******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Cable Texas, Inc., Complainant v. Entergy Services, Inc., Respondent ) ) ) ) ) ) ) File No. PA 97-006 ORDER Adopted: April 16, 1999 Released: April 21, 1999 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. In this Order we consider a complaint ("Complaint") filed by Cable Texas, Inc. ("CTX"), pursuant to Section 224 of the Communications Act of 1934, as amended, ("Act") and Part 1, Subpart J of the Commission's Rules, against Entergy Services, Inc. ("Entergy"). Pursuant to Section 224, the Commission adjudicates disputes between utilities and cable operators concerning allegedly unjust and unreasonable pole attachment rates, terms, and conditions. In its Complaint, CTX requests that we declare that Entergy's application of the field count provision of the pole attachment agreement between the parties renders that provision an unjust and unreasonable term or condition. CTX requests that we order a refund of the amount paid for the field count conducted by Entergy. CTX also requests other relief that the Commission deems just, reasonable, and proper. Lastly, CTX requests that we grant it payment of its costs and attorneys' fees in prosecuting this action. We will set a just and reasonable fee for the field count conducted by Entergy and order a refund of the amount paid in excess of that fee. We deny the request for payment of costs and attorneys' fees. 2. The Complaint was filed on July 9, 1997. Entergy moved for an extension of time and filed its response ("Answer") on August 22, 1997. CTX filed a reply ("Reply") on September 11, 1997. The record is replete with additional unauthorized filings. The Commission's Rules allow for a response to a complaint and a reply to that response. "[N]o other filings and no motions other than for extension of time will be considered unless authorized by the Commission." The Commission may resolve the complaint based upon the filings, it may meet with the parties to clarify issues, and it may, at its discretion, order evidentiary proceedings. To the extent the filings provide useful factual information which should have been provided with the original, prescribed filings, we will include the factual information in the record. 3. The Commission may also request additional filings or more information. On June 2, 1998, the Commission issued a request to Entergy, pursuant to 1.1409(a) of the Commission's Rules, for additional information ("Request"). Entergy was given 30 days to provide the further information and, with the agreement of CTX, an extension until July 9, 1998. Entergy submitted an incomplete reply to the Commission's request on July 9, 1998 ("Submission") and a further reply, consisting solely of maps, to the Commission's request on July 23, 1998 ("Maps"). CTX submitted their response to the Maps by letter dated July 31, 1998. Any additional filings after Entergy's final response to our Request and CTX's July 31, 1998 response will be stricken from the record. 4. The Commission requested, by letter dated August 10, 1998, that Entergy suggest a meeting date before August 21, 1998, "in order to clear up the remaining details and resolve this complaint." By letter dated August 20, 1998, Entergy declined to meet with the Commission and requested a hearing. CTX opposed the hearing on August 24, 1998, and requested an immediate decision. The pole attachment complaint procedures are designed to ensure a simple and expeditious process. Whether to hold a hearing on any issue related to a complaint is solely at the discretion of the Commission. The Commission may "so conduct its proceedings as will best conduce to the proper dispatch of business and the ends of justice." We have before us sufficient information upon which to base our decision and will not hold a hearing in this proceeding. II. BACKGROUND 5. CTX and Entergy have a pole attachment agreement ("Agreement") with an effective date of February 1, 1992. The Agreement provides for a field count to be made of the poles to which CTX has made attachments ("Pole Survey"). The Pole Survey is to be made at the discretion of Entergy "for the purpose of computation of the correct rental fees due." CTX is to reimburse the costs of the Pole Survey. The Agreement also specifies that no attachments will be made to Entergy's poles without written permission from Entergy. Clause 3.03C, entitled "Field Counts and Unreported Contacts," specifies at paragraph (c) that, should there be unreported attachments, rental for these attachments will be calculated from the last field count and a charge of $25 for each unauthorized attachment will be levied as a "reasonable administrative charge." 