’ view, § 224(b) “mean[s] something very different
for ILECs” because ILECs do not have § 224(f)(1) access rights and thus do
not benefit from this particular interpretation of § 224(b). Pet. Br. 35.
Petitioners contend that the resulting difference in treatment renders the
agency’s decision to regulate ILEC attachments arbitrary.
The Court need not decide this claim because it was not raised before
the Commission and therefore is not properly before this Court. See 47
U.S.C. § 405(a); BDPCS, Inc. v. FCC, 351 F.3d 1177, 1182 (D.C. Cir. 2003).
In any event, the claim is meritless. The “generality” of terms such as “just”
and “reasonable” “opens a rather large area for the free play of agency
discretion.” Orloff v. FCC, 352 F.3d 415, 420 (D.C. Cir. 2003), cert. denied,
542 U.S. 937 (2004). Accordingly, the Commission can apply the just-and-
reasonable standard to impose different requirements in different contexts.
See ibid. (holding that carriers subject to competitive forces may be regulated
differently from other carriers under the “unjust” and “unreasonable”
standard of 47 U.S.C. § 202). The Commission reasonably denied ILECs the
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right to demand access to utility poles on just-and-reasonable terms because
ILECs do not have statutory access rights. That other attachers with such
access rights may demand just and reasonable terms does not indicate
inconsistent treatment, but rather a rational tailoring of the just and reasonable
standard to the particular circumstances involved.
b. Amicus EEI calls it “absurd” that ILEC attachments may be
regulated even though they “do not fall within the very specific rate formula
for attachments by telecommunications carriers” in § 224(e). Amicus Br. 13;
see also Int. Br. 11. That argument cannot be reconciled with Gulf Power,
which held that the §§ 224(d) and (e) rates are not “the exclusive rates
allowed” under § 224 (534 U.S. at 335) and that the Commission may
“prescribe just and reasonable rates” in other cases “without necessary
reliance upon a specific statutory formula devised by Congress,” id. at 336.
EEI further contends that regulation of ILEC attachments is
inconsistent with 47 U.S.C. § 251(b)(4), which imposes a duty on local
exchange carriers to “afford access to [their] poles . . . to competing providers
of telecommunications services on rates, terms, and conditions that are
consistent with section 224.” EEI argues that, if ILECs are viewed as
“providers of telecommunications services,” § 251(b)(4) would grant access
rights to ILECs that § 224(f)(1) does not. Amicus Br. 14. The Commission
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made clear, however, that ILECs “cannot use section 251(b)(4) as a means of
gaining access to the facilities or property” of a local exchange carrier
because the agency has long interpreted the “more general access provisions”
of § 251(b)(4) in light of “the specific denial of access under section 224.”
Order n.643 (J.A. __) (internal quotation marks omitted). Accordingly, EEI
is incorrect to characterize § 251(b)(4) and § 224(f)(1) as “inconsistent with
each other.” Amicus Br. 14.
3. Finding nothing in the text of § 224 to support their argument,
petitioners resort to the statute’s legislative history and its “essential
purpose.” Pet. Br. 24; see also Amicus Br. 15-16. That argument fares no
better. Notably, petitioners do not cite any legislative history that “compels
(or even suggests) the conclusion that Congress intended to limit” the
Commission’s authority to regulate ILEC attachments. Consumer
Electronics Ass’n v. FCC, 347 F.3d 291, 298-299 (D.C. Cir. 2003). Instead,
they contend that the legislative history generally reveals an intent to provide
only “new entrants” with access to utility poles at regulated rates. Pet. Br.
25-26; see also Amicus Br. 15. The Supreme Court rejected a similar
argument in Gulf Power, holding that the “economic rationale” of regulating
poles solely to the extent they are a “bottleneck facility” found “no support in
the text” of the statute and, hence, could not limit the Commission’s
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regulatory authority. 534 U.S. at 341. The Court’s analysis is consistent with
the general understanding that “statutes often go beyond the principal evil to
cover reasonably comparable evils, and it is ultimately the provisions of our
laws rather than the principal concerns of our legislators by which we are
governed.” Public Citizen v. Carlin, 184 F.3d 900, 904 (D.C. Cir. 1999)
(internal quotation marks omitted). Accordingly, even if petitioners had
provided support for their reading of the legislative history (and they have
not), the ordinary meaning of the term “provider of telecommunications
service” does not distinguish between new providers and old, and the
meaning of that term “is what matters under the statute.” Gulf Power, 534
U.S. at 333.
B. The Commission Adequately Explained its Change in
Policy
In concluding that § 224 covers ILEC attachments, the Commissionacknowledged that it was departing from its previous interpretation of the
statute. See Order ¶ 208 (J.A. __). Such “change is not invalidating, since
the whole point of Chevron is to leave the discretion provided by the
ambiguities of a statute with the implementing agency.” Brand X, 545 U.S. at
981 (internal quotation marks omitted). The Commission must explain the
reasons for the change, 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;
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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.” Nat’l Cable
& Telecomms. Ass’n v. FCC, 567 F.3d 659, 669 (D.C. Cir. 2009) (quoting
FCC v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1811 (2009)).
The Commission provided a sufficient reason for its “decision to
change from a narrow to a broader definition” of “provider of
telecommunications service,” namely, that “the broader definition better
serve[s] the goals of the Act.” Southern Co., 313 F.3d at 581. As the
Commission explained, ILECs may no longer “be in an equivalent bargaining
position with electric utilities in pole attachment negotiations” as they
typically were in the past. Order ¶ 206 (J.A. __). The Commission found
that ILECs now “as a whole appear to own approximately 25-30 percent of
poles and electric utilities appear to own approximately 65-70 percent of
poles, compared to historical ownership levels that were closer to parity.”
Ibid. As a result, the Commission reasonably concluded that “market forces
and independent negotiations may not be alone sufficient to ensure just and
reasonable rates, terms and conditions” for ILEC attachments to electric
poles. Order ¶ 199 (J.A. __).
The Commission also predicted that regulating ILEC attachments
would advance the goal of “promot[ing] competition,” particularly with
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respect to “new services,” such as video and broadband services, that ILECs
have begun to offer “subsequent to the 1996 Act.” Order ¶¶ 206, 208 (J.A.
__). Specifically, ensuring that ILECs can obtain just and reasonable pole-
attachment rates would “reduce input costs, such as pole rental rates, [which]
can expand opportunities for investment” in broadband services. Order ¶ 208
(J.A. __).
Recognizing, however, that “the issues related to rates for pole
attachments by [ILECs] raise complex questions,” the Commission proceeded
cautiously. Order ¶ 214 (J.A. __). It noted that “not all incumbent LECs are
similarly situated in terms of their bargaining position relative to other pole
owners,” id. ¶ 215 (J.A. __), and it “question[ed] the need to second guess
the negotiated resolution of arrangements entered into [in situations where the
parties have] relatively equivalent bargaining power,” id. ¶ 216 (J.A. __).
Accordingly, the Commission sensibly concluded that it would “proceed on a
case-by-case basis,” id. ¶ 214 (J.A. __), which would allow it to consider
evidence of particular ILECs’ “inferior bargaining position,” id. ¶ 215 (J.A.
__), and other relevant evidence in evaluating whether the rates, terms, and
conditions for an ILEC attachment are just and reasonable.
1. Petitioners question the existence of a growing gap in pole
ownership, Pet. Br. 28, but substantial record evidence supports the
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Commission’s findings. The Commission cited evidence by ILECs that
showed a significant disparity in pole ownership. See Order ¶ 206 & n.617
(J.A. __); see also Comments of Verizon, WC Docket No. 07-245 (Aug. 16,
2010), Att., Declaration of James Slavin and Steven R. Frisbie, at 4 ¶ 13 (J.A.
__) (“The number of poles that are solely owned by electric utilities in
municipalities continues to grow faster than the number of poles that are
solely owned by Verizon.”); Comments of AT&T, Inc., WC Docket No. 07-
245 (Aug, 16, 2010), at 18 (J.A. __) (“the ownership of poles is roughly 25-
30% ILEC” and 70-75% electric company.).
Indeed, even utility companies acknowledged the increasing disparity
in pole ownership since the mid-1990s. For example, petitioners Florida
Power & Light and Tampa Electric informed the Commission that “actual
relative ownership percentages with all ILECs are 69% FPL and 31% ILEC,”
with “ILEC pole ownership . . . declin[ing] slightly” since 1994 in Florida
Power’s territory at an average of “less than 1/2% per year.” Initial
Comments of Florida Power & Light and Tampa Electric regarding ILECs
and Pole Attachment Rates, WC Docket No. 07-245 (Mar. 7, 2008), at 7 (J.A.
__). Notably, petitioners fail to identify any record evidence contradicting
the Commission’s finding of a significant and growing disparity in pole
ownership nationwide.
53
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The Commission’s cautious case-by-case approach answers
petitioners’ concerns that “circumstances can vary considerably from location
to location,” Pet. Br. 28 (quoting Order ¶ 215 (J.A. __)), and that ILECs may
not lack bargaining power in all circumstances (in which cases petitioners
question the need for regulation), id. at 29-30. Further, petitioners miss the
mark when they argue that ILECs will always have equal bargaining power to
electric utilities because electric utilities need access to ILEC poles. Pet. Br.
