Case Background
Purpose
of this Rulemaking
This rulemaking
was initiated in order to implement the 2021 Florida Legislature’s amendments
to Section 366.04, Florida Statutes (F.S.), Jurisdiction of Commission, that
require the Florida Public Service Commission (Commission) to regulate and
enforce rates, charges, terms, and conditions of certain pole attachments to ensure that such rates, charges, terms,
and conditions are just and reasonable.
Under the new
law, the Commission is required to hear and resolve complaints concerning
rates, charges, terms, conditions, voluntary agreements, or any denial of
access relative to pole attachments. When taking action upon such complaints,
the Commission must establish just and reasonable cost-based rates, terms, and
conditions for pole attachments by applying the decisions and orders of the
Federal Communications Commission (FCC) unless a pole owner or attaching entity establishes by competent, substantial
evidence in a Section 120.569 and 120.57, F.S., proceeding that an alternative
cost-based pole attachment rate is just and reasonable and in the public
interest.
The Commission
is required to propose procedural rules to administer and implement this
authority no later than January 1, 2022.
Certification
to the Federal Communications Commission
Under
Section 366.04(8)(g), F.S., after the proposed rule has been filed with the
Department of State and becomes effective, the Commission must provide
certification to the FCC pursuant to 47 U.S.C. § 224(c)(2). After Rule
25-18.010, F.A.C., becomes effective, staff intends to bring a recommendation
to the next available Commission Conference for Commission approval and
issuance of a certification order. The certification must include a statement
that:
·
The Commission regulates the rates, terms, and
conditions for pole attachments pursuant to the authority of Section 366.04(8),
F.S.; and
·
The Commission in so regulating such rates,
terms, and conditions has the authority to consider and does consider the
interests of the subscribers of the services offered via such attachments, as
well as the interests of the consumers of the utility services, under the authority
of Section 366.04(8)(b), F.S.
In
order to be considered to regulate the rates, terms, and conditions for pole
attachments, the Commission must have issued and made effective rules and
regulations implementing the Commission’s regulatory authority over pole
attachments. In addition, the Commission must take
final action on a complaint within 180 days after the complaint is filed with
the Commission or within the period prescribed for final action in the
implementing rule, not to extend beyond 360 days after the complaint is filed.
Procedural
Issues
A
Notice of Rule Development for this rule appeared in the August 17, 2021
edition of the Florida Administrative Register, Vol. 47, No. 159. A staff rule
development workshop was held on September 1, 2021. Participating at the
workshop were AT&T, CTIA, Comcast, Crown Castle Fiber LLC (Crown
Castle), Florida Internet and Television
Association, Inc. (FIT), Duke Energy Florida (DEF), Florida Power & Light
Company (FPL), and Tampa Electric Company (TECO). Post-workshop written
comments were provided by CTIA, Crown Castle, DEF, FPL, FIT, Frontier
Communications, and TECO.
Rules
adopted by the Commission to implement Section 366.04(8), F.S., are not subject
to Section 120.541, F.S., Statement of estimated regulatory costs (SERC). For this reason, a SERC has not been
prepared for this rule. The Commission
has jurisdiction pursuant to Sections 120.54, 350.127(2), and 366.04(8)(g), F.S.
Discussion
of Issues
Issue 1:
Should the Commission propose the adoption of Rule
25-18.010, F.A.C., Pole Attachment Complaints?
Recommendation:
Yes, the Commission should propose the adoption of
Rule 25-18.010, F.A.C., Pole Attachment Complaints, as set forth in Attachment
A. Also, the Commission should certify Rule 25-18.010, F.A.C., as a minor
violation rule. (Wendel, Cowdery, Harper)
Staff Analysis:
Draft Rule 25-18.010, F.A.C., implements Section
366.04(8), F.S., which requires the Commission to regulate and enforce rates,
charges, terms, and conditions of pole attachments. The Commission is required
to hear and resolve complaints concerning rates, charges, terms, conditions,
voluntary agreements, or any denial of access relative to pole attachments. The
Commission must propose procedural rules to administer and implement this
subsection no later than January 1, 2022, and upon adoption of the rules, it
must provide its certification to the FCC pursuant to 47 U.S.C. § 224(c)(2).
