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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Florida Cable )
Telecommunications Association, )
Inc.; Comcast Cablevision of )
Panama City, Inc.; Mediacom )
Southeast, L.L.C.; and Cox )
Communications Gulf Coast, )
L.L.C., ) File No. PA 00-004
)
Com- )
plainants, )
)
v. )
)
Gulf Power Company,
Respondent.
MEMORANDUM OPINION AND ORDER
Adopted: May 12, 2003
Released: May 13, 2003
By the Chief, Enforcement Bureau:1
I. INTRODUCTION
In this Memorandum Opinion and Order, we grant a complaint
filed by Florida Cable Telecommunications Association, Inc.
(``FCTA''); Comcast Cablevision of Panama City, Inc.
(``Comcast''); Mediacom Southeast, L.L.C. (``Mediacom'');
and Cox Communications Gulf Coast, L.L.C. (``Cox'') against
Gulf Power Company (``Gulf Power'') pursuant to section 224
of the Communications Act of 1934, as amended (``Act'').2
In short, FCTA, Comcast, Mediacom, Cox, and Time Warner
(collectively, the ``Cable Operators'') challenge Gulf
Power's imposition of a rate increase under new pole
attachment agreements that allegedly exceeds the rates the
Cable Operators paid under prior pole attachment agreements
by ``more than 514 percent (and in one case as high as 550
percent).''3 As explained below, we find Gulf Power's
proposed rate of $38.06 to be unjust and unreasonable. We
further reject Gulf Power's argument that the Commission
should abandon its reliance on the rate formula contained in
its rules,4 and order the parties to negotiate new contracts
using that formula as a guide for determining a reasonable
rate. Until that time, the Cable Operators may remain
attached to Gulf Power's poles at the rates contained in
their former agreements.
II. BACKGROUND
The Cable Operators provide cable services throughout
communities in Florida.5 The Cable Operators, or their
predecessors-in-interest, and Gulf Power have had
longstanding relationships governed by voluntary pole
attachment contracts.6 For the year beginning July 1999
through June 2000, the Cable Operators paid annual pole
attachment rates ranging from $5.00 to $6.20 per pole.7 In
mid-2000, Gulf Power sent the Cable Operators notices that
their annual pole attachment rates would increase to
$38.06.8
On July 10, 2000, the Cable Operators filed their Complaint
with the Commission. The Cable Operators allege that Gulf
Power violated section 224 of the Act by unilaterally
terminating existing pole attachment agreements, forcing the
Cable Operators to execute new pole attachment agreements,
and refusing to negotiate in good faith concerning the terms
and conditions of those new agreements.9 According to the
Cable Operators, Gulf Power's actions ``represent an
unprecedented break in the established course of dealing''
that the parties had maintained, pursuant to which attachers
would remain on Gulf Power's poles during the course of
negotiations toward new pole agreements.10 The Cable
Operators maintain that, under the Commission's rules, Gulf
Power is entitled to charge an attachment rate between $4.16
and $4.93 per pole.11 Nevertheless, the Cable Operators
assert that they are willing to accept the ``moderately
higher rates in the $5.00 to $6.20 range'' provided for in
their prior contracts with Gulf Power.12 The Complaint,
inter alia, asks the Commission (1) to declare that Gulf
Power has acted unreasonably, and that the proposed $38.06
rate is unlawful; (2) to establish an annual pole attachment
rate for cable operators in Florida in an amount not greater
than the former contract rate (not to exceed $6.20 per
pole); and (3) to order Gulf Power to cease and desist from
terminating the prior pole attachment agreements, negotiate
in good faith regarding new agreements, comply with the
Commission's rules regarding any rate increase, and refund
the Cable Operators any amounts they have paid in excess of
proper rates, plus interest.13
On August 9, 2000, Gulf Power filed a Response, which, in
addition to denying all of the Complaint's material
allegations, argues that the Commission lacks jurisdiction
over the Complaint.14 Moreover, the Response asserts that
the Commission's ``cable rate'' does not result in just
compensation, because it excludes compensation for the value
derived from space on poles that cannot be used for
attachments, fails to allow recovery of all costs associated
with the ``taking,'' and inappropriately is based on
embedded costs.15 Finally, the Response argues that the
price Gulf Power proposes to charge for attachments is
supported by standard appraisal and valuation principles.16
On the same day, Gulf Power filed a motion seeking
confidential treatment of competitively-sensitive,
proprietary data relating to its ``operating options, costs
and practices,'' arguing that such data should be protected
from disclosure to anyone other than members of the
Commission's staff.17 According to Gulf Power, most of the
confidential information is contained in its FERC Form No. 1
for the year ending December 31, 1999, and neither the
Federal Energy Regulatory Commission (``FERC''), nor the
Florida Public Service Commission, has compelled disclosure
of that information.18
The Cable Operators filed a Reply on August 29, 2000.19 In
addition to taking issue with Gulf Power's arguments that it
properly terminated its contracts with the Cable
Operators,20 the Reply contends that the Commission's
regulations provide just compensation for attachers' use of
Gulf Power's poles.21
III. ANALYSIS
III.A. The Commission Has Jurisdiction to
Resolve the Complaint.