29-30 (citing Order nn. 618 & 655 (J.A. __)). As the Commission explained
in the Order, the effect of disparity in pole ownership manifests itself, not in
the likelihood that the two sides will fail to reach agreement on access, but in
the potential that the rates, terms, and conditions upon which ILECs obtain
access to poles may not be just and reasonable. See Order ¶ 206 & n.618
(J.A. __).
2. Petitioners also dispute the Commission’s prediction that ensuring
just and reasonable rates for ILEC attachments will benefit consumers and
encourage broadband deployment. Pet. Br. 30-32. They face a high hurdle,
because “to the extent that the FCC’s decision is based upon a predictive
judgment, the court’s review is particularly deferential.” BellSouth Corp. v.
FCC, 162 F.3d 1215, 1222 (D.C. Cir. 1999) (citation and internal quotation
marks omitted). “[I]t is within the scope of the agency’s expertise to
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make . . . a prediction about the market it regulates, and a reasonable
prediction deserves [judicial] deference notwithstanding that there might also
be another reasonable view.” Constellation Energy Commodities Group, Inc.
v. FERC, 457 F.3d 14, 24 (D.C. Cir. 2006) (internal quotation marks
omitted).
In this case, the Commission had a sound basis for predicting that
regulating ILEC attachments would benefit consumers. Although petitioners
dismiss the “ex parte letter from USTA” (Pet. Br. 30) that the Commission
cited (Order ¶ 208 (J.A. __)), that letter (filed on behalf of USTelecom’s
many ILEC members) confirms that “one of the major hurdles facing ILECs
is access to the capital necessary to meet the competitive challenges presented
by next generation broadband networks that have been deployed by cable
companies who enjoy the benefit of lower attachment rates today.” Letter
from Walter B. McCormick, Jr., USTelecom, to Marlene H. Dortch,
Secretary, FCC, WC Docket No. 07-245 (Mar. 31, 2011), at 6 (J.A. __). The
letter shows (and petitioners do not dispute) that ILECs pay significantly
more for pole attachments than their cable competitors – in the aggregate
between “$320 to $350 million [more each year] than they would pay at the
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17
cable rate.” See Order ¶ 208 (J.A. __). The Commission explained that
such substantial differences may affect “the extent to which investment and
deployment choices by such providers, and competition more generally, are
distorted based on regulatory classifications.” Order ¶ 181 (J.A. __); see also
Order ¶ 208 & n.629 (J.A. __). Moreover, the Commission explained that
“reduc[ing] input costs, such as pole rental rates, can expand opportunities for
investment” in broadband services. Order ¶ 208 (J.A. __); see also id. ¶ 179
(J.A. __). The “broader definition” of “provider of telecommunications
service” is thus “justified because it limits the financial burden on
telecommunications providers and therefore encourages growth and
competition in the industry.” Southern Co., 313 F.3d at 581. This sort of
prediction “regarding the actions of regulated entities” is “precisely the type
of policy judgment[] that courts routinely and quite correctly leave to
administrative agencies.” Public Citizen, Inc. v. NHTSA, 374 F.3d 1251,
1260-1261 (D.C. Cir. 2004) (internal quotation marks omitted).
17 Petitioners mistakenly claim that the Commission ignored comments by the
National Cable & Telecommunications Association (NCTA) that regulating
ILEC attachments would harm consumers. Pet. Br. 31. In fact, NCTA’s
comments were directed at an unadopted proposal in the FCC’s NPRM to
increase the cable rate – a proposal that NCTA believed would unduly benefit
ILECs as pole owners and thereby harm broadband deployment. See
Comments of the National Cable & Telecommunications Association, WC
Docket No. 07-245 (Mar. 7, 2008), at ii (J.A. __).
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IV. PETITIONERS’ CHALLENGE TO THE COMMISSION’S
DECISION TO EXTEND THE REFUND PERIOD IS
MERITLESS
pole-attachment complaint violates § 224 because the Commission’s
authority to adjudicate disputes is triggered by the filing of the complaint.
Pet. Br. 53-54. This argument, like petitioners’ claim of conflict under
§ 224(b) and (f)(1) (see page 47, supra), is barred by 47 U.S.C. § 405(a)
because petitioners did not raise it before the agency. BDPCS, Inc., 351 F.3d
at 1182.
Even if not waived, the argument fails. Section 224(b) grants the
Commission broad authority to “adopt procedures necessary and appropriate
to hear and resolve complaints” concerning pole-attachment rates, terms, and
conditions, and “enforc[e] any determinations resulting from complaint
procedures” by “tak[ing] such action as it deems appropriate and necessary.”
47 U.S.C. § 224(b)(1). Section 224(b) is silent on how the Commission is to
carry out those responsibilities by fashioning remedies (including providing
for refunds), and “agencies have authority to fill gaps where the statutes are
silent.” Gulf Power, 534 U.S. at 339. The ability to award refunds has been a
critical – and lawful – component of the Commission’s implementation of
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§ 224 since its inception. See First Report and Order, 68 FCC 2d at 1599-
1600 ¶ 44.
Moreover, even assuming the premise of petitioners’ argument that the
Commission’s “jurisdiction” can only be “trigger[ed]” by the filing of a
complaint (Pet. Br. 53-54), it does not follow that the Commission’s authority
to award redress is constrained by the date of such a filing. For example, a
district court’s jurisdiction is typically also triggered by the filing of a
complaint, but it has never been thought that a court may award relief only
for post-complaint damages. As the Commission concluded, “[t]here does
not appear to be a justification for treating pole attachment disputes
18
differently.” FNPRM ¶ 88 (J.A. __).
Petitioners’ claim that the new refund rule is arbitrary is likewise
baseless. According to petitioners, the Commission failed to support its
conclusion that the date-of-complaint limitation on refunds acted as a
“disincentive to engage in pre-complaint negotiation.” Pet. Br. 55 (quoting
Order n.345 (J.A. __)). The original rule itself, however, was premised on
18 Contrary to petitioners’ claim that the legislative history suggests an intent
“to grant only prospective regulatory authority,” Pet. Br. 54, the Senate
Report on which petitioners rely merely states that the Commission’s
jurisdiction over electric utility companies – “entities not otherwise subject to
FCC jurisdiction” – is “strictly circumscribed” in that it does not extend to
matters unrelated to pole attachments. S. Rep. No. 95-580, at 15.
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the policy of “encourag[ing] early filing [of complaints] when rates are
considered objectionable.” First Report and Order, 68 FCC 2d at 1600 ¶ 45
(emphasis added). It was reasonable for the Commission to conclude that a
policy of encouraging early filing of complaints may, in practice, create a
disincentive for “pre-complaint negotiation.” Order n.345 (J.A. __); see also
Comments of Time Warner Cable, Inc., WC Docket No. 07-245 (Aug. 16,
2010), at 28 (J.A. __) (new rule “will facilitate informal dispute resolution
and reduce litigation before the Commission, because attachers will not be
compelled immediately to file a complaint in order to preserve their damages
claims.”).
Finally, petitioners contend that extending the refund period is
unnecessary because the sign-and-sue rule – “which allows an attacher to
challenge the lawfulness of terms in an executed pole attachment agreement
that the attacher claims it was coerced to accept in order to gain access to
utility poles” (Order ¶ 119 (J.A. __)) – will obviate any pre-complaint
refunds. Pet. Br. 55-56. That argument is barred by § 405(a) because
petitioners did not raise it before the agency. In any event, the sign-and-sue
approach is unlikely to be followed by every pole-attachment complainant; to
the extent an aggrieved attacher has made unjust or unreasonable payments
59
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 70 of 88
prior to the filing of its complaint, the Commission’s new refund rule is
necessary “to make injured attachers whole.” Order ¶ 110 (J.A.__).
CONCLUSION
For the foregoing reasons, the petition for review should be denied.Respectfully
submitted,
SHARIS A. POZEN
AUSTIN C. SCHLICK
ACTING ASSISTANT ATTORNEY
GENERAL COUNSEL
GENERAL
PETER KARANJIA
ROBERT B. NICHOLSON
DEPUTY GENERAL COUNSEL
KRISTEN C. LIMARZI
ATTORNEYS
RICHARD K. WELCH
DEPUTY ASSOCIATE GENERAL
UNITED STATES
COUNSEL
DEPARTMENT OF JUSTICE
WASHINGTON, D.C. 20530
/s/ Nandan M. Joshi
NANDAN M. JOSHI
COUNSEL
FEDERAL COMMUNICATIONS
COMMISSION
WASHINGTON, D.C. 20554
(202) 418-1740
February 17, 2012
60
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 71 of 88
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
AMERICAN ELECTRIC POWER
SERVICE CORPORATION, ET AL.
PETITIONERS,
v.
NO. 11-1146
FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS.
CERTIFICATE OF COMPLIANCE
Pursuant to the requirements of Fed. R. App. P. 32(a)(7), I hereby
certify that the accompanying Brief for Respondents in the captioned case
contains 13,097 words.
