Knology Inc. v. Georgia Power Co.
| Decision Date | 20 November 2003 |
| Docket Number | PA 01-006,FCC 03-292 |
| Court | Federal Communications Commission Decisions |
| Parties | Knology, Inc., Complainant, v. Georgia Power Company, Respondent. |
Adopted: November 14, 2003
MEMORANDUM OPINION AND ORDERMarlene H. Dortch Secretary
By the Commission:
I. INTRODUCTION
1. In this Order, we grant in part and deny in part a pole attachment complaint that Knology, Inc. ("Knology") filed against Georgia Power Company ("Georgia Power") pursuant to section 224 of the Communications Act of 1934, as amended ("Act").[1] In particular, we grant Knology's claims that Georgia Power imposed unjust and unreasonable terms and conditions of attachment by (1) charging Knology the entire cost of inspecting Knology's attachments one year or more after the attachments were installed; (2) failing to allocate among all attachers certain common costs; (3) assessing against Knology certain excessive charges; and (4) failing to provide Knology sufficiently detailed billing information. We deny the remainder of Knology's claims. We further order Georgia Power, as more particularly set forth herein, to refund to Knology certain amounts paid since June 8 2001.[2] We also direct Georgia Power to recalculate certain overhead expenses and encourage the parties to reach agreement on these expenses after the recalculation.
II. BACKGROUND
2. Knology is a franchised cable television operator and certified local exchange carrier providing cable, interstate and intrastate telecommunications, and Internet access service in Georgia.[3] In particular, Knology serves the cities of Augusta, Columbus, Evans, Forest Hills, Grovetown, Martinez, and Midland, Georgia.[4]
3. Georgia Power is an electric utility that generates and distributes electricity to over 1.8 million customers throughout Georgia.[5] As such, Georgia Power owns and controls facilities used to distribute electricity, including poles that are subject to the mandatory access provisions of section 224.[6] The State of Georgia has not certified to the Commission that it regulates the rates, terms, or conditions of pole attachments.[7]
4. In February 1998, Knology and Georgia Power entered into a Georgia Power Company Standard Pole Attachment Agreement ("Agreement").[8] The Agreement allows Knology to attach its facilities to Georgia Power's poles in exchange for the payment of an annual rental fee.[9] With respect to modifications to Georgia Power poles or other make-ready work necessitated by Knology's attachments, paragraph 7.2 of the Agreement requires Knology to reimburse Georgia Power for all associated costs.[10] Similarly, paragraph 3.3 of the Agreement states that Knology [11] The Agreement also requires Knology to reimburse Georgia Power for its fees and disbursements relating to "administrative services not otherwise required to be performed under this agreement."[12]
5. In 1998, Knology began constructing an independent network to provide video, telecommunications, and Internet services in Augusta, Georgia.[13] Part of this network construction involved the attachment of Knology's cables and equipment to Georgia Power's poles.[14] According to Knology, Georgia Power prohibits Knology from performing its own construction on Georgia Power's poles.[15] Rather, Knology must use two Georgia Power contractors, Utility Consultants Inc. ("UCI") and Utilities Support Systems ("USS").[16] UCI conducts pole inspections and performs construction prior to the installation of Knology's attachments, while USS inspects poles after installation.[17] In addition, after USS performs its post-construction inspection, UCI makes further engineering recommendations for additional construction.[18]
6. Through November 2001, Georgia Power and its contractors billed Knology in excess of $6 million.[19] Knology paid these invoices until approximately May 2001, when the total charges associated with the project appeared to Knology to be excessively high.[20]Thereafter, Knology paid only a portion of the assessed charges.[21]
7. On June 8, 2001, Knology's Director of Make Ready, Wayne Singleton, wrote to Georgia Power indicating that he "recently started a cost and production evaluation of [Knology's] Augusta project" and requesting that Georgia Power provide information (such as field measurements and notes, construction recommendations, and billing records) that would assist in his review of make-ready charges Georgia Power had levied.[22] Although Georgia Power provided Knology some information, Knology considers Georgia Power's responses to be inadequate.[23] Nevertheless, Mr. Singleton conducted an "audit" of Georgia Power's make-ready charges and practices ("Singleton Audit"), the results of which form the basis of Knology's Complaint.[24]