We begin by addressing two threshold jurisdictional issues.
First, Gulf Power argues that the Complaint must be
dismissed, because the Commission lacks jurisdiction to
regulate rates for pole attachments that are used to provide
Internet service, irrespective of whether the Internet
service is provided on a stand-alone or co-mingled basis.22
This argument easily is answered by the United States
Supreme Court's decision in National Cable
Telecommunications Association v. Gulf Power Company, which
held that section 224 vests the Commission with authority to
regulate pole attachments of cable services providers that
also provide access to the Internet.23
Second, Gulf Power argues that the Commission lacks
jurisdiction to resolve the Complaint, because the claims at
issue are for breach of contract.24 According to Gulf
Power, the Complaint does not allege that the contractual
provisions themselves are unjust and unreasonable.25
Rather, the Complaint purportedly reflects the Cable
Operators' unhappiness over the outcome of the provisions'
application: in other words, the ``consequences and impact
of both their contractual obligations and their having to
meet those duties seems unreasonable and unjust'' to the
Cable Operators.26
In enacting section 224, Congress recognized that the
Commission's involvement in ``regulat[ing] the rates, terms,
and conditions for pole attachments'' would include review
of a utility's pole attachment ``practices.''27 The terms
and conditions of pole attachments consequently include not
only the reasonableness of the contract provisions
themselves, but also the reasonableness of pole owner
practices in implementing contract provisions.28 This case
concerns Gulf Power's ``unilateral rate increases, with the
concomitant threat to dislodge [the Cable Operators']
attachments with the express purpose to make [the Cable
Operators] assert [their] mandatory right to access'' under
section 224(f).29 This type of practice by a utility in
administering its contracts with attachers falls squarely
within the ambit of section 224.
III.B. The Complaint Is Ripe for Resolution.
Gulf Power maintains that the Complaint is not ripe for
resolution, because the Cable Operators have not
demonstrated that the parties' negotiations reached an
impasse prior to the filing of the Complaint.30
Specifically, Gulf Power argues that it has offered to meet
with the Cable Operators to ``discuss the new pole
attachment agreement[s]'' and to ``explain Gulf Power's use
of replacement cost in an attempt to establish a fair
payment . . . that approaches just compensation.''31
According to Gulf Power, it is the Cable Operators who have
refused to engage in any meaningful negotiations.32 Despite
Gulf Power's protestations, we believe the Complaint is ripe
for resolution.
Parties are not required to engage in extended negotiations
where they appear to be far apart in their analysis of the
issues.33 We believe such is the situation in this case.
In the Spring of 2000, Gulf Power advised Cox, Comcast, and
Mediacom that they were required to execute new pole
attachment agreements providing for a dramatically higher
attachment rate in order to remain on Gulf Power's poles.34
Time Warner received a letter dated October 26, 2000,
stating that its pole attachment agreement must be amended
to reflect the higher rate.35 Gulf Power has demonstrated
that it is unwilling to negotiate a rate less than the
demanded rate of $38.06. Specifically, in its Response,
Gulf Power makes clear that it considers the $38.06 rate to
be ``just compensation,'' and that it will not continue
``subsidized pole attachment fees . . . .''36 The parties
met at various times to discuss the rate increase, and also
exchanged correspondence regarding the increase.37
Communications ultimately broke down, prompting the Cable
Operators to file this Complaint.38 Based on our review of
the record, we believe that further negotiations between the
parties are likely to be fruitless without the Commission's
intervention.
III.C. Gulf Power Has Failed to Justify Its
Imposition of a $38.06 Annual Pole
Attachment Rate.