Complaints
Sections (1) and (2) of draft Rule 25-18.010, F.A.C.,
address complaints. Subsection (1) lists the information that must be included
in a complaint filed with the Commission by a pole owner or attaching entity. If
the complaint requires the Commission to establish just and reasonable
cost-based rates, terms, and conditions for pole attachments, the complaint
must contain an explanation of the methodology the complainant is requesting
the Commission to apply. Subsection (2)
of the draft rule specifies that the filing date for the complaint is the date
that a complaint is filed with the Commission Clerk containing all required
information set forth in subsection (1) of the rule.
FPL’s post-workshop comments suggest that Rule 25-18.010,
F.A.C., should require a complainant to certify that it is in compliance with
all unchallenged or undisputed provisions of the applicable agreement. FPL states that this will help ensure that
the parties narrow the scope of the complaint to only those provisions truly at
issue and ensure that all pre-complaint efforts to resolve the dispute are as
fruitful as possible. FPL also states that by requiring such certification, the
Commission would help eliminate the unfair practice that occurs when attaching
entities withhold the entire amount of an outstanding rental payment rather
than solely the amount in dispute.
Staff does not recommend that a certification of
compliance with undisputed provisions of a pole attachment agreement should be
required in the complaint because the issues in dispute will be identified as
part of the complaint proceeding. Draft
subsection (1)(e) requires the complaint to include a statement of disputed
issues of material fact or a statement that there are no disputed issues of
material fact. A respondent has the opportunity to identify what it believes to
be the issues in dispute in its response.
If a Section 120.569 and 120.57, F.S., hearing is requested, specific
issues to be resolved will be identified during the course of the proceeding.
Responses
Subsection (3) states that a pole owner or attaching
entity that is the subject of the complaint may file a response to the complaint.
The response must be filed with the Commission Clerk within 30 calendar days of
the date the complaint was served on that party, unless the Prehearing Officer
grants a motion for extension of time as provided in the Uniform Rules of
Procedure. The 30 day filing requirement is intended to assure that the docket
may proceed expeditiously, while recognizing the Prehearing Officer’s authority
to grant a motion for extension of time in appropriate situations.
Subsection (4) of the draft rule states that if a response
is filed, it must include a statement of whether a Section 120.569 and 120.57,
F.S., evidentiary hearing is being requested to resolve the complaint. In addition, if the complaint requires the
Commission to establish just and reasonable cost-based rates, terms, and
conditions for pole attachments, the response must contain an explanation of
the methodology the respondent is requesting the Commission to apply. The rule
does not limit the information that may be included in the response, and,
therefore, the respondent may include any relevant information that it wants
the Commission to consider in response to the complaint.
FPL’s post-workshop comments suggest that the rule should state
that a pole owner or attaching entity that is the subject of the complaint must
file its initial response with the Commission within 30 calendar days of
the date the complaint was served on that party. Staff does not envision a
respondent filing more than one response to a complaint. If additional time is
needed for a response, subsection (3) states that a motion for extension of
time to file the response may be filed. If a Section 120.569 and 120.57, F.S.,
hearing is properly requested, the Prehearing Officer will issue an Order
Establishing Procedure (OEP) that will govern the proceeding under the
applicable Florida Administrative Code procedural rules. Staff anticipates that the OEP may address
the timeframe for discovery, prefiled testimony and exhibits, prehearing
statements by the parties, a prehearing order, hearing date(s), and
post-hearing briefs by the parties.
