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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 8, 2003 Decided May 16, 2003
No. 02-1163
PUBLIC SERVICE COMPANY OF COLORADO,
PETITIONER
v.
FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS
MILE HI CABLE PARTNERS, L.P., ET AL.,
INTERVENORS
On Petition for Review of an Order of the
Federal Communications Commission
David R. Poe argued the cause for petitioner. With him on
the briefs was Brett A. Snyder.
Roberta L. Cook, Counsel, Federal Communications Com-
mission, argued the cause for respondents. With her on the
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
brief were Robert B. Nicholson and Robert J. Wiggers, Attor-
neys, U.S. Department of Justice, Jane E. Mago, Assistant
General Counsel, Federal Communications Commission, and
John E. Ingle, Deputy Associate General Counsel. Gregory
M. Christopher, Counsel, entered an appearance.
T. Scott Thompson argued the cause for intervenors. With
him on the brief were Wesley R. Heppler and Brian M. Josef.
Before: ROGERS and GARLAND, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
Opinion for the Court filed Per Curiam.
Per Curiam: Public Service Company of Colorado (PSCo)
petitions for review of a Federal Communications Commis-
sion order that found certain terms and conditions of their
pole attachment agreement with Mile Hi Cable Partners,
L.P., et al. (TCI) unreasonable. We deny the petition. The
FCC’s modifications of the ‘‘rates, terms, and conditions’’ of
the agreement were a reasonable exercise of its regulatory
authority under the Pole Attachment Act.
I.
The statute authorizes the FCC to ‘‘regulate the rates,
terms, and conditions for pole attachments to provide that
such rates, terms, and conditions are just and reasonable’’ in
states that do not have regulations themselves (like Colora-
do). 47 U.S.C. § 224(b)(1). Accordingly, the Commission
adopted complaint and enforcement procedures to ensure that
cable systems have ‘‘nondiscriminatory access to utility poles,
ducts, conduits, and rights-of-way on rates, terms, and condi-
tions that are just and reasonable.’’ 47 C.F.R. § 1.1401. If a
cable company believes that a particular rate, term, or condi-
tion of a pole attachment agreement is unjust or unreason-
able, it is expected to attempt to renegotiate with the utility.
If negotiations fail, the company may seek resolution by filing
a complaint with the Commission.
The original agreements between PSCo and TCI were
signed between 1983 and 1995. Each of the agreements
required TCI to submit a written application and gain PSCo’s
3
approval before making an attachment. PSCo also has the
right to inspect the attachments, and TCI must maintain
them according to the applicable state and local safety regula-
tions. The utility is indemnified for legal injuries related to
the attachments.
In May 1995, PSCo sent a new pole attachment agreement
to TCI for signature and advised TCI that it was terminating
the previous agreements. TCI signed but voiced objections.
The new agreement keeps most of the same obligations but
adds the requirement that TCI notify PSCo after the comple-
tion or removal of any installation. It also provides for a one-
time fee of $250.00 for each attachment made by the cable
systems without the required authorization, replacing the
previous $50.00 penalty. And it further specifies that the
authorized attachment rate will be calculated according to a
FCC formula, an average of $3.77 annually per pole. When
PSCo exercises its right to audit the poles to detect unautho-
rized attachments and such attachments are found, TCI may
be charged for the costs.
In March 1996, about nine months after it had implemented
the new agreement, PSCo conducted an audit. The survey
disclosed that TCI had more than 25,000 unauthorized attach-
ments. PSCo notified TCI about the study’s findings and
sent invoices for 23,231 of them on March 2, 1998. The
charges, totaling almost $6 million, included: (1) the unautho-
rized attachment charge of $250 per pole, (2) pole attachment
rental fees of $1.72 per pole for a six-month period for the
unauthorized attachments, and (3) a charge of $3.50 for each
unauthorized attachment for TCI’s share of the survey cost,
pursuant to their agreement. TCI refused to pay the
charges, and on March 13, 1998, PSCo filed suit against TCI
in the Denver District Court alleging breach of contract and
seeking damages for the unpaid invoice.