/s/ Nandan M. Joshi
Nandan M. Joshi
Counsel
Federal Communications Commission
Washington, D.C. 20554
(202) 418-1740 (Telephone)
(202) 418-2819 (Fax)
February 17, 2012
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 72 of 88
STATUTORY AND REGULATORY APPENDIX
Contents
Page
47 U.S.C. § 224 ...................................................................................... 1
47 U.S.C. § 405 ...................................................................................... 3
47 U.S.C. § 1302 .................................................................................... 5
47 C.F.R. § 1.1409 (2011)...................................................................... 7
47 C.F.R. § 1.1410 (2011)...................................................................... 9
47 C.F.R. § 1.1409 (2010)....................................................................10
47 C.F.R. § 1.1410 (2010)....................................................................12
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 73 of 88
§ 224
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
Page 58
Act of 1934 [this section] which are pending on the date
sider and does consider the interests of the
of the enactment of this Act [Dec. 8, 1983] within ninety
subscribers of the services offered via such at-
days of such date of enactment.’’
tachments, as well as the interests of the con-
§ 224. Pole attachments
sumers of the utility services.
(a) Definitions
(3) For purposes of this subsection, a State
shall not be considered to regulate the rates,
As used in this section:
terms, and conditions for pole attachments—
(1) The term ‘‘utility’’ means any person who
(A) unless the State has issued and made ef-
is a local exchange carrier or an electric, gas,
fective rules and regulations implementing
water, steam, or other public utility, and who
the State’s regulatory authority over pole at-
owns or controls poles, ducts, conduits, or
tachments; and
rights-of-way used, in whole or in part, for any
(B) with respect to any individual matter,
wire communications. Such term does not in-
unless the State takes final action on a com-
clude any railroad, any person who is coopera-
plaint regarding such matter—
tively organized, or any person owned by the
(i) within 180 days after the complaint is
Federal Government or any State.
filed with the State, or
(2) The term ‘‘Federal Government’’ means the
(ii) within the applicable period prescribed
Government of the United States or any agency
for such final action in such rules and regu-
or instrumentality thereof.
lations of the State, if the prescribed period
(3) The term ‘‘State’’ means any State, terri-
does not extend beyond 360 days after the fil-
tory, or possession of the United States, the Dis-
ing of such complaint.
trict of Columbia, or any political subdivision,
(d) Determination of just and reasonable rates;
agency, or instrumentality thereof.
‘‘usable space’’ defined
(4) The term ‘‘pole attachment’’ means any at-
(1) For purposes of subsection (b) of this sec-
tachment by a cable television system or pro-
tion, a rate is just and reasonable if it assures a
vider of telecommunications service to a pole,
utility the recovery of not less than the addi-
duct, conduit, or right-of-way owned or con-
tional costs of providing pole attachments, nor
trolled by a utility.
(5) For purposes of this section, the term more than an amount determined by multiply-
‘‘telecommunications carrier’’ (as defined in sec-
ing the percentage of the total usable space, or
tion 153 of this title) does not include any in-
the percentage of the total duct or conduit ca-
cumbent local exchange carrier as defined in pacity, which is occupied by the pole attach-
section 251(h) of this title.
ment by the sum of the operating expenses and
actual capital costs of the utility attributable
(b) Authority of Commission to regulate rates, to the entire pole, duct, conduit, or right-of-
terms, and conditions; enforcement powers; way.
promulgation of regulations
(2) As used in this subsection, the term ‘‘usa-
(1) Subject to the provisions of subsection (c)
ble space’’ means the space above the minimum
of this section, the Commission shall regulate
grade level which can be used for the attach-
the rates, terms, and conditions for pole attach-
ment of wires, cables, and associated equipment.
ments to provide that such rates, terms, and
(3) This subsection shall apply to the rate for
conditions are just and reasonable, and shall any pole attachment used by a cable television
adopt procedures necessary and appropriate to
system solely to provide cable service. Until the
hear and resolve complaints concerning such effective date of the regulations required under
rates, terms, and conditions. For purposes of en-
subsection (e) of this section, this subsection
forcing any determinations resulting from com-
shall also apply to the rate for any pole attach-
plaint procedures established pursuant to this ment used by a cable system or any tele-
subsection, the Commission shall take such ac-
communications carrier (to the extent such car-
tion as it deems appropriate and necessary, in-
rier is not a party to a pole attachment agree-
cluding issuing cease and desist orders, as au-
ment) to provide any telecommunications serv-
thorized by section 312(b) of this title.
ice.
(2) The Commission shall prescribe by rule (e) Regulations governing charges; apportion-
regulations to carry out the provisions of this
ment of costs of providing space
section.
(1) The Commission shall, no later than 2
(c) State regulatory authority over rates, terms,
years after February 8, 1996, prescribe regula-
and conditions; preemption; certification; tions in accordance with this subsection to gov-
circumstances constituting State regulation
ern the charges for pole attachments used by
(1) Nothing in this section shall be construed
telecommunications carriers to provide tele-
to apply to, or to give the Commission jurisdic-
communications services, when the parties fail
tion with respect to rates, terms, and condi-
to resolve a dispute over such charges. Such reg-
tions, or access to poles, ducts, conduits, and ulations shall ensure that a utility charges just,
rights-of-way as provided in subsection (f) of reasonable, and nondiscriminatory rates for pole
this section, for pole attachments in any case
attachments.
where such matters are regulated by a State.
(2) A utility shall apportion the cost of provid-
(2) Each State which regulates the rates, ing space on a pole, duct, conduit, or right-of-
terms, and conditions for pole attachments shall
way other than the usable space among entities
certify to the Commission that—
so that such apportionment equals two-thirds of
(A) it regulates such rates, terms, and condi-
the costs of providing space other than the usa-
tions; and
ble space that would be allocated to such entity
(B) in so regulating such rates, terms, and
under an equal apportionment of such costs
conditions, the State has the authority to con-
among all attaching entities.
1
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 74 of 88
Page 59
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
§ 225
(3) A utility shall apportion the cost of provid-
AMENDMENTS
ing usable space among all entities according to
1996—Subsec. (a)(1). Pub. L. 104–104, § 703(1), inserted
the percentage of usable space required for each
first sentence and struck out former first sentence
entity.
which read as follows: ‘‘The term ‘utility’ means any
(4) The regulations required under paragraph
person whose rates or charges are regulated by the Fed-
(1) shall become effective 5 years after February
eral Government or a State and who owns or controls
8, 1996. Any increase in the rates for pole attach-
poles, ducts, conduits, or rights-of-way used, in whole
or in part, for wire communication.’’
ments that result from the adoption of the regu-
Subsec. (a)(4). Pub. L. 104–104, § 703(2), inserted ‘‘or
lations required by this subsection shall be provider of telecommunications service’’ after ‘‘sys-
phased in equal annual increments over a period
tem’’.
of 5 years beginning on the effective date of such
Subsec. (a)(5). Pub. L. 104–104, § 703(3), added par. (5).
regulations.
Subsec. (c)(1). Pub. L. 104–104, § 703(4), inserted ‘‘, or
(f) Nondiscriminatory access
access to poles, ducts, conduits, and rights-of-way as
provided in subsection (f) of this section,’’ after ‘‘condi-
(1) A utility shall provide a cable television
tions’’.
system or any telecommunications carrier with
Subsec. (c)(2)(B). Pub. L. 104–104, § 703(5), substituted
nondiscriminatory access to any pole, duct, con-
‘‘the services offered via such attachments’’ for ‘‘cable
duit, or right-of-way owned or controlled by it.
television services’’.
(2) Notwithstanding paragraph (1), a utility
Subsec. (d)(3). Pub. L. 104–104, § 703(6), added par. (3).
providing electric service may deny a cable tele-
Subsecs. (e) to (i). Pub. L. 104–104, § 703(7), added sub-
secs. (e) to (i).
vision system or any telecommunications car-
1994—Subsec. (b)(2). Pub. L. 103–414 substituted ‘‘The
rier access to its poles, ducts, conduits, or Commission’’ for ‘‘Within 180 days from February 21,
rights-of-way, on a non-discriminatory 1 basis
1978, the Commission’’.
where there is insufficient capacity and for rea-
1984—Subsec. (c)(3). Pub. L. 98–549 added par. (3).
sons of safety, reliability and generally applica-
1982—Subsec. (e). Pub. L. 97–259 struck out subsec. (e)
ble engineering purposes.
which provided that, upon expiration of 5-year period
(g) Imputation to costs of pole attachment rate
that began on Feb. 21, 1978, provisions of subsec. (d) of
this section would cease to have any effect.
A utility that engages in the provision of tele-
communications services or cable services shall
EFFECTIVE DATE OF 1984 AMENDMENT
impute to its costs of providing such services
Amendment by Pub. L. 98–549 effective 60 days after
(and charge any affiliate, subsidiary, or associ-
Oct. 30, 1984, except where otherwise expressly pro-
ate company engaged in the provision of such
vided, see section 9(a) of Pub. L. 98–549, set out as a
services) an equal amount to the pole attach-
note under section 521 of this title.
ment rate for which such company would be lia-
EFFECTIVE DATE
ble under this section.
