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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: ) ) PA 96-007 TCG DALLAS, INC. ) ) v. ) ) TEXAS UTILITIES ELECTRIC COMPANY ) ) Motion for Cease and Desist Order ) Regarding Pole Attachment Policies ) ORDER Adopted: April 10, 1998 Released: April 13, 1998 By the Chief, Financial Analysis and Compliance Division, Cable Services Bureau: I. INTRODUCTION 1. In this Order, we address a Motion for a Cease and Desist Order ("Motion") filed by TCG Dallas ("TCG") pursuant to Section 312(b) of the Communications Act and Section 1.1412 of the Commission's rules. TCG, a competitive access provider serving parts of Texas, and Texas Utilities Electric Company ("TU Electric") entered into a pole attachment agreement in 1992 ("1992 Agreement") which was then amended in 1994 ("1994 Amendment"). TCG contends that the 1994 Amendment violates the Commission's holding in Heritage Cablevision Assoc. of Dallas v. Texas Util. Elec. Co. ("Heritage") and that TCG is entitled to a regulated pole attachment rate pursuant to Section 224 of the Communications Act. TU Electric has filed an Opposition ("Opposition") and TCG has filed a Reply ("Reply") to TU Electric's Opposition. For the reasons discussed below, we conclude that the 1992 Agreement and its 1994 Amendment are not subject to the Commission's jurisdiction, and therefore we dismiss TCG's Motion. II. BACKGROUND 2. TCG is a competitive access provider and a competitive local exchange carrier. In order to offer interexchange access service, TCG leases excess capacity on the fiber optic facilities of other companies, particularly cable operators. To serve areas not served by cable operators or others, TCG also installs fiber optic facilities of its own. TU Electric is "a utility engaged in the generation, purchase, transmission, distribution and sale of electric energy in Texas." In the 1992 Agreement, TU Electric contracted with TCG, allowing it to place attachments on approximately 71 TU Electric poles at a rate of $17.00 per pole. The 1992 Agreement also required "that TCG provide, install, and maintain for TU Electric, free of charge, up to 12 dark fibers along each and every route under the 1992 Agreement." 3. A reorganization of TCG took place in 1995. In order to obtain TU Electric's consent to the restructuring, TCG consented to the 1994 Amendment. In the 1994 Amendment, TCG agreed to "pay a fee for every pole to which facilities that carry TCG's services are attached. In other words, TCG . . . must pay a fee for the attachments of cable television operator's facilities when TCG . . . is leasing capacity from those cable operators - regardless of the fact that TCG does not own or control the facilities being attached to the poles." The rate per pole under the 1994 Amendment is $17.00 minus the regulated cable operator's rate. The 1994 Amendment also required TCG to provide TU Electric the use of 12 dark fibers. If TCG did not provide the dark fibers, the rate per pole increased to "$46.21, plus [inflation] per pole per year [as provided in the 1992 Agreement]." 4. Since the 1994 Amendment, TCG has paid only $17.00 per pole for the original 71 poles described in the 1992 Agreement. TCG has not paid for the additional poles, as required under the 1994 Amendment, and has not provided TU Electric with the use of dark fiber. On April 26, 1996, TU Electric requested an accounting from TCG describing the number of TU Electric poles used by cable operators carrying TCG's service and demanded that TCG pay the fee imposed by the 1994 Amendment for past and present attachments. TCG filed its Motion on November 19, 1996. III. DISCUSSION 5. In Heritage the Commission determined that cable system operators are entitled to regulated rates under Section 224 of the Communications Act "both for traditional video services and nontraditional (i.e., data) services that are provided on a 'commingled basis over a single network within [a] cable franchise.'" TCG requests that we order TU Electric to cease and desist from enforcing the fee imposed in the 1994 Amendment because the imposition of the fee violates the Commission's holding in Heritage. TU Electric argues that the 1992 Agreement and the 1994 Amendment are not within the Commission's jurisdiction. We agree with TU Electric. 6. Prior to 1996, Section 224 authorized the Commission to adjudicate disputes between cable television system operators and telephone and electric utilities concerning alleged unjust and unreasonable pole attachment rates, terms and conditions. At the time that Heritage was decided, Section 224 applied only to pole attachments made by a cable television system. Heritage is not applicable in this case because TCG was not a cable operator and was unable to invoke the provisions of Section 224 at the time of its agreements. In the Telecommunications Act of 1996 ("1996 Act"), Congress extended the Commission's jurisdiction under Section 224 to include telecommunications providers and instructed the Commission to promulgate new rules to regulate pole attachment rates charged to telecommunications carriers. Until those rules become effective, Congress determined that the current regulations concerning the "rate for any pole attachment used by a cable television system solely to provide cable services . . . shall also apply to the rate for any pole attachment used by a cable operator or any telecommunications carrier (to the extent such carrier is not a party to a pole attachment agreement) to provide any telecommunications service" (emphasis added). 7. The 1996 Act became effective on February 8, 1996. At that time TCG, a provider of telecommunications services, was a party to a pole attachment agreement (the 1992 Agreement and its 1994 Amendment). Congress excluded from the Commission's jurisdiction telecommunications providers that were parties to pole attachment agreements as of the effective date of the 1996 Act. Because TCG was a party to the 1992 Agreement and its 1994 Amendment as of the effective date of the 1996 Act, we have no jurisdiction over the rates, terms and conditions of the 1992 Agreement and its 1994 Amendment. While TCG acknowledges that Section 224, as amended by the 1996 Act, "excludes telecommunications carriers who are a party to a pole attachment agreement, [TCG states that it] does not fall within that provision since its pole attachment agreement with TU Electric is void and unenforceable by its own terms." TCG maintains that its pole attachment agreement with TU Electric is unenforceable because the additional surcharge, added by the 1994 Amendment, is an illegal provision which is unenforceable under Section 224 and Heritage. TCG's assertions do not persuade us. As stated above, Heritage may only be applied by those agreements which are protected under Section 224 of the Communications Act. Therefore, Heritage does not cause TCG's pole attachment agreement with TU Electric to be void or unenforceable. The 1992 Agreement, and its 1994 Amendment, because they concern a utility and a telecommunications provider, and were in effect prior to February 8, 1996, comprise the type of agreement specifically excluded by Congress in Section 224, as amended by the 1996 Act. Because Congress has explicitly limited our jurisdiction by excluding this type of pole attachment agreement from Section 224, as amended by the 1996 Act, we must dismiss TCG's Motion. IV. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that TCG Dallas, Inc.'s Motion for Cease and Desist Order against Texas Utilities Electric Company IS DISMISSED. 9. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R Section 0.321. FEDERAL COMMUNICATIONS COMMISSION Elizabeth W. Beaty Chief, Financial Analysis and Compliance Division Cable Services Bureau