In response, TCI filed a complaint with the FCC, pursuant
to the Pole Attachment Act, alleging that the rates, terms,
and conditions that generated the civil action in Colorado
were unjust and unreasonable. The Bureau denied PSCo’s
Motion to Dismiss, rejecting the utility’s assertions that the
4
FCC lacked jurisdiction and that TCI was merely looking to
avoid the contractual remedy for its unauthorized attach-
ments. See Mile Hi Cable Partners, L.P. v. Public Serv. Co.
of Colorado, 13 FCC Rcd 13407 (Cable Serv. Bur. 1998). One
week later, the state trial court dismissed PSCo’s complaint
on the grounds that the FCC had primary jurisdiction to
determine whether the rates, terms, and conditions of the
agreement were reasonable under the Pole Attachment Act.
See Public Serv. Co. of Colorado. v. Mile Hi Cable Partners,
L.P., No. 98CV2225, Order (Colo. Dist. July 21, 1998).
The Commission affirmed the Bureau’s decision, concluding
that the statute gave it primary jurisdiction to regulate the
alleged unjust and unreasonable terms and conditions in the
agreement. See Mile Hi Cable Partners, L.P. v. Public Serv.
Co. of Colorado, 14 FCC Rcd 3244 (1999). The Colorado
Court of Appeals also affirmed the essentials of the trial
court’s ruling, but remanded to reinstate PSCo’s breach of
contract claim and stay the proceedings until the FCC’s final
determination on the reasonableness of the unauthorized
attachment provisions. See Public Serv. Co. of Colorado v.
Mile Hi Cable Partners, L.P., 995 P.2d 310 (Colo. App. 1999).
The Cable Services Bureau addressed the merits of TCI’s
complaint on June 30, 2000. The Bureau determined, and the
Commission later agreed, that the $250.00 fee for unautho-
rized attachments was excessive. See Mile Hi Cable Part-
ners, L.P. v. Public Serv. Co. of Colorado, 15 FCC Rcd 11450
(Cable Serv. Bur. 2000). The Commission affirmed the Bu-
reau’s finding that, on the facts of this case, a reasonable
unauthorized attachment charge would equal ‘‘five times the
annual rent that [TCI] would have paid if the attachment had
been authorized.’’ Mile Hi Cable Partners, L.P. v. Public
Serv. Co. of Colorado, 17 FCC Rcd 6268, 6272 (2002).1 It
1 The Bureau had indicated that a reasonable unauthorized
attachment fee would not exceed an amount equal to the annual
pole attachment fee for ‘‘the number of years since the most recent
inventory or five years, whichever is less.’’ Mile Hi Cable, 15 FCC
Rcd at 11458.
5
recommended that the charge be imposed in lieu of any
amounts recoverable for unpaid annual fees and in addition to
the recovery of the attachment survey costs. The Commis-
sion relied heavily upon the prevailing industry rates and the
length of time for the average TCI attachment in calculating
its figure.
The Commission also agreed with the Bureau that it would
be unjust and unreasonable to permit the utility to collect
unauthorized attachment fees for connections to ‘‘drop poles,’’
(poles that typically take a service drop line to customers that
are unusually far from a ‘‘mainline pole’’), prior to December
29, 1997, when PSCo sent invoices notifying TCI that it was
charging for drop pole attachments separately. The Bureau
considered PSCo’s failure to present evidence challenging
TCI’s assertion that it had never submitted an application to
make an attachment to a drop pole, and took note of an old
application’s sample sketch, which did not include drop poles
in its key. However, the Commission did find it reasonable
for PSCo to charge an annual pole attachment fee for drop
poles after it had notified TCI.
Finally, the Bureau concluded that it would be unjust and
unreasonable for PSCo to assess an unauthorized attachment
fee without taking into account TCI’s alleged payment for
poles to which it had not attached. In affirming the Bureau’s
decision, the Commission directed the utility to recalculate
the number of unauthorized attachments and to grant TCI
access to its records to verify the count.
II.
PSCo’s main contention is that the FCC exceeded its
jurisdiction under the Pole Attachment Act, 47 U.S.C.
§ 224(b)(1), and ignored its own precedent, by addressing
matters suited for the state trial court in Colorado. Specifi-
cally, PSCo believes that the FCC’s review of the agreement’s
application to drop poles, and its order directing the utility to
recalculate the number of unauthorized attachments and
credit TCI for payments supposedly made for unattached
6
poles, intruded on the state court’s jurisdiction over contract
law.2 We do not agree.
