FCC Record, Volume 26, No. 7, Pages 4843 to 5761, March 28 - April 08, 2011 Page: 5,315

170. Nor does section 224's legislative history demonstrate that the telecom rate must always
be higher than the cable rate.s19 The utilities principally rely on statements drawn from the legislative
history of the House proposal to amend section 224.520 As discussed above, however, it was the Senate
version that formed the basis for the conference agreement, and even that language was subject to
revision in relevant respects.52' We are not persuaded that certain isolated statements by individual
Senators compel a different result.522 Rather, as explained above, we find the legislative history taken as
a whole does not clarify Congress's intent, nor does it compel an interpretation of section 224(e) that is
contrary to the one we adopt here.523
171. Finally, utility references to Commission and court decisions acknowledging that the
telecom rate is higher than the cable rate do not establish that section 224(e) required a higher telecom
rate.s24 In 1998, the Commission selected a fully allocated cost approach, which was one of the
permissible outcomes under section 224(e).525 The subsequent Commission and court statements thus
were simply accurate characterizations of the mathematical result of the Commission's initial decision to
use fully allocated costs in the telecom rate formula.526 To the extent that there is any dicta in prior
Commission decisions to the contrary, we reject such statements in light of the statutory interpretation we
adopt here, and because they were at odds with the Commission's contemporaneous recognition in the
text of its rules that, even as initially implemented, the telecom rate theoretically could be higher or lower
than the cable rate.27
519 See, e.g., Oncor Comments at 60-61 (arguing "legislative intent to create a separate and distinct rate that would
yield a higher rate than the pre-existing Cable Rate") (citing H. Rep. No. 104-204 at 92 and H. Conf. Rep. No. 104-
458 at 206 (1966)).
52o See, e.g., Alliance Comments at 86; Alliance Reply at 20, 34; Oncor Comments at 60-61; APPA Reply at 9.
521 See supra paras. 162-166.
522 The Florida IOUs cite a statement by Senator Hollings suggesting his view that the telecom rate would be higher
than the cable rate. See Florida IOUs Nov. 8, 2010 Ex Parte Letter at 6 (citing 142 Cong. Rec. S. 689) (Feb. 1,
1996) (quoting Sen. Hollings's statement that "[c]able companies may continue to pay the same [pole attachment]
rate as long as they provide only cable service; once cable companies start to provide telephone service, a higher rate
will phase in over ten years").
523 See supra paras. 162-166.
s2a See, e.g., Florida IOUs Comments at 61.
5s2 See 1998 Implementation Order, 13 FCC Rcd at 6800 n. 160; Telecom Rate NPRM, 12 FCC Rcd at 11737, para.
33.
s26 Thus, contrary to the Florida IOUs assertion, the following statement in a Commission order does not mean that
fully allocated costs are required: "The end result of the application of the telecommunications pole attachment
formula is a rate which reflects the fully allocated costs of the pole-related expenses." Alabama Cable Order, 16
FCC Rcd at 12231, para. 49.
527 See 47 C.F.R. 1.1409(f). In particular, utilities argue that some Commission decisions stated that section 224(e)
requires "fully allocated costs" be used in the telecom rate. See, e.g., Florida IOUs Nov. 8, 2010 Ex Parte Letter at
2-3 (citing Implementation of Section 703 of the Telecommunications Act of 1996, CS Docket No. 96-166, Order, 11
FCC Red 9541, 9544, para. 6 (1996)). The statement at issue, however, was made in passing in the background
discussion of an item that did not involve the implementation of the telecom rate formula or any meaningful
statutory analysis in that regard. Similarly, Commission statements in the 1998 Implementation Order anticipating
that the telecom rate would be higher than the cable rate were not based on any actual statutory analysis there, and
are more properly understood as flowing simply from the fact that, as the Commission initially had implemented
224(e), it generally resulted in a higher rate. See 1998 Implementation Order, 13 FCC Rcd at 6795-96, para. 34; see
also Alabama Cable Order, 16 FCC Red at 12231, para. 49. We also disagree with an assertion by Alliance that a
prior Commission statement regarding the use of historical costs necessarily implies an intent by Congress to "use a
capital cost-based methodology for calculating the telecom rate." Alliance Reply at 18 (citing 2001 Order on
Reconsideration, 16 FCC Rcd at 12117, para. 22). There was no mention of capital costs by the Commission there.
(continued....)
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Federal Communications Commission

FCC 11-50