8. Knology filed a Complaint with the Commission on November 21, 2001. Based upon the Singleton Audit, the Complaint alleges that Georgia Power: (1) double billed Knology for certain engineering and construction charges in the amount of approximately $132, 000; (2) overbilled Knology in the amount of approximately $318, 184 for performing comprehensive pole surveys under the guise of post-inspection of Knology's attachments; (3) performed work on the pole network that is not specific to or otherwise caused by Knology's attachments and charged Knology in excess of $1.4 million for this work rather than apportioning the charges among the various attachers to the poles; (4) imposed unreasonable and excessive overhead charges notwithstanding the concomitant application of general surcharges amounting to $600, 000; and (5) refused to itemize, describe, or otherwise provide clarifying information that would assist Knology in identifying the basis for Georgia Power's make-ready charges.[25] The Complaint seeks a declaration that Georgia Power's make-ready practices are unlawful, a refund of amounts Georgia Power improperly billed Knology (including amounts Knology paid prior to the filing of the Complaint), and an order requiring Georgia Power to modify its practices in the future.[26]
9. Georgia Power filed a Response to Knology's Complaint on December 21, 2001. The Response denies each count of the Complaint, asserting that (1) Knology and other attachers were responsible for repeated engineering recommendations and duplicative construction;[27] (2) the pre-construction and post-construction inspections were part of the make-ready process, and Knology was the sole beneficiary of the inspections;[28] (3) all costs charged to Knology were reasonable and consistent with Georgia Power's right to recover the fully allocated cost of providing pole attachments;[29] and (4) Georgia Power provided all documentation in a timely manner.[30] In addition, the Response contends that the Complaint should be dismissed, because the Commission lacks jurisdiction, the case is not ripe for review, and the Complaint is procedurally defective.[31] Finally, the Response asserts that, under the Commission's rules and the Agreement, any refund obligation by Georgia Power would be limited to payments Knology made after the filing of the Complaint.[32]
10. Knology submitted a Reply on January 10, 2002, which takes issue with the jurisdictional, ripeness, and procedural objections raised in the Response[33] and argues that Georgia Power's defenses to Knology's substantive claims are without merit.[34] In addition, the Reply reiterates that, in order to avoid an unjust result, the Commission should order refunds of Knology's pre-complaint payments for unreasonable make-ready practices.[35]
11. On June 6, 2002, with the assistance of Commission staff, the parties attempted unsuccessfully to resolve their dispute through mediation. As a byproduct of their negotiations, however, the parties each moved to supplement the record in this proceeding with extensive information relating to the various charges at issue in the Complaint.[36] Georgia Power opposed Knology's Motion for Leave.[37] Despite concerns that one or both parties were less than diligent in ensuring the completeness of their initial pleadings, and in the interest of obtaining a complete record on which to decide the case, Commission staff granted the parties' motions[38] and permitted each side an opportunity to respond to the other side's supplement.[39]
12. Finally, on September 25, 2002, Commission staff issued a letter to the parties requesting additional specific information relating to the claims raised in this proceeding.[40]Among other things, Commission staff asked questions pertaining to pole inspections, pole change-outs, engineering recommendations, and overhead charges. Each party filed a voluminous response[41] and a reply.[42] After the parties' final submissions in this case, neither party sought leave to add additional information that it believed would aid our resolution of the dispute.
III. DISCUSSION
13. Georgia Power raises several procedural objections pertaining to the Commission's authority to resolve Knology's Complaint. Specifically, the Response argues that the Commission should dismiss the Complaint, because (1) the Commission lacks jurisdiction to resolve the dispute; (2) the dispute is unripe; and (3) the Complaint does not...
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