Section 224(b)(1) of the Pole Attachment Act provides that:
[T]he Commission shall regulate the rates, terms,
and conditions for pole attachments to provide that
such rates, terms, and conditions are just and rea-
sonable, and shall adopt procedures necessary and
appropriate to hear and resolve complaints concern-
ing such rates, terms, and conditions.
47 U.S.C. § 224(b)(1) (emphasis added). The plain meaning
of the statute supports the Commission. It simply decided
that an agreement’s rate (unauthorized attachment charges),
term (application to drop poles), and condition (concerning
credits for overpayments) were unjust and unreasonable, and
authorized modifications pursuant to 47 C.F.R. § 1.1410.3
Moreover, if there were any ambiguity–which there is not–the
Commission’s interpretation of the jurisdictional scope of the
‘‘rates, terms, and conditions’’ of an agreement would be
entitled to Chevron deference. See Transmission Access
Policy Study Group v. FERC, 225 F.3d 667, 694 (D.C. Cir.
2000); Oklahoma Natural Gas Co. v. FERC, 28 F.3d 1281,
1283–84 (D.C. Cir. 1994).
2 At oral argument, the Commission abandoned its contention
that PSCo’s jurisdiction challenge is untimely. The government, as
a separate respondent, had not joined the FCC’s waiver argument
in the first place.
3 The regulation provides that:
If the Commission determines that the rate, term, or
condition complained of is not just and reasonable, it may
prescribe a just and reasonable, rate, term, or condition
and may:
(a) Terminate the unjust and unreasonable rate, term,
and condition;
(b) Substitute in the pole attachment agreement the just
and reasonable rate, term, or condition established by
the Commission; and
(c) Order a refund, or payment, if appropriate.
7
Nor do we think that the Commission’s decision regarding
drop poles, finding it unreasonable for the term ‘‘pole’’ to be
applied retroactively to cover them without prior notification,4
amounts to a question of contract interpretation appropriate
only for the state trial court applying Colorado law. The
statute provides that the Commission is to regulate the terms
of a pole attachment contract unless ‘‘such matters are regu-
lated by a State.’’ 47 U.S.C. § 224(c)(1). Since Colorado has
not established such regulations, the Commission was permit-
ted to regulate the application of a ‘‘term’’ of this agreement
as it relates to the application of a particular ‘‘rate.’’ And the
Commission reasonably affirmed the Bureau’s reliance on the
utility’s failure to produce any evidence that TCI had ever
submitted an application for drop pole attachments and could
not explain why drop poles were not depicted in the sample
sketches on the attachment applications.
PSCo also contends that the Bureau’s order to ‘‘recalculate
the number of authorized attachments, to include credit for
allegedly non-existent attachments for which TCI paid an
annual pole attachment fee, and to exclude drop poles from
the count’’ was an assessment of damages that only the state
trial court had authority to calculate. Mile Hi Cable, 15 FCC
Rcd at 11459. But we see nothing in the language of the Act
that conflicts in any way with that order. The express
authority to regulate rates surely includes the power to
specify how those rates should be calculated.
The directive to exclude drop poles from the recount was
just an outgrowth of the FCC’s view of the agreement’s
applications to such poles. But it was also permissible for the
Commission to add the ‘‘condition’’ that PSCo credit any
nonexistent attachments that have already been paid for.
4 Section 2.11(a) of the agreement obligates TCI to pay unau-
thorized attachment charges: ‘‘[i]f any of [TCI]’s Facilities shall be
found attached to poles for which no license or Application has been
approvedTTTT’’ Section 4.1(a) requires that: ‘‘[TCI] shall pay for
use of poles under this License, an annual rental fee for each pole
included within an approved Application, in such amount as shall be
specified therein.’’
8
Congress has given the FCC the authority to ‘‘take such
action as it deems appropriate and necessary, including issu-
ing cease and desist orders’’ to enforce ‘‘any determinations
resulting from complaint procedures established pursuant to
this subsection.’’ 47 U.S.C. § 224(b)(1).
The Commission has left the door open for potential litiga-
tion of factual disputes over whether specific authorized at-
tachments have been accounted for and/or unauthorized at-
tachments incorrectly identified, although it is not at all
apparent that under the statute it was obligated to do so. As
the Commission explained in its initial jurisdictional order,
moreover, its decision does not contradict its prior holdings.
