Illinois-Indiana Cable Television Ass'n, Inc. v. Public Service Commission of State of Ind., ILLINOIS-INDIANA

Docket NºNo. 2-979A285
Citation427 N.E.2d 1100
Case DateOctober 27, 1981
CourtCourt of Appeals of Indiana

Phillip E. Bainbridge, Highland, for plaintiff-appellant.

Linley E. Pearson, Atty. Gen., Jeff G. Fihn, Deputy Atty. Gen., Indianapolis, for Public Service Commission of Indiana.

Bruce N. Cracraft, Thomas E. Dooley, Indianapolis, for Indiana Bell Telephone Co., Inc.

Thomas W. Yoder, Livingston, Dildine, Haynie & Yoder, Fort Wayne, for Indiana & Michigan Electric Co.

Fred P. Bamberger, Bamberger, Foreman, Oswals & Hahn, Evansville, for Southern Indiana Gas and Electric Co.

Jerry P. Belknap, Indianapolis, Ronald Prater, Indiana & Michigan Electric Co., Fort Wayne, Marcus E. Woods, Christopher J. Weber, Indianapolis Power & Light Co., Indianapolis, Charles W. Campbell, Frank T. Lewis, Public Service Co. of Indiana, Inc., Plainfield, David C. Jensen, Eichhorn, Eichhorn & Link, Hammond, Barnes, Hickam, Pantzer & Boyd, Indianapolis, for Electric Utility respondents-appellees.

NEAL, Presiding Judge.


The Illinois-Indiana Cable Television Association, Inc. (CATV) 1 appeals from a determination by the Public Service Commission of Indiana (Commission) that the Commission has jurisdiction over cable television pole attachment rates, charges, and conditions. 2 (Hereinafter, in the interests of brevity and the avoidance of undue repetition, pole attachments.)


This appeal was preceded by the following events.

On January 29, 1979, the Commission, under authority of Ind.Code 8-1-2-58, 3 on its own initiative commenced an investigation into the rates and charges for cable television pole attachments to facilities regulated by the Commission.

Pursuant to 47 U.S.C.A. § 224(c)(2) 4 the Commission certified to the Federal Communications Commission (FCC) its assumption of authority to regulate the "rates, terms, and conditions for cable television attachments to facilities of regulated telephone and electric utilities" in Indiana. The Commission additionally certified, pursuant to the federal statute, that it has the authority to consider, and does consider, the interests of the subscribers of cable television services as well as the interests of consumers of regulated utility services.

On February 13, 1979, CATV, an association which represents the interests of many cable television companies in Indiana and Illinois, petitioned to intervene in the proceedings, and on February 15, 1979, moved to dismiss the proceedings based on lack of subject matter jurisdiction. On February 28, 1979, the Commission granted the petition to intervene and denied the motion to dismiss.

On February 16, 1979, a prehearing conference was held, at which evidence and testimony was presented, resulting in a Pre-Hearing Conference Order. Most of that conference was conducted off the record. The Commission found that:

"It is in the public interest to develop and adopt a uniform methodology and criteria for determination of just and reasonable rates and charges for cable television pole attachments to facilities owned by utilities subject to the jurisdiction of the Commission, and the Commission has jurisdiction over such rates and charges."

The Commission further determined that it "has jurisdiction over the subject matter of this cause and the parties named respondents herein (regulated electric and telephone utilities)...."

Prior to the date set by the Commission for a final hearing, CATV filed a motion seeking the Commission to certify to this court the question of jurisdiction, to hold an additional pre-conference hearing, and to limit the scheduled hearing to the determination of whether the Commission is acting within its legally granted legislative powers. Upon the denial of this motion, CATV requested from the Commission the complete transcript and filed its assignment of errors. This appeal ensued.

In addition to the Commission, defending the Commission's action as Appellees herein are the various electric utility companies and telephone companies that intervened in the administrative proceedings.

