FCC Regulatory Update

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www.mwe.com www.mwe.com

FCC Regulatory Update

Shirley S. Fujimoto

McDermott, Will & Emery LLP 600 13th Street NW Washington, DC 20005-3096

(202) 756-8282

[email protected]

Wisconsin Joint Use Conference 2005 April 27-28

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Pole Attachment Timeline

1978 Pre-1978: No Pole Attachment Jurisdiction Pole Attachment Act Passed 1996 1996 Telecommunications Act Passed, Amending Pole Attachments Act

1999 2002 FCC Implementation of 1996 Act Challenges to FCC Rulemakings, Dockets 96-98, 97-98, 97-151, in 11th_{Cir., DC Cir.,} U.S. Supreme Court

2004

Pole Attachment Responsibility Moves to Enforcement

Bureau, Phase in of Telecom Rate Begins

Emphasis on Mediation, Negotiation

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Mediation Trend

Reassignment of authority over pole attachments from

Cable Services Bureau to Enforcement Bureau marks

change in FCC treatment of cases to more

mediation-focused resolution and fewer formal decisions

Enforcement Bureau pole attachment staff background:

formerly tasked with Common Carrier disputes under

Section 201 of the Communications Act, which are largely

resolved through mediation. This philosophy has now been

imported into the pole attachment arena.

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Mediation Trend

Pre-Complaint Mediation

¾ Purpose and Goals

• Satisfies good faith settlement requirement under the FCC’s rules (47 C.F.R. Sec. 1.1404(k)

• Attempt to narrow and resolve issues if possible to focus/streamline any issues that end up in a formal complaint

Post-Complaint Mediation

¾ Purpose and Goals

• Conserve Commission resources and allow companies to find a mutually agreeable resolution; avoid repeat or ongoing disputes

• More expedient than resolution by formal decision

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Mediation Trend

The Enforcement Bureau’s Statement on Mediation:

¾ “Parties are strongly encouraged to attempt to settle or narrow

their dispute before filing a pole attachment complaint. To assist parties in this effort, MDRD emphasizes mediation of pole attachment disputes, preferably prior to the actual filing of a complaint…to inform us of the impending proceeding, and for information regarding MDRD's mediation program. Mediations allow the parties to focus on a solution to their dispute, and not waste resources in costly and time-consuming litigation. The Division has had great success with its mediation efforts; many cases that would have been formal complaints have been

resolved informally without further litigation with the help of MDRD staff.”

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Mediation Trend

z Is there any guidance on the horizon?

z FCC Enforcement Trend: Mediation and Negotiated Settlement Before and After a Complaint is Filed (No written decisions issued) z 9 out of the last 10 pole attachment Orders issued by the

Enforcement Bureau have been non-substantive dismissals of cases pursuant to negotiated settlement agreements among the parties

z American Fiber v. KCPL – PAA Status of Fiber Provider

z FiberTech v. Duquesne – PAA Status of Fiber Provider, Cost of

engineering surveys

z RCN v. PECO – Make-ready and engineering costs

z Virginia Cable v. VEPCO – Make-ready costs, Telecom rate

elements, burdens (average number of attachers)

z No Substantive Orders issued since November 2003 z No Substantive Orders, No Appellate Review

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Issues in Pending Cases

Just Compensation (Florida Cable Ass’n v. Gulf Power)

Application of the Telecommunications Rate (Texas

Cable v. CenterPoint, CenterPoint v. Texas Cable)

Utility Engineering Standards and Inspection Practices

(ACTA v. Entergy Arkansas)

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Just Compensation

Florida Cable Telecommunications Ass’n v. Gulf Power

Co. (EB 04-381)

Background – Alabama Power v. FCC

z Before seeking just compensation,

utility must show:

z Pole is at full capacity; and z either:

z another buyer is waiting in the wings, or

z the utility has a higher-valued use for the space. z Cert. Denied, October 2003

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Just Compensation

Florida Cable Telecommunications Ass’n v. Gulf Power

Co. (EB 04-381)

¾ Designated for Hearing before Administrative Law Judge Richard Sippel

Proceeding in Discovery – Interrogatories exchanged

¾ Each seeking detailed information on the opposing parties’ networks and infrastructure

¾ Focus on capacity of poles

Pole count proceeding over cable companies’ objection

Hearing Scheduled March 28, 2006

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Telecom Rate Application

CenterPoint/Time Warner (2 Cases)

Supplemental briefing completed in November 2004

Is the Telecom Rate charged according to the

character of the attachment, or the character of the

entity?

¾

CenterPoint’s contamination theory

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Telecom Rate Application

Who is a telecommunications carrier?

¾ Certification by the State authority ¾ Provision of cable modem services ¾ Provision of VoIP

¾ Use of/option to use network by an affiliate

Telecom Rate Issues - Average Number of Attaching Entities/Burden

of Proof

¾ When must the FCC’s presumptions be used? Who must rebut them?

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Engineering and Inspections

ACTA v. Entergy Arkansas

Sample safety inspections conducted as a result of damages and

outages traceable to cable plant

Full Inspections conducted after sample inspections showed high

incidents of engineering violations of the pole agreement and NESC standards

Cable Operators primarily object to:

¾ Overall cost of inspections ¾ Apportionment of costs

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Engineering and Inspections

Who is entitled to dictate engineering

standards? Does the FCC have jurisdiction or expertise to regulate?

Are standards in excess of the NESC reasonable? Should cable operators be entitled to dictate

who a utility uses to inspect its facilities?

May safety inspections be conducted more than

one year after installation, or outside of the routine inspection process?

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Other Controversies

z

Wireless Attachments

z

Are within the Pole Attachments Act

z

Rates must be just and reasonable

z

Reasonableness determined on a case-by-case

basis

z No formula or agency application of standard

z Recent Public Notice “reminding” utilities of their

obligations to wireless providers as the FCC is “aware of” a number of wireless disputes

FCC Regulatory Update