Policy

Judge Nixes Pole Hike

2/09/2007 7:00 PM Eastern

Cable operators in Florida's panhandle could avoid pole-attachment rate hikes of as much as $3.2 million a year, due to a recent decision by an administrative law judge for the Federal Communications Commission.

Judge Richard Sippel on Jan. 31 rejected arguments by Gulf Power Co., an Atlanta-based utility, in support of the increases.

Gulf Power manager of public affairs John Hutchinson said the utility's litigator was out of town when the decision was rendered, and the company was not ready to comment until attorneys could examine the decision. But John Seiver, an attorney with Davis Wright Tremaine, who represented cable interests, said he fully expects the utility to appeal. Gulf Power has until the end of the month to do so.

Cable operators and power companies have long been at odds over pole-attachment rates. Utility companies have argued that pole-attachment rates, regulated by the FCC, were set in 1978 and don't reflect their current value to users. Power companies and their ratepayers pay the lion's share of construction and maintenance fees, while cable operators pay a fraction of the cost of maintaining the pole. Cable-industry attorneys put the average cost to cable at 7.41% of the annual maintenance for a power pole.

The latest conflict grew out of a challenge by the Florida Cable Telecommunications Association, and members of Comcast, Mediacom Communications, Bright House Networks and Cox Communications, to a rate increase requested by Gulf Power in 2000. The power company sought to increase rates 500%, from $6.20 per year to an annual $38.06.

The increase was based on a decision from the 11th U.S. Circuit Court of Appeals, in a decision regarding a Gulf Power sister company, Alabama Power. That decision indicated that a power company could charge increased rates if it could prove a power pole was “full” and that a cable operator's occupancy prevented the company from collecting more from another user for the space cable occupies.

Gulf Power argued the 150,000 poles used by Florida operators are full, justifying higher rates.

Seiver said the judge's decision is important, because had he ruled in Gulf Power's favor, other utilities could have adopted its rate setting, resulting in vastly higher costs for pole attachments throughout the U.S.

September