Section 224 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.''39 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.''40
In a pole attachment complaint proceeding, the complainant
bears the burden of establishing a prima facie case that the
rate, term, or condition of attachment at issue is not just
and reasonable, or that the denial of access violates
section 224(f) of the Act.41 Toward that end, a complaint
must include data and information in support of the claim.42
Nonetheless, the Commission will not dismiss a complaint if
the requisite information is not available from public
records or from the utility after reasonable request.43
The Cable Operators have met their burden of establishing a
prima facie case. Specifically, the Complaint, supported by
numerous exhibits, alleges that Gulf Power notified the
Cable Operators of its desire to have the parties execute
new pole attachment agreements containing a $38.06 pole
attachment rate that is significantly higher than the rate
the Cable Operators had been paying.44 Moreover, the
Complaint sets forth the outcome of the Cable Operators'
``rate study,'' which concluded that, using the Commission's
Cable Formula,45 an appropriate attachment rate ranges from
$4.16 to $4.93 per pole per year.46 Accordingly, we address
the question of whether the rates proposed by the Cable
Operators are below the statutory just and reasonable
rate.47
Gulf Power does not expressly allege that the rates
currently paid under the parties' contracts, which range
from $5.00 to $6.20,48 or the maximum annual rate calculated
under the Cable Formula, are less than the utility's
incremental costs.49 Rather, Gulf Power contends that the
Commission should abandon the Cable Formula, because the
formula purportedly does not provide just compensation.50
As an alternative, Gulf Power supports application of a
``reproduction cost methodology,'' which is based on a
``gross pole investment price arising from the replacement
cost of the pole at current prices.''51 According to Gulf
Power, the ``reproduction cost methodology'' includes ``all
proper FERC accounts,'' and fully allocates the cost of both
usable and unusable space.52 The ``reproduction cost
methodology,'' Gulf Power contends, produces an annual rate
of $38.06.53 Gulf Power further attempts to shore up the
reasonableness of its $38.06 rate by including an affidavit
that discusses various methods of making market valuations
for property and concludes that an appropriate range for an
annual attachment rate for Gulf Power's poles is $40-$45.54
We reject Gulf Power's assertion that the Cable Formula does
not provide just compensation. The Commission has concluded
that its pole attachment formulas, together with the payment
of make-ready expenses, provide compensation that exceeds
just compensation.55 The Eleventh Circuit Court of Appeals
upheld that determination, explaining:
In short, before a power company can seek
compensation above marginal cost, it must
show with regard to each pole that (1)
the pole is at full capacity and (2)
either (a) another buyer of the space is
waiting in the wings or (b) the power
company is able to put the space to a
higher-valued use with its own
operations. Without such proof, any
implementation of the Cable Rate (which
provides for much more than marginal
cost) necessarily provides just
compensation.56
Gulf Power has submitted no evidence in this proceeding that
would satisfy the test articulated by the Eleventh
Circuit.57
Finally, we find no merit in Gulf Power's objections to
specific aspects of the Cable Formula, which the utility has
asserted, time and again, before the Commission. First,
Gulf Power argues that the Commission's presumptions
concerning pole height (i.e., 37.5 feet) and usable space
(i.e., 13.5 feet)58 do not reflect the ``realities of the
utility industry'' or ``Gulf Power's system of poles.''59
Rather, Gulf Power claims that its average existing pole
height is 40 feet (with usable space of 11.5 feet) based
upon its claim that its average replaced pole in 1999 is
approximately 40 feet.60 There is no evidence, however, to
support a conclusion that the average height of the poles
Gulf Power replaced in 1999 reflects the system-wide pole
height average.61 Second, Gulf Power argues that additional
capital accounts should be included in the investment
calculation for poles and conduits,62 as well as in the
calculation of the carrying charge rate.63 The Commission
has addressed these identical arguments previously,64 and
Gulf Power provides no new information or argument to
persuade us that, in order to ensure just compensation, it
is necessary to include additional accounts.
In sum, Gulf Power fails utterly to justify its proposed
annual pole attachment rate of $38.06 using the Cable
Formula. Accordingly, we find that rate to be unreasonable
under section 224 of the Act and the Commission's rules.
Moreover, Gulf Power offers no persuasive reason why
departure from the Cable Formula is warranted in this case.
Accordingly, we order Gulf Power to allow the Cable
Operators to remain attached to Gulf Power's poles at the
rates under their former contracts (i.e., $5.00 to $6.20),
pending satisfactory negotiation of new agreements. We
further order the parties to negotiate new agreements in
good faith using the Cable Formula as a guide to
establishing a reasonable rate. To the extent the Cable
Operators have paid the $38.06 rate, we order refunds of the
difference between the $38.06 rate and the rates contained
in the parties' prior pole attachment agreements.