The Appellees herein filed motions to dismiss or affirm contending, essentially, that the actions taken by the Commission do not constitute an appealable final order. This court, per order of September 3, 1980, denied Appellees' motions, finding that the assertion of jurisdiction over the determination of cable television pole attachments by the Commission is appealable since lack of subject matter jurisdiction may be raised at any time and that such assertion of jurisdiction is an initial and integral step in a regulatory scheme. See In re Northwestern Indiana Telephone Company, (1930) 201 Ind. 667, 171 N.E. 65; Citizens Gas & Coke Utility v. Sloan, (1964) 136 Ind.App. 297, 196 N.E.2d 290.

The federal regulatory scheme 5 empowers the FCC to regulate the rates, terms, and conditions of pole attachments to ensure that such rates, terms, and conditions are just and reasonable. 47 U.S.C.A. § 224(b)(1). However, federal regulation is yielded to state regulation upon certification by a state that:

"(A) it regulates such rates, terms, and conditions; and

(B) in so regulating such rates, terms, and conditions, the State has the authority to consider and does consider the interests of the subscribers of cable television services, as well as the interests of the utility services."

47 U.S.C.A. § 224(c)(2)(A), (B). Thus,

"Any State which chooses to regulate pole attachments may do so at any time, and will preempt the (FCC's) involvement in pole attachment arrangements in that state simply by notifying the FCC that it regulates the rates, terms, and conditions for such attachments. (The federal statute) in no way limits or restricts the powers of the several States to regulate pole attachments." 6

It is upon the Commission's certification to the FCC under 47 U.S.C.A. § 224(c)(2), supra, and the Commission's pronouncement of its intent to initiate procedures for the promulgation of rules and regulations concerning pole attachments that CATV bases its claim that the Commission has exceeded its legislated authority. The utilities already subscribe to technical standards regarding the physical placement, operation, maintenance, etc. of the CATV coaxial At oral argument, counsel for Appellee utilities expressed concern that the federal parameters of allowable rates are too low. Under the federal statute, just and reasonable rates are to be determined according to 47 U.S.C.A. § 224(d), which states:

                cables on utility poles.  7  The parties appear to be more concerned with the economic (rate-making) aspects of pole attachments

"Determination of just and reasonable rates; definition

(d)(1) For purposes of subsection (b) of this section, a rate is just and reasonable if it assures a utility the recovery of not less than the additional costs of providing pole attachments, nor more than an amount determined by multiplying the percentage of the total usable space, or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating expenses and actual capital costs of the utility attributable to the entire pole, duct, conduit, or right-of-way.

(2) As used in this subsection, the term 'usable space' means the space above the minimum grade level which can be used for the attachment of wires, cables, and associated equipment."

The maximum return is to be determined by the following formula:

                                SPACE OCCUPIED BY CATV      (OPERATING EXPENSES
                MAXIMUM RATE  =  ----------------------  X      PLUS CAPITAL
                                   TOTAL USABLE SPACE       COSTS OF POLES) 8

This formula thus ensures that the rate assessed CATV does not exceed the expenses attributable to that portion of usable space on the poles that it occupies. It appears from gratuitous information supplied by the parties in their briefs, but without testimonial support in the record due to the limited scope of that document, that it is the custom that the CATV companies supply their own materials and utilize their own manpower in installing and maintaining the cables along the utility poles.


We restate the issues raised by CATV as follows:

I. The Commission's assumption of regulatory jurisdiction over pole attachment rates is arbitrary and capricious in that the Commission perfunctorily denied CATV's motion to dismiss the investigation, in that there was no evidence before the Commission upon which it could base its decision.

II. Cable television is not a public utility. As such, the Commission has exceeded its statutory authority in assuming jurisdiction over that industry.

III. CATV is not a consumer of utility services by virtue of its status as a lessee of utility pole space. The Commission has the power of regulation only over a utility's mandated public function. The rental of space on utility poles is only an incidental service provided by utility companies and, as such, it is not within the range of activities subject to Commission regulation.

IV. Contrary to its assertion in its certification of jurisdiction to the FCC, the Commission is not mandated to consider the interests of cable television subscribers. The Commission may consider only the...

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