Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Kansas City Cable Partners ) d/b/a Time Warner Cable of Kansas City, ) File No. PA 99-001 Complainant ) ) v. ) ) Kansas City Power & Light Company, ) Respondent ) ) and ) ) In the Matter of ) ) Kansas City Power & Light Company, ) File No. PA 99-002 Complainant ) ) v. ) ) Kansas City Cable Partners ) d/b/a Time Warner Cable of Kansas City, ) Respondent ) CONSOLIDATED ORDER Adopted: July 14, 1999 Released: July 15, 1999 By the Deputy Chief, Cable Services Bureau: 1. In this Order we consider a pole attachment complaint ("Complaint") filed by Kansas City Cable Partners d/b/a Time Warner Cable of Kansas City ("Time Warner") against Kansas City Power & Light Company ("KCPL"). The Complaint was filed pursuant to Section 224 of the Communications Act of 1934, as amended, and Subpart J of the Commission's Rules. Pursuant to Section 224, the Commission adjudicates disputes between utilities and cable operators concerning allegedly unjust and unreasonable pole attachment rates, terms, and conditions. The Complaint alleges effective denial of access to poles owned by KCPL and requests that the Commission order KCPL to immediately approve all of Time Warner's pending applications for attachment to KCPL's poles in Overland Park, Kansas. The Complaint also requests that we order KCPL to immediately grant access to all poles that do not need replacement or to which attachment can be made temporarily, pending replacement, without causing a safety hazard. The Complaint further requests that we order KCPL to immediately commence make-ready work and change-out of poles where KCPL has deemed it necessary and to grant immediate access upon completion of work. Lastly, Time Warner asks that we order KCPL to respond to all future applications within thirty days as specified in the pole attachment agreement. 2. The Complaint and a motion for expedited action ("Motion I") were filed on May 7, 1999. KCPL notified the Commission of its intent to answer Motion I by letter dated May 12, 1999, and filed an opposition to Motion I ("Opposition I") on May 18, 1999. Time Warner filed a reply to Opposition I ("Reply I") on May 21, 1999. KCPL filed its response to the Complaint ("Response") on June 7, 1999. Time Warner filed its reply to the Response ("Reply") on June 14, 1999. On June 17, 1999, KCPL filed a motion for designation for hearing ("Motion II"), and Time Warner filed its opposition to Motion II ("Opposition II") on June 21, 1999. KCPL filed its reply to Opposition II ("Reply II") on June 29, 1999. At that point in time, the record was closed. Although KCPL subsequently filed some additional motions, 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." We decline to authorize, accept or address any additional motions filed after the Reply II was filed on June 29, 1999. 3. In Motion I, Time Warner requests that the Commission adopt an expedited pleading cycle for this proceeding. Time Warner asserts that the Commission has stated it will expedite complaints involving access and requests that the time to submit a response to its complaint be shortened from 30 days to 10 days and the time for reply by Time Warner be shortened from 20 days to 7 days. In Implementation of the Local Competition Provisions in the Telecommunications Act of 1996 ("Local Competition Order"), the Commission acknowledged that "time is of the essence" and, in response to a request for an expedited review process, established complaint procedures to ensure a full record for the Commission when considering a complaint. We stated that "[b]y implementing specific complaint procedures for denial of access cases, we seek to establish swift and specific enforcement procedures that will allow for competition where access can be provided." The Commission anticipated that all relevant information would be available to it upon receipt of the complaint, and stated that final decisions would be resolved expeditiously. We did note, however, that a request for additional information from the Commission must be responded to within 5 days. While we agree that access complaints should be handled expeditiously, we decline to establish a pleading cycle specific to this case. As we stated in the Local Competition Order, "[b]ecause we are using the expedited process described herein, we do not believe stays or other equitable relief will be granted . . . ". We believe the normal pleading cycle established by our rules is appropriate in this case as opposed to the hybrid process requested by Time Warner. Therefore, we will deny Time Warner's Motion I. We have, however, completed an expedited review of the Complaint. 4. In its Motion II, KCPL has requested that this proceeding be designated for hearing. We deny the Motion. The pole attachment complaint procedures are designed to ensure a simple and expeditious process. 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. Whether to hold a hearing on any issue related to a complaint is solely at the discretion of the Commission. We have before us sufficient information upon which to base our decision. Therefore, we will not hold a hearing in this proceeding and we will deny KCPL's Motion II. 5. On June 30, 1999 KCPL filed a complaint ("KCPL Complaint") against Time Warner alleging that Time Warner violated its agreement with KCPL regarding the process by which Time Warner may overlash additional cable to its existing lines. The KCPL Complaint alleges that Time Warner's practices regarding notice and application for attachments are unjust and unreasonable. KCPL does not place in issue the rates, terms or conditions of the pole attachment agreements between the parties and therefore, it does not invoke the Commission's jurisdiction. Rather, KCPL makes an issue of Time Warner's failure to comply with KCPL's interpretation of the rates, terms, and conditions of the agreements. The remedies