IV. ORDERING CLAUSES
1. 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,
1.1401-1.1418, that the relief requested in the
Complaint IS GRANTED TO THE EXTENT INDICATED
HEREIN.
2. 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, 1.1410, that
the annual pole attachment rate of $38.06 IS
UNREASONABLE and IS TERMINATED, effective upon
the release of this Order.
3. 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, 1.1410, that
the rates contained in the parties' prior pole
attachment agreements (i.e., $5.00-$6.20 annually
per pole) ARE CONTINUED, pending further
negotiations between the parties.
4. 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, 1.1410, that
Gulf Power Company SHALL REFUND to Complainants
Comcast Cablevision Panama City, Inc., Mediacom
Southeast, L.L.C., and Cox Communications Gulf
Coast, L.L.C., within thirty (30) days of the
release of this Order, that portion of any
amounts paid in excess of the rates contained in
the parties' prior pole attachment agreements,
for the period July 10, 2000 to the present, plus
interest to the date of the refund.
5. 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, 1.1410, that
Gulf Power Company SHALL REFUND to Complainant
Time Warner Cable, within thirty (30) days of the
release of this Order, that portion of any
amounts paid in excess of the rate contained in
the parties' prior pole attachment agreement, for
the period March 13, 2001 to the present, plus
interest to the date of the refund.
6. 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,
1.1401-1.1418, that Gulf Power Company and the
Complainants SHALL NEGOTIATE IN GOOD FAITH
maximum just and reasonable rates for pole
attachments, in accordance with the Commission's
rules.
7. 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,
1.1401-1.1418, that the Motion of Gulf Power
Company for Leave to File Motion to Dismiss
Complaint for Lack of Jurisdiction, File No. PA
00-004 (filed July 20, 2000); Gulf Power
Company's Motion for Leave to File a Motion for
Confidential Treatment of Commercial and
Financial Information, File No. PA 00-004 (filed
Aug. 9, 2000); Gulf Power Company's Motion for
Leave to File Supplemental Authority, File No. PA
00-004 (filed Sept. 11, 2000); and Motion for
Leave to File Comments on Gulf Power Notice of
Filing Supplemental Authority, File No. PA 00-004
(filed Sept. 21, 2000), ARE GRANTED.
8. 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,
1.1401-1.1418, that the Motion of Gulf Power
Company to Dismiss Complaint and Complainants'
Petition for Temporary Stay for Lack of
Jurisdiction, File No. PA 00-004 (filed July 20,
2000); Gulf Power Company's Motion to Strike,
File No. PA 00-004 (filed Aug. 7, 2000); Gulf
Power Company's Motion for Confidential Treatment
of Commercial and Financial Information, File No.
PA 00-004 (filed Aug. 9, 2000); Gulf Power
Company's Motion to Strike and Reply to
Complainants' Opposition to Request for Grant of
Motion for Confidential Treatment, File No. PA
00-004 (filed Sept. 6, 2000); and Gulf Power
Company's Motion to Strike the Complainants'
Supplement or, in the Alternative, Motion to
Dismiss, File No. PA 00-004 (filed Apr. 11, 2001)
ARE DENIED.
FEDERAL COMMUNICATIONS
COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
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, 17 FCC Rcd 4672 (2002).
2 47 U.S.C. § 224. See Complaint, File No. PA 00-004 (filed
July 10, 2000) (``Complaint''). On March 13, 2001, the
original complainants endeavored to add Time Warner Cable
(``Time Warner'') as a complainant. Supplement, File No. PA
00-004 (filed Mar. 13, 2001) (``Supplement''). Gulf Power
objected to the amendment, claiming, inter alia, that Time
Warner had suffered no cognizable injury as of the date the
Complaint was filed, and that the amendment constitutes an
attempt by Time Warner unlawfully to obtain a refund
retroactive to January 1, 2001 (the effective date of the
higher annual pole attachment rate Gulf Power charged Time
Warner). Gulf Power Company's Motion to Strike the
Complainants' Supplement or, in the Alternative, Motion to
Dismiss, File No. PA 00-004 (filed Apr. 11, 2001) (``Motion
to Strike'') at 3-7. We deny the Motion to Strike. The
Commission has recognized that a state association, on
behalf of its members, can facilitate negotiations with a
utility and, when the negotiations reach an impasse,
coordinate the filing of a complaint. See Amendment of
Rules and Policies Governing the Attachment of Cable
Television Hardware to Utility Poles, Report and Order, 2
FCC Rcd 4387, 4397-98, ¶¶ 78-80 (1987) (``Hardware Order''),
aff'd, Memorandum Opinion and Order, 4 FCC Rcd 468 (1989).
