FCC Pole-Attachments Order Upheld by 8th Circuit

Telecom companies said a court's Monday affirmation of a 2015 FCC order aimed at equalizing telco and cable pole-attachment rates to spur broadband will help the spread of faster internet connections. It was a loss for utilities and a win for the commission. Monday's 8th U.S. Circuit Court of Appeals decision (see 1707310070) denied a petition for review of the FCC order power companies that own poles. Judge Roger Wollman wrote the decision in Ameren v. FCC (Case 16-1683) for the panel that included judges Diana Murphy and Steven Colloton.

The 8th Circuit said the FCC made a reasonable policy decision under the Supreme Court’s Chevron standard of review, so the court must defer to the commission’s expertise: "The FCC sought to eliminate the disparity between the Cable and Telecom Rates in order to avoid subjecting cable providers offering broadband service to the higher Telecom Rate, and to avoid rate disparity between states whose pole attachment rates are regulated by the FCC and those states that had elected to regulate pole attachment rates using the Cable Rate even for telecommunications providers.” American Electric Power, Ameren and other utilities said the FCC order conflated two cost formulas in violation of congressional intent and used an arbitrary and capricious definition of cost (see 1608100016).

The term “cost” in Section 224 is ambiguous, said the court, disagreeing with the energy companies that the FCC order defied Congress' intent to establish two different rates in Sections 224(d)(1) and Section 224(e). “We disagree that the statute evinces such an intent,” the 8th Circuit said. “The statute permits, but does not require, the Cable Rate and the Telecom Rate to diverge.” The court also disagreed that the FCC interpretation rendered Section 224(e) superfluous. “Whether or not the rates diverge, the Cable Rate must fall within the range set forth in § 224(d) and the Telecom Rate must be calculated according to the formula set forth in § 224(e).” The FCC, American Electric and Amaren didn’t comment.

The decision is “a victory for broadband users, competition and deployment,” Incompas CEO Chip Pickering said in a statement. “Pole attachment pricing and delays have held back the deployment of broadband networks by new companies seeking to provide better service, faster speeds and lower prices,” he said. The FCC could further speed deployment by supporting one-touch, make-ready on poles, which would allow a single third-party contractor to move existing pole riders’ attachments to make room for new entrants, Pickering said.

The court decision brings attachment rates "closer to parity" and "underscores the FCC’s broad authority in this area," a USTelecom spokeswoman said. Rates charged by utilities to broadband providers directly affect deployment costs, she said.