sought by KCPL would enjoin Time Warner from behavior which KCPL asserts is in violation of the pole attachment agreements between the parties. The Commission will not assert its jurisdiction merely to enforce the terms of a pole attachment agreement. The Commission's authority under Section 224 "does not supplant that of the local jurisdiction when the issue between the parties is a breach of contract not involving unjust or unreasonable contractual terms, rates or conditions." We dismiss the complaint for failure to state a rate, term or condition which is claimed to be unjust and unreasonable. In doing so, we make no determination whether the rates, terms and conditions in the agreements between KCPL and Time Warner involving overlashing are just and reasonable. Because we are dismissing the KCPL Complaint as invalid on its face, we decline to accept or address any additional pleadings in that matter which are now moot. 6. Section 224(b)(1) of the Act 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" except where these matters are regulated by a State. Section 224(f) provides that a utility must provide nondiscriminatory access to its poles except "where there is insufficient capacity and for reasons of safety, reliability and generally applicable engineering purposes." We have concluded that "under the 'just and reasonable' standard, we have ample authority to consider terms and conditions in our ultimate decision on a complaint." Further, we have concluded that "where onerous terms or conditions are found to exist on the basis of evidence, a cable company may be entitled to a rate adjustment or the term or condition may be invalidated." We have also determined that we may take action when a utility has engaged in unjust or unreasonable practices. Private negotiation is the preferred method for creating pole attachment arrangements and for dispute resolution. Should negotiations fail, the parties may seek resolution of disputes by the Commission by filing a complaint. 7. On September 30, 1998, Time Warner filed applications to place new attachments on poles owned by KCPL together with maps indicating overlashing of existing attachments to begin upgrading Time Warner's cable system in Overland Park, Kansas. Time Warner was informed by KCPL that a number of the poles needed to be replaced at the expense of Time Warner. KCPL informed Time Warner that the replacement was necessary because KCPL's contractor, Capital Electric, had determined that the poles would not meet National Electrical Safety Code ("NESC") guidelines for wind and ice loading conditions after Time Warner's attachments had been added. Time Warner hired its own consulting engineers ("BHC") for an independent evaluation of the poles. BHC examined a sample of 52 of the poles that KCPL identified as needing replacement and determined that many of the poles it examined either would meet NESC guidelines or were in need of replacement before additional attachments would be added. 8. Through January and February 1999, the parties engaged in a dialogue over engineering methods and other issues related to determining the number of poles needing replacement and who should bear the cost of that replacement. By letter dated February 22, 1999, Time Warner reminded KCPL of the requirement in the pole attachment agreement that applications be processed within 30 days and the requirement of the Commission's rules that a response in writing be provided within 45 days. Time Warner then insisted that KCPL provide the following information by February 26, 1999: For all listed applications submitted in September 1998, provide us with a final determination regarding which poles need to be replaced, as well as sufficient backup information so that we can understand the basis for that determination. As to these poles, also advise us of the cost to Time Warner for any poles for which Time Warner is responsible for paying the replacement cost. In addition, set forth exactly when each pole can be replaced, assuming that Time Warner provides immediate payment of any costs to be charged to it, with the understanding that we would want the pole replacement to proceed in the order the poles are listed on the chart. 9. KCPL responded in a lengthy letter dated February 26, 1999, in which they committed to completing the engineering review by March 5, 1999. This letter advised that Time Warner is responsible for the replacement of (1) all poles which are currently overloaded due to Time Warner's or its predecessors' cable loadings and (2) all poles that will become overloaded as a result of Time Warner's cable upgrade program. KCPL is willing to permit Time Warner to proceed with its upgrade project provided that the following conditions are met (1) a method acceptable to both parties is reached for resolving any controversy regarding how many poles will be replaced and who will pay for them, (2) Time Warner will submit overlash and pole attachment applications for KCPL approval, and (3) the past due balance on invoices submitted to Time Warner must be brought current. It further advised that "the cost to replace a pole typically ranges between $3,000 to $5,000, depending on the class and length of pole and the equipment attached to the pole. A more specific estimate of costs cannot be done until the review process is completed. As soon as practicable, KCPL will provide Time Warner with an estimate of the costs." By letter dated March 22, 1999, KCPL notified Time Warner of the estimated costs: $556,275. 