Advisories
11th Circuit Rebuffs Electric Utilities' Challenges to FCC Pole Attachment Regulation
04.12.00
In Gulf Power v. FCC (“Gulf Power II”) the United States Court of Appeals for the 11th Circuit (Atlanta) rejected most of the electric utility industry’s objections to the FCC’s pole attachment regulation and deferred consideration of challenges to the pole and conduit rate formulas. The Court, however, in a divided opinion, raised troubling questions about high-speed Internet over cable and telecommunications systems as well as about wireless attachments.
This decision arises from multiple utility challenges to the FCC’s pole attachment rules. In Gulf Power I, a different panel of the 11th Circuit had ruled that the 1996 Act amendments to the Pole Attachment Act requiring nondiscriminatory access to poles and conduits for cable television operators and telecommunications carriers was constitutional (see our advisory dated Sept. 10, 1999). In particular, the court in Gulf Power I found that mandatory access was a taking, but held that Congress could delegate to the FCC the job of setting “just compensation” in the form of regulated pole and conduit rentals. In this second challenge to pole attachment regulation, the electric utilities argued that under no set of circumstances could the FCC’s formula provide them “just compensation.”
In Gulf Power II, released April 11, 2000, the 11th Circuit held that the utilities’ attacks on the FCC’s pole formula as unconstitutionally low were not ripe to be evaluated because the utilities did not have a concrete case in hand. It held, likewise, that utility claims for additional compensation for overlashed cable needed to await a concrete case. (The court also held that the FCC properly treated dark fiber as within the FCC’s jurisdiction under the Pole Attachment Act and that dark fiber was not subject to additional charge by the utilities.)
The problem in Gulf Power II is the decision by two of the three judges that Internet service is neither cable service nor telecommunications service, and that the FCC therefore has no authority to set or limit rents charged for attachments that carry Internet traffic—as though the Pole Act protected only narrowly defined services, rather than physical facilities. The court in Gulf Power II made a similar ruling (also divided) to exclude wireless attachments from the scope of the 1996 amendments to the Pole Attachment Act. Both points provoked a vigorous dissent (by the author of the majority opinion in Gulf Power I), but the cable and CLEC industries are now faced with a decision that would carve out a large section of plant from the protections of the Pole Attachment Act. We expect further proceedings.
The electric utilities have also challenged the FCC’s Reconsideration Order issued last October concerning a number of pole and conduit accounting and formula issues. That new appeal, also lodged in the 11th Circuit, is entitled Southern Company v. FCC.
If you would like a copy of the 11th Circuit’s decision or have any questions, please contact us.
This decision arises from multiple utility challenges to the FCC’s pole attachment rules. In Gulf Power I, a different panel of the 11th Circuit had ruled that the 1996 Act amendments to the Pole Attachment Act requiring nondiscriminatory access to poles and conduits for cable television operators and telecommunications carriers was constitutional (see our advisory dated Sept. 10, 1999). In particular, the court in Gulf Power I found that mandatory access was a taking, but held that Congress could delegate to the FCC the job of setting “just compensation” in the form of regulated pole and conduit rentals. In this second challenge to pole attachment regulation, the electric utilities argued that under no set of circumstances could the FCC’s formula provide them “just compensation.”
In Gulf Power II, released April 11, 2000, the 11th Circuit held that the utilities’ attacks on the FCC’s pole formula as unconstitutionally low were not ripe to be evaluated because the utilities did not have a concrete case in hand. It held, likewise, that utility claims for additional compensation for overlashed cable needed to await a concrete case. (The court also held that the FCC properly treated dark fiber as within the FCC’s jurisdiction under the Pole Attachment Act and that dark fiber was not subject to additional charge by the utilities.)
The problem in Gulf Power II is the decision by two of the three judges that Internet service is neither cable service nor telecommunications service, and that the FCC therefore has no authority to set or limit rents charged for attachments that carry Internet traffic—as though the Pole Act protected only narrowly defined services, rather than physical facilities. The court in Gulf Power II made a similar ruling (also divided) to exclude wireless attachments from the scope of the 1996 amendments to the Pole Attachment Act. Both points provoked a vigorous dissent (by the author of the majority opinion in Gulf Power I), but the cable and CLEC industries are now faced with a decision that would carve out a large section of plant from the protections of the Pole Attachment Act. We expect further proceedings.
The electric utilities have also challenged the FCC’s Reconsideration Order issued last October concerning a number of pole and conduit accounting and formula issues. That new appeal, also lodged in the 11th Circuit, is entitled Southern Company v. FCC.
If you would like a copy of the 11th Circuit’s decision or have any questions, please contact us.