Section effective on thirtieth day after Feb. 21, 1978,
(h) Modification or alteration of pole, duct, con-
see section 7 of Pub. L. 95–234, set out as an Effective
duit, or right-of-way
Date of 1978 Amendment note under section 152 of this
Whenever the owner of a pole, duct, conduit,
title.
or right-of-way intends to modify or alter such
§ 225. Telecommunications services for hearing-
pole, duct, conduit, or right-of-way, the owner
impaired and speech-impaired individuals
shall provide written notification of such action
to any entity that has obtained an attachment
(a) Definitions
to such conduit or right-of-way so that such en-
As used in this section—
tity may have a reasonable opportunity to add
(1) Common carrier or carrier
to or modify its existing attachment. Any entity
that adds to or modifies its existing attachment
The term ‘‘common carrier’’ or ‘‘carrier’’ in-
after receiving such notification shall bear a
cludes any common carrier engaged in inter-
proportionate share of the costs incurred by the
state communication by wire or radio as de-
owner in making such pole, duct, conduit, or
fined in section 153 of this title and any com-
right-of-way accessible.
mon carrier engaged in intrastate communica-
(i) Costs of rearranging or replacing attachment
tion by wire or radio, notwithstanding sec-
tions 152(b) and 221(b) of this title.
An entity that obtains an attachment to a
pole, conduit, or right-of-way shall not be re-
(2) TDD
quired to bear any of the costs of rearranging or
The term ‘‘TDD’’ means a Telecommunica-
replacing its attachment, if such rearrangement
tions Device for the Deaf, which is a machine
or replacement is required as a result of an addi-
that employs graphic communication in the
tional attachment or the modification of an ex-
transmission of coded signals through a wire
isting attachment sought by any other entity
or radio communication system.
(including the owner of such pole, duct, conduit,
(3) Telecommunications relay services
or right-of-way).
The term ‘‘telecommunications relay serv-
(June 19, 1934, ch. 652, title II, § 224, as added
ices’’ means telephone transmission services
Pub. L. 95–234, § 6, Feb. 21, 1978, 92 Stat. 35;
that provide the ability for an individual who
amended Pub. L. 97–259, title I, § 106, Sept. 13,
has a hearing impairment or speech impair-
1982, 96 Stat. 1091; Pub. L. 98–549, § 4, Oct. 30, 1984,
ment to engage in communication by wire or
98 Stat. 2801; Pub. L. 103–414, title III, § 304(a)(7),
radio with a hearing individual in a manner
Oct. 25, 1994, 108 Stat. 4297; Pub. L. 104–104, title
that is functionally equivalent to the ability
VII, § 703, Feb. 8, 1996, 110 Stat. 149.)
of an individual who does not have a hearing
impairment or speech impairment to commu-
1 So in original. Probably should be ‘‘nondiscriminatory’’.
nicate using voice communication services by
2
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 75 of 88
Page 217
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
§ 405
sions of this chapter, or relating to the enforce-
may be appropriate: Provided, That in any case
ment of any of the provisions of this chapter.
where such petition relates to an instrument of
The Commission shall have the same powers and
authorization granted without a hearing, the
authority to proceed with any inquiry instituted
Commission, or designated authority within the
on its own motion as though it had been ap-
Commission, shall take such action within nine-
pealed to by complaint or petition under any of
ty days of the filing of such petition. Reconsid-
the provisions of this chapter, including the erations shall be governed by such general rules
power to make and enforce any order or orders
as the Commission may establish, except that
in the case, or relating to the matter or thing
no evidence other than newly discovered evi-
concerning which the inquiry is had, excepting
dence, evidence which has become available only
orders for the payment of money.
since the original taking of evidence, or evi-
dence which the Commission or designated au-
(June 19, 1934, ch. 652, title IV, § 403, 48 Stat. thority within the Commission believes should
1094.)
have been taken in the original proceeding shall
§ 404. Reports of investigations
be taken on any reconsideration. The time with-
in which a petition for review must be filed in a
Whenever an investigation shall be made by
proceeding to which section 402(a) of this title
the Commission it shall be its duty to make a
applies, or within which an appeal must be
report in writing in respect thereto, which shall
taken under section 402(b) of this title in any
state the conclusions of the Commission, to-
case, shall be computed from the date upon
gether with its decision, order, or requirement
which the Commission gives public notice of the
in the premises; and in case damages are award-
order, decision, report, or action complained of.
ed such report shall include the findings of fact
(b)(1) Within 90 days after receiving a petition
on which the award is made.
for reconsideration of an order concluding a
(June 19, 1934, ch. 652, title IV, § 404, 48 Stat. hearing under section 204(a) of this title or con-
1094.)
cluding an investigation under section 208(b) of
this title, the Commission shall issue an order
§ 405. Petition for reconsideration; procedure; granting or denying such petition.
disposition; time of filing; additional evi-
(2) Any order issued under paragraph (1) shall
dence; time for disposition of petition for re-
be a final order and may be appealed under sec-
consideration of order concluding hearing or
tion 402(a) of this title.
investigation; appeal of order
(June 19, 1934, ch. 652, title IV, § 405, 48 Stat. 1095;
(a) After an order, decision, report, or action
July 16, 1952, ch. 879, § 15, 66 Stat. 720; Pub. L.
has been made or taken in any proceeding by
86–752, § 4(c), Sept. 13, 1960, 74 Stat. 892; Pub. L.
the Commission, or by any designated authority
87–192, § 3, Aug. 31, 1961, 75 Stat. 421; Pub. L.
within the Commission pursuant to a delegation
97–259, title I, §§ 122, 127(c), Sept. 13, 1982, 96 Stat.
under section 155(c)(1) of this title, any party 1097, 1099; Pub. L. 100–594, § 8(d), Nov. 3, 1988, 102
thereto, or any other person aggrieved or whose
Stat. 3023.)
interests are adversely affected thereby, may pe-
tition for reconsideration only to the authority
CODIFICATION
making or taking the order, decision, report, or
‘‘Reconsiderations’’ substituted in text for ‘‘Rehear-
action; and it shall be lawful for such authority,
ings’’ as the probable intent of Congress, in view of
whether it be the Commission or other author-
amendment by section 127(c)(1) of Pub. L. 97–259, which
ity designated under section 155(c)(1) of this substituted ‘‘reconsideration’’ for ‘‘rehearing’’ wher-
title, in its discretion, to grant such a reconsid-
ever appearing in this section.
eration if sufficient reason therefor be made to
AMENDMENTS
appear. A petition for reconsideration must be
filed within thirty days from the date upon
1988—Pub. L. 100–594 designated existing provisions as
which public notice is given of the order, deci-
subsec. (a), substituted ‘‘section 155(c)(1)’’ for ‘‘section
155(d)(1)’’ in two places, and added subsec. (b).
sion, report, or action complained of. No such
1982—Pub. L. 97–259 substituted ‘‘reconsideration’’ for
application shall excuse any person from com-
‘‘rehearing’’ wherever appearing and ‘‘the Commission
plying with or obeying any order, decision, re-
gives public notice of the order, decision, report, or ac-
port, or action of the Commission, or operate in
tion complained of’’ for ‘‘public notice is given of or-
any manner to stay or postpone the enforcement
ders disposing of all petitions for rehearing filed with
thereof, without the special order of the Com-
the Commission in such proceeding or case, but any
mission. The filing of a petition for reconsider-
order, decision, report, or action made or taken after
ation shall not be a condition precedent to judi-
such rehearing reversing, changing, or modifying the
original order shall be subject to the same provisions
cial review of any such order, decision, report,
with respect to rehearing as an original order’’.
or action, except where the party seeking such
1961—Pub. L. 87–192 provided for petition for rehear-
review (1) was not a party to the proceedings re-
ing to the authority making or taking the order, deci-
sulting in such order, decision, report, or action,
sion, report, or action, substituted references to report
or (2) relies on questions of fact or law upon and action for requirement, wherever else appearing,
which the Commission, or designated authority
and inserted references to proceeding by any des-
within the Commission, has been afforded no op-
ignated authority within the Commission, wherever ap-
portunity to pass. The Commission, or des-
pearing.
1960—Pub. L. 86–752 substituted ‘‘any party’’ for ‘‘and
ignated authority within the Commission, shall
party’’ in first sentence, and inserted sentence dealing
enter an order, with a concise statement of the
with disposition of petitions for rehearing.
reasons therefor, denying a petition for recon-
1952—Act July 16, 1952, provided for taking of newly
sideration or granting such petition, in whole or
discovered evidence and evidence which should have
in part, and ordering such further proceedings as
been taken in original hearing.
3
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 76 of 88
§ 406
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
Page 218
EFFECTIVE DATE OF 1960 AMENDMENT
(June 19, 1934, ch. 652, title IV, § 407, 48 Stat.
Section 4(d)(4) of Pub. L. 86–752 provided that: ‘‘The
1095.)
amendment made by paragraph (2) of subsection (c) of
this section [amending this section] shall only apply to
§ 408. Order not for payment of money; when ef-
petitions for rehearing filed on or after the date of the
fective
enactment of this Act [Sept. 13, 1960].’’