10. With a letter dated April 27, 1999, Time Warner sent a check in the amount of $556,275 to KCPL. The letter recited that, "This amount includes payment for pole replacements that Time Warner believes are not its responsibility to replace. If our companies cannot agree on a proper and fair allocation of the pole replacement costs, Time Warner reserves the right to contest these charges and to seek a refund of a portion of this payment . . . ." The letter requests that KCPL begin replacing poles with 25 already identified by Time Warner in an April 21, 1999, letter and proceeding in order to poles identified by Time Warner in subsequent correspondence. The letter ultimately requests that Time Warner be notified by April 30, 1999, that work has commenced. No such notice appears in the record. KCPL acknowledges that the check was tendered. 11. The Commission's rules provide that denial of access must be in writing and that it must be explicit and absolute. Only two permissible reasons for denial of access are acceptable insufficient capacity or reasons of safety, reliability and generally applicable engineering purposes. The Local Competition Order provides guidance on necessary and sufficient conditions for denial of access based upon these reasons. Where capacity can be expanded to accommodate the attachment, access cannot be denied on the grounds of insufficient capacity. The utility may rely on the NESC to provide standards for safety, reliability, and generally applicable engineering standards, but the utility is not the final arbiter of such issues and its conclusions are not presumed reasonable. 12. The parties have adopted these principles in their negotiations. The matters in contention are whether certain poles should be changed out and, for poles that do require replacement, who should bear the cost. KCPL has recognized the validity of the analysis for compliance with the NESC performed by Time Warner's contractor. There is no explicit approval or denial of specific requests for access included in the pleadings. KCPL notified Time Warner which poles would accommodate its proposed attachments and which poles would require replacement to accommodate the proposed attachment. Although KCPL's February 26, 1999 letter articulates conditions which must be met to proceed with the project, none of these conditions are acceptable reasons for denial of access to the poles. 13. Both parties must meet the requirements of the NESC. KCPL is insisting that Time Warner choose between what it frames as two engineering methodologies to determine which poles require replacement. It asserts that the results of its methodology is essentially the same as that of Time Warner's contractor, BHC, although it concedes that BHC's method is more precise than its predictive model. KCPL allows that BHC's method is "more apt to identify poles that fail the requirements of the NESC as a result of problems with actual vertical clearances." KCPL's method makes assumptions about the height of attachments and consider, primarily, longitudinal loading. BHC's method determines the actual placement of attachments and focuses on transverse loading. 14. The main issue then is not whether poles need to be replaced, but who is responsible for that replacement. KCPL's analysis provided only an estimate of the number of poles needing replacement. In one sample of 50 poles which KCPL had identified as Time Warner's responsibility to replace, KCPL later determined, based on BHC's findings, that 9 did not need replacement, 28 were overloaded by KCPL, 10 were overloaded with Time Warner facilities, and 3 were overloaded with a combination of telephone and Time Warner attachments. The February 26, 1999 letter asserts, and Time Warner concurs that Time Warner will be responsible for replacing all poles that are overloaded due to Time Warner's current attachments and those poles that will become overloaded as a result of Time Warner's attachments. KCPL, in the document estimating costs for Time Warner at $556,275, identified 152 poles out of 347 needing replacement that are KCPL's responsibility to replace. There is no indication that replacement of these poles has begun. 15. Time Warner has tendered payment for the cost of replacing poles according to KCPL's preferred methodology, with the reservation that it will seek refunds as appropriate. Time Warner has chosen a more precise methodology and both parties agree that it assures compliance with NESC standards. KCPL has identified under its less precise method poles which tentatively need to be replaced. Time Warner's contractor has begun eliminating from that number poles which do not need to be replaced. KCPL advises that on May 24, 1999, their contractor, Capital Electric, began planning for pole replacements and that KCPL has retained contract crews to replace poles on sections 1, 2 and 3, the ones on which BHC has completed its review. KCPL should commence replacement of the remaining poles which the parties have essentially agreed need to be replaced. As Time Warner appears to be willing, and obligated, to pay for the additional engineering analysis, which KCPL has stated is acceptable to it, Time Warner can continue to assess the rest of the poles identified for replacement while change out progresses on those poles already conclusively identified for it. 16. The tenor of the Response is that KCPL is continuing to pressure Time Warner to accept the results of its methodology. Because KCPL's methodology is merely an estimate, and Time Warner has paid the estimated cost, KCPL must proceed. As stated above, time is of the essence on access matters and dilatory cooperation is as effective as denial. KCPL is protected as it has in hand a tendered payment for its costs. Should it later be determined that some of those costs are not incurred or should be incurred by KCPL, a refund may be appropriate. 17. KCPL has interjected into this proceeding its conflict with Time Warner regarding applications for or notice of overlashing by Time Warner of its own facilities. Whether any of the requirements related to this topic are just and reasonable are not an issue in this proceeding. The issue of overlashing is relevant only to the extent that the proposed expansion of Time Warner's system involves replacement of poles to accommodate the overlashing. Identification of poles needing replacement has been accomplished; KCPL cannot deny access to enforce unrelated procedural requirements of the pole attachment agreement. 