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Federal Communications Commission
Washington, D.C. 20554
Cable Television Association of )
Georgia, et al., ) ) File No. PA 98-004
Complainants ) )
v. ) )
BellSouth Telecommunications, )
Adopted: July 17, 2002 Released:
July 19, 2002
By the Chief, Enforcement Bureau:1
1. In this Order we grant a pole attachment complaint
("Complaint") filed by the Cable Television Association of
Georgia, et al. ("CTAG")2 against BellSouth
Telecommunications, Inc. ("BellSouth") pursuant to Section
224 of the Communications Act of 1934, as amended ("Pole
Attachment Act")3 and Subpart J of Part 1 of the
Commission's rules.4 BellSouth, a local exchange carrier,
filed a Response to the Complaint and CTAG filed a Reply.
In this Order, we find BellSouth's annual pole attachment
rate of $5.03 to be unjust and unreasonable, we set a just
and reasonable annual pole attachment rate of $4.27 per
pole, and we order refunds.
2. Pursuant to the Pole Attachment Act, the
Commission has the authority to regulate the rates, terms,
and conditions for attachments by a cable television system
or provider of telecommunications service to a pole, duct,
conduit, or right-of-way owned or controlled by a utility.5
The Pole Attachment Act grants the Commission general
authority to regulate such rates, terms and conditions,
except where such matters are regulated by a State.6 The
Commission is authorized and has adopted procedures
necessary to resolve complaints concerning such rates,
terms, and conditions.7 The Commission has concluded that
"where onerous terms or conditions are found to exist on the
basis of the evidence, a cable company may be entitled to a
rate adjustment or the term or condition may be
3. In addition, the Pole Attachment Act, as amended
by the Telecommunications Act of 1996 ("1996 Act"),9 imposes
upon all utilities, the duty to "provide a cable television
system or any telecommunications carrier with
nondiscriminatory access to any pole, duct, conduit, or
right-of-way owned or controlled by it."10 This directive
ensures that "no party can use its control of the enumerated
facilities and property to impede, inadvertently or
otherwise, the installation and maintenance of
telecommunications and cable equipment by those seeking to
compete in those fields."11
4. The Commission has developed a formula methodology
to determine maximum allowable pole attachment rates to
ensure that such rates are just and reasonable.12 A utility
may not charge more than the maximum amount permitted by the
formulas developed by the Commission. The Commission's
Cable Formula,13 used in resolving complaints by cable
systems, is applicable in this case.14 The Cable Formula
allocates the cost of the entire pole by the percentage of
usable space occupied by the attachment. The Cable Formula
includes recovery for all pole-related costs, including
administrative, maintenance, and tax expenses, as well as
depreciation and a rate of return approved by the utility's
state public service commission. The 1987 Pole Attachment
Order15 provided a Cable Formula for local exchange carrier
("LEC") utilities using the Commission's Part 31 regulatory
accounts.16 At that time, a LEC reported data collected in
accordance with the Commission's Part 31 accounts on an FCC
Form M. Effective January 1, 1988, Part 31 was replaced by
Part 32, which changed how LECs account for and report
certain costs.17 The Commission's Annual Report Form M was
revised on April 27, 1989 to reflect the new accounting
system in Part 32.18
5. In 1990, the Common Carrier Bureau responded to a
request for clarification concerning which Part 32 accounts
should be used in place of the Part 31 accounts in the Cable
Formula. The Common Carrier Bureau released a guidance
letter concerning the use of Part 32 accounts in the Cable
Formula.19 In 1995, the Common Carrier Bureau provided
further guidance concerning which Part 32 accounts should be
included in the Cable Formula in a hearing designation
order, UACC Midwest, Inc., et al. v. South Central Bell
Telephone Company20 ("1995 Order").21 In the 2000 Pole
Attachment Order,22 the Commission formalized and clarified
the Part 32 accounts to be used in the Cable Formula for LEC
utilities, acknowledging that an exact tracking of expenses
from Part 31 accounts to Part 32 accounts was not
possible.23 LECs now maintain their Part 32 accounts and
file their annual operating costs with the Commission's
Automated Reporting and Management Information System
("ARMIS").24 ARMIS Report 43-02 - Uniform System of
Accounts contains the financial information necessary to
calculate pole attachments rates.25 In this case, we apply
the rules as they existed at the time the Complaint was
filed ("1998 Cable Formula"), because the Commission had not
yet adopted the final rule clarifying the specific Part 32
accounts to be included in the Cable Formula.26
6. In October 1997, BellSouth notified CTAG that it
was increasing its annual pole attachment rate to $5.03 per
pole beginning January 1, 1998. In its Complaint, CTAG
claims that the $5.03 rate exceeds the maximum permitted
rate calculated using the 1998 Cable Formula. Using the
1998 Cable Formula, and relying on the public information
reported annually by BellSouth to the Commission, CTAG
calculates an annual pole attachment rate of $4.27.27 CTAG
also argues that the new rate of $5.03 violates the
nondiscrimination clause of the Pole Attachment Act because
is exceeds the $4.20 annual pole attachment rate that
BellSouth charges certain competitive local exchange
carriers ("CLECs") that are attached to its poles.
