FCC Violated Plain Language of Telecom Act in Pole Attachment Order, Power Companies Claim in Briefs
The FCC violated the plain language of Section 224 of the 1996 Telecom Act when it passed its pole attachments order, power companies said in court documents filed late Tuesday. American Electric Power Service and its allies filed their brief laying out their challenge to last April’s order (CD April 8 p3) and the Edison Electric Institute filed an amicus brief with the U.S. Court of Appeals for the D.C. Circuit.
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Both documents say the FCC acted contrary to the law when it “reinterpreted” Section 224 to give incumbents a chance to lower their rates, setting deadlines for affixing attachments and giving wireless carriers the right to attach to the top of poles. The order was approved without dissent. The FCC has claimed it has authority over ILEC rates under Section 224 but that “conclusion erroneously thwarts Congress’ clear intent,” Edison Electric said: “Second, the FCC’s proposal to redefine the telecommunications rate formula in Section 224(e) is a transparent, and results driven attempt to compel electric utilities to subsidize broadband providers on speculation that this will promote broadband deployment."
April’s order also went against the FCC’s own recommendations in the National Broadband Plan, American said. The plan “admitted that ‘without statutory change, the convoluted rate structure for cable and telecommunications providers will persist’ and recommended that ‘Congress should consider amending Section 224 of the Act to establish a harmonized access policy for all poles, ducts conduits and rights-of-way,'” American said, quoting liberally from the broadband plan. “Congress has not made any changes to the statute since that time.”
Congress intended telcos pay higher rates than cable companies, American said, citing legislative language in Section 224(e)(4). The FCC acknowledged as much in its 1998 Report and Order on pole attachment rates, American said.
The only departure from the Telecom Act in the 1998 Report and Order came through the “Space Allocation Factor,” which created a range of telco rates from 151 percent to 228 percent of the cable rate, American said. Last April’s order, however, “override[s] the distinctions between the separate statutory formulae,” American said. “To accomplish its policy goal, the FCC simply multiplied the Annual Pole Cost by the percentages necessary to make the Telecom Rate equal to the Cable Rate,” American said. The FCC didn’t offer any explanation for this change, which American called “an algebraic sleight of hand designed to conflate the separate rate for telecommunications carriers with the rate applicable to cable operators.”
"The FCC’s new ‘discovery’ of a purported ambiguity is simply a rationalization for its result-oriented rulemaking, which it claims is necessary because the Telecom Rate no longer serves certain policy objectives,” American said. FCC officials didn’t comment. The case hasn’t yet been set for argument.