Texas Utilities Elec. Co. v. F.C.C.
| Decision Date | 25 June 1993 |
| Docket Number | No. 92-1032,92-1032 |
| Citation | 997 F.2d 925 |
| Parties | TEXAS UTILITIES ELECTRIC COMPANY, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, TCI Cablevision of Dallas, Inc.; Florida Power & Light Company; MFS Communications Company, Inc.; United States Telephone Association; National Cable Television Association, Inc.; Community Antenna Television Association, Inc.; Utilities Telecommunications Council; Duke Power Company; Continental Cablevision, Inc.; Monongahela Power Company, the Potomac Edison Company and West Penn Power Company (APS Operating Companies); South Carolina Electric & Gas Company; American Electric Power Service Corporation; Carolina Power and Light Company; Virginia Electric and Power Company, Intervenors. District of Columbia Circuit |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Michael D. Paul argued the cause for petitioner. With him on the briefs was Michael W. Faber.
John E. Ingle, Deputy Associate Gen. Counsel, F.C.C., argued the cause for respondents. With him on the briefs were Renee Licht, Acting Gen. Counsel, and Gregory M. Christopher, Counsel, F.C.C., Robert B. Nicholson and James W. Lowe, Attys., U.S. Dept. of Justice. Robert L. Pettit also entered an appearance for respondent F.C.C.
Paul Glist, John D. Seiver and Robert G. Scott, Jr., filed the briefs for intervenors TCI Cablevision of Dallas, Inc., National Cable Television Ass'n, Inc., Community Antenna Television Ass'n, Inc., and Continental Cablevision, Inc. Michael S. Schooler, David L. Nicoll and Diane B. Burstein entered appearances for intervenor Nat. Cable Television Ass'n, Inc. Gardner F. Gillespie entered an appearance for intervenor Continental Cablevision, Inc.
Mark J. Tauber and Nora E. Garrote entered appearances for intervenor Florida Power & Light Co.
Andrew D. Lipman, Jean L. Kiddoo and Helen E. Disenhaus entered appearances for intervenor MFS Communications Co., Inc. Martin McCue and James R. Hobson entered appearances for intervenor U.S. Telephone Ass'n.
Jeffrey L. Sheldon entered an appearance for intervenor Utilities Telecommunications Council.
Michael W. Faber and Michael D. Paul entered appearances for intervenor Duke Power Co.
Philip J. Bray, Hegerstown, MD, entered an appearance for intervenors Monongahela Power Co., the Potomac Edison Co., and West Penn Power Co. (APS Operating Companies).
Shirley S. Fujimoto and Kris Anne Monteith entered appearances for intervenors American Electric Power Service Corp., Carolina Power and Light Co., and Virginia Elec. and Power Co. Shirley S. Fujimoto with whom Kris Anne Monteith entered an appearance for intervenor South Carolina Elec. & Gas Co.
Before WALD, HENDERSON and RANDOLPH, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
This case comes to us as part of a second round in an ongoing battle over the rates that utilities may charge to cable television companies for attachments of cables to their poles. The first round commenced over twenty years ago when the nascent cable television industry turned to the poles owned by telephone and electric utilities as the only feasible method for building a network to access customers. The cable companies complained that the utilities were using their obviously superior bargaining position at that time to impose exorbitant pole attachment rates which threatened the viability of cable television. Congress responded in 1978 by authorizing the Federal Communications Commission ("FCC" or "Commission"), in the Pole Attachment Act ("PAA"), 47 U.S.C. § 224, to regulate rates assessed by utilities for "any attachment by a cable television system" to their poles. The cable companies had thereafter only to pay "just and reasonable" rates for attachments, currently in the neighborhood of $5 per pole per year.
