FCC Affirms Order Striking Down Electric Utility’s Efforts to Hamper the Provisioning of Competitive Telecommunications Services by a Cable Operator

On July 28, the Federal Communications Commission released an Order affirming an important victory for pole-attachment licensees initially decided by the Commission more than six years ago.

In Marcus Cable Associates v. Texas Utilities Electric Company, the Commission affirmed a Cable Services Bureau Order declaring unlawful several pole attachment terms and conditions that the Dallas-based electric utility TU Electric (now TXU or Oncor) began imposing on cable operators at the same time that the utility’s affiliates were undertaking an aggressive expansion into the telecommunications business. The 1996 complaint was precipitated by a utility demand (similar to one that the same utility made several years before that also resulted in FCC and court decisions against the utility) that the cable operator share a portion of revenues generated from the provision of fiber over its cable plant. In addition to upholding the earlier finding that the utility could not compel Marcus to provide a portion of its non-video revenues over and above the maximum pole attachment rental rate that TU is permitted to charge, the full Commission (again) found that:

1. The lease of fiber by the cable operator to telecommunications providers is not a sublease or assignment of pole attachment contracts;
2. TU Electric may not require Marcus to disclose the identity or location of non-video customers; and
3. TU Electric may not require attaching parties to obtain “poison-pill” customer “releases” which disparage the quality and dependability of a pole-licensee’s facilities and services.

In so doing, the Commission found that the utility’s unlawful requirements “appear to be a thinly-veiled attempt to undermine the provision of telecommunications services offered by actual or potential competitors.”

Although the Commission upheld the finding that TU Electric’s contract provisions were unreasonable, the Commission limited the Bureau’s Order only to the parties in this proceeding, and reversed the Bureau-level decision to strike the offending provisions from all of the utility’s pole-attachment agreements. However, the Commission’s Order still stands as useful precedent in defining the limits of reasonable utility conduct in pole attachment matters, particularly as electric utilities continue to diversify into telecommunications and broadband. 

Please let us know if you have any questions concerning this or any related matter. A copy of the decision is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-173A1.pdf.