7. In its Response, BellSouth first argues that
additional accounts should be included in calculating the
maximum rate. Specifically, BellSouth seeks to include
Accounts 612428 and 653529 in the administrative component
of the formula. Although the Commission has since clarified
that these specific accounts are not to be included in the
Cable Formula,30 at that time the standard for including
those accounts was detailed in the 1995 Order. In the 1995
Order, the Common Carrier Bureau stated that portions of
either of these Part 32 accounts could be included in the
administrative component of the rate calculation if those
portions would have been includable in the rate calculation
when using Part 31 accounts. In the 1995 Order, the utility
was directed to analyze the accounts in order to make that
determination and to support its conclusions by affidavit.
In its Response, BellSouth admits that under the Part 31
scheme, amounts that might now be included in Accounts 6124
and 6535 were booked to pole expense based on monthly usage
or engineering time data. However, BellSouth makes no
attempt to identify a portion of these accounts that might
have been includable as pole expense under the Part 31
scheme. Instead, BellSouth argues that the entire accounts
should be included.31 We find that BellSouth has not met
its burden to identify and substantiate any portion of these
two accounts that might have been included under the Part 31
scheme. Therefore, we find CTAG's exclusion of these
accounts from the administrative component of the 1998 Cable
Formula to be reasonable.
8. BellSouth next asserts that it should be able to
generate a state-level rate rather than the company-level
rate calculated by CTAG. BellSouth seeks to rely on
internally generated data for certain accounts rather than
the publicly available and independently verifiable company-
level data reported to ARMIS. Specifically, in this case,
public reports are not available for state-level pole
investment related accumulated depreciation (Account 3100)
and accumulated deferred taxes (Account 4340) and certain
state-level expenses (e.g., rents and benefits) included in
Account 6411. BellSouth argues that internally generated
reports are sufficiently reliable for use in developing a
state-level pole attachment rate provided the internal
values are reconciled with company-level data made publicly
available in BellSouth's ARMIS reports. BellSouth's
Response incorporates the affidavit of William J. P. Tyler
("Tyler Affidavit") to justify its rate calculation.32
9. CTAG objects to BellSouth's use of state-level
data because it is not publicly filed and subject to
regulatory review and analysis for purposes other than pole
attachments. CTAG also points out that internal data is not
available for pre-complaint negotiation because it is not
part of ARMIS or otherwise publicly available.
10. To determine a just and reasonable pole attachment
rate, Congress directed the Commission to institute an
expeditious program "which will necessitate a minimum of
staff, paperwork and procedures consistent with fair and
efficient regulation."33 To that end, Congress noted that
although there may be some difficulty in determining the
components of the operating expenses and actual capital
costs of the utility, special accounting measures or studies
should not be necessary since the majority of the cost and
expense items attributable to the utility pole plant are
already established and reported to various regulatory
bodies and therefore the information is already a matter of
public record.34 The Commission has stated, "we expect to
continue to use a methodology which utilizes publicly
available data, does not require ratemaking proceedings, and
lends itself to an expeditious resolution of disputes. It
is our intent to conform to the will of Congress and to
avoid protracted proceedings, special studies, or
submissions of internal corporate data to the maximum extent
11. The Commission has expressed a preference for
using publicly available data to calculate the maximum pole
attachment rate.36 In Television Cable Service, Inc. v.
Monongahela Power Co.,37 the Commission expressed its
preference for "data developed for regulatory purposes."38
Nevertheless, we do not require that only publicly available
data be used. The provisions in the rules requiring
utilities to provide data to attachers anticipate that some
data may be available only from the utility. However, in
complaint proceedings, where the Commission may take notice
of information in publicly available filings made by the
parties, it is our practice "in the absence of supported
carrying charges . . . to use the figure from publicly
12. The methodology used to arrive at a pole
attachment rate should be simple and based on publicly
identifiable and verifiable data whenever it is available.40
Section 1.1404(g) of the Commission's rules describes the
requirements for the submission of data.41 It states that
data and information should be based upon historical or
original cost methodology. Data should be derived from
ARMIS, FERC 1,42 or other reports filed with state or
federal regulatory agencies. Calculations made in
connection with figures should also be submitted. Section
1.1409(a) of the Commission's rules43 also provides that
publicly available data may be relied upon by the Commission
when insufficient data is available in the record upon which
to base its determination.
13. BellSouth's reliance on Teleprompter v. Southern
Bell, 44 is misplaced. In that case, the Common Carrier
Bureau accepted state-wide data in lieu of company-wide data
but did not comment on whether the state-wide data was
publicly filed. In addition, the state-wide data lowered
the carrying charge rate component of the formula. As the
Commission stated in Teleprompter v. C&P Telephone45 the
Commission's formula methodology "passes the test of
reasonableness under the circumstances: it employs publicly
available figures; it is simple; and it includes the
critical elements identified by Congress as part of annual
14. In this case, BellSouth does not offer support for
the data it presents. The Tyler Affidavit includes exhibits
that list the individual states included in the company-
level filing along with an amount for each state that when
totaled equals the amount on the ARMIS report for a
particular account. However, BellSouth provides no
information about the basis it used to allocate costs from
its aggregate company-level accounts to the various states.
Neither does BellSouth provide any specific information
about its data source for the specific amounts apportioned
to each state. Many of BellSouth's attachments to its
original Response are fairly illegible and some of
BellSouth's figures are not reconciled to anything. Indeed,
the Tyler Affidavit relies on alternative data as well as
differing reporting time frames in its calculations,
demonstrating the difficulty BellSouth itself had with
acquiring internal data to use in the 1998 Cable Formula.
15. We find CTAG's reliance on the company-wide ARMIS
data to be reasonable. In this case, calculation of the
annual pole attachment rate using company-level data is
efficient and expedient, publicly verifiable and represents
an equitable portion of BellSouth's actual capital costs and
operating expenses. BellSouth does not provide sufficient
information or explanation of its proposed calculations to
support its use of internally generated reports. Upon
review of CTAG's amended calculation, we agree with CTAG's
calculated rate of $4.27 using the 1998 Cable Formula.
Therefore, we set the maximum permitted rate at $4.27 per
annum per pole. We order BellSouth to refund to the CTAG
members represented herein, any amount paid over the maximum
just and reasonable per pole attachment rate of $4.27 for
1998, plus interest,47 beginning April 1, 1998 (the date of
the filing of the Complaint) or the date the individual CTAG
member was added via supplemental filing.48
16. Finally, we address briefly CTAG's allegation that
the rate of $5.03 is discriminatory and in violation of
Section 224(f)(1) of the Pole Attachment Act. CTAG asserts
that BellSouth charges CLEC attachers in Georgia an annual
pole attachment rate of $4.20 per pole.49 BellSouth
responds that not all CLECs in Georgia pay a rate of $4.20
and the rate was set for a previous year, not 1998. Given
our decision requiring BellSouth to lower its rate to $4.27,
we need not reach the issue of whether the $5.03 rate
constitutes discrimination in violation of the Pole
17. Accordingly, IT IS ORDERED, pursuant to Sections
0.111, 0.311 and 1.1401-1.1418 of the Commission's rules, 47
C.F.R. §§ 0.111, 0.311 and 1.1401-1.1414, that the
Complaint IS GRANTED TO THE EXTENT INDICATED HEREIN.
18. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 1.1410 of the Commission's rules, 47 C.F.R. §§
0.111, 0.311 and 1.1410, that the annual pole attachment
rate of $5.03, effective April 1, 1998, IS UNREASONABLE.
19. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 1.1410 of the Commission's rules, 47 C.F.R. §§
0.111, 0.311 and 1.1410, that the annual rate of $4.27 for
1998 for each pole attachment IS SUBSTITUTED for the rate of
$5.03, effective upon the release of this Order.
20. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 1.1410 of the Commission's rules, 47 C.F.R. §§
0.111, 0.311 and 1.1410, that BellSouth SHALL REFUND to CTAG
members, within thirty (30) days of the release of this
Order, that portion of the amount paid in excess of the
maximum permitted pole rate of $4.27, plus interest to the
date of refund, for the period beginning April 1, 1998 or
the date the individual CTAG member joined the Complaint as
indicated in Attachment A, through December 31, 1998.
21. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 1.1401-1.1418 of the Commission's Rules, 47 C.F.R.
§§ 0.111, 0.311 and 1.1401-1.1418, that CTAG and BellSouth
SHALL NEGOTIATE IN GOOD FAITH, a maximum just and reasonable
rate for the rates beginning in 1999, in accordance with the
David H. Solomon
Chief, Enforcement Bureau ATTACHMENT A
GROUP A (Refunds begin 4/01/98)
1. Brenmor Cable Partners, L.P., d/b/a InterMedia
2. Robin Media Grp., Inc. d/b/a/ InterMedia
3. Time Warner Cable
4. Insight Communications
5. TCI of Columbus
6. James Cable Partners
7. Cable Equities of CO., Ltd.
GROUP B (Refunds begin 4/23/98)
8. Comcast Communications, Inc.
9. Jones Communications of GA/SC, Inc.
10. Peachtree Cable TV, Inc.
11. Charter Communications, L.P.
12. Charter Communications II, L.P.
13. Falcon Cablevision
GROUP C (Refunds begin 4/29/98)
14. Cox Cable of Middle GA
GROUP D (Refunds begin 5/21/98)
15. Wometco CA TV of GA (& various Wometco CATV
systems: Clayton Co., Cobb Co., Rockdale Co., Fulton
Co., Fayette Co.)
16. Media One, Inc. (various systems)
GROUP E (Refunds begin10/22/98)
17. Northland Cable Properties Seven L.P.
18. Northland Cable Properties Eight L.P.
GROUP F (Refunds begin 3/04/99)
19. InterMedia Partners (Peachtree City, GA) (Note:
Brenmor Cable Partners, L.P. and Robin Media Group,
Inc. filed on April 1, 1998)
1 Effective March 25, 2002, the Commission transferred
responsibility for resolving pole attachment complaints from
the former Cable Services Bureau to the Enforcement Bureau.
See Establishment of the Media Bureau, the Wireline
Competition Bureau and the Consumer and Governmental Affairs
Bureau, Reorganization of the International Bureau and Other
Organizational Changes, FCC 02-10, 17 FCC Rcd 4672 (2002).
2 CTAG filed on behalf of 19 of its cable operator members
that have pole attachment agreements with BellSouth. See
Attachment A for a list of cable operators represented by
CTAG in this matter and the dates the members were included
in the Complaint.
3 47 U.S.C. §224.
4 47 C.F.R. §§1.1401-1.1418.
5 47 U.S.C. § 224 (b) (1).
6 47 U.S.C. § 224 (b) and (c). Georgia has not certified
that it regulates rates, terms and conditions of pole
attachments. See Public Notice, "States That Have Certified
That They Regulate Pole Attachments," 7 FCC Rcd 1498 (1992).
747 U.S.C. § 224 (b)(1).
8Amendment of Rules and Policies Governing the Attachment of
Cable Television Hardware to Utility Poles, Memorandum Order
and Opinion on Reconsideration, 4 FCC Rcd 468, 471 at ¶ 26
9 Pub. L. No. 104-104, 110 Stat. 56 (1996).
10 47 U.S.C. § 224 (f) (1).
11 Implementation of the Local Competition Provisions in the
Telecommunications Act of 1996, 11 FCC Rcd 15499 at ¶ 1123
(1996), on reconsideration, 14 FCC Rcd 18049 (1999);
affirmed in part Southern Company v. FCC, No. 99-15160 (11th
Cir., released June 13, 2002).
12 See Adoption of Rules for the Regulation of Cable
Television Pole Attachments, First Report and Order, 68
F.C.C. 2d 1585 (1978); Second Report and Order, 72 F.C.C. 2d
59 (1979); Memorandum and Order, 77 F.C.C. 2d 187 (1980),
aff'd, Monongahela Power Co. v. FCC, 655 F.2d 1254 (D.C.
Cir. 1985) (per curiam); and Amendment of Rules and Policies
Governing the Attachment of Cable Television Hardware to
Utility Poles, 2 FCC Rcd 4387 (1987). See also,
Implementation of Section 703(e) of the Telecommunications
Act of 1996, 13 FCC Rcd 6777 (1998) and Amendment of Rules
and Policies Governing Pole Attachments, 15 FCC Rcd 6453
(2000), pet. for recon. denied in part, Amendment of
Commission's Rules and Policies Governing Pole Attachments,
CS Docket No. 97-98; Implementation of Section 703(e) of the
Telecommunications Act of 1996, FCC 01-170, 16 FCC Rcd 12103
(2001), appeal pending sub nom. Southern Company Services,
Inc. et al. v. FCC, Case No. 01-1326 (D.C. Cir., filed July
13 See 47 C.F.R. § 1.1409 (e)(1).
14 The Cable Formula applies to attachments made by cable
systems and telecommunications carriers providing
telecommunications services until February 8, 2001.
Beginning February 8, 2001, it applies only to cable system
attachments. See Amendment of Rules and Policies Governing
Pole Attachments, FCC 00-116, 15 FCC Rcd 6453 at ¶ 5 (2000).
15 Amendment of Rules and Policies Governing the Attachment
of Cable Television Hardware to Utility Poles, CC Docket No.
86-212, 2 FCC Rcd 4387 (1987) ("1987 Pole Attachment
16 1987 Pole Attachment Order, 2 FCC Rcd 4387, 4402-03,
Appendix B (1987).
17 See Revision of the Uniform System of Accounts and
Financial Reporting Requirements for Class A and Class B
Telephone Companies (Parts 31, 33, 42, 43 of the FCC's
Rules), Report and Order, FCC 86-221, 60 Rad. Reg. 2d 1111
(1986); on reconsideration, 2 FCC Rcd 1086 (1987).
18 Revision of Annual Report Form M, DA 89-503, 4 FCC Rcd
4879 (1989); erratum DA 89-519, 4 FCC Rcd 4565 (1989).
19 Letter from Kenneth P. Moran, Chief, Accounting and
Audits Division, Common Carrier Bureau, to Paul Glist, Esq.,
Cole, Raywid & Braverman, 5 FCC Rcd 3898 (CCB 1990).
20 UACC Midwest, Inc., et al. v. South Central Bell
Telephone Company, DA 95-1363, 10 FCC Rcd 10905 (CCB 1995).
21 See also Multimedia Cablevision, Inc. v. Southwestern
Bell Telephone Company, FCC 96-362, 11 FCC Rcd 11202 (1996).
22 Amendment of Rules and Policies Governing Pole
Attachments, 15 FCC Rcd 6453 (2000), on reconsideration, FCC
01-170, 16 FCC Rcd 12103 (2001), appeal pending sub nom.