6. A Pole Survey was conducted by Entergy from the end of May through August of 1996 ("1996 Count"). From the Pole Survey, Entergy determined that CTX was attached to 8,930 poles. Entergy sent an invoice to CTX requesting payment for "two contractors to field inspect" in the amount of $31,046 on October 22, 1996. By letter of November 21, 1996, CTX protested the amount. On February 14, 1997, CTX paid the amount of the invoice, which included the disputed amount. The letter accompanying CTX's payment states that the amount is still in dispute and recites that payment is being made in response to representations by Entergy that it would process no further applications for attachment until the invoice was paid. 7. In the Request, we asked Entergy to provide information from which to determine the nature and purpose of the work done by the contractors, for which CTX was billed. We were advised that the contractors had been employees of Wink Engineering, a contractor that was providing a number of general engineering and related services to Entergy at the time and are now employees of Entergy. We were told that the instructions to the contractors were oral and there was no contract, guidance, or statement of work provided to the contractors. A declaration from Ms. Carma Boyd, an employee of Entergy, includes a copy of the invoice of the contractor for the 1996 Count ("Invoice"). The Invoice indicates a total of 548 hours plus mileage. CTX submitted a document identical to the one submitted by Ms. Boyd except that it included the number of hours multiplied by 2 contractors at $26.80 per hour plus $2,745.30 in mileage for a total Invoice amount of $32,118.10. 8. In our Request, we asked for the work product delivered as a result of the work and any report or documentation on which the charges are based. Entergy indicates that the work product provided by the contractor that performed the 1996 Count is the Maps delivered to the Commission on July 23, 1998. The letter accompanying these maps indicates that they are copies of the maps made during the survey for the 1996 Count. CTX asserts that these maps are not copies of the ones previously reviewed by CTX in response to the Pole Survey and that the maps previously reviewed at Entergy's field office "were brand new renderings of distribution facilities in our service area complete with color-coded schematics of every attachment, on every pole in CTX's service area." It is not necessary to a resolution of this matter to determine which maps were presented to CTX. We will accept for the purpose of proceeding on this Complaint that the Maps are the work product of the 1996 Count. III. DISCUSSION 9. The main issue is whether the amount billed to CTX for the 1996 Count is excessive. To resolve this issue requires consideration of 1) whether the field count was solely related to cable attachments or contained an element of benefit to Entergy and 2) if the project was solely a field count of pole attachments, what is a reasonable cost for such a survey. A related issue is whether the Entergy improperly used the threat of imposition of unauthorized attachment fees in exacting payment of the disputed amount. 10. For each new pole attachment, CTX files an application with Entergy indicating the number of poles involved and the general vicinity of the installation, along with a sketch showing the location. Periodically, Entergy performs a Pole Survey to verify the total number of pole attachments. The most recent Pole Survey prior to the one at issue in the Complaint was the 1992 Count, invoiced on November 20, 1992. At that time CTX was found to be attached to 6,305 poles. In January 1994, CTX was billed for attachments to 6,369 poles. Based on an October 22, 1996 invoice, CTX paid for attachment to 6,992 poles in 1996. 