[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
________________________ JUNE 13, 2002
THOMAS K. KAHN
No. 99-15160 CLERK
________________________
FCC Docket No. 96-00098
SOUTHERN COMPANY,
Petitioner,
UNITED TELECOM COUNSEL,
EDISON ELECTRIC INSTITUTE, INC., and
BELL ATLANTIC,
Intervenors,
versus
FEDERAL COMMUNICATIONS COMMISSION
and UNITED STATES OF AMERICA,
Respondents,
MCI WORLDCOM, INC., AT&T, US WEST,
NATIONAL CABLE TELEVISION ASSOCIATION
and CALIFORNIA CABLE ASSOCIATION,
Intervenors.
________________________
No. 00-10257
________________________
FCC Docket No. 99-00266
FLORIDA POWER & LIGHT COMPANY,
Petitioner,
versus
FEDERAL COMMUNICATIONS COMMISSION,
UNITED STATES OF AMERICA,
Respondents,
MCI WORLDCOM, INC.,
Intervenor.
________________________
No. 00-11027
________________________
FCC Docket No. 96-00098
BALTIMORE GAS AND ELECTRIC COMPANY,
Petitioners,
versus
FEDERAL COMMUNICATIONS COMMISSION,
UNITED STATES OF AMERICA,
Respondents,
MCI WORLDCOM, INC.,
Intervenor.
2
________________________
No. 00-11071
________________________
FCC Docket No. 96-00098
COMMONWEALTH EDISON COMPANY,
Petitioner,
versus
FEDERAL COMMUNICATIONS COMMISSION,
UNITED STATES OF AMERICA,
Respondents,
MCI WORLDCOM, INC.,
Intervenor.
________________________
No. 00-11193
________________________
FCC Docket No. 96-00098
ATLANTIC CITY ELECTRIC COMPANY,
DELMARVA POWER AND LIGHT COMPANY,
DUQUENSE LIGHT COMPANY,
POTOMAC ELECTRIC POWER COMPANY,
PUBLIC SERVICE ELECTRIC AND GAS COMPANY,
RELIANT ENERGY HL&P,
TAMPA ELECTRIC COMPANY,
VIRGINIA ELECTRIC AND POWER COMPANY,
Petitioners,
versus
FEDERAL COMMUNICATIONS COMMISSION and
UNITED STATES OF AMERICA,
Respondents,
3
MCI WORLDCOM, INC.,
Intervenors.
________________________
No. 00-11300
________________________
FCC Docket No. 96-00098
AMERICAN ELECTRIC POWER SERVICE CORPORATION,
Petitioner,
BELL ATLANTIC,
Intervenor,
versus
FEDERAL COMMUNICATIONS COMMISSION,
UNITED STATES OF AMERICA,
Respondents,
MCI WORLDCOM, INC,
Intervenor.
________________________
No. 00-11452
________________________
FCC Docket No. 96-00098
DUKE ENERGY CORPORATION,
Petitioner,
BELL ATLANTIC,
Intervenor,
versus
4
FEDERAL COMMUNICATIONS COMMISSION and
UNITED STATES OF AMERICA,
Respondents,
MCI WORLDCOM, INC.,
Intervenor.
________________________
Petitions for Review of Orders of the
Federal Communications Commission
_________________________
(June 13, 2002)
Before EDMONDSON, Chief Judge, BIRCH and WILSON, Circuit Judges.
WILSON, Circuit Judge:
Petitioners, a geographically diverse group of electric utility companies,
raise a series of challenges to several Federal Communications Commission (FCC)
guidelines implementing the 1996 Amendments to the Pole Attachments Act, 47
U.S.C. § 224. After carefully reviewing petitioners’ claims, and after the benefit
of oral argument, we hold that the FCC erred when it issued guidelines stating (1)
that the Pole Attachments Act’s coverage extends to electric transmission facilities;
and (2) that utilities must expand the capacity of their facilities to ensure that
attaching entities have access to those facilities. On each of petitioners’ remaining
challenges to the FCC guidelines, we decline to disturb the FCC’s determinations.
5
BACKGROUND
From the inception of the cable television industry, cable television
companies have attached their distribution cables to utility poles owned and
maintained by power and telephone companies. As a practical matter, cable
companies have had little choice but to do so. The start up costs of constructing an
entirely new set of poles and other distribution facilities for cable television cables
are prohibitive, and when coupled with the difficulties of obtaining regulatory
approval for a distinct set of utility poles, the barriers to such construction are
insurmountable. Therefore, cable companies have long rented space from utilities
on their extant poles and conduits. Ownership of the only facilities available gave
the utilities a superior bargaining position when renting space to cable providers,
and the Pole Attachments Act (passed in 1978) reflects Congress’s decision to
regulate this relationship.
The Pole Attachments Act gave the FCC the authority to “regulate the rates,
terms, and conditions for pole attachments to provide that such rates, terms, and
conditions are just and reasonable” in any state that does not already have such
regulations in place. Id. § 224(b)(1). This Act established a set of guidelines for
the FCC to use in determining whether the rates and terms of pole attachments
6
were “just and reasonable,” and based upon these guidelines, the FCC promulgated
a series of rules regulating the practice.
Importantly, the FCC’s regulatory authority pursuant to the Pole
Attachments Act was limited; it could not mandate that utilities make their poles
available to cable providers, but rather could merely regulate the rates charged
those cable providers that were voluntarily given access to poles. Voluntary access
was hardly an issue at the time. Indeed, utilities were anxious to lease surplus
portions of their poles to cable providers, and thus get some return on what would
otherwise be surplus plant. The problem that the Pole Attachments Act sought to
address was the potentially unfair prices utilities could extract from cable
companies for leasing space, not any problems associated with the denial of access
to the cable companies.
By 1996, the economic landscape surrounding pole attachments had
undergone a fundamental change. Electric utilities saw the telecommunications
arena as a logical and potentially lucrative choice for the diversification of their
businesses. Cable companies were fearful that the utilities’ prospective entry into
the telecommunications market would endanger their pole attachments, as utilities
would be unwilling to rent space on their poles to competing entities. Congress
elected to address both of these matters in the 1996 Telecommunications Act.
7
The 1996 Telecommunications Act authorized expanded competition in
telecommunications markets, permitting utilities to enter that rapidly expanding
field. Congress recognized, however, that utilities would lose the incentive to
voluntarily enter into pole attachment agreements with telecommunications and
cable television companies that were now their competitors.1 Congress thus added
a “nondiscriminatory access” provision to the Pole Attachments Act, requiring any
utility that uses its poles, ducts, conduits, or rights-of-way for wire
communications to provide cable television or telecommunications companies with
access to that space on a nondiscriminatory basis. Id. § 224(f)(1). A utility may
only deny such entities access “on a non-discriminatory basis where there is
insufficient capacity and for reasons of safety, reliability and generally applicable
engineering purposes.” Id. § 224(f)(2).
Shortly after the passage of the 1996 Telecommunications Act, the FCC
issued a series of regulations designed to implement the legislation. The bulk of
the regulations, contained in the FCC’s First Report and Order, addressed issues
relating to the deregulation of local telephone exchanges. However, the First
1
A number of new telecommunications entities had been seeking to attach their wires to
utility poles for some time, but were not covered by the Pole Attachments Act. The 1996
Telecommunications Act added telecommunications carriers to the class of entities entitled to
regulated rates for pole attachments, and granted them the same access rights given cable
companies.
8
Report and Order also promulgated guidelines seeking to implement the 1996
Telecommunications Act’s provisions modifying the Pole Attachments Act.2
Petitioners filed petitions seeking reconsideration of some of the FCC’s findings in
the Order. After considering these requests for changes in the First Report and
Order, the FCC issued its Order on Reconsideration in 1999. Petitioners brought
the instant action objecting to the following determinations initially made in the
First Report and Order and affirmed upon reconsideration:
(1) that the Act covers electric transmission facilities, as opposed to merely “any
pole, duct, conduit, or right-of-way owned or controlled by [utilities]”;
(2) that utilities must expand pole capacity to accommodate requests for attachment
in situations where it is agreed that there is insufficient capacity on a given pole to
permit third-party pole attachments;
(3) that utilities may not reserve available capacity on their facilities for future
utility-related use unless the reservation is made pursuant to a bona fide
development plan, and that utilities must permit use of such reserved space by
third-party attachers until the utility has an “actual need” for the space;
2
The Pole Attachments Act, as modified by the 1996 Telecommunications Act, will
hereinafter be referred to as the “Act.”
9
(4) that if the utilities use some of their poles, ducts conduits, and rights-of-way for
wire communications services, the Act grants third-party attachers access to all of
the utilities’ poles, ducts, conduits, or rights-of-way;
(5) that the utilities may not limit those who place and maintain attachments on
their poles to their own specially trained employees or contractors; and
(6) that the utilities must comply with a series of guidelines regarding notification
to third-party attachers in the event a pole needs to be modified, and must bear
certain costs associated with pole modifications.
We will discuss each of these objections in turn.
DISCUSSION
The FCC is charged with administering the Act, and the guidelines under
review were promulgated pursuant to its interpretation of the Act. We therefore
will review the FCC’s interpretation of the statute using the two-step process first
articulated in Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842–45 (1984).
Chevron’s first step requires us to ascertain whether Congress has spoken
unambiguously “to the precise question at issue.” Id. at 842. If the language of the
statute is unambiguous, we go no further, for we must give effect to clear
congressional intent. Id. at 842–43. If, however, we determine that Congress’s
intent is ambiguous as to the question at issue, we must move on to the second step
10
of the Chevron test and ask whether the agency’s interpretation of congressional
intent is reasonable. Id. at 844. We must defer to an agency’s reasonable
interpretation of congressional intent. Id. at 844–45.
I.
Electric Transmission Facilities
We first consider whether the FCC exceeded its authority by asserting that
the Act applies not just to the “poles, ducts, conduits, and rights-of-way owned or
controlled by [utilities],” 47 U.S.C. § 224(f)(1), but to electric transmission
facilities as well. Petitioners contend that the plain language of the Act limits its
coverage to electric distribution facilities, and that the FCC acted ultra vires when
it construed the Act as applying to electric transmission plant as well.3 The FCC
claims that the distinction between electric transmission facilities and electric
distribution facilities is not as clear as petitioners suggest, and that petitioners’
construction of the Act would thwart congressional intent by carving out an
artificial exemption from the Act’s coverage for any facility designated as
containing “transmission” plant.
3
The specific language of the FCC guideline to which petitioners object is the following:
“electric transmission facilities are not exempted from the pole attachment provisions of section
224.” Order on Reconsideration, 14 FCC Rcd. 18049, para. 27 (Oct. 20, 1999).
11
To ascertain whether the FCC’s guideline is an acceptable construction of
congressional intent, we will first need to assess the differences between a utility’s
transmission facilities and its distribution facilities. We then must consider the
statutory language, and see whether the statute’s text limits the application of the
Act to a utility’s distribution plant. We can then apply the Chevron test to the FCC
guideline.
Petitioners argue that electric transmission facilities are entirely distinct from
local distribution facilities and are outside of the purview of the FCC’s regulatory
authority. The distinction between the two types of facilities has been described by
one state public service commission as follows:
The operations of an electric utility can be separated into three major
systems: production, transmission, and distribution. Transmission systems,
which comprise the second major component of an electric utility, transmit
large quantities of electrical energy over relatively long distances from
generating stations to major load centers. Transmission systems consist of
switching stations, substations, towers, conductors (wires), and rights-of-
way.
The third major component of an electric utility is the distribution system
and is comprised of substations, underground cables, poles, overhead
conductors, transformers, service drops, and meters that supply power to the
customers.
Re Conn. Light & Power Co., 92 P.U.R.4th 50, 58–61 (Conn. Dep’t of Pub. Util.
Control Mar. 23, 1988).
12
The important differences between electric transmission facilities and
electric distribution facilities are reflected in the present regulatory scheme for
electric utilities. Transmission systems generally transport energy in bulk across
state lines, and the operation of these systems is subject to regulation by the
Federal Energy Regulatory Commission (FERC) pursuant to the Federal Power
Act. 16 U.S.C. § 824(b)(1). However, the Federal Power Act explicitly divests the
FERC of regulatory jurisdiction “over facilities used for the generation of electric
energy or over facilities used in local distribution.” Id. This provision recognizes
the essentially local character of distribution facilities and systems, as opposed to
the primarily interstate character of electric transmission facilities. Regulation of
the latter was to be implemented by the FERC, while regulation of the former was
to be left primarily in the hands of state and local authorities. This bifurcated
regulatory structure is indicative of the accepted and fundamental distinction
between a utility’s transmission plant and its distribution plant.
The FCC argues, however, that this distinction is not as clear as petitioners
claim. Not all transmission facilities necessarily entail interstate transmission of
energy. Section 824(b)(1) recognizes this fact, and divests the FERC of regulatory
authority over facilities used “only for the transmission of electric energy in
intrastate commerce, or over facilities for the transmission of electric energy
13
consumed wholly by the transmitter.” Id. While “transmission” of electricity may
generally be an interstate matter, there are clearly situations in which transmission
takes place entirely within a state, outside of the jurisdiction of federal regulatory
bodies.
Another reason that the distinction between distribution and transmission
facilities is difficult to draw is that many poles have a shared purpose. The FCC
found, and petitioners do not dispute, that a number of distribution poles are
affixed with transmission conductors and other transmission plant. See Br. of Pet’r
Fla. Power & Light Co. at 27. There are plainly instances where elements of the
two segments of the electric industry are combined on one entity, such as a
distribution pole.
Thus, the FCC argues that it is arbitrary and contrary to the statute to attempt
to draw a hard distinction between “distribution” and “transmission” facilities.
They found that the Act applies to any facility that can be used for wire
attachments. See Br. of Resp’ts at 31. Our task is to assess whether this finding
can be reconciled with the intent of the Act.
We begin our analysis with the text of the statute. The relevant language
concerning the scope of the Act’s coverage provides that “[t]he term pole
attachment means any attachment by a cable television system or provider of
14
telecommunications service to a pole, duct, conduit, or right-of-way owned or
controlled by a utility.” 47 U.S.C. § 224(a)(4). “Poles, ducts, and conduits” are
regular components of local distribution systems and not interstate transmission
systems. Indeed, the primary physical unit responsible for carrying transmission
wire – towers – are notably absent from the definition of “pole attachment.” This
indicates to us that Congress intended the Act as a mechanism for regulating
attachments on the utilities’ distribution facilities, not their transmission facilities
and systems.
This reading of the Act is strengthened by the presence of a reverse-
preemption provision, codified at 47 U.S.C. § 224(c)(1), which removes the FCC’s
authority to regulate pole attachments in any place where a state has elected to do
so. As states lack general regulatory authority over interstate transmission
facilities, this language strongly suggests that the Act’s coverage does not extend
beyond local distribution facilities. The Senate Committee notes accompanying
the Act lend credence to this interpretation of the Act’s coverage:
The committee considers the matter of CATV pole attachments to be
essentially local in nature, and that the various state and local regulatory
bodies which regulate other practices of telephone and electric utilities are
better equipped to regulate CATV pole attachments. . . . It is only because
such state or local regulation currently does not widely exist that federal
supplemental regulation is justified.
15
S. Rep. No. 95-580, at 16-17 (1977), reprinted in 1978 U.S.C.C.A.N. 109, 124–25
(caps omitted).
The text of the statute, coupled with the presence of this reverse-preemption
clause, make it plain that the Act’s coverage was intended to be limited to the
utilities’ local distribution facilities, and was not to extend to the general regulation
of interstate transmission towers and plant.
However, this does not mean that the FCC lacks the authority to regulate a
pole that happens to contain transmission wire. The Act grants the FCC the power
to regulate “poles, ducts, conduits, or rights-of-way,” and does not limit the FCC’s
authority to those “poles, ducts, conduits, or rights-of-way” not used for the
purposes of transmission.
Applying the Chevron test to the relevant FCC guideline, we find that the
Act, when considered as whole, speaks precisely to the question at issue. Our
inquiry is therefore complete after the first step of the Chevron test. The reverse-
preemption clause, coupled with the absence of any textual reference to “towers”
or other forms of transmission plant, indicates that Congress intended to limit the
Act’s application to local distribution facilities. Therefore, petitioners are correct
that the scope of the Act, and of the FCC’s regulatory power, does not extend to a
utility’s interstate electric transmission towers and facilities, which are regulated
16
by the FERC and are outside of the purview of the FCC’s authority. To the extent
that the FCC guideline suggests that the Act covers interstate transmission towers
and facilities, it must be struck down, as it fails to effect the unambiguous intent of
Congress.
However, the FCC is correct that the text of the Act clearly indicates that its
coverage extends to any of a utility’s “poles, ducts, conduits, or rights-of-way,” so
long as the utility (1) uses any of its “poles, ducts, conduits, or rights-of-way” for
wire communications; and (2) the facility does not fall within one of the exceptions
indicated in § 224(f)(2). The fact that a given “pole, duct, conduit, or right[]-of-
way” may have some transmission plant attached to it does not exclude it from the
coverage of the Act. These local distribution facilities, festooned as they may be
with transmission wires, are plainly within the FCC’s jurisdiction under the terms
of the Act.
In sum, the plain language of the Act mandates the following: transmission
towers and other interstate transmission facilities are not subject to the Act’s
provisions, and the FCC lacks the authority to regulate these facilities. However,
the Act generally covers all “poles, ducts, conduits and rights-of-way,” and these
local distribution facilities are covered by the Act, regardless of whether they are
used in part for transmission wires or other transmission facilities.
17
II.
Expansion of Capacity
In situations where it is agreed that capacity on a given pole or other facility
is insufficient to accommodate a proposed attachment, the FCC orders require
utilities to expand the capacity of their existing infrastructure at the request of
attaching entities. Petitioners challenge this requirement as contrary to the express
language of the Act. The challenged portion of the Order on Reconsideration
reads as follows: “[T]he principle of nondiscrimination established by section 224
(f) (1) requires a utility to take all reasonable steps to expand capacity to
accommodate requests for attachment just as it would expand capacity to meet its
own needs.” Order on Reconsideration, 14 FCC Rcd. 18049, para. 51 (Oct. 20,
1999).
Petitioners’ challenge to this guideline is rooted in the text of § 224(f)(2).
This clause provides that “a utility providing electric service may deny a cable
television system or any telecommunications carrier access to its poles, ducts,
conduits, or rights-of-way on a non-discriminatory basis where there is insufficient
capacity and for reasons of safety, reliability and generally applicable engineering
purposes.” 47 U.S.C. § 224(f)(2). Petitioners argue that this language speaks
precisely to the question of whether utilities must expand the capacity of their plant
18
to provide access for potential attachers, and answers that question in the negative.
The entire purpose of this section is to specify the exceptions to the general rule
mandating that utilities provide cable and telecommunications companies
nondiscriminatory access to their facilities; one of those exceptions is implicated
when the facility contains “insufficient capacity.” If utilities are required to
expand the capacity of their plant at the request of a third party, “it is hard to see
how you can give section 224 (f) (2) any meaning at all . . . .” Order on
Reconsideration, 14 FCC Rcd. at 18099 (Powell, Comm’r, concurring in part and
dissenting in part).
The FCC counters this argument by noting that many utilities now use their
poles to support thriving telecommunications businesses of their own (ten of the
thirteen petitioners own or have financial involvement in telecommunications
businesses), and suggests that the nondiscrimination principle that motivated the
1996 Telecommunications Act mandates that the FCC prohibit a utility from
“favor[ing] itself over other parties with respect to the provision of
telecommunications or video programming services.” First Report and Order, 11
FCC Rcd. 15499, para. 1157 (Aug. 1, 1996). The rule on expansion of capacity,
according to the FCC, is simply one manner in which the FCC implements
Congress’s intent to prevent utilities from exploiting their monopoly ownership of
19
the necessary infrastructure to deny competitors access to their markets. The FCC
merely mandates that utilities make room for third parties in the same manner in
which they would if they needed additional space for their telecommunications
operations.
The FCC’s position is contrary to the plain language of § 224(f)(2). While
the FCC is correct that the principle of nondiscrimination is the primary purpose of
the 1996 Telecommunications Act, we must construe statutes in such a way to
“give effect, if possible, to every clause and word of a statute.” Williams v. Taylor,
529 U.S. 362, 404 (2000) (internal quotation marks omitted). Section 224(f)(2)
carves out a plain exception to the general rule that a utility must make its plant
available to third-party attachers. When it is agreed that capacity is insufficient,
there is no obligation to provide third parties with access to that particular “pole,
duct, conduit, or right-of-way.” 47 U.S.C. § 224(f)(2). As Commissioner Michael
Powell noted, it is hard to see how this provision could have any independent
meaning if utilities were required to expand capacity at the request of third parties.
The entire purpose of the section is to specify the conditions under which the
general rules mandating access for third parties do not apply. By attempting to
extend those generally applicable rules into an area where the statutory text clearly
directs that they not apply, the FCC is subverting the plain meaning of the Act.
20
Therefore, our inquiry on this issue need not extend beyond the first step of
the Chevron test. The FCC’s attempt to mandate capacity expansion is outside of
the purview of its authority under the plain language of the statute.
III.
Reserved Space
Petitioners object to the FCC’s orders specifying the disposition of “reserved
space” on a given pole or other utility-owned facility. The FCC acknowledges that
utilities enjoy the right to reserve space on their facilities for their future use, in
order to ensure the integrity and reliability of their core utility service. However,
the FCC guidelines require that utilities seeking to reserve space on their facilities
take two distinct steps to which they object. First, utilities may not reserve space
for future use unless they do so pursuant to a “bona fide development plan that
reasonably and specifically projects a need for that space in the provision of its
core utility service.” First Report and Order, 11 FCC Rcd. at para. 1169. Second,
utilities must permit third parties to use reserved space until such time as the utility
demonstrates an actual need for the reserved space. Petitioners claim that these
requirements are contrary to the language and intent of the Act and, alternatively,
are arbitrary and capricious exercises of the FCC’s discretionary authority.
21
Petitioners once again rely upon the text of § 224(f)(2) to support their
contention that the FCC’s rule is contrary to statute. They argue that the language
permitting utilities to deny access on the basis of “insufficient capacity”
specifically entrusts the utilities with the power to determine when capacity is
insufficient, and the FCC’s rules limiting the utilities’ ability to reserve capacity on
their facilities removes this power from the utilities and places it in the FCC’s
hands. Utilities regularly reserve space on poles to ensure the reliability and safety
of electric service, as well as for legitimate engineering purposes. Petitioners argue
that requiring the utilities to justify their decision to reserve capacity for these
purposes to the FCC gives the FCC a power completely outside of the realm of its
expertise, and is contrary to the language and intent of the Act.
Petitioners further claim that the rule mandating that reserved space be
offered to third parties until such time as it is actually needed by a utility is both
contrary to § 224(f)(2) and blatantly unreasonable. Once again, petitioners argue
that the plain language of § 224(f)(2) is contradicted when utilities are forced to
provide space, even temporarily, for third-party attachers when the utilities have
already determined (through the reservation of space) that capacity is insufficient.
Also, as a practical matter, it will be extremely difficult to evict third parties using
reserved space at the time a utility develops an actual need for the space. This
22
would risk disrupting existing cable television or telecommunications service and
would be unlikely to receive FCC approval. Thus, petitioners claim that the FCC’s
rule foists an unworkable system onto the utilities with respect to their rights to
reserve space on their facilities.
The FCC argues that its rules on reserved space are simply a mechanism for
ensuring that the nondiscrimination principle is fully implemented. Its rules are a
method of ensuring that the utilities do not reserve excessive space indefinitely in
an effort to keep potential competitors from using their facilities. The FCC claims
that the “bona fide development plan” rule is a reasoned mechanism to guarantee
that utilities do not reserve space without legitimate purposes in mind. The “actual
need” regulation is another reasonable manner of ensuring that utilities do not
reserve space for extensive periods in an effort to deny attachers (and prospective
competitors) the benefit of their infrastructure. The FCC asserts that both of these
rules are simply ways of making sure that utilities that claim that “insufficient
capacity” exists on their poles due to reserved space actually do lack the capacity
on their poles based upon legitimate future needs, and are not simply attempting to
reserve excessive space in order to thwart the interests of their competitors.
Applying the Chevron test to the FCC’s guidelines, we find that the Act does
not speak precisely to the question at issue; namely, how the term “insufficient
23
capacity” is to be defined. Nothing in the language of the statute specifies the
conditions under which capacity should be deemed insufficient. Petitioners’
construction of the Act, which claims that the utilities enjoy the unfettered
discretion to determine when capacity is insufficient, is not supported by the Act’s
text. The language of § 224(f)(2) does not speak in such absolute terms; there are
no suggestions, here or elsewhere in the Act, that utilities enjoy the right to reserve
as much space as they wish for as long as they deem necessary, and on that basis,
to deny cable companies attachments based upon a lack of capacity. In fact, the
statute is silent on the scope and parameters of the term “insufficient capacity,” and
on the relationship between that term and the utilities’ ability to reserve available
space for future needs.
The absence of statutory language outlining this relationship is a gap in the
statutory scheme. “From that gap springs executive discretion.” Gonzalez v. Reno,
212 F.3d 1338, 1348 (11th Cir.), cert. denied, 530 U.S. 1270 (2000). Chevron
mandates that we defer to a reasonable agency effort to fill the gaps in a given
statutory scheme. 467 U.S. at 843–44. Therefore, we turn to step two of the
Chevron test, which requires us to assess whether the FCC guidelines on reserved
space are reasonable.
24
The FCC guideline requiring a “bona fide development plan” as a
prerequisite to a utility’s reservation of space for its future needs is a reasonable
exercise of agency discretion. The FCC recognized that utilities enjoy the power to
reserve space on their facilities for future utility-related needs. However, the FCC
must have some way of assessing whether these needs are bona fide; otherwise, a
utility could arbitrarily reserve space on a pole, claiming it necessary on the basis
of unsupportable “future needs,” and proceed to deny attachers space on the basis
of “insufficient capacity.” This is clearly not what Congress intended when it
passed the Act; such a construction would undermine the plain intent of the
nondiscrimination provisions found in § 224(f)(1). The FCC thus requires utilities
to justify their need for any space they seek to reserve (and thus deny potential
attachers) by demonstrating a bona fide future need for that space. This appears an
eminently reasonable mechanism to ensure that when utilities reserve space on a
pole and deny attachers access on the basis of insufficient capacity, capacity is
actually insufficient. If in individual cases, the FCC unreasonably rejects a utility’s
legitimate reservation of space, the utilities are entitled to seek judicial review of
that order.
The second FCC guideline under attack – allowing third parties to use
reserved space until the utility demonstrates actual need – is another reasonable
25
effort to fill a gap in the statute. Reserved space on a given facility is not unusable
in the short term. The FCC construed the term “insufficient capacity” to mean the
actual absence of usable physical space on a pole. Reserved capacity is,
temporarily at least, of use to attaching entities. All parties will presumably be
aware of the temporary nature of this available space, and attachers will have to be
prepared for potential disruptions that may occur when the utility demonstrates an
actual need for the space. There is nothing unreasonable or arbitrary about this
construction of the ambiguous term “insufficient capacity.” Hence, it is entitled to
deference under the terms of Chevron.
In conclusion, the FCC guidelines with respect to reserved space are
reasonable constructions of an ambiguous statutory term. We therefore must
accord those guidelines due deference.
IV.
Scope of Third-Party Access
Petitioners claim that the FCC exceeded its statutory authority when it found
that the Act triggered access for third parties to all of a utility’s “poles, ducts,
conduits, and rights-of-way,” regardless of whether those facilities are presently
being used for wire communications. The challenged language in the First Report
and Order reads: “We see no statutory basis . . . for the argument made by some
26
utilities that they should be permitted to devote a portion of their poles, ducts,
conduits, and rights-of-way to wire communications without subjecting all such
property to the access obligations of section 224 (f) (1).” First Report and Order,
11 FCC Rcd. at para. 1173.
The crux of petitioners’ claim is their construction of the text of § 224(a)(1),
which defines a “utility” as “any person . . . who owns or controls poles, ducts,
conduits, or rights-of-way used, in whole or in part, for any wire communications.”
47 U.S.C. § 224(a)(1). The utilities argue that this language demonstrates
congressional intent to limit the Act’s coverage to facilities already being used for
wire communications.
Petitioners’ argument is weak. The plain meaning of § 224(a)(1) is that a
utility (for the purposes of the statute) is any entity that controls “poles, ducts,
conduits, or rights-of-way” and uses some of those facilities for wire
communications. The language does not limit the definition of a “utility” to an
entity that uses all of its facilities for the purpose of wire communications; the lack
of such limiting language leads to the natural inference that a utility is an entity
that owns or controls some facilities used for that purpose.
Furthermore, the plain language of another part of the Act effectively
forecloses petitioners’ argument. Section 224(f)(1) provides that “[a] utility shall
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provide a cable television system or any telecommunications carrier with
nondiscriminatory access to any pole, duct, conduit, or right-of-way owned or
controlled by it.” Id. § 224(f)(1). This language plainly mandates that utilities
make all of their “poles, ducts, conduits, or rights-of-way” available to third-party
attachers (unless one of the exceptions listed in § 224(f)(2) applies), regardless of
whether the facility is presently being used for telecommunications purposes. We
have noted that “the adjective ‘any’ is not ambiguous; it has a well established
meaning.” Lyes v. City of Riviera Beach, 166 F.3d 1332, 1337 (11th Cir. 1999) (en
banc) (internal quotation marks omitted). “Read naturally, the word ‘any’ has an
expansive meaning . . . . [When] Congress [does] not add any language limiting
the breadth of that word, . . . ‘any’ means ‘all.’” Merritt v. Dillard Paper Co., 120
F.3d 1181, 1186 (11th Cir. 1997) (citation omitted) (internal quotation marks
omitted). In this context, the lack of a limitation upon the adjective ‘any’ means
that § 224(f)(1) expands the Act’s coverage to all “poles, ducts, conduits, or rights-
of-way owned or controlled by a utility.”
Thus, we need not look beyond Chevron’s first prong on this issue.
Congress has unambiguously stated that the Act’s coverage extends to all “poles,
ducts, conduits, or rights-of-way owned or controlled by a utility.” The FCC
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orders under challenge give this plain language effect, and therefore we cannot
disturb the orders.
V.
Third-Party Workers
Petitioners argue that after an attaching entity is granted access to the
utility’s facilities, the utility should be able to limit those that perform attachment
installation and maintenance to its own specially trained employees or designated
independent contractors. Petitioners challenge the FCC guideline stating the
following: “[A] utility may require that individuals who will work . . . in the
proximity of electric lines . . . have the same qualifications, in terms of training, as
the utility’s own workers, but the party seeking access will be able to use any
individual workers who meet these criteria.” Order on Reconsideration, 14 FCC
Rcd. at para. 86.
Petitioners argue that the rule goes beyond the statutory authority the FCC
enjoys to regulate the “rates, terms, and conditions” of pole attachments. 47
U.S.C. § 224(b)(1). They argue that the statute does not give the FCC the authority
to regulate the utility’s employment practices, an area already regulated by other
federal and state agencies. This position is shared by FCC Commissioner Harold
W. Furchtgott-Roth, who stated in his dissent, “Put directly, I see nothing in
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section 224 that gives this Commission authority to regulate the labor and
employment practices of electric utilities. This is simply not a case of statutory
ambiguity.” Order on Reconsideration, 14 FCC Rcd. at 18097 (Furchtgott-Roth,
Comm’r, concurring in part and dissenting in part).
Alternatively, petitioners contend that the rule is unreasonable. In order to
work safely on electric facilities, personnel require a unique understanding of the
dangers associated with performing construction, maintenance, or repair work in
proximity to electric wires. Personnel having such skills are in short supply.
According to petitioners, outside workers, regardless of their paper qualifications,
likely will not be as capable as those that work day in and day out on these
facilities for the utilities. In the case of utility employees, the utility is able to
supervise the work, make competency determinations, and discipline employees
when necessary. This is not the case with employees of third-party attachers.
Petitioners claim that the ultimate result of the rule is unduly onerous to utilities,
which must endure the dangers associated with less capable people working on
their lines. Therefore, petitioners aver that the guideline must be struck down as
capricious.
Applying the Chevron test to this guideline, we find that the statute does not
speak unambiguously to the question at issue. There is no mention of the
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qualifications of workers anywhere in the Act’s text. However, the Act gives the
FCC the power to regulate the “rates, terms and conditions” of pole attachments;
the FCC argues that its regulations governing the qualifications of workers falls
within the parameters of its authority to regulate the “conditions” of pole
attachments. Absent some clear indication on the face of a statute that an agency
lacks the authority to regulate a particular subject matter, “agencies have authority
to fill gaps where the statutes are silent.” Nat’l Cable & Telecomms. Ass’n v. Gulf
Power Co., __ U.S. __, 122 S. Ct. 782, 789 (2002). The Act does not specify what
sorts of concerns constitute the “conditions” of a pole attachment, and there is no
statutory language suggesting that regulation of the physical process of attaching
wires (by workers) is outside of the scope of the “conditions” of a pole attachment.
Hence, we have a gap in the statutory scheme – the “conditions” of a pole
attachment must be given some content. The gap in the statute means that
Congress has not spoken unambiguously to the precise question at issue, and
Chevron mandates that we must defer to a reasonable agency attempt to give effect
to ambiguous congressional intent.
Looking at this second step of the Chevron analysis, we find the FCC’s rule
within the scope of its discretion. Once an attaching entity is granted access to a
utility’s facilities, the attacher must install its equipment on the utility’s facilities
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and perform maintenance on that equipment from time to time, and the FCC
recognizes that forcing third-party attachers to use the utility’s workers to construct
and maintain the attachments would impede the attachers’ access to the poles and
lead to disputes over compensation, quality of work, and the like. The FCC’s rule
mandates that third-party workers have access to the poles in order to prevent these
potential disputes, but permits utilities to set standards for those workers to ensure
that they have the necessary qualifications. This guideline is a reasonable effort to
regulate one of the fundamental “conditions” of a pole attachment – namely, the
process by which an attachment is made and maintained. The guideline represents
an attempt to balance the interests involved in a measured and reasonable way, and
Chevron dictates that we accord it appropriate deference. We therefore decline to
overturn the FCC’s findings regarding the regulation of third-party workers.
VI.
Pole Modification
Petitioners dispute two additional sets of guidelines the FCC developed in
interpreting § 224(h) of the Act, which provides,
Whenever the owner of a pole, duct, conduit, or right-of-way intends to
modify or alter such pole, duct, conduit, or right-of-way, the owner shall
provide written notification of such action to any entity that has obtained an
attachment to such conduit or right-of-way so that such entity may have a
reasonable opportunity to add to or modify its existing attachment. Any
entity that adds to or modifies its existing attachment after receiving such
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notification shall bear a proportionate share of the costs incurred by the
owner in making such pole, duct, conduit, or right-of-way accessible.
47 U.S.C. § 224(h).
Petitioners challenge the following three guidelines implementing this
statutory provision:
(1) that absent a private agreement, utilities seeking to modify their poles or
facilities must give the companies with attachments on that facility sixty days
notice of the proposed modification;4
(2) that a utility that uses a request for modification from an attaching entity to
bring its facilities into compliance with applicable safety or other regulatory
guidelines will be responsible for its share of the modification costs; and
(3) that a utility will bear all of the costs of any government-mandated
modification of a facility (such as road widening, etc.), as the utility would bear
those costs even in the absence of any attachment to the facility.
Applying the Chevron test to each of these guidelines, we find that Congress
has not spoken precisely to any of these questions. The Act mandates that
attaching entities be given notice when a modification is to take place; the
4
The guideline contains an exception for situations where sixty days notice would be
impractical, and in such cases, simply requires the utilities inform attaching entities of proposed
modifications “as soon as reasonably practicable.” Order on Reconsideration, 14 FCC Rcd. at
para. 89.
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language does not specify the time frame for that notice. The Act requires that
each attaching entity pay a “proportionate” share of the costs an owner incurs in
making its facilities available to them; the term “proportionate” is not defined in
the text of the statute. Therefore, we have gaps in the statute with respect to the
specifics of these issues, and we must defer to any reasonable agency efforts to fill
these gaps. Chevron, 467 U.S. at 843–44.
We find nothing capricious in the FCC’s construction of § 224(h). The
sixty-day rule is a common-sense, flexible effort to implement the statute’s notice
requirement. The second guideline, requiring that utilities bear a proportionate
share of the costs associated with modernizing their plants pursuant to an attacher’s
request for a modification, is also reasonable. As the utilities will be the primary
beneficiaries of efforts to modernize their facilities, it is logical for the FCC to
mandate that they bear some share of the costs of the transition. Finally, it is
reasonable to mandate that utilities bear the costs of modifying their facilities in
response to local government mandates, given that they would bear these costs in
any event. Attaching entities are not given a free ride, as incremental costs
associated with moving the attachment can be factored into the standard rent
utilities charge to attachers. Order on Reconsideration, 14 FCC Rcd. at para. 105.
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In sum, the FCC’s guidelines implementing § 224(h) are neither contrary to
the statute nor unreasonable, and we therefore decline to disturb them.
CONCLUSION
In conclusion, we find that two of the FCC’s guidelines implementing the
1996 amendments to the Act are contrary to the statutory language and must be
overturned. First, the FCC exceeded its authority under the Act when it
determined that interstate transmission towers and plant were subject to its
regulatory authority. The Act’s language and structure limit its coverage to “poles,
ducts, conduits, and rights-of-way,” which do not generally comprise part of a
utility’s transmission system. While the presence of transmission wires or other
transmission facilities on “poles, ducts, conduits, or rights-of-way” does not divest
the FCC of jurisdiction over those facilities, the FCC plainly has no jurisdiction
over transmission towers or other transmission plant. Second, the FCC lacks the
authority to order utilities to expand the capacity of their infrastructure to
accommodate third-party attachers in situations where it is agreed that existing
capacity is insufficient. With respect to all of the other guidelines under challenge,
we decline to overturn the FCC’s determinations.
SO ORDERED.
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