FCC Record, Volume 26, No. 7, Pages 4843 to 5761, March 28 - April 08, 2011 Page: 5,296
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1978 when it added section 224 to the Communications Act.385 Although section 224 relied on "cost" as
the foundation for determining just and reasonable attachment rates, it recognized the range of ways that
"cost" could be interpreted. In particular, section 224(d)(1) defines a just and reasonable rate as ranging
from a statutory minimum based on the additional costs of providing pole attachments to a statutory
maximum based on fully allocated costs.386
128. The additional, or incremental, costs that form the basis for the statutory minimum are the
costs that would not be incurred by the utility "but for" the pole attachments.387 These costs include pre-
construction survey, engineering, make-ready, and change-out costs incurred in preparing the pole for
attachments.388 Congress expected a pole attachment rate based on incremental costs to be minimal since
most of those costs would have been fully recovered in the make-ready charges already paid by the
attacher.389 The maximum rate for attachments under section 224(d)(1), identified as a percentage of fully
allocated costs, reflects a portion of operating expenses and capital costs that a utility incurs in owning
and maintaining poles; the percentage is equal to the portion of space on a pole occupied by an attacher.39"
129. In a series of orders, the Commission implemented a formula that cable television system
attachers and utilities could use to determine a maximum allowable just and reasonable pole attachment
rate - referred to as the cable rate formula - and procedures for resolving rate complaints.39' In 1987, the
U.S. Supreme Court found that the cable rate formula adopted by the Commission provides pole owners
with adequate compensation, and thus did not result in an unconstitutional "taking."392
130. Telecommunications Act of 1996. Congress expanded the reach of section 224 in the 1996
Act to promote infrastructure investment and competition. Among other things, Congress added
"provider[s] of telecommunications service[s]" as a category of attacher entitled to pole attachments at
just and reasonable rates, terms and conditions under section 224,393 and added section 224(e), which
provides a methodology "to govern the charges for pole attachments used by telecommunications carriers
385 Pole Attachment Act of 1978, Pub. L. No. 95-234, 92 Stat. 33, codified at Communications Act of 1934, as
amended; 47 U.S.C. 224. Congress reacted to an apparent need in the cable television industry to resolve conflicts
between such providers, then known as "CATV systems," and utility pole, duct, and conduit owners over the
charges for use of such facilities. See generally 1977 Senate Report, reprinted in 1978 U.S.C.C.A.N. 109.
386 47 U.S.C. 224(d)(1); see also 1977 Senate Report at 19-21, reprinted in 1978 U.S.C.C.A.N. at 127-28.
387 1977 Senate Report at 19, reprinted in 1978 U.S.C.C.A.N. at 127.
388 "Make-ready" generally refers to the modification of poles or lines or the installation of guys and anchors to
accommodate additional facilities. See 1977 Senate Report at 19, reprinted in 1978 U.S.C.C.A.N. at 127. A pole
change-out is the replacement of a pole to accommodate additional users. Amendment of Rules and Policies
Governing the Attachment of Cable Television Hardware to Utility Poles, CC Docket No. 86-212, Report and Order,
2 FCC Rcd 4387, 4388, para. 6 n.3 (1987) (1987 Rate Order), recon. denied, 4 FCC Rcd 468 (1989).
389 See 1977 Senate Report at 19, reprinted in 1978 U.S.C.C.A.N. at 127; 1987 Rate Order, 2 FCC Rcd at 4388,
3901977 Senate Report at 19-20, reprinted in 1978 U.S.C.C.A.N. at 127-28.
391 See, e.g., First Report and Order, 68 FCC 2d 1585 (adopting complaint procedures); Adoption of Rules for the
Regulation of Cable Television Pole Attachments, CC Docket No. 78-144, Memorandum Opinion and Order, 77
FCC 2d 187 (1980) (defining, e.g., safety space, average usable space, attachment as occupying 12 inches of space,
and make-ready as non-recurring cost); 1987 Rate Order, 2 FCC Red 4387. The cable rate formula was codified in
the 1998 Implemnentation Order, 13 FCC Red 6777 at 47 C.F.R. 1.1409(e)(1).
92 FCC v. Florida Power Corp., 480 U.S. 245 (1987); see Alabama Cable Telecomm. Ass'n v. Alabama Power Co.,
Application for Review, File No. PA 00-003, Order, 16 FCC Red 12209 (2001) (Alabama Cable Order), review
deniedsub non. Alabama Power Co. v. FCC, 311 F.3d 1357 (11th Cir. 2002), cert. denied, Alabama Power Co. v.
FCC, 540 U.S. 937 (2003).
93 47 U.S.C. 224(a)(4), (b)(l).
Federal Communications Commission
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United States. Federal Communications Commission. FCC Record, Volume 26, No. 7, Pages 4843 to 5761, March 28 - April 08, 2011, book, April 2011; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc52169/m1/468/: accessed August 22, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.