Three Pole Attachment Claims Progress under FCC’s New Complaint Proceedings

July 31, 2019

In the past year, the Federal Communications Commission (“FCC”) made numerous changes to the way that pole attachment complaints are governed as they pertain to setting the rates that incumbent local exchange carriers (“ILECs”) are charged for pole attachments. So far there have been three complaints filed after these changes were made. This post will review the details of the FCC’s orders and then summarize some of each claimant’s and respondent’s arguments.In July 2018, the FCC adopted a Report and Order designed to consolidate the procedural rules for formal complaints against common carriers, over pole attachments, and about advanced communications services and equipment into one uniform system. In terms of specifics, the Report and Order adopts the following revisions:

  • Creates a system of uniform filing deadlines, allowing 30 days to answer a complaint and shortening the reply period to 10 days;
  • Extends to pole attachment proceedings information designation requirements, which stipulate that the complaint, answer, and reply all include information about individuals with firsthand knowledge of the facts surrounding the claims;
  • Adopts a new rules that allow for up to ten interrogatories to be served at both the complaint and answer stage, and up to five interrogatories to be served at the reply stage;
  • Clarifies that motions to dismiss may be filed, although the FCC expressly notes that they will be rarely granted;
  • Continues to allow for bifurcation, which separates proceedings regarding determination of damages from determinations of liability;
  • Retains the Accelerated Docket rules and applies them to pole attachments;
  • Establishes a 270-day shot clock over complaints that allege unjust and unreasonable rates, terms, and conditions regarding pole attachments; and
  • Maintains existing pole attachment rules that require complaints to include information about pole costs and compels utility pole operators to disclose such information to attachers upon request before a complaint is filed.

Another significant change to the pole attachment complaint process was adopted the following month in the FCC’s Third Report and Order, which more directly focused on pole attachment issues. In a subsection titled, “Addressing Outdated Rate Disparities” the FCC reversed its earlier presumption about the rates that ILECs should be charged. The FCC’s Third Report and Order asserts that since the FCC last considered this issue in 2011, the rate of pole ownership among ILECs has decreased, eroding their bargaining power against electric utilities, whose pole ownership increased during the same timeframe. In response, the FCC created a presumption for new and newly renewed agreements that ILECs are similarly situated to non-incumbent attachers and should be treated like a competitive local exchange carrier (“CLEC”) or a cable provider with respect to their attachment rates. This presumption can only be rebutted if the respondent utility demonstrates with clear and convincing evidence that the ILEC receives a material advantage over other attachers, such as not requiring advanced approval for attachments, guaranteed space on the pole, or preferential location on the pole.

The first complaint under these rules was filed on April 22, 2019 by AT&T against Alabama Power. In its complaint, AT&T contends that because Alabama Power owns more than three-quarters of the poles within the parties’ mutual service territory, the presumption indicates that the telecommunications company is in a disadvantaged bargaining position. AT&T also alleges that Alabama Power presented no credible evidence of a material advantage to rebut this presumption and that AT&T is entitled to the same $8 per pole per year telecom rate that Alabama Power charges CLECs. AT&T is demanding the return of alleged overpayments dating back to 2012.

On June 21, 2019, Alabama Power filed a response. In its response, Alabama Power asserts that an arbitration clause in the parties’ agreement requires them to resolve the issues presented by AT&T’s complaint via non-binding arbitration. Alabama Power further alleges that, AT&T never met the Third Report and Order’s requirement of good faith negotiations between the parties prior to filing a complaint with the Commission. In substantive response to AT&T’s complaint, Alabama Power argues that the parties’ agreement was entered into in 1978, and the FCC’s Third Report and Order is therefore not applicable to it; the parties’ agreement does provide material advantages to AT&T; and, if AT&T were to be charged on the per-foot basis that AT&T recommends, its charges would be higher.

Crown Castle Fiber initiated the second case under the FCC’s new rules, on June 19, 2019, when it filed two complaints against Commonwealth Edison Company (“ComEd”), the first for denial of access and the second for unlawful rates. Crown Castle asserts that ComEd’s practice of “red tagging” poles constitutes denial of access. According to the Complaint, ComEd “red tags” poles that have lost more than a third of their original strength. These poles must either be reinforced or replaced, depending on their condition. Crown Castle alleges that ComEd is violating standard industry practice by not replacing the priority poles within thirty days and the non-priority poles within one year. Crown Castle also contends that ComEd is conducting its analysis based on one-third of the pole’s original strength when it should be making calculations including the current load weight on the pole. Finally, Crown Castle claims that ComEd has been charging it to replace poles that are red tagged due to pre-existing conditions, which violates the FCC’s Third Report and Order. In its other complaint, Crown Castle accuses ComEd of charging rates that exceed the Telecom Rate formula. In this complaint, Crown Castle argues that because its wireless attachments take up a relatively small portion of the usable space on the pole, it is being overcharged, and thus demands back the amount of its overpayments starting from 2013.

ComEd responded to these complaints by filing a motion to dismiss and a motion for abeyance on June 28, 2019. The motion to dismiss is based on a jurisdictional claim that the State of Illinois certified its regulation of pole attachments, and in so doing, reverse pre-empted the jurisdiction of the FCC. The motion argues that the FCC acknowledged this as such by listing Illinois amongst the states on the May 2010 Public Notice “States that Have Certified that They Regulate Pole Attachments.” On July 8, Crown Castle filed an opposition to these motions on the basis that the Illinois Commerce Commission’s (“ICC”) pole attachment rules were designed to regulate attachments made by cable television operators, making the certification irrelevant. A week later, on July 15, 2019, the FCC Enforcement Bureau denied the motion to dismiss and the motion for abeyance. According to the Enforcement Bureau, even though Illinois certified in 1985 that the ICC had made rules that implement the state’s “regulatory authority over pole attachments,” a December 2018 notice from the ICC to the FCC revealed that it lacked regulatory authority over attachments owned by telecommunication companies on poles owned by electric utilities.

The third case under the new rules was initiated on July 1, 2019, when AT&T filed a complaint against Florida Power & Light (“FP & L”), claiming that they were being charged an unjust and unreasonable pole attachment rate. According to the Complaint, of the estimated 638,914 poles that the two entities share, FP & L owns about two-thirds. AT&T further asserts that it believes that FP & L cannot substantiate that it provides a material advantage over other attachers. AT&T also contends that because the parties’ agreement contains an evergreen provision, the Third Report and Order’s new rules should apply to the parties from the date that the order took effect. However, AT&T further argues that, even without the FCC’s new presumption for ILECs, it was being charged an unjust and unreasonable rate, and it demands the return of all overpayments for the period covered by the five year statute of limitations.

If you would like additional information regarding the FCC’s new pole attachment complaint procedures or any of the pending complaint proceedings, please contact Charles Zdebski at 202.659.6605.

This Utilities and Telecommunications Alert is intended to keep readers current on matters affecting businesses and is not intended to be legal advice.

© Eckert Seamans Cherin & Mellott, LLC, 2019, all rights reserved.

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