Indeed, the Commission's rules expressly provide that a
state association may bring a complaint on behalf of its
cable operator members. 47 C.F.R. § 1.1404(a). When a
state association is a lead complainant, the Commission
allows similarly-situated aggrieved complainants to join in
a complaint against a utility, because it promotes
administrative efficiency. Hardware Order, 2 FCC Rcd at
4397-98, ¶¶ 78-80. It would be a waste of resources to
require a similarly-situated cable operator to file a
separate complaint simply because a utility delayed in
providing notice to that cable operator of precisely the
same rate change. Gulf Power does not argue that Time
Warner is situated differently from the other cable
operators, beyond the fact that Time Warner did not receive
notice of Gulf Power's rate change until October 26, 2000.
(Gulf Power did ``reserve[ ] the right to file additional
pleadings,'' if the Commission allows Time Warner to be
added as a party. Motion to Strike at 6 n.6. Gulf Power
has had numerous and adequate opportunities to supplement
the record, however. Having failed to do so on this issue,
the record is now closed.) As indicated below, the refund
we order to be paid to Time Warner accrues from the date on
which Time Warner was added to the proceeding - i.e., March
13, 2001.
3 Complaint at 2, at 5, ¶ 15. Pursuant to 47 C.F.R. §
1.1403(d), and simultaneously with the filing of the
Complaint, the Cable Operators filed a Petition for
Temporary Stay of Gulf Power's announced termination of
access to its poles unless the Cable Operators paid the
higher rate. Petition for Temporary Stay, File No. PA 00-
004 (filed July 10, 2000) (``Petition for Temporary Stay'').
The parties filed multiple submissions pertaining to the
issues raised in the Petition for Temporary Stay. See Gulf
Power Company's Answer to Petition for Temporary Stay, File
No. PA 00-004 (filed July 21, 2000) (``Answer to Petition
for Temporary Stay''); Motion of Gulf Power Company to
Dismiss Complaint and Complainants' Petition for Temporary
Stay for Lack of Jurisdiction, File No. PA 00-004 (filed
July 21, 2000); Opposition to Motion to Dismiss, File No. PA
00-004 (filed July 31, 2000) (``Motion to Dismiss''); Motion
to Strike; Letter dated August 16, 2000 to Magalie Roman
Salas, Secretary, FCC, from Brian M. Josef, counsel for
Cable Operators, File No. PA 00-004 (filed Aug. 16, 2000).
Because this Order disposes of the substantive issues raised
in the Petition for Temporary Stay, we dismiss it and the
filings relating to it as moot.
4 See 47 C.F.R. § 1.1409(e)(1).
5 Complaint, Exhibit 2 (Schedule of Parties, Poles and
Communities); Supplement, Exhibit 2 (Schedule of Parties).
6 Complaint at 4, ¶ 11.
7 See Complaint, Exhibit 3 (Pole Attachment Agreements
between Cox and Gulf Power ), Exhibit 4 (Pole Attachment
Agreements between Comcast and Gulf Power), Exhibit 5 (Pole
Attachment Agreements between Mediacom and Gulf Power);
Supplement, Exhibit 5 (Pole Attachment Agreement).
8 Complaint at 5, ¶ 15 & Exhibit 9 (Cover Letters and Draft
Pole Attachment Agreements from Gulf Power to Cox), Exhibit
10 (Cover Letters and Draft Pole Attachment Agreements from
Gulf Power to Comcast); Exhibit 11 (Cover Letters and Draft
Pole Attachment Agreements from Gulf Power to Mediacom);
Supplement, Exhibit 9.
9 Complaint at 7, ¶¶ 22-23.
10 Complaint at 5, ¶ 4, at 7, ¶ 24.
11 Complaint at 7 n.4.
12 Complaint at 7 n.4.
13 Complaint at 8-9, ¶ 29.
14 Gulf Power Company's Response to Complaint, File No. PA
00-004 (filed Aug. 9, 2000) (``Response'') at 9-13, ¶ 4.
15 Response at 38-48.
16 Response at 48-52.
17 Gulf Power Company's Motion for Confidential Treatment of
Commercial and Financial Information, File No. PA 00-004
(filed Aug. 9, 2000) (``Motion for Confidential Treatment'')
at 2. See also Gulf Power Company's Motion for Leave to
File Motion for Confidential Treatment of Commercial and
Financial Information, File No. PA 00-004 (filed Aug. 9,
200) (``Motion for Leave to File Motion for Confidential
Treatment'') at 2.