11. Based on the 1996 Count, Entergy asserts that CTX is attached to 8,930 poles belonging to Entergy and that, of these attachments, 1,938 are unreported. The Maps submitted to the Commission as the work product of the 1996 Count, however, show that CTX is attached to 6,422 poles belonging to Entergy. A comparison of the Maps to the 1992 Count shows a difference only for Feeder 79. The 1996 Count shows 112 poles with attachments on Sheet 4, and 5 poles with attachments on Sheet 7 for Feeder 79; the 1992 Count does not include these Sheets as having poles with attachments. This raises serious questions about the credibility of the circumstances surrounding the 1996 Count. 12. The 1992 Count was conducted by Charles A. Green, Inc. Mr. Green made the count and supplied his own transportation. He collected an amount equal to $1.25 multiplied by the number of poles to which CTX's cable was attached. The 1996 Count was contracted to Wink Engineering, with the explanation that Entergy had a blanket contract with Wink Engineering for all types of engineering work. The cost of the 1996 Count is based on the hourly rate of two employees of Wink Engineering plus travel costs. Entergy describes both employees as engineers. Entergy stated that all instructions were oral and that the employees were required to "ride out the entire area, identify the poles owned by Entergy to which CTX had attached, and report those attachments to Entergy." Entergy offers no explanation why an engineer is required to identify that a cable is attached to a pole and make a notation on a map. Entergy certainly offers no explanation why the second employee would also have be an engineer when the primary function of the second person is to drive the vehicle. Entergy does assert that the participation of the second person arises from safety concerns and is an industry practice. 13. The cost of an inspection of pole attachments should be borne solely by the cable company, if and only if, cable attachments are the sole ones inspected and there is nothing in the inspection to benefit the utility or other attachers to the pole. A fourfold increase in the cost of the pole count is presented by CTX as an indication that work was done during the pole count that was not related to the cable attachments. CTX asserts that extra effort in performing the 1996 Count may have been required to produce a set of new, color- coded distribution maps with every attachment on every pole in CTX's service area identified on the maps. Entergy insists that the Maps submitted to the Commission in response to our request are the only maps it possesses that indicate attachments to poles. As previously stated, we accept the Maps submitted by Entergy as the work product of the field count. 14. The practices of Entergy in implementing the terms and conditions of the agreement with CTX must be just and reasonable. Entergy cannot engage a contractor to perform a pole count and disregard the cost because CTX is responsible for paying it. Though we do not expect Entergy to negotiate the lowest possible fee, the work should be done at a competitive rate in consonance with the work to be done. Entergy has filed to show why, four years after the 1992 Count, it cost four times as much to cover the same plant and count 117 more poles, an increase of less than two percent. 15. CTX has proposed that a reasonable rate is $0.85 per pole and has offered a copy of a letter from another Texas utility to a cable system giving that as the rate for a pole count. The letter, however, also mentions that the cable system will supply a second employee and transportation. The letter includes a $0.13 per pole data processing fee. The total cost would be $0.98 per pole plus transportation and provision of an additional employee. CTX asserts, in the Reply, that it has obtained information from unspecified sources that the other Texas utility has also conducted pole counts for the same rate without the cable system having supplied transportation and a second employee. CTX also asserts that the 13› charge is an administrative cost for maintaining the utility's database and should not be charged to the cable system. The letter, however, specifies that a diskette will be provided to the cable system as a result of the survey. The amount of $0.85 per pole suggested by CTX as the appropriate rate per pole is unsubstantiated. There is nothing to show that anyone actually paid that rate. The only information in the record shows that the rate was offered as $0.98 per pole when the cable system provided transportation and an additional employee. 