Southern Company Services, Inc. et al. v. FCC, Case No. 01-
1326 (D.C. Cir., filed July 26, 2001) ("2000 Pole Attachment
23 Id. at ¶ 45.
24Reporting Requirements for Certain Class A and Tier 1
Telephone Companies (Parts 31, 43, 67 and 69 of the FCC's
Rules), CC Docket No. 86?182, 2 FCC Rcd 5770 (1987),
modified on recon., 3 FCC Rcd 6375 (1988).
25The ARMIS 43-02 Report provides the annual operating
results of the carriers' telecommunications operations for
every account in Part 32. See 47 C.F.R. Part 32.
26 We note that CTAG calculated a rate of $4.27 using the
1998 Cable Formula. Using the same public records that CTAG
used, our current Cable Formula would yield a rate of $4.25.
27 In its Reply, CTAG recalculated its rate with an
additional amount added to the administrative component
based on BellSouth's Response. This addition did not change
the $4.27 rate.
28 47 C.F.R. § 32.6124 (General purpose computers expense).
29 47 C.F.R. § 32.6535 (Engineering expense).
30 See 2000 Pole Attachment Order at ¶¶ 45-52.
31 In support of its argument, BellSouth cites to the
Commission's Notice of Proposed Rulemaking, 12 FCC Rcd 7449
(1997). However, the proposed rules in the Notice were not
adopted by the Commission and, in fact, Accounts 6124 and
6535 were specifically excluded from the Cable Formula
calculation by the Commission in the 2000 Pole Attachment
32 Response at pp. 2-11, referencing Affidavit of William
J.P. Tyler ("Tyler Affidavit").
33 See S. Rep. No. 95-580, 95th Cong., 1st Sess. at 21
34 Id. at 19-20.
35 Notice of Proposed Rulemaking, Amendment of Rules and
Policies Governing the Attachment of Cable Television
Hardware to Utility Poles, CC Dkt. No. 86-212, FCC 86-274
(released June 6, 1986).
36 See Amendment of Rules and Policies Governing the
Attachment of Cable Television Hardware to Utility Poles, 2
FCC Rcd 4387 at ¶¶ 37, 47, and 52 (1987).
37 Television Cable Services, Inc. v. Monongahela Power Co.,
88 F.C.C. 2d 63 (CCB 1981), modified in part, FCC 81-488, 88
F.C.C. 2d 56 (1981).
38 Id. at ¶ 20.
39 Teleprompter v. C&P of West Virginia, FCC 80-372, 79
F.C.C. 2d 232 at ¶ 17 (1980). See also Texas Cable and
Telecommunications Association v. GTE Southwest
Incorporated, DA 99-348, 14 FCC Rcd 2975 at ¶¶ 26-29 (CSB
40 First Report and Order, 68 FCC 2d 1585 (1978); 1987 Pole
Attachment Order, 2 FCC Rcd 4387 (1987).
41 47 C.F.R. §1.1404(g).
42 Form 1 is the Annual Report that electric utilities file
with the Federal Energy Regulatory Commission.
43 47 C.F.R. §1.1409(a).
44 Teleprompter Corp., et al. v. Southern Bell Tel. & Tel.
Co., 49 RR 2d 1428, 1430 (CCB 1981).
45 Teleprompter of Fairmont, Inc., et al. v. Chesapeake &
Potomac Telephone Company of West Virginia, FCC 81-32, 85
F.C.C. 2d 243 at ¶ 16 (1981).
46 Id. at ¶ 16.
47 The Commission has determined previously that the
appropriate rate of interest on the overcharges is the
current interest rate for Federal tax refunds and additional
tax payments. See Teleprompter of Fairmont, Inc. v.
Chesapeake and Potomac Telephone Co. of West Virginia, FCC
80-372, 79 F.C.C. 2d 232 at ¶ 24 (1980), order on recon., 85
F.C.C. 2d 243 (1981).
48 See Attachment A of this Order for a list of the CTAG
members and the dates they are eligible to receive refunds.
49 Complaint at p. 3, referencing Complaint, Exhibit 6
(Review of Cost Studies, Methodologies, and Cost-Based Rates
for Interconnection and Unbundling of BellSouth
Telecommunications Services, Georgia Pub. Serv. Comm'n
Docket 7061-U (October 21, 1997) at 64).