Except as otherwise provided in this chapter,
§ 406. Compelling furnishing of facilities; manda-
all orders of the Commission, other than orders
mus; jurisdiction
for the payment of money, shall take effect thir-
ty calendar days from the date upon which pub-
The district courts of the United States shall
lic notice of the order is given, unless the Com-
have jurisdiction upon the relation of any per-
mission designates a different effective date. All
son alleging any violation, by a carrier subject
such orders shall continue in force for the period
to this chapter, of any of the provisions of this
of time specified in the order or until the Com-
chapter which prevent the relator from receiv-
mission or a court of competent jurisdiction is-
ing service in interstate or foreign communica-
sues a superseding order.
tion by wire or radio, or in interstate or foreign
transmission of energy by radio, from said car-
(June 19, 1934, ch. 652, title IV, § 408, 48 Stat. 1096;
rier at the same charges, or upon terms or con-
Pub. L. 97–259, title I, § 123, Sept. 13, 1982, 96 Stat.
ditions as favorable as those given by said car-
1098.)
rier for like communication or transmission
AMENDMENTS
under similar conditions to any other person, to
issue a writ or writs of mandamus against said
1982—Pub. L. 97–259 substituted provision that all or-
carrier commanding such carrier to furnish fa-
ders of the Commission but for payment of money shall
take effect thirty calendar days from the date upon
cilities for such communication or transmission
which public notice of the order is given, unless the
to the party applying for the writ: Provided,
Commission designates a different effective date, and
That if any question of fact as to the proper that such orders shall continue in force for the period
compensation to the carrier for the service to be
of time specified in the order or until the Commission
enforced by the writ is raised by the pleadings,
or a court of competent jurisdiction issues a supersed-
the writ of peremptory mandamus may issue, ing order, for provision that such orders would take ef-
notwithstanding such question of fact is unde-
fect within such reasonable time, not less than thirty
termined, upon such terms as to security, pay-
days after service of the order, and would continue in
force until its further order, or for a specified period of
ment of money into the court, or otherwise, as
time, as prescribed in the order, unless the same were
the court may think proper pending the deter-
suspended or modified or set aside by the Commission,
mination of the question of fact: Provided fur-
or suspended or set aside by a court of competent juris-
ther, That the remedy given by writ of manda-
diction.
mus shall be cumulative and shall not be held to
exclude or interfere with other remedies pro-
§ 409. Hearings
vided by this chapter.
(a) Filing of initial decisions; exceptions
(June 19, 1934, ch. 652, title IV, § 406, 48 Stat.
In every case of adjudication (as defined in
1095.)
section 551 of title 5) which has been designated
§ 407. Order for payment of money; petition for
by the Commission for hearing, the person or
enforcement; procedure; order of Commis-
persons conducting the hearing shall prepare
sion as prima facie evidence; costs; attorneys’
and file an initial, tentative, or recommended
fees
decision, except where such person or persons
become unavailable to the Commission or where
If a carrier does not comply with an order for
the Commission finds upon the record that due
the payment of money within the time limit in
and timely execution of its functions impera-
such order, the complainant, or any person for
tively and unavoidably require that the record
whose benefit such order was made, may file in
be certified to the Commission for initial or
the district court of the United States for the
final decision.
district in which he resides or in which is lo-
(b) Exceptions to initial decisions; memoranda;
cated the principal operating office of the car-
determination of Commission or authority
rier, or through which the line of the carrier
within Commission; prohibition against con-
runs, or in any State court of general jurisdic-
sideration of own decision
tion having jurisdiction of the parties, a peti-
tion setting forth briefly the causes for which he
In every case of adjudication (as defined in
claims damages, and the order of the Commis-
section 551 of title 5) which has been designated
sion in the premises. Such suit in the district
by the Commission for hearing, any party to the
court of the United States shall proceed in all
proceeding shall be permitted to file exceptions
respects like other civil suits for damages, ex-
and memoranda in support thereof to the initial,
cept that on the trial of such suits the findings
tentative, or recommended decision, which shall
and order of the Commission shall be prima be passed upon by the Commission or by the au-
facie evidence of the facts therein stated, except
thority within the Commission, if any, to whom
that the petitioner shall not be liable for costs
the function of passing upon the exceptions is
in the district court nor for costs at any subse-
delegated under section 155(d)(1) 1 of this title:
quent stage of the proceedings unless they ac-
Provided, however, That such authority shall not
crue upon his appeal. If the petitioner shall fi-
be the same authority which made the decision
nally prevail, he shall be allowed a reasonable
to which the exception is taken.
attorney’s fee, to be taxed and collected as a
1
part of the costs of the suit.
See References in Text note below.
4
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 77 of 88
§ 1205
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
Page 340
§ 1205. Funding
munities across the Nation, improved health
(a) In general
care and educational opportunities, and a bet-
ter quality of life for all Americans.
In addition to any amounts provided by appro-
(2) Continued progress in the deployment
priation Acts, funding for this chapter shall be
and adoption of broadband technology is vital
provided from the Digital Transition and Public
to ensuring that our Nation remains competi-
Safety Fund in accordance with section 3010 of
tive and continues to create business and job
the Digital Television Transition and Public
growth.
Safety Act of 2005 (47 U.S.C. 309 note).
(3) Improving Federal data on the deploy-
(b) Compensation
ment and adoption of broadband service will
assist in the development of broadband tech-
The Assistant Secretary of Commerce for
nology across all regions of the Nation.
Communications and Information shall com-
(4) The Federal Government should also rec-
pensate any such broadcast station licensee or
ognize and encourage complementary State ef-
permittee for reasonable costs incurred in com-
forts to improve the quality and usefulness of
plying with the requirements imposed pursuant
broadband data and should encourage and sup-
to section 1201(c) of this title from funds made
port the partnership of the public and private
available under this section. The Assistant Sec-
sectors in the continued growth of broadband
retary shall ensure that sufficient funds are
services and information technology for the
made available to effectuate geographically tar-
residents and businesses of the Nation.
geted alerts.
(c) Credit
(Pub. L. 110–385, title I, § 102, Oct. 10, 2008, 122
Stat. 4096.)
The Assistant Secretary of Commerce for
Communications and Information, in consulta-
SHORT TITLE
tion with the Under Secretary of Homeland Se-
Pub. L. 110–385, title I, § 101, Oct. 10, 2008, 122 Stat.
curity for Science and Technology and the 4096, provided that: ‘‘This title [enacting this chapter
Under Secretary of Commerce for Oceans and and amending section 1302 of this title] may be cited as
Atmosphere, may borrow from the Treasury be-
the ‘Broadband Data Improvement Act’.’’
ginning on October 1, 2006, such sums as may be
§ 1302. Advanced telecommunications incentives
necessary, but not to exceed $106,000,000, to im-
(a) In general
plement this chapter. The Assistant Secretary
of Commerce for Communications and Informa-
The Commission and each State commission
tion shall ensure that the Under Secretary of
with regulatory jurisdiction over telecommuni-
Homeland Security for Science and Technology
cations services shall encourage the deployment
and the Under Secretary of Commerce for on a reasonable and timely basis of advanced
Oceans and Atmosphere are provided adequate
telecommunications capability to all Americans
funds to carry out their responsibilities under
(including, in particular, elementary and sec-
sections 1203 and 1204 of this title. The Treasury
ondary schools and classrooms) by utilizing, in a
shall be reimbursed, without interest, from manner consistent with the public interest, con-
amounts in the Digital Television Transition venience, and necessity, price cap regulation,
and Public Safety Fund as funds are deposited
regulatory forbearance, measures that promote
into the Fund.
competition in the local telecommunications
market, or other regulating methods that re-
(Pub. L. 109–347, title VI, § 606, Oct. 13, 2006, 120
move barriers to infrastructure investment.
Stat. 1941.)
(b) Inquiry
REFERENCES IN TEXT
The Commission shall, within 30 months after
This chapter, referred to in subsecs. (a) and (c), was
February 8, 1996, and annually thereafter, initi-
in the original ‘‘this title’’, meaning title VI of Pub. L.
ate a notice of inquiry concerning the availabil-
109–347, Oct. 13, 2006, 120 Stat. 1936, which is classified
ity of advanced telecommunications capability
principally to this chapter. For complete classification
to all Americans (including, in particular, ele-
of title VI to the Code, see Short Title note set out
mentary and secondary schools and classrooms)
under section 1201 of this title and Tables.
Section 3010 of the Digital Television Transition and
and shall complete the inquiry within 180 days
Public Safety Act of 2005, referred to in subsec. (a), is
after its initiation. In the inquiry, the Commis-
section 3010 of Pub. L. 109–171, which is set out in a note
sion shall determine whether advanced tele-
under section 309 of this title.
communications capability is being deployed to
all Americans in a reasonable and timely fash-
CHAPTER 12—BROADBAND
ion. If the Commission’s determination is nega-Sec.
tive, it shall take immediate action to acceler-
1301. Findings.
ate deployment of such capability by removing
1302.
Advanced telecommunications incentives.
barriers to infrastructure investment and by
1303.
Improving Federal data on broadband.
promoting competition in the telecommunica-
1304.
Encouraging State initiatives to improve tions market.
broadband.
(c) Demographic information for unserved areas
1305.
Broadband Technology Opportunities Pro-
gram.
As part of the inquiry required by subsection
(b), the Commission shall compile a list of geo-
§ 1301. Findings
graphical areas that are not served by any pro-
The Congress finds the following:
vider of advanced telecommunications capabil-
(1) The deployment and adoption of broad-
ity (as defined by subsection (d)(1)) 1 and to the
band technology has resulted in enhanced eco-
1
nomic development and public safety for com-
See References in Text note below.
5
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 78 of 88
Page 341
TITLE 47—TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
§ 1303
extent that data from the Census Bureau is
Communications Commission shall include in-
available, determine, for each such unserved
formation comparing the extent of broadband
area—
service capability (including data trans-
(1) the population;
mission speeds and price for broadband service
(2) the population density; and
capability) in a total of 75 communities in at
(3) the average per capita income.
least 25 countries abroad for each of the data
(d) Definitions
rate benchmarks for broadband service uti-
For purposes of this subsection: 2
lized by the Commission to reflect different
(1) Advanced telecommunications capability
speed tiers.