18 Motion for Confidential Treatment at 2, 5. On September
14, 2000, FERC denied Gulf Power's request for confidential
treatment of ``certain information in Gulf Power Company's
1999 Form 1 filing,'' because FERC ``does not consider the
Form 1 information confidential.'' See Letter dated
November 9, 2000 to Magalie Roman Salas, Secretary, FCC,
from Brian M. Josef, counsel for Cable Operators, File No.
PA 00-004 (filed Nov. 9, 2000) (attachment). Gulf Power's
FERC Form No. 1 reports now are available on the Internet.
See http://www.ferc.gov. Moreover, this Order does not rely
on any other of the purportedly confidential information,
because that information relates to Gulf Power's proposed
alternative ``reproduction cost methodology,'' which we
reject. See paragraph 16, infra. See also Motion for Leave
to File Motion for Confidential Treatment at 3 (``In
addition [to the FERC Form 1 information], some of the
confidential information supporting the replacement cost
methodologies being submitted by Gulf Power is from Gulf
Power's internal documents . . . .''). For these reasons,
we deny the Motion for Confidential Treatment as moot.
19 Reply, File No. PA 00-004 (filed Aug. 29, 2000)
(``Reply'').
20 Reply at 6-20.
21 Reply at 20-57.
22 Response at 9. See also Motion to Dismiss at 3-4; Motion
to Strike at 3-7.
23 534 U.S. 327, 333 (2002) (``Gulf Power'').
24 Response at 10; Motion to Dismiss at 4-6.
25 Response at 12; Motion to Dismiss at 5.
26 Response at 12; Motion to Dismiss at 5-6.
27 See Newport News Cablevision, Ltd. Communications, Inc.
v. Virginia Electric & Power Co., Order, 7 FCC Rcd 2610,
2610, ¶ 4 (Comm. Car. Bur. 1992) (``Newport News'') (citing
S. Rep. No. 580, 95th Cong., 1st Sess. at 14 (1977),
reprinted in 1978 U.S. Code Cong. & Admin. News 109
[Commission involvement via section 224 was intended to
``minimize the effect of unjust or unreasonable pole
attachment practices on the wider development of cable
television service to the public.'']).
28 Newport News, 7 FCC Rcd at 2610, ¶ 4.
29 Alabama Cable Telecommunications Ass'n v. Alabama Power
Co., Order, 16 FCC Rcd 12209, 12217, ¶ 19 (2001) (``APCo
Review''), review denied sub nom. Alabama Power Co. v. FCC,
311 F.3d 1357 (11th Cir. 2002) (``Alabama Power''), petition
for certiorari filed. See, e.g., Response at 15 (``[A]ny of
the Complainants herein that desires to keep or place its
facilities on Gulf Power's poles will be required to mandate
such access under Section 224 of the Act.'').
30 Response at 20-21, ¶ 18. See Amendment of Commission's
Rules and Policies Governing Pole Attachments, Consolidated
Partial Order on Reconsideration, 16 FCC Rcd 12103, 12111, ¶
10 (2001) (``Pole Attachments Reconsideration Order'') (the
pole attachment complaint rules apply ``when parties are
unable to arrive at a negotiated agreement . . . .''); see
also 47 C.F.R. § 1.1404(k) (a pole attachment complaint must
include ``a brief summary of all steps taken to resolve the
problem prior to filing. If no such steps were taken, the
complain[an]t shall state the reason(s) why it believed such
steps were fruitless.'').
31 Response at 20-21, ¶ 18. See also Second Affidavit of
Michael R. Dunn, File No. PA 00-004 (filed Aug. 9, 2000)
(``Second Dunn Affidavit'') at 2-3, ¶ 3; Third Affidavit of
Michael R. Dunn, File No. PA 00-004 (filed Aug. 9, 2000)
(``Third Dunn Affidavit'') at 3, ¶ 4.
32 Response at 21, ¶ 18. See also Second Dunn Affidavit at
3, ¶ 5; Third Dunn Affidavit at 3, ¶ 4.
33 See, e.g., Teleprompter of Fairmont, Inc. v. Chesapeake &
Potomac Telephone Co. of West Virginia, Memorandum Opinion
and Order, 85 FCC 2d 243, 244 n.2 (1981) (Commission
considered complainant's representation that its differences
with the utility over pole attachments rates were so great
that negotiations would be futile to be ``satisfactory'' for
purposes of the pole attachment rules'').
