News

Utility Wants Fee Hike Before Court Rules

3/11/2001 7:00 PM Eastern

Even as cable operators await the U.S. Supreme Court's take on whether pole-attachment rates should be unregulated, operators in Georgia claim they're being pressed into signing blank-check attachment agreements in order to proceed with plant upgrades.

Long-term contracts with electric utility Georgia Power, a division of Southern Co., have historically set annual pole-attachment rates at $5.85 each.

But another Southern Co. division, Gulf Power Co., has challenged those capped long-term rates in court. In a Florida case, Gulf Power argued that new cable products such as data delivery change MSOs' classification from cable-service providers to providers of telecommunications service.

As such, owners of the poles should be able to charge rates that will protect the infrastructure investment made by power-company shareholders, the utilities argue.

Last year, that argument won the day in a Florida court. The high court agreed to hear an appeal of the Federal Communications Commission and National Cable Telecommunications Association v. Gulf Power, but no decision is expected until at least late this year.

Meanwhile, Georgia's cable systems-which operate in a competitive environment-are trying to add fiber to their networks. But a potential roadblock may stand in the way.

Last June, Georgia Power informed operators that its pole-attachment rate would rise for 2000 to $53.35 per pole, per year.

Nancy Horne, president of the Cable Television Association of Georgia, complained that her members received "standard contracts" with some onerous terms. For example, operators were told to provide complete access to financial records.

The power company also wanted 30 days' notice for overlashing work, which could stall the restoration of service after natural disasters.

"The terms were really not negotiable," Horne said.

In December, Georgia Power said current contracts were about to expire. Operators pleaded for extensions, but to no avail.

The trade association complained to the FCC. But some operators, anxious to move forward with rebuilding projects, signed contracts but left a blank space where the pole-attachment rate would be.

"They've got us over a barrel," Charter Communications Inc. spokesman Dave Andersen said. Charter will continue to pay the prior rate, he said.

The power company contends that the old rates represent an "unconstitutional taking," Georgia Power spokesman Barry Inman said. Georgia Power wants contracts that provide adequate compensation before allowing any new pole connections.

The rate for 2001 has yet to be calculated, he added.

The FCC pushed back action until March 15, at the cable association's request. Horne said the power company did not submit its complaint rebuttal to CTAG for legal analysis, as is required by law.

Cable-industry attorney Paul Glist of Cole, Raywid & Braverman predicted the FCC would enforce the status quo. He noted that Alabama Power, another Southern Co. division, tried last year to hit operators with a $38 per-pole annual rate, but failed at the FCC last September.

September