The term ‘‘advanced telecommunications ca-
(2) Contents
pability’’ is defined, without regard to any
The Commission shall choose communities
transmission media or technology, as high-
for the comparison under this subsection in a
speed, switched, broadband telecommunica-
manner that will offer, to the extent possible,
tions capability that enables users to origi-
communities of a population size, population
nate and receive high-quality voice, data,
density, topography, and demographic profile
graphics, and video telecommunications using
that are comparable to the population size,
any technology.
population density, topography, and demo-
(2) Elementary and secondary schools
graphic profile of various communities within
The term ‘‘elementary and secondary
the United States. The Commission shall in-
schools’’ means elementary and secondary
clude in the comparison under this sub-
schools, as defined in section 7801 of title 20.
section—
(A) a geographically diverse selection of
(Pub. L. 104–104, title VII, § 706, Feb. 8, 1996, 110
countries; and
Stat. 153; Pub. L. 107–110, title X, § 1076(gg), Jan.
(B) communities including the capital cit-
8, 2002, 115 Stat. 2093; Pub. L. 110–385, title I,
ies of such countries.
§ 103(a), Oct. 10, 2008, 122 Stat. 4096.)
(3) Similarities and differences
REFERENCES IN TEXT
The Commission shall identify relevant sim-
Subsection (d)(1), referred to in subsec. (c), was in the
original ‘‘section 706(c)(1) of the Telecommunications
ilarities and differences in each community,
Act of 1996’’ and was translated as reading ‘‘section
including their market structures, the number
706(d)(1) of the Telecommunications Act of 1996’’, which
of competitors, the number of facilities-based
is classified to subsection (d)(1) of this section, to re-
providers, the types of technologies deployed
flect the probable intent of Congress and the redesigna-
by such providers, the applications and serv-
tion of subsec. (c) as (d) by Pub. L. 110–385, title I,
ices those technologies enable, the regulatory
§ 103(a)(2), Oct. 10, 2008, 122 Stat. 4096.
model under which broadband service capabil-
CODIFICATION
ity is provided, the types of applications and
Section was formerly set out as a note under section
services used, business and residential use of
157 of this title.
such services, and other media available to
Section was enacted as part of the Telecommunica-
consumers.
tions Act of 1996, and not as part of the Broadband Data
(c) Consumer survey of broadband service capa-
Improvement Act which comprises this chapter.
bility
AMENDMENTS
(1) In general
2008—Subsec. (b). Pub. L. 110–385, § 103(a)(1), sub-
stituted ‘‘annually’’ for ‘‘regularly’’.
For the purpose of evaluating, on a statis-
Subsecs. (c), (d). Pub. L. 110–385, § 103(a)(2), (3), added
tically significant basis, the national charac-
subsec. (c) and redesignated former subsec. (c) as (d).
teristics of the use of broadband service capa-
2002—Subsec. (c)(2). Pub. L. 107–110 substituted ‘‘sec-
bility, the Commission shall conduct and
tion 7801 of title 20’’ for ‘‘paragraphs (14) and (25), re-
make public periodic surveys of consumers in
spectively, of section 14101 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 8801)’’.
urban, suburban, and rural areas in the large
business, small business, and residential con-
EFFECTIVE DATE OF 2002 AMENDMENT
sumer markets to determine—
Amendment by Pub. L. 107–110 effective Jan. 8, 2002,
(A) the types of technology used to provide
except with respect to certain noncompetitive pro-
the broadband service capability to which
grams and competitive programs, see section 5 of Pub.
consumers subscribe;
L. 107–110, set out as an Effective Date note under sec-
(B) the amounts consumers pay per month
tion 6301 of Title 20, Education.
for such capability;
DEFINITIONS
(C) the actual data transmission speeds of
For definitions of terms used in this section, see sec-
such capability;
tion 3(b) of Pub. L. 104–104, set out as a Common Termi-
(D) the types of applications and services
nology note under section 153 of this title.
consumers most frequently use in conjunc-
tion with such capability;
§ 1303. Improving Federal data on broadband
(E) for consumers who have declined to
(a) Omitted
subscribe to broadband service capability,
the reasons given by such consumers for de-
(b) International comparison
clining such capability;
(1) In general
(F) other sources of broadband service ca-
As part of the assessment and report re-
pability which consumers regularly use or
quired by section 1302 of this title, the Federal
on which they rely; and
(G) any other information the Commission
2 So in original. Probably should be ‘‘section:’’.
deems appropriate for such purpose.
6
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 79 of 88
Federal Communications Commission
§ 1.1409
or condition alleged in the complaint
case that the rate, term, or condition
not to be just and reasonable. Factual
is not just and reasonable or that the
allegations shall be supported by affi-
denial of access violates 47 U.S.C.
davit of a person or persons with actual
§ 224(f). If, however, a utility argues
knowledge of the facts and exhibits that the proposed rate is lower than its
shall be verified by the person who pre-
incremental costs, the utility has the
pares them. The response, reply, and burden of establishing that such rate is
other pleadings may be signed by coun-
below the statutory minimum just and
sel.
reasonable rate. In a case involving a
(b) The response shall be served on denial of access, the utility shall have
the complainant and all parties listed
the burden of proving that the denial
in complainant’s certificate of service.
was lawful, once a prima facie case is
(c) The reply shall be served on the
established by the complainant.
respondent and all parties listed in re-
spondent’s certificate of service.
(c) The Commission shall determine
(d) Failure to respond may be deemed
whether the rate, term or condition
an admission of the material factual complained of is just and reasonable.
allegations contained in the complaint.
For the purposes of this paragraph, a
rate is just and reasonable if it assures
[44 FR 31650, June 1, 1979]
a utility the recovery of not less than
§ 1.1408
Number of copies and form of
the additional costs of providing polepleadings.
attachments, nor more than an amount
determined by multiplying the per-
(a) An original and three copies of centage of the total usable space, or
the complaint, response, and reply the percentage of the total duct or con-
shall be filed with the Commission.
(b) All papers filed in the complaint
duit capacity, which is occupied by the
proceeding must be drawn in con-
pole attachment by the sum of the op-
formity with the requirements of erating expenses and actual capital
§§ 1.49, 1.50 and 1.52.
costs of the utility attributable to the
entire pole, duct, conduit, or right-of-
§ 1.1409
Commission consideration of
way.the complaint.
(d) The Commission shall deny the
(a) In its consideration of the com-
complaint if it determines that the
plaint, response, and reply, the Com-
complainant has not established a
mission may take notice of any infor-
prima facie case, or that the rate, term
mation contained in publicly available
or condition is just and reasonable, or
filings made by the parties and may ac-
that the denial of access was lawful.
cept, subject to rebuttal, studies that
(e) When parties fail to resolve a dis-
have been conducted. The Commission
pute regarding charges for pole attach-
may also request that one or more of
ments and the Commission’s complaint
the parties make additional filings or
procedures under Section 1.1404 are in-
provide additional information. Where
voked, the Commission will apply the
one of the parties has failed to provide
following formulas for determining a
information required to be provided by
maximum just and reasonable rate:
these rules or requested by the Com-
mission, or where costs, values or
(1) The following formula shall apply
amounts are disputed, the Commission
to attachments to poles by cable opera-
may estimate such costs, values or tors providing cable services. This for-
amounts it considers reasonable, or mula shall also apply to attachments
may decide adversely to a party who
to poles by any telecommunications
has failed to supply requested informa-
carrier (to the extent such carrier is
tion which is readily available to it, or
not a party to a pole attachment agree-
both.
ment) or cable operator providing tele-
(b) The complainant shall have the communications services until Feb-
burden of establishing a prima facie ruary 8, 2001:
317
7
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 80 of 88
§ 1.1409
47 CFR Ch. I (10–1–11 Edition)
Maximum
Net Cost of
Carrying
= Space Factor ×
×
Rate
a Bare Pole
Ch
e Rate
arg
Where
Space = Space Occupied by Attachment
Factor
Total Usable Space
(2) With respect to attachments to than that yielded by the applicable for-
poles by any telecommunications car-
mula in paragraph 1.1409(e)(2)(ii) of this
rier or cable operator providing tele-
section:
communications services, the max-
Rate = Space Factor × Cost
imum just and reasonable rate shall be
Where Cost
the higher of the rate yielded by para-
in Urbanized Service Areas = 0.66 × (Net Cost
graphs (e)(2)(i) or (e)(2)(ii) of this sec-
of a Bare Pole × Carrying Charge Rate)
tion.
in Non-Urbanized Service Areas = 0.44 × (Net
(i) The following formula applies to
Cost of a Bare Pole × Carrying Charge
the extent that it yields a rate higher
Rate).
(ii) The following formula applies to
mula in paragraph 1.1409(e)(2)(i) of this
the extent that it yields a rate higher
section:
than that yielded by the applicable for-
ER09MY11.025</GPH>
(3) The following formula shall apply
erators and telecommunications car-
to attachments to conduit by cable op-
riers:
ER09MY11.024</GPH>
318
ER29JN01.012</MATH>
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 81 of 88
Federal Communications Commission
§ 1.1411
Maximum
1
Duct
Carrying
⎡
1
⎤
⎡No. of
Net Conduit Investment
⎤
Rate per
=
×
Charge
⎢ Ducts
⎥ ×
Linear ft.