34 Complaint at 5, ¶ 15 & Exhibit 9 (Cover Letters and Draft
Pole Attachment Agreements from Gulf Power to Cox), Exhibit
10 (Cover Letters and Draft Pole Attachment Agreements from
Gulf Power to Comcast); Exhibit 11 (Cover Letters and Draft
Pole Attachment Agreements from Gulf Power to Mediacom).
35 Supplement, Exhibit 9. There is no indication that Time
Warner attempted to negotiate with Gulf Power, although Gulf
Power does not raise this as an issue. As discussed supra
note 2, as a matter of administrative efficiency, we will
allow Time Warner to participate in this proceeding, but the
refund ordered in this case will accrue from the date on
which Time Warner was added to the proceeding - i.e., March
13, 2001.
36 Response at 21, ¶ 18.
37 See Complaint at 6, ¶¶ 17-18, Exhibit 7 (Declaration of
L. Keith Gregory) at 3-5, ¶¶ 7-13, Exhibit 12 (June 2, 2000
Letter from J. Christopher Redding to Michael R. Dunn re:
Pole Attachments), Exhibit 13 (June 28, 2000 Letter from
Bruce Glickman to Michael R. Dunn re: Pole Attachment
Agreement), Exhibit 14 (June 16, 2000 Letters from Michael
R. Dunn to J. Christopher Redding and Thomas R. Nathan re:
Pole Attachments), Exhibit 15 (July 7, 2000 Letter from J.
Christopher Redding to Michael R. Dunn re: Cox
Communications Pole Attachment Agreement); Reply at 11-12;
Response at 17-22, ¶¶ 15-18.
38 Response at 20-21, ¶ 18.
39 47 U.S.C. § 224(f)(1).
40 Implementation of the Local Competition Provisions in the
Telecommunications Act of 1996, First Report and Order, 11
FCC Rcd 15499, 16060, ¶ 1123 (1996) (subsequent history
omitted).
41 47 C.F.R. § 1.1409(b). See also 47 C.F.R. § 1.1409(d)
(``The Commission shall deny the complaint if it determines
that the complainant has not established a prima facie case
. . . .'').
42 47 C.F.R. § 1.1404(g).
43 47 C.F.R. § 1.1406(b).
44 Complaint at 5, ¶ 15, Exhibit 9 (Cover Letters and Draft
Pole Attachment Agreements from Gulf Power to Cox), Exhibit
10 (Cover Letters and Draft Pole Attachment Agreements from
Gulf Power to Comcast), Exhibit 11 (Cover Letters and Draft
Pole Attachment Agreements from Gulf Power to Mediacom);
Supplement, Exhibit 9.
45 The Cable Formula is the methodology the Commission
developed to calculate the maximum allowable pole attachment
rate a specific utility may charge a cable operator
providing cable services. See Amendment of Rules and
Policies Governing Pole Attachments, Report and Order, 15
FCC Rcd 6453, 6457, ¶ 5 (2000) (``Fee Order''), review
denied sub nom. Southern Co. Serv., Inc. v. FCC, 313 F.3d
574 (D.C. Cir. 2002); Pole Attachments Reconsideration
Order, 16 FCC Rcd at 12107, ¶ 5. See also Adoption of Rules
for the Regulation of Cable Television Pole Attachments,
First Report and Order, 68 FCC2d 1585 (1978) (``First Report
and Order''); Second Report and Order, 72 FCC2d 59 (1979)
(``Second Report and Order''); Third Report and Order, 77
FCC2d 187 (1980) (``Third Report and Order''), review denied
sub nom. Monongahela Power Co. v. FCC, 655 F.2d 1254 (D.C.
Cir. 1985) (per curiam); Hardware Order, 2 FCC Rcd at 4387.