18. Neither can KCPL condition access on payment of a disputed claim. KCPL has insisted that all past due balances be brought current by Time Warner. Time Warner states that they fully intend to "pay a fair price for all work performed," but indicates that the appropriate amount is in dispute. Debt collection is not permissible grounds for denial of access. 19. The record indicates a significant number of poles at issue which currently violate NESC loading standards, some with existing Time Warner attachments and some with only KCPL attachments. KCPL asserts that it did not agree to allow Time Warner to attach to poles which were already overloaded in violation of NESC standards or which would become overloaded in violation of NESC standards when Time Warner's attachment was added. KCPL has stated its obligation to meet NESC standards. It appears that a number of poles that need replacement violate NESC requirements prior to attachment by Time Warner and the violation of the NESC would not be caused by Time Warner's facilities. Correction of the pre-existing code violation is reasonably the responsibility of KCPL and only additional expenses incurred to accommodate Time Warner's attachment to keep the pole within NESC standards should be borne by Time Warner. 20. The pole attachment agreements between KCPL and Time Warner anticipate a process whereby Time Warner files an application to request a permit to attach. Upon receipt of the application, KCPL determines whether the space is available, without the necessity of incurring make-ready or change-out costs. If so, KCPL approves the application for the permit and upon approval, Time Warner has the right to attach. If KCPL determines that make-ready or change-out costs must be incurred, KCPL gives Time Warner the estimated cost of the work. If Time Warner approves the estimate, the application for permit is approved and Time Warner reimburses KCPL for the actual costs incurred. Apparently, Time Warner's upgrade of its Overland Park system overwhelmed the application process, requiring KCPL to review a large number of applications in a timely manner. Time Warner challenged KCPL's methodology for determining the estimate for necessary make-ready and change-out work and that challenge had merit based upon the apparent agreement among the two engineering firms used by the parties. Time Warner's applications also appear to be a catalyst for KCPL's discovery that many of its poles did not meet NESC standards even without Time Warner's attachments. We believe that KCPL has had adequate time to adjust to the Time Warner upgrade of its system which will involve a substantial number of additional applications and that KCPL should not be allowed to hold up the upgrade unnecessarily. Time Warner, by tendering its payment of KCPL's estimate, despite the estimate's apparent faults, satisfied its requirements under the agreements and should be able to proceed with the upgrade. 21. The record in this matter is notable for the number of points upon which Time Warner and KCPL do agree. The Commission has consistently promoted the negotiation process for resolving pole attachment complaints. The record indicates that on numerous occasions, the parties were close to an agreement. However, because of the lengthy delay that Time Warner has already suffered, which is preventing Time Warner from providing upgraded services to its customers, we believe it is necessary to order KCPL to grant the applications and proceed with the make-ready and change-out work. The applications should be approved, and Time Warner should be responsible only for the actual costs for make-ready or change-out work which is made necessary because of Time Warner's attachments. We believe, based on the record, that both KCPL and Time Warner are capable of proceeding in this matter in good faith and that they will be able to reach agreement on the actual costs as the work is completed. 22. Accordingly, IT IS ORDERED, pursuant to Sections 0.321 and 1.1403 of the Commission's rules, 47 C.F.R. 0.321 and 1.1403, that the complaint filed by Kansas City Cable Partners d/b/a Time Warner Cable of Kansas City, PA 99-001, IS GRANTED TO THE EXTENT INDICATED HEREIN. 23. IT IS FURTHER ORDERED, pursuant to Sections 0.321 and 1.1406 of the Commission's rules, 47 C.F.R. 0.321 and 1.1406, that the complaint filed by Kansas City Power & Light Company, PA 99-002, IS DISMISSED. 24. IT IS FURTHER ORDERED, that Time Warner Cable of Kansas City's Motion for Expedited Action and Kansas City Power & Light Company's Motion for Designation of Proceeding for Adjudicatory Hearing ARE DENIED. 25. IT IS FURTHER ORDERED that Kansas City Power & Light Company SHALL COMMENCE WITHIN SEVEN (7) DAYS OF THE RELEASE OF THIS ORDER, pole change-out and make-ready work to make Kansas City Power & Light Company's poles ready for attachment by Time Warner Cable of Kansas City in Overland Park, Kansas and SHALL PROCEED TO APPROVE WITHOUT DELAY all applications for access to poles in Overland Park, Kansas, submitted to it by Time Warner Cable of Kansas City between September 1, 1998 and May 1, 1999. 26. IT IS FURTHER ORDERED that Time Warner Cable of Kansas City SHALL NOT overlash its own lines or make new attachments to poles which have been identified as not meeting the requirements of the National Electrical Safety Code, or which have been determined would be in violation of the National Electrical Safety Code upon overlashing or attachment by Time Warner Cable of Kansas City, until the necessary pole change-out and/or make-ready work for that pole is completed. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau