The National Cable Television Association is preparing a counteroffensive against electric companies that see a bonanza from a new court decision allowing them to increase fees they charge cable companies to string lines on their utility poles.
Attorneys for the NCTA last week were putting the finishing touches on a request to rehear a case brought by a host of power companies against the FCC in the federal appeals court in Atlanta.
The upshot of the April 11 decision, cable attorneys say, is that pole-attachment costs may no longer be capped by federal ceilings when cable companies provide Internet service. Last week, the FCC was mulling whether to ask for a new hearing as well. Petitions for rehearing are due May 26.
"We did find the decision troubling," said FCC Cable Services Bureau Chief Deborah Lathen.
Equally disturbing to the FCC are broader implications that could strip the FCC of authority to mandate any access requirements for wireless carriers. Under the court's ruling, the FCC's ongoing effort to set rules for wireless providers' providers' access to apartments and other multiple dwellings could be thrown out. "There is a big, big cloud looming over it," Lathen said.
Since the ruling, Pensacola, Fla.-based Gulf Power has notified Comcast Cablevision of Panama City that annual per-pole rates will rise from $5 to $38. The rate increase is the first of many expected across the Southeast as a result of the April 11 ruling.
"The FCC for the last 20 years has held attachment fees artificially low compared to what other companies pay," said a Gulf Power spokesman. "Forty dollars is in line with what others pay."
The ruling has also prompted Virginia Electric Power Co. to ask the FCC to dismiss a complaint brought by Cavalier Telephone Co. on grounds that regulators no longer have jurisdiction over the rates charged to the competitive local exchange carrier.
"The magnitude of this decision is starting to play out," said NCTA Counsel Neal Goldberg. Cable companies fear that the ruling will force them to pay dramatically higher prices as MSOs roll out new services.
Utility companies seem to be interpreting the rule more broadly, raising cable industry fears even further. Gulf Power officials say the decision eliminates FCC regulation of all pole rates, regardless of whether Internet service is provided.
"The gulf between their interpretation and ours is very wide," said NCTA's Goldberg.
And the cable attorneys say the narrower interpretation is bad enough. Under the Atlanta court's ruling, Internet services provided by cable systems are not "telecommunications services" or "cable services" but rather are "information services." As a result, the court said, the FCC has authority to regulate pole-attachment rates only when the lines are used "solely" for cable services.
But cable industry officials call that reasoning "thin" because the 1996 Telecommunications Act stated that the FCC has authority to set rates for "any" cable attachment. The industry's counter argument was echoed by the dissenter on the Atlanta circuit's three-judge panel. "Because of the unambiguous definition of any,'" the law "requires the FCC to ensure just and reasonable rates for all pole attachments, including those used to provide Internet service," wrote Judge Edward E. Carnes.
The decision, which countermands two-year old FCC rules, is binding only in the 11th circuit but can be used as guidance in other federal courts. The court's ruling applies only to federally set rates and has no impact on companies with pole fees set by state governments.
Congress in 1978 first gave the FCC power to step in and set pole-attachment rates when private negotiations failed and states chose not to regulate the charges. Congress was responding to complaints that utilities could take advantage of their control over the supply of poles to charge monopoly prices.
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