See Mile Hi Cable, 14 FCC Rcd at 3248. In Appalachian
Power Co. v. Capitol Cablevision Corp., 49 Rad. Reg. 2d
(P&F) 574 (1981), for example, the utility requested, inter
alia, an order directing the cable company to pay Appala-
chian all amounts due for pole attachment rentals. (Appala-
chian essentially brought to the FCC the claim PSCo has
taken to the state trial court.) Although it determined a
reasonable annual rental rate, the FCC in Appalachian decid-
ed that it did not have the authority to issue such an order.
It held that the collection of unpaid fees is a matter for state
courts. See id. at 578.
In this case, the FCC has simply said that in order for the
unauthorized attachment rate and related terms of the agree-
ment to be reasonable, PSCo should take into account the
allegedly nonexistent attachments for which TCI had paid.
After the utility performs its recalculation, the state trial
court, as it anticipated, will be able to decide the utility’s
claim according to the FCC’s modifications of the agreement.
See Mile Hi Cable, 995 P.2d at 312–13.
III.
PSCo does not challenge the Commission’s authority to
modify the unauthorized attachment rate (five times the
annual attachment rent, plus interest). Instead, petitioner
9
contends that the FCC’s calculation is ‘‘arbitrary’’ and ‘‘capri-
cious’’ under the APA. PSCo’s primary concern is that the
FCC’s calculated rate undermines the utility’s ability to pro-
tect the safety of its poles and to deter TCI from making
unauthorized attachments. Petitioner is correct that unau-
thorized attachment fees can be used to accomplish the
objective of ‘‘preventing unsafe and unauthorized attach-
ments.’’ See Alert Cable TV of N.C., Inc. v. Carolina Power
and Light Co., 1985 FCC LEXIS 3679 *6 (March 20, 1985).
But the Commission has not decided otherwise here. Rather,
it has simply concluded that, given the provisions and obli-
gations of the entire agreement, the industry rate effectively
promotes these objectives. In doing so, the Commission has
maintained consistency with its prior decisions by judging
‘‘the fairness’’ of the charge ‘‘in relation to other provisions of
the contract, as well as prevailing practices in the industries
involved, and the pole rate charges involved in the particular
case.’’ Id. at *5.
In its analysis, the FCC approved of the Bureau’s assess-
ment of the prevailing industry standards, which showed that
while TCI has perhaps paid as much as $750.00 per pole, and
as little as nothing, for unauthorized attachments, most utili-
ties currently charge a one-time fee of ‘‘$15.00 to $25.00 per
pole, or charges based on back rent for no more than three
years.’’ Mile Hi Cable, 17 FCC Rcd at 6271–72. Finding no
reason to doubt TCI’s uncontested expert testimony regard-
ing industry practices, the Commission correctly figured that
an attachment rate based on the years of unpaid annual rent,
on average $3.77 per pole plus interest, would put the charge
right in the middle of the industry’s range – a calculation
hardly indicative of arbitrary decision making and a rate that
apparently provides sufficient deterrence for most other pole
attachment agreements. In addition, as intervenors (TCI)
point out, under the FCC’s unauthorized attachment rate, a
violating cable company would face the same penalty, five
times the rental rate plus interest, even for an unauthorized
attachment that had only been in place for two weeks.
Also underlying the rate modification was the evidence that
TCI had acquired all but one of the cable systems in question
10
between 1991 and 1993, on average about five years before
PSCo began its attachment survey. The Commission thought
it unreasonable to subject TCI to unauthorized attachment
fees for the 10 years prior to its owning the attachments in
question, especially since PSCo did not conduct systemic
surveys of its poles. It believed the calculation balanced the
need to provide an effective remedy with the need to encour-
age utilities not to delay audits of unauthorized attachments,
which also serve as a deterrent. See id. at 6272–73.
Contrary to PSCo’s suggestion, the FCC’s decision did take
into account PSCo’s safety concerns. The Commission noted
the agreement provisions that obligate TCI to comply with
the applicable state and local government safety regulations,
and indemnify PSCo for any liability associated with its
attachments (authorized or not). See id. at 6273 n.26. It
then concluded reasonably that TCI’s exclusive liability for
hazards related to its attachments, and the detrimental effect
that unsafe attachments would have on its own services, offer
adequate incentives to heed the pertinent safety codes.
Without any additional evidence, such as widespread safety or
deterrence failures in similar agreements at the industry rate,
the Commission was not compelled to consider formulating a
higher one.
Accordingly, the petition is denied.