In a recent Public Notice, the Federal Communications Commission (FCC) announced that the Wireline Competition Bureau is soliciting comment on a Petition for Declaratory Ruling filed by the Edison Electric Institute (EEI Petition) concerning available refund remedies in pole attachment complaint proceedings. The EEI Petition requests that the FCC reverse its November 2020 Decision interpreting the rule governing available refunds in 47 C.F.R. § 1.1407(a) that allows for refunds of overpayments "consistent with the applicable statute of limitations."
The FCC interpreted that rule to allow it to decide which law is "applicable" and in exercising its authority chose to borrow "the most closely analogous statute of limitations under state law." State statutes of limitations can range from three to 10 years, thus making the extent of refund liability dependent on the state law that the FCC determines is applicable on a case-by-case basis (in the November 2020 Decision, the FCC applied a three-year limitations period for contract actions under Maryland law).
EEI asks the Commission to stop relying on state statutes and instead to adopt the two-year limitation period that applies to recovery of overcharges by common carriers under 47 U.S.C. § 415(b). EEI also requests that recovery of any refunds be limited to the period following good faith notice of a dispute.
Interested parties are directed to file comments or oppositions to the Petition by August 23, 2021, and reply comments by September 10, 2021.
Adoption of a Two-Year Statute of Limitations
The EEI Petition urges the FCC to declare that pole attachment relief, including refunds of overcharges, be limited to two years—similar to the two-year limitation on claims seeking carrier overcharges established in Section 415(b) that applies to refund liability in pole attachment complaint proceedings against incumbent local exchange carrier (ILEC) pole owners.
EEI claims that relying on state law has led to variable "discriminatory" results and advocates a change from "borrowing" state law limitations periods to "borrowing" instead the federal two-year limitations found in Section 415(b). EEI urges that Section 415(b) is the more appropriate vehicle than state law as it would create uniformity and consistency among pole-owning entities subject to refund liability.
Prohibition of Refunds Prior to Good Faith Notice of a Dispute
EEI also asks the FCC to declare that "refunds in pole attachment complaint proceedings are not 'appropriate' for any period" prior to a complaint providing good faith notice of a dispute.
According to EEI, "without notice of a dispute, a utility cannot reasonably discern whether or to what extent it might be exposed to 'refund' liability." This argument, notably, follows the FCC's 2011 decision abolishing a rule that had limited refunds to the date a complaint was filed, instead allowing refunds "as far back in time as the applicable statute of limitations allows."
Public Resistance to EEI's Petition
Even before the Public Notice was issued, USTelecom – the Broadband Association (USTelecom) expressed its "strong opposition" to the EEI Petition. In a letter to the FCC dated July 2, 2021, USTelecom Ex Parte, WC Docket No. 17-84, USTelecom argues that as a threshold matter, the EEI Petition must be dismissed because it fails to satisfy the legal requirements for a declaratory ruling as the Petition lacks any "controversy, uncertainty, or lack of guidance under the Commission's existing rules."
Substantively, USTelecom disputes that EEI's proposed reforms would actually accomplish its stated goal of "facilitat[ing] broadband deployments" but, rather, warns that EEI's proposals "would frustrate broadband deployment by undermining negotiations, complicating disputes, accelerating the filing of pole attachment complaints, rewarding utilities that violate federal law, and providing a strong incentive to further delay pole attachment rate reductions."
FCC's Relevant Prior Rulings
The EEI Petition seeks another bite at the apple. EEI's arguments were addressed in the 2011 Decision where the Commission found that charges an electric utility pole owner lodged against Verizon were "unjust and unreasonable" under FCC orders establishing a maximum rate that local exchange carriers (LECs) could be charged for pole attachments.
The FCC expressed support of the current practice of "borrowing" statutes of limitation from state law and "leav[ing] the Commission to determine the 'applicable statute of limitations' in each complaint proceeding," reasoning that following the "general rule [of] favoring application of state limitations period is particularly appropriate in the context of Commission pole attachment complaints because they involve utility poles affixed to real property located in particular states." (Emphasis added).
This is aligned with current practice as poles are regulated by state and local laws, "even where a state has not exercised 'reverse preemption' option under section 224(c) of the Act."
Regulations surrounding pole attachment complaint proceedings, including regulation of rates, is consistently a hot-button issue for "attaching" cable system and telecommunications service providers and the pole owners. We expect more members of the public and stakeholders to express views on the EEI Petition leading up to the deadlines and will update this post as appropriate.