⎣
⎢Number of
No
/m.
Ducts
. of Inner Ducts ⎦⎥ ×
× System Duct Length (ft./m.)
⎣
⎦
Rate
(Percentage of Conduit Capacity) (Net Linear Cost of a Conduit)
simplified as:
Carrying
Maximum Rate
Duct
1
Net Conduit Investment
=
×
× Charge
Per Linear ft./m.
No. of Inner Ducts
System Duct Length (ft./m.)
Rate
If no inner-duct is installed the frac-
(3) Order a refund, or payment, if ap-
tion, ‘‘1 Duct divided by the No. of propriate. The refund or payment will
Inner-Ducts’’ is presumed to be 1⁄2.
normally be the difference between the
(f) Paragraph (e)(2) of this section amount paid under the unjust and/or
shall become effective February 8, 2001
unreasonable rate, term, or condition
(i.e., five years after the effective date
and the amount that would have been
of the Telecommunications Act of paid under the rate, term, or condition
1996). Any increase in the rates for pole
established by the Commission, plus in-
attachments that results from the terest, consistent with the applicable
adoption of such regulations shall be statute of limitations; and
phased in over a period of five years be-
(b) If the Commission determines
ginning on the effective date of such that access to a pole, duct, conduit, or
regulations in equal annual incre-
right-of-way has been unlawfully de-
ments. The five-year phase-in is to nied or delayed, it may order that ac-
apply to rate increases only. Rate re-
ductions are to be implemented imme-
cess be permitted within a specified
diately. The determination of any rate
time frame and in accordance with
increase shall be based on data cur-
specified rates, terms, and conditions.
rently available at the time of the cal-
(c) Order a refund, or payment, if ap-
culation of the rate increase.
propriate. The refund or payment will
normally be the difference between the
[43 FR 36094, Aug. 15, 1978, as amended at 52
amount paid under the unjust and/or
FR 31770, Aug. 24, 1987; 61 FR 43025, Aug. 20,
1996; 61 FR 45619, Aug. 29, 1996; 63 FR 12025,
unreasonable rate, term, or condition
Mar. 12, 1998; 65 FR 31282, May 17, 2000; 66 FR
and the amount that would have been
34580, June 29, 2001; 76 FR 26639, May 9, 2011]
paid under the rate, term, or condition
established by the Commission from
§ 1.1410
Remedies.
the date that the complaint, as accept-If the Commission determines that able, was filed, plus interest.
the rate, term, or condition complained
[44 FR 31650, June 1, 1979, as amended at 76
of is not just and reasonable, it may
FR 26639, May 9, 2011]
prescribe a just and reasonable rate,
term, or condition and may:
§ 1.1411
Meetings and hearings.
(a) If the Commission determinesthat the rate, term, or condition com-
The Commission may decide each
plained of is not just and reasonable, it
complaint upon the filings and infor-
may prescribe a just and reasonable mation before it, may require one or
rate, term, or condition and may:
more informal meetings with the par-
(1) Terminate the unjust and/or un-
ties to clarify the issues or to consider
reasonable rate, term, or condition;
settlement of the dispute, or may, in
(2) Substitute in the pole attachment
its discretion, order evidentiary proce-
agreement the just and reasonable dures upon any issues it finds to have
rate, term, or condition established by
been raised by the filings.
the Commission;
319
ER29JN01.015</MATH>
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 82 of 88
§ 1.1408
47 CFR Ch. I (10–1–10 Edition)
(b) The response shall be served on that the proposed rate is lower than its
the complainant and all parties listed
incremental costs, the utility has the
in complainant’s certificate of service.
burden of establishing that such rate is
(c) The reply shall be served on the
below the statutory minimum just and
respondent and all parties listed in re-
reasonable rate. In a case involving a
spondent’s certificate of service.
denial of access, the utility shall have
(d) Failure to respond may be deemed
the burden of proving that the denial
an admission of the material factual was lawful, once a prima facie case is
allegations contained in the complaint.
established by the complainant.
[44 FR 31650, June 1, 1979]
(c) The Commission shall determine
whether the rate, term or condition
§ 1.1408
Number of copies and form of
complained of is just and reasonable.pleadings.
For the purposes of this paragraph, a
(a) An original and three copies of rate is just and reasonable if it assures
the complaint, response, and reply a utility the recovery of not less than
shall be filed with the Commission.
the additional costs of providing pole
(b) All papers filed in the complaint
attachments, nor more than an amount
proceeding must be drawn in con-
determined by multiplying the per-
formity with the requirements of centage of the total usable space, or
§§ 1.49, 1.50 and 1.52.
the percentage of the total duct or con-
duit capacity, which is occupied by the
§ 1.1409
Commission consideration of
pole attachment by the sum of the op-the complaint.
erating expenses and actual capital
(a) In its consideration of the com-
costs of the utility attributable to the
plaint, response, and reply, the Com-
entire pole, duct, conduit, or right-of-
mission may take notice of any infor-
way.
mation contained in publicly available
(d) The Commission shall deny the
filings made by the parties and may ac-
complaint if it determines that the
cept, subject to rebuttal, studies that
complainant has not established a
have been conducted. The Commission
prima facie case, or that the rate, term
may also request that one or more of
or condition is just and reasonable, or
the parties make additional filings or
that the denial of access was lawful.
provide additional information. Where
(e) When parties fail to resolve a dis-
one of the parties has failed to provide
pute regarding charges for pole attach-
information required to be provided by
ments and the Commission’s complaint
these rules or requested by the Com-
mission, or where costs, values or procedures under Section 1.1404 are in-
amounts are disputed, the Commission
voked, the Commission will apply the
may estimate such costs, values or following formulas for determining a
amounts it considers reasonable, or maximum just and reasonable rate:
may decide adversely to a party who
(1) The following formula shall apply
has failed to supply requested informa-
to attachments to poles by cable opera-
tion which is readily available to it, or
tors providing cable services. This for-
both.
mula shall also apply to attachments
(b) The complainant shall have the to poles by any telecommunications
burden of establishing a prima facie carrier (to the extent such carrier is
case that the rate, term, or condition
not a party to a pole attachment agree-
is not just and reasonable or that the
ment) or cable operator providing tele-
denial of access violates 47 U.S.C. communications services until Feb-
§ 224(f). If, however, a utility argues ruary 8, 2001:
Maximum
Net Cost of
Carrying
= Space Factor ×
×
Rate
a Bare Pole
Ch
e Rate
arg
312
10
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 83 of 88
Federal Communications Commission
§ 1.1409
Where
Space = Space Occupied by Attachment
Factor
Total Usable Space
(2) Subject to paragraph (f) of this pole attachment agreement) or cable
section the following formula shall operator providing telecommuni-
apply to attachments to poles by any
cations services beginning February 8,
telecommunications carrier (to the ex-
2001:
tent such carrier is not a party to a
⎡Carrying⎤
Maximum Rate = Space Factor × Net Cost of a Bare Pole × ⎢ Charge ⎥
⎢ Rate
⎣
⎦
⎥
⎡ Space
⎛ 2
pace
⎛
⎞
Unusable S
⎞ ⎤
⎢⎝Occupied⎠ +
×
⎝
⎜
⎥
3
No. of Attaching Entities⎠⎟
e Factor
Where Spac
= ⎢
⎥
⎢
t
Pole Heigh
⎥
⎢
⎥
⎣
⎢
⎦
⎥
(3) The following formula shall apply
erators and telecommunications car-
to attachments to conduit by cable op-
riers:
Maximum
1
Duct
Carrying
⎡
1
⎤
⎡No. of
Net Conduit Investment
⎤
Rate per
=
×
Charge
⎢ Ducts
⎥ ×
Linear ft.
⎣
⎢Number of
No
/m.
Ducts
. of Inner Ducts ⎦⎥ ×
× System Duct Length (ft./m.)
⎣
⎦
Rate
(Percentage of Conduit Capacity) (Net Linear Cost of a Conduit)
simplified as:
Carrying
Maximum Rate
Duct
1
Net Conduit Investment
=
×
× Charge
Per Linear ft./m.
No. of Inner Ducts
System Duct Length (ft./m.)
Rate
If no inner-duct is installed the frac-
ginning on the effective date of such
tion, ‘‘1 Duct divided by the No. of regulations in equal annual incre-
Inner-Ducts’’ is presumed to be 1⁄
ER29JN01.015</MATH>
2.
ments. The five-year phase-in is to
(f) Paragraph (e)(2) of this section apply to rate increases only. Rate re-
shall become effective February 8, 2001
ductions are to be implemented imme-
(i.e., five years after the effective date
diately. The determination of any rate
of the Telecommunications Act of
1996). Any increase in the rates for pole
ER29JN01.014</MATH>
attachments that results from the
adoption of such regulations shall be
phased in over a period of five years be-
313
ER29JN01.013</MATH>
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 84 of 88
§ 1.1410
47 CFR Ch. I (10–1–10 Edition)
increase shall be based on data cur-
(b) If any person shall in any written
rently available at the time of the cal-
response to Commission correspond-
culation of the rate increase.
ence or inquiry or in any application,
pleading, report, or any other written
[43 FR 36094, Aug. 15, 1978, as amended at 52
statement submitted to the Commis-
FR 31770, Aug. 24, 1987; 61 FR 43025, Aug. 20,
1996; 61 FR 45619, Aug. 29, 1996; 63 FR 12025,
sion pursuant to this subpart make any
Mar. 12, 1998; 65 FR 31282, May 17, 2000; 66 FR
misrepresentation bearing on any mat-
34580, June 29, 2001]
ter within the jurisdiction of the Com-
mission, the Commission may, in addi-
§ 1.1410
Remedies.
tion to any other remedies, includingIf the Commission determines that criminal penalties under section 1001 of
the rate, term, or condition complained
Title 18 of the United States Code, im-
of is not just and reasonable, it may
pose a forfeiture pursuant to section
prescribe a just and reasonable rate, 503(b) of the Communications Act, 47
term, or condition and may:
U.S.C. 503(b).
