After a lengthy hiatus of more than a decade following Office of Management and Budget (“OMB”) review of several provisions in the FCC’s pole attachment complaint rules having information collection requirements, including rules placing obligations on certain cable television operators and pole owners, the Commission earlier this week published notices making those rules effective. In 1998 and 2000, the Commission modified its pole attachment regulations to require, among other things, that cable operators notify pole owners upon commencing to offer telecommunications services and that pole owners and other utilities, within 30 days of a request from a telecommunications carrier or cable operator, provide information to support a rate, term, or condition for attachment to or occupation of a pole, duct, conduit, or other right-of-way of the pole owner or utility.
The suspense did not last long. Less than five weeks after a spirited oral argument before a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit (the “Court”) on January 23, 2013, the Court today affirmed key aspects of the Federal Communications Commission’s April 2011 Report and Order and Order on Reconsideration (“Report and Order”). The Report and Order had modified major portions of the Commission’s pole attachment rules implementing the Pole Attachment Act, codified as Section 224 of the Communications Act of 1934 (the “Act”).
The American Electricity Power Services Corporation and other electric utility companies (“Petitioners”) challenged three aspects of the FCC’s Report and Order. (1) The Report and Order interpreted Section 224(b)(1) of the Act, which authorizes the Commission to regulate the rates, terms and conditions of “pole attachments” and assure that they are “just and reasonable,” to apply to incumbent local exchange carriers (“ILECs”) as “providers of telecommunications services.” Building on this interpretation, the Report and Order enabled ILECs to bring complaints before the FCC against investor-owned utility pole owners on whose poles they are attached, even though the statute excludes ILECs from the definition of “telecommunications carrier” for purposes of Section 224. (2) The Commission adopted a new pole attachment rate formula applicable to telecommunications carriers (the “telecom rate formula”) specifically designed to bring the telecom rate down to the same level as that paid by cable operators when the FCC’s presumed number of attachers is used in the telecom rate formula. (3) The Report and Order modified the FCC’s rules, which had limited to compensatory damages to be awarded only from the date of a complaint to the FCC going forward, to allow damages to be awarded for a period prior to the date of the complaint consistent with the applicable statute of limitations.
The Court denied all three challenges in their entirety, applying Chevron deference to the Commission’s interpretations. The Court’s opinion, quoting FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009), underscored that where the FCC modifies its regulations, as it did in the Report and Order, the hurdle the Commission must clear is a “modest” one. Specifically, the Commission “need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better.”