Today, two decades later, the battle wages over the cable industry's efforts to enter the growing market for nonvideo communications services, such as data transmission. Intervenor TCI Cablevision of Dallas, Inc. ("TCI") offers both conventional video entertainment programming and nonvideo communications over the cables it attaches to utility poles owned by petitioner Texas Utilities Electric Company ("TU"). TCI complained to the Commission that TU levies the regulated annual rate of approximately $5 per pole where the cable transmits traditional video programming, but adds a surcharge of between $50 and $100 per pole where the cable, at least in part, transmits nonvideo communications. In response, TU asserted that the FCC's statutory authority over pole attachment rates was limited to those attachments distributing video programming. The FCC disagreed, positing that "Section 224 is most reasonably read to provide that a cable operator may seek Commission-regulated rates for all pole attachments within its system, regardless of the type of service provided over the equipment attached to the poles." It then found the pole attachment rates imposed by TU to be unjust and unreasonable, and accordingly, ordered a refund. TU now petitions for review of these determinations.
The stark question raised by this petition is whether the FCC may prohibit a utility from charging a cable television system operator an unregulated pole attachment rate because some cable attachments within the system are used to transmit nonvideo communications. We are unable to find in the PAA or its legislative history a clearly expressed intent on the part of Congress to limit the FCC's jurisdiction to pole attachments that are used strictly for traditional video programming. Faced with this statutory ambiguity, we believe the Commission has arrived at a permissible construction, rational and consistent with the congressional purpose in enacting the PAA. And finally, we can discern no error in the Commission's conclusion that the pole attachment rate charged by TU in the present proceeding is unjust and unreasonable. Therefore, the petition for review is denied.
TCI enjoys an exclusive franchise to provide cable television service to the residents of Dallas. Pursuant to an agreement with TU, TCI leases space on TU's electricity poles to attach cable distribution facilities, consisting of coaxial or fiber optic cable and associated equipment. As a technical matter, the cables are lashed to an aerial support strand, which in turn is affixed to a single point within the section of the pole designated as "communications space." The coaxial cables are deployed primarily to transmit conventional video programming to the company's subscribers, but are also used for certain data transmissions among local school districts, fire departments, police stations and libraries. Similarly, within a sheath of fiber optic cable, certain strands may be dedicated to traditional video communication, while other strands may provide nonvideo communications services. This network of coaxial and fiber optic cable runs throughout the franchise region, but extends as well to points outside the Dallas area.
Under the pole attachment agreement, TCI is charged the regulated annual rate of about $5 per pole for any cable attachment designed to provide "cable television service." However, where any strand within the fiber optic cable transmits nonvideo communications, a surcharge of between $6 and $109 is added, depending upon the number of strands involved in the nonvideo transmission. In 1989, TU sought payment of the surcharge for cable attachments on some 1,800 poles, but TCI refused, complaining to the FCC that the premium was unjust and unreasonable under the PAA and requesting a refund of amounts previously paid. TU moved to dismiss TCI's complaint on the ground that the Commission's jurisdiction to regulate pole attachment rates was confined strictly to cable attachments used to distribute traditional video programming.
The Commission observed first that the TCI cable network represents a mixed system of coaxial and fiber optic cable, each of which transmits both video and nonvideo communications. Thus, the fiber optic facilities import satellite video signals that are then distributed over the air by microwave to coaxial cable facilities which distribute the video programming to individual subscribers. The fiber optic cable is also required by the Dallas franchise to serve as a redundant, back-up video feed in the event the microwave fails. Moreover, "TCI also utilizes its fiber optic cables to provide nonvideo broadband communications services to nonresidential customers, including data transmission services pursuant to private contract [with] commercial customers in the Dallas metropolitan area."
Turning next to the jurisdictional dispute, the Commission decided that the PAA is most reasonably read, in light of the legislative history, to confer upon the agency authority to regulate any pole attachment by a cable television system operator within its system and within its franchise area. Pole attachments outside the franchise area, whether for video or nonvideo communications, were deemed to be excluded from the act's coverage. The Commission concluded that "TCI is indisputably a cable television system operator within its franchise area," and therefore "Section 224 empowers [the Commission] to regulate the pole attachments at issue in this proceeding." Finally, the Commission noted that TU had provided no cost justification for imposing a surcharge for fiber optic strands transmitting nonvideo communications. It therefore concluded that TU could only "charge TCI a single, regulated rate for pole attachments within TCI's franchise area," and that any premium based on the type of service being provided over the cable equipment attached to the pole was unjust and unreasonable. At a subsequent hearing to determine the amount of any refund owed TCI, the Commission determined that for 1,705 of the 1,788 poles at issue, TU had...
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