(a) Terminate the unjust and unrea-
§ 1.1414
State certification.
sonable rate, term, or condition;(b) Substitute in the pole attachment
(a) If the Commission does not re-
agreement the just and reasonable ceive certification from a state that:
rate, term, or condition established by
(1) It regulates rates, terms and con-
the Commission; and
ditions for pole attachments;
(c) Order a refund, or payment, if ap-
(2) In so regulating such rates, terms
propriate. The refund or payment will
and conditions, the state has the au-
normally be the difference between the
thority to consider and does consider
amount paid under the unjust and/or the interests of the subscribers of cable
unreasonable rate, term, or condition television services as well as the inter-
and the amount that would have been
ests of the consumers of the utility
paid under the rate, term, or condition
services; and,
established by the Commission from
(3) It has issued and made effective
the date that the complaint, as accept-
rules and regulations implementing the
able, was filed, plus interest.
state’s regulatory authority over pole
attachments (including a specific
[44 FR 31650, June 1, 1979]
methodology for such regulation which
§ 1.1411
Meetings and hearings.
has been made publicly available in thestate), it will be rebuttably presumed
The Commission may decide each that the state is not regulating pole at-
complaint upon the filings and infor-
tachments.
mation before it, may require one or
(b) Upon receipt of such certification,
more informal meetings with the par-
the Commission shall give public no-
ties to clarify the issues or to consider
tice. In addition, the Commission shall
settlement of the dispute, or may, in
compile and publish from time to time,
its discretion, order evidentiary proce-
a listing of states which have provided
dures upon any issues it finds to have
certification.
been raised by the filings.
(c) Upon receipt of such certification,
the Commission shall forward any
§ 1.1412
Enforcement.
pending case thereby affected to theIf the respondent fails to obey any state regulatory authority, shall so no-
order imposed under this subpart, the
tify the parties involved and shall give
Commission on its own motion or by
public notice thereof.
motion of the complainant may order
(d) Certification shall be by order of
the respondent to show cause why it the state regulatory body or by a per-
should not cease and desist from vio-
son having lawful delegated authority
lating the Commission’s order.
under provisions of state law to submit
such certification. Said person shall
§ 1.1413
Forfeiture.
provide in writing a statement that he(a) If any person willfully fails to or she has such authority and shall cite
obey any order imposed under this sub-
the law, regulation or other instru-
part, or any Commission rule, or
ment conferring such authority.
314
12
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USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 85 of 88
11-1146
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
American Electric Power Service, et al., Petitioners,
v.Federal Communications Commission and United States of America,
Respondents.
CERTIFICATE OF SERVICE
I, Nandan M. Joshi, hereby certify that on February 17, 2012, I electronicallyfiled the foregoing Brief for Respondents with the Clerk of the Court for the
United States Court of Appeals for the D.C. Circuit by using the CM/ECF
system. Participants in the case who are registered CM/ECF users will be
served by the CM/ECF system.
Some of the participants in the case, denoted with asterisks below, are not
CM/ECF users. I certify further that I have directed that copies of the
foregoing document (without attachments) be mailed by First-Class Mail to
those persons, unless another attorney at the same mailing address is
receiving electronic service.
Eric B. Langley
Sean Branley Cunningham
J. Russell Campbell
Hunton & Williams LLP
Jason Tompkins
2200 Pennsylvania Avenue, N.W.
Balch & Bingham LLP
Washington, D.C. 20037
1901 Sixth Avenue North
Counsel for: Petitioner
Suite 1500
Birmingham, Alabama 35203
Counsel for Petitioner
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 86 of 88
Kristen C. Limarzi
David P. Murray
Robert B. Nicholson
*Thomas Jones
U.S. Department of Justice
Willkie Farr & Gallagher LLP
Antitrust Division, Apellate Section
1875 K Street, N.W.
Room 3224
Washington, D.C. 20006
950 Pennsylvania Avenue, N.W.
Counsel for: Intervenor tw telecom
Washington, D.C. 20530
inc.
Counsel for: USA
Michael E. Glover
Helgi C. Walker
Edward Shakin
*Bennett L. Ross
Katharine R. Saunders
Brendan T. Carr
Verizon
Wiley Rein LLP
1320 North Courthouse Road
1776 K Street, N.W.
Ninth Floor
Washington, DC 20006
Arlington, VA 22201
Counsel for: Intervenor Verizon,
Counsel for: Intervenor Verizon
USTelecom, CenturyLink and AT&T
Daniel L. Brenner
Michael Fitch
Hogan Lovells US LLP
PCIA-The Wireless Infrastructure
Columbia Square
Association
555 Thirteenth Street, N.W.
901 N. Washington Street
Washington, D.C. 20004-1109
Suite 600
Counsel for: Intervenor Bright
Alexandria, VA 22314
House Networks, LLC
Counsel for: Intervenor PCIA-The
Wireless Infrastructure Association
Craig E. Gilmore
Gardner F. Gillespie
Wilkinson Barker Knauer, LLP
Paul A. Werner, III
2300 N Street, N.W.
Hogan Lovells US LLP
Suite 700
Columbia Square
Washington, D.C. 20036
555 Thirteenth Street, N.W.
Counsel for: Intervenor PCIA-The
Washington, D.C. 20004-1109
Wireless Infrastructure Association
Counsel for: Intervenor Time
Warner Cable Inc.
2
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 87 of 88
Michael F. Altschul
Jonathan D. Hacker
*Brian M. Josef
Loren L. AliKhan
CTIA-The Wireless Association
O’Melveny & Myers LLP
1400 16th Street, N.W.
1625 Eye Street, N.W.
Suite 600
Washington, D.C. 20006-4001
Washington, D.C. 20036
Counsel for: Intervenor CTIA
Counsel for: Intervenor CTIA
John B. Richards
Christopher A. Fedeli
Thomas B. Magee
Judicial Watch, Inc.
Keller and Heckman, LLP
425 Third Street, S.W., Suite 800
1001 G Street, N.W.
Washington, DC 20024
Suite 500 West
Counsel for: Intervenor Mediacom
Washington, D.C. 20001
Communications Corporation
Counsel for: Intervenors Consumers
Energy Company, et al.
Lynn Charytan
*Jeffrey E. Rummel
Comcast Corporation
Adam D. Bowser
300 New Jersey Avenue, N.W.
Arent Fox LLP
Suite 700
1050 Connecticut Avenue, N.W.
Washington, D.C. 20001
Washington, D.C. 20036
Counsel for: Intervenor Comcast
Counsel for: Intervenor Sunesys,
LLC
Wesley R. Heppler
Neal Morse Goldberg
Paul Glist
NCTA
John D. Seiver
25 Massachusetts Avenue, N.W.
T. Scott Thompson
Suite 1000
Davis Wright Tremaine LLP
Washington, DC 20001-1431
1919 Pennsylvania Avenue, N.W.
Counsel for: Intervenor NCTA
Suite 800
Washington, D.C. 20006
Counsel for: Intervenors Comcast,
Charter Communications, Inc.,
Mediacom Communications
Corporation, and NextG Networks,
Inc.
3
USCA Case #11-1146 Document #1359138 Filed: 02/17/2012 Page 88 of 88
John E. Benedict
Christopher M. Heimann
1099 New York Avenue, N.W.
Gary Liman Phillips
Suite 250
AT&T
Washington, D.C. 20001
1120 20th Street, N.W.
Counsel for: Intervenor CenturyLink Suite 1000
Local Operating Companies
Washington, D.C. 20036
Counsel for: Intervenor AT&T
*William Aubrey Brown
Jonathan E. Nuechterlein
AT&T Inc.
Heather M. Zachary
1120 20th Street, N.W.
Wilmer Cutler Pickering Hale and
Suite 1000
Dorr LLP
Washington, D.C. 20036
1875 Pennsylvania Avenue, N.W.
Counsel for: Intervenor AT&T
Washington, D.C. 20006-1420
Counsel for: Intervenor NCTA and
Comcast
Shirley S. Fujimoto
*Aryeh B. Fishman
Kevin M. Cookler
Edward Comer
*Jeffrey L. Sheldon
Edison Electric Institute
Fish & Richardson P.C.
701 Pennsylvania Avenue
1425 K Street, N.W. 11th Floor
Washington, D.C. 20004
Washington, D.C. 20005
Counsel for: Amicus Curiae Edison
Counsel for: Amicus Curiae Edison
Electric Institute
Electric Institute
/s/ Nandan M. Joshi
4
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