16. Furthermore, we have a record which establishes a competitive rate. Mr. Green was employed to perform the work before and, according to Mr. Fortenberry, would have been employed again had Mr. Fortenberry not been instructed to use Wink Engineering. Any difference between the cost for Mr. Green's services and those of Wink Engineering for this project must be attributed to benefits to Entergy for using a contractor with whom it had a continuing relationship and to Entergy's disregard for the reasonableness of the cost of the pole count. As it is the practice that costs are calculated based upon the number of poles which are found to have attachments, we will determine the just and reasonable cost based upon the rate from the 1992 Count of $1.25 per pole, adjusted for inflation. The just and reasonable cost for the 1996 Count is $1.40 multiplied by 6,422 for a total of $8,990.00. 17. CTX has asked us to declare that there is no basis for Entergy to assess fees for unauthorized attachments. There is truly no basis for such fees as there are no unauthorized attachments. CTX paid fees for 6,992 attachments in 1996; whereas, the 1996 Count shows CTX is attached to only 6,422 poles. The number of poles used by Entergy to determine the annual rent due it by CTX is inaccurate based upon Entergy's count. IV. CONCLUSION 18. CTX has requested a refund of the cost of the 1996 Count, which it paid on February 14, 1997. The Complaint was filed on July 9, 1997. Section 1.1410 (c) of the Commission's Rules provides for refunds which it specifies are normally the difference between the amount paid and "the amount that would have been paid under the rate, term, or condition established by the Commission from the date that the complaint, as acceptable, was filed plus interest." Section 1.1415 of the Commission's Rules provides that we may "issue other orders . . . as will best conduce to . . . the ends of justice." 19. CTX paid the fee assessed for the 1996 Count under protest in the face of Entergy's refusal to process applications for further attachments. The filing of the Complaint was delayed because CTX observed our preference for negotiated settlement of disputes. The fee is not a recurring one. We find that this is not the normal situation anticipated in the Section 1.1410(c). For that reason and for reasons of justice, we will order the refund to CTX of the difference between the amount we have determined is reasonable for the 1996 Count and the amount it paid, plus interest. CTX is entitled to a refund of all sums paid in excess of $8,990.00 for the pole count conducted by Wink Engineering in 1996 at the request of Entergy plus interest. 20. CTX requests that we grant payment of its costs and attorneys' fees. In pole attachment proceedings, the Commission does not have the authority to grant costs and attorney's fees. The request will be denied. V. ORDERING CLAUSES 21. Accordingly, IT IS ORDERED, pursuant to Sections 0.321 and 1.1401-1.1413 of the Commission's Rules, 47 C.F.R. 0.321 and 1.1401-1.1413, that the relief requested by Cable Texas, Inc., IS GRANTED to the extent indicated above. 22. IT IS FURTHER ORDERED, pursuant to Sections 0.321, 1.1410, and 1.1415 of the Commission's Rules and Section 224(b)(1) of the Communications Act of 1934, as amended, that the just and reasonable cost for the field count of poles to which Cable Texas, Inc., was attached in 1996 IS DETERMINED TO BE $8,990.00. 23. IT IS FURTHER ORDERED, pursuant to Sections 0.321, 1.1410(c), and 1.1415 of the Commission's Rules and Section 224(b)(1) of the Communications Act of 1934, as amended, that Entergy Services, Inc., SHALL REFUND, within thirty (30) days of release of this Order, to Cable Texas, Inc., excess payments made in the amount of TWENTY-TWO THOUSAND AND FIFTY-SIX DOLLARS ($22,056.00) plus interest to the date of refund. These excess payments for which a refund is ordered consist of the difference between the payments made under protest for the field count completed in 1996 ($31,046.00) and the reasonable cost calculated by the Commission ($8,990.00). 