46 Complaint at 6-7, ¶ 19 & n.4.
47 As a threshold argument, the Cable Operators contend that
the Commission need not decide whether, utilizing the
principle of ``just compensation,'' Gulf Power is entitled
to a higher pole rate than that produced by the Cable
Formula. Reply at 6. According to the Cable Operators, the
Commission should find that the ``unilateral and coercive
character of Gulf Power's termination and rate increase''
contravened the parties' twenty-year ``custom and course of
dealing,'' which permitted the Cable Operators to keep their
attachments on Gulf Power's poles while the parties
negotiated new voluntary pole attachment agreements. Reply
at 6-7. The Commission has refused to find that voluntary
relationships automatically become mandatory relationships
(i.e., are ``grandfathered'') pursuant to the 1996 Act's
mandatory access amendments to section 224. In other words,
at some point a pole owner reasonably may terminate a
voluntary relationship with an attacher without running
afoul of section 224, even though the pole owner still must
grant access. See APCo Review, 16 FCC Rcd at 12218, ¶¶ 20-
21. Because we deny this argument by the Cable Operators,
we need not resolve whether Gulf Power in fact had a
contract with one of the attachers (Cox) and, if so, when
that contract (as well as the other contracts) expired.
See, e.g., Motion to Dismiss at 5 & n.3; Response at 7, 11-
12 & n.4.
48 Complaint at 7 n.4.
49 See 47 U.S.C. § 224(d)(1); 47 C.F.R. § 1.1409(c).
50 Response at 34-48, ¶ 28. In making this argument, Gulf
Power incorporates its Petition for Reconsideration in CS
Docket No. 97-98.
51 Response at 49. See Third Dunn Affidavit at 12-16, ¶¶
19-24.
52 Response at 49. See Third Dunn Affidavit at 12-16, ¶¶
19-24.
53 Response at 49. See Third Dunn Affidavit at 12-16, ¶¶
19-24.
54 Response at 49-51. See Affidavit of Henry J. Wise, MAI,
File No. PA 00-004 (filed Aug. 9, 2000) (``First Wise
Affidavit''); Second Affidavit of Henry J. Wise, MAI, File
No. PA 00-004 (filed Sept. 12, 2000) (``Second Wise
Affidavit'').
55 APCo Review, 16 FCC Rcd at 12223-36, ¶¶ 32-61.
56 Alabama Power, 311 F.3d at 1370-71.
57 Cf. Alabama Power, 311 F.3d at 1370 (``[N]owhere in the
record did APCo allege that APCo's network of poles is
currently crowded. It therefore has no claim.''). Gulf
Power and Alabama Power Company are wholly-owned
subsidiaries of The Southern Company. See Complaint,
Exhibit 17 (FERC Form No. 1: Annual Report of Major Electric
Utilities, Licensees and Others) (filed May 2, 2000).
Although Gulf Power was not a party to the Bureau proceeding
underlying the Commission's order in APCo Review, it filed
in the Eleventh Circuit a Petition for Review of the Bureau
order. The Court of Appeals dismissed Gulf Power's petition
for lack of standing. Alabama Power, 311 F.3d at 1366-67.
Gulf Power argues that its filing of a Petition for Review
in Alabama Power divests the Commission of jurisdiction to
decide the Complaint in the instant matter. See Motion to
Strike at 2-3. That argument - which borders on the
frivolous - is moot in light of the Eleventh Circuit's
disposition of Gulf Power's Petition for Review in Alabama
Power.
58 See Fee Order, 15 FCC Rcd at 6465, ¶ 16.
59 Response at 42.
60 Response at 42-43; Third Dunn Affidavit at 14, ¶ 21 &
Attachment E (Gulf Power Company 1999 New Pole Additions and
Average Pole Heights).
61 Gulf Power indicates that it owns 224,555 distribution
poles, and that it uses 66,440 distribution poles. Third
Dunn Affidavit, Attachment A (Gulf Power Company Response
for Data and Information Specified in 47 C.F.R. § 1.1404(g)
(Based on December 31, 1999 Data)) at 1. The utility,
however, fails to provide information about the various
heights of these poles, or even about a statistically-valid
sampling of the poles.
62 Specifically, Gulf Power argues that, in addition to FERC
Account 364, the following capital accounts should be
utilized: Account 360 (land and land rights), Account 365
(overhead conductors and devices), Account 368 (line
transformers), and Accounts 389-399 (general plant).
Response at 41-42; Third Dunn Affidavit at 10, ¶ 16.
63 According to Gulf Power, a ``full and perfect price''
necessary to provide just compensation must include FERC
Account 580 (operation supervision and engineering), Account
583 (overhead line expenses), Account 588 (miscellaneous
distribution expenses), Account 590 (maintenance supervision
and engineering), and Account 598 (maintenance of
miscellaneous distribution plant). Response at 40-41; Third
Dunn Affidavit at 10, ¶ 16.
64 APCo Review, 16 FCC Rcd at 12236, ¶ 61; Pole Attachment
Reconsideration Order, 16 FCC Rd at 12159-64, ¶¶ 116-28.