Electric Utilities Support Supreme Court Challenge of FCC’s Pole Attachment Order
Electric utility companies are supporting a petition for the Supreme Court to find unlawful provisions of the FCC’s 2011 pole attachment order bringing ILECs within the protections of the Pole Attachment Act. The U.S. Court of Appeals for the D.C. Circuit in February upheld the rules (CD Feb 27 p9), which give advantages to some companies that seek to attach cables and network equipment to utility poles. In amicus briefs, the Edison Electric Institute and several electric companies argued that the FCC overstepped its jurisdiction when it waded into a long and successful history of private contractual relationships between ILECs and electric utilities.
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American Electric Power Service Corp., which lost its case before the D.C. Circuit, petitioned in May for the Supreme Court to overturn an FCC order it said “could shift hundreds of millions of dollars in costs” to electric ratepayers. “The D.C. Circuit left the fox (the FCC) in charge of the henhouse (the scope of its regulatory authority),” AEP wrote. It argued the D.C. Circuit misconstrued an unambiguous statute, and that the FCC failed to provide a reasoned justification for re-interpreting the act to extend its protections to ILECs.
"We're all pretty up in arms about it,” said Thomas Magee, partner at Keller Heckman, who represents DTE Electric Co., Minnesota Power, National Grid, and South Carolina Electric & Gas Co. Magee filed an amicus brief in late June supporting the challenge. “There really is no way that Congress intended the FCC to regulate the joint-use relationship between electric utility and telephone company pole owners,” he told us. “But the D.C. Circuit let them get away with it."
When the FCC asserted jurisdiction over attachments by ILEC pole owners to electric utility poles, that was an “impermissible expansion” of the agency’s statutory authority, the power companies said in their brief (http://bit.ly/11nyRe5). “Such a radical and unjustified departure from Congressional intent and past precedent will undermine joint pole arrangements between telephone company and electric utility pole owners spanning the last one hundred years,” they said, arguing the results “could be disastrous."
The FCC’s “one-sided regulation” of the longstanding joint ownership relationships will upset private contractual relationships “to the unfair benefit of ILECs and the enormous detriment of the electric utility industry,” they said. Hundreds of millions of dollars annually will be transferred from electric utilities and their ratepayers to telcos “via reduced attachment rentals.” Some telcos might exit joint pole ownership altogether, the brief said, “since the FCC’s attachment rules are so favorable as compared to joint use.” Ultimately, if the FCC’s jurisdiction holds, the commission “could force the transfer of billions of dollars in pole ownership and maintenance costs from ILECs to electric utilities,” it said.
For decades, electric utilities nationwide have had “joint use” or “joint ownership” contracts with many different ILEC pole-owning partners, the electric utilities said. Those contracts spelled out the rights and responsibilities of each pole owner with respect to its and the other party’s poles. The “comprehensive” rights and responsibilities “are absent” from the “vastly different” third party attacher contracts between electric utility and ILEC pole owners, they said. “The FCC’s assertion of jurisdiction over joint use arrangements between electric utilities and ILECs (predicated on pole ownership) as if they were the same as pole attachment contracts with cable companies and CLECs (simple licensee arrangements) is an unjustified and unfair distortion of the Pole Attachment Act and violates years of specific FCC precedent to the contrary.”
The Edison Electric Institute, a trade association representing electric utility companies, argued in its own amicus brief that the FCC’s new pole attachment rules “upset a careful balance established by Congress.” The rules will have “substantial, negative implications for electric utilities and their customers across the country,” EEI said.
May’s Arlington v. FCC decision, in which the Supreme Court said the agency is entitled to deference when interpreting ambiguous statutes about its jurisdiction (CD May 21 p1), is relevant here, EEI said: “In extending the protections of the Pole Attachments Act to ILECs, the FCC has gone beyond the clear line established by Congress through the plain language of the statute and well beyond what any possible ‘ambiguity’ would allow."
The decades-long relationship between electric utilities and ILECs has resulted in “the safe and economically efficient nationwide deployment of millions of miles of electric and communications infrastructure,” EEI wrote. It “will be significantly and irreparably disrupted if the decision by the D.C. Circuit to allow the FCC to extend its authority to regulate the rates paid by ILECs for attachment to electric utility poles is allowed to stand,” the association said. The FCC declined to comment.