24. IT IS FURTHER ORDERED, pursuant to Sections 0.321, 1.1410, and 1.1415 of the Commission's Rules and Section 224(b)(1) of the Communications Act of 1934, as amended, the request of Cable Texas, Inc., for payment of its attorneys' fees and other costs incurred by it in this proceeding IS DENIED. 25. IT IS FURTHER ORDERED, pursuant to Sections 0.321 and 1.1415 of the Commission's Rules and Section 224(b)(1) of the Communications Act of 1934, as amended, that Entergy Services, Inc., and Cable Texas, Inc., SHALL AGREE ON AND ESTABLISH the number of poles belonging to Entergy Services, Inc., to which Cable Texas, Inc., will be considered attached as reported contacts for the year 1999. Such number will be used to calculate the payments to be made by Cable Texas, Inc., for the year 1999 and will be the basis for such calculations in future years. FEDERAL COMMUNICATIONS COMMISSION Deborah A. Lathen Chief, Cable Services Bureau Appendix Feeder No. Sheet No. Revision Date 1996 Count 1992 Count Difference 61 5/8/91 230 230 0 1 10/16/87 83 83 0 2 5/8/91 104 104 0 3 12/2/86 43 43 0 62 2/7/92 130 130 0 1 10/21/91 64 64 0 2 1/8/92 66 66 0 3 9/30/88 0 0 4 4/4/88 0 0 5 12/5/86 0 0 6 12/5/86 0 0 7 2/7/92 0 0 8 3/24/92 0 0 9 12/5/86 0 0 10 12/5/86 0 0 11 12/5/86 0 0 12 12/5/86 0 0 63 1/19/90 349 349 0 1 10/16/87 237 237 0 2 11/5/91 11 11 0 3 6/14/90 15 15 0 4 3/24/92 33 33 0 5 12/8/86 53 53 0 6 12/8/86 0 0 7 12/8/86 0 0 Feeder No. Sheet No. Revision Date 1996 Count 1992 Count Difference 71 9/28/90 518 518 0 1 9/28/90 67 67 0 2 3/8/91 245 245 0 3 8/27/92 146 146 0 4 9/28/90 5 5 0 5 8/27/92 20 20 0 6 9/28/90 35 35 0 7 1/24/91 0 0 8 9/28/90 0 0 9 9/28/90 0 0 10 9/28/90 0 0 11 9/28/90 0 0 12 9/28/90 0 0 13 9/28/90 0 0 14 9/28/90 0 0 15 9/28/90 0 0 16 9/28/90 0 0 17 9/28/90 0 0 18 9/28/90 0 0 72 6/1/91 338 338 0 1 12/11/86 16 16 0 2 6/1/92 109 109 0 3 2/26/91 38 38 0 4 12/11/86 18 18 0 5 3/1/91 53 53 0 6 12/11/86 73 73 0 7 12/11/86 31 31 0 76 1/23/90 523 523 0 1 12/3/86 43 43 0 2 2/24/88 214 214 0 3 12/3/86 0 0 4 12/3/86 15 15 0 5 5/8/89 66 66 0 6 3/24/92 185 185 0 7 12/3/86 0 0 Feeder No. Sheet No. Revision Date 1996 Count 1992 Count Difference 77 2/3/92 727 727 0 1 6/1/88 10 10 0 2 1/21/87 341 341 0 3 5/1/92 221 221 0 4 6/1/88 0 0 5 12/3/87 0 0 6 7/27/90 155 155 0 7 1/21/87 0 0 8 6/30/89 0 0 9 1/21/87 0 0 10 9/30/88 0 0 11 5/17/88 0 0 12 1/21/87 0 0 13 1/21/87 0 0 78 5/8/91 214 214 0 1 1/26/87 179 179 0 2 7/11/89 0 0 3 1/26/87 6 6 0 4 5/8/91 15 15 0 5 12/4/87 14 14 0 79 2/3/92 219 102 117 1 12/15/86 0 20 -20 2 12/15/86 20 20 3 12/18/86 33 33 0 4 11/5/91 112 112 5 12/18/86 23 23 0 6 1/29/91 26 26 0 7 12/23/86 5 5 8 8/4/92 0 0 9 8/26/92 0 0 10 12/31/86 0 0 11 3/24/92 0 0 12 5/28/87 0 0 13 12/31/86 0 0 Feeder No. Sheet No. Revision Date 1996 Count 1992 Count Difference L-432 182 182 0 1 3/24/92 0 0 2 4/8/81 0 0 3 7/14/81 0 0 4 9/19/91 0 0 5 4/8/81 0 0 6 12/3/90 0 0 7 9/27/90 0 0 8 4/13/81 28 28 0 9 4/13/81 0 0 10 4/20/81 0 0 11 4/20/81 0 0 12 3/24/92 118 118 0 13 4/13/81 36 36 0 14 9/6/90 0 0 154 5/29/92 1168 1168 0 1 10/31/91 0 0 2 9/19/90 0 0 3 9/19/90 0 0 4 9/19/90 0 0 5 9/19/90 0 0 6 7/15/91 0 0 7 2/7/92 0 0 8 2/7/92 0 0 9 9/19/90 0 0 10 9/19/90 0 0 11 9/19/90 0 0 12 9/19/90 0 0 13 9/19/90 0 0 14 5/1/92 0 0 15 9/19/90 0 0 16 9/19/90 0 0 17 7/15/91 0 0 18 8/26/92 94 94 0 19 4/20/92 275 275 0 20 9/19/90 75 75 0 21 2/7/92 0 0 22 7/15/91 0 0 23 2/7/92 341 341 0 24 2/6/92 81 81 0 25 2/18/92 98 98 0 26 2/6/92 204 204 0 Feeder No. Sheet No. Revision Date 1996 Count 1992 Count Difference 17 11/26/91 583 583 0 1 3/4/91 161 161 0 2 11/26/91 122 122 0 3 11/26/91 225 225 0 4 2/13/91 29 29 0 5 11/26/91 6 6 0 6 2/16/92 14 14 0 7 11/26/91 26 26 0 18 2/20/92 263 263 0 1 3/24/92 82 82 0 2 2/18/92 181 181 0 3 5/12/89 0 0 51 1/29/90 0 0 0 1 4/4/90 0 0 2 7/12/89 0 0 3 3/13/89 0 0 4 3/13/89 0 0 5 3/13/89 0 0 52 9/18/91 0 0 0 1 9/18/91 0 0 2 1/29/91 0 0 3 11/16/89 0 0 4 11/16/89 0 0 56 1/26/90 328 328 0 1 3/29/89 205 205 0 2 3/29/89 0 0 3 3/29/89 0 0 4 3/29/89 0 0 5 10/27/89 0 0 6 3/24/92 77 77 0 7 3/29/89 0 0 8 2/18/92 46 46 0 Feeder No. Sheet No. Revision Date 1996 Count 1992 Count Difference 57 3/8/91 650 650 0 1 8/15/91 119 119 0 2 8/27/92 338 338 0 3 3/24/92 187 187 0 4 2/26/91 6 6 0 5 10/15/79 0 0 6 5/12/79 0 0 Grand Total 6422 6305 117