Time Deadline for Commission Final Action on a Complaint
Subsection (5) of the draft rule states that the
Commission will take final action on a complaint concerning rates, charges,
terms, conditions, and voluntary agreements relative to pole attachments at a
Commission Conference no later than 360 days after the complaint’s filing date
as set forth in subsection (2). Subsection (6) states that for complaints limited
to denial of access relative to pole attachments, the Commission will take
final action no later than 180 days after the complaint’s filing date as
established under subsection (2).
Stakeholders’ Comments
CTIA suggests that the Commission should consider a
180-day deadline, perhaps less, particularly for complaints regarding access to
poles for attaching entities, which it states are significantly easier to
adjudicate than rate-based complaints. CTIA states that the FCC has implemented
a 60-day accelerated docket for pole attachment complaints under its
jurisdiction and
that Maine requires a final order from its Public Utilities Commission
resolving a dispute within seven business days of a complaint being filed.
Crown Castle states that it believes that the 360-day
resolution timeline for complaints involving matters such as rates of pole
attachment is appropriate; however a short timeline for resolution is necessary
for pole access complaints.
FIT suggests a 90-day timeframe for pole attachment complaints
alleging denial of access, stating that unlike a rate dispute that can be
remedied with true-ups or refunds, a denial of pole access has immediate and
irreparable harm not only to the broadband provider but to the consumers who
rely on those services. FIT states that all other pole attachment complaints
should be resolved “within 180 days of the complaint’s filing and in no case
later than 360 days after the complaint’s filing date as set forth in
subsection (2) of this rule.”
DEF suggests that the Commission should take final action
on pole access complaints no later than 180 days after the complaint’s filing
date. FPL did not comment on the time frames for taking final action on
complaints. TECO did not specifically state that the rule should provide for
resolution of complaints in less than 360 days, instead suggesting that the
rule provide that the Commission may adopt an expedited schedule for resolution
for cause shown. In addition, TECO suggested that if the Commission decides to
adopt a shorter time period for resolving pole access complaints, such as 180
days, the rule should be clear that the expedited time frame applies only to
pole access complaints and not to complaints about the rates, terms, or
conditions associated with pole access.
Staff Analysis
Under Section 366.04(8)(g), F.S., the Commission must
provide its 47 U.S.C. 224(c)(2) certification to the FCC upon adoption of Rule
25-18.010, F.A.C. Section 224(c)(3)B. of
47 U.S.C. requires the Commission to take action on pole attachment complaints
within 180 days after the complaint is filed or within the time prescribed for
such final action by Commission rule, not to exceed 360 days after the
complaint is filed.
Staff recommends in subsection (5) of the draft rule that
the Commission take final action on a complaint concerning rates, charges,
terms, conditions, and voluntary agreements relative to pole attachments at a
Commission Conference no later than 360 days after the complaint’s filing date
as set forth in subsection (2). Staff is recommending the maximum time allowed
by the FCC in recognition that the Commission will be addressing complex
matters not previously under its jurisdiction.
Section 366.04(8)(f), F.S., recognizes this by enacting a procedure
allowing any petitioning pole owner or attaching entity to participate as an
intervenor with full party rights under Chapter 120, F.S., in the first four
formal administrative proceedings conducted to determine pole attachment rates. The Legislature stated that “[t]hese initial four
proceedings are intended to provide commission precedent on the establishment
of pole attachment rates by the commission and help guide negotiations toward
voluntary pole attachment agreements.”
Staff believes that allowing 360 days for the Commission to take final
agency action on a complaint will assure sufficient time for discovery,
hearing, post-hearing briefs, and staff preparation of a recommendation for the
Commission. Further, the Prehearing
Officer will set the schedule, and there is no impediment to the Commission
taking final action in less time if circumstances warrant.
Rulemaking participants appeared in general agreement that
the rule should require that complaints concerning denial of access relative to
pole attachments be resolved in less time than pole attachment complaints
involving rates and charges. Final
action by the FCC on pole access denial complaints is expected no later than
180 days from the date the complaint is filed with the FCC “except in
extraordinary circumstances.” Staff
recommends in subsection (6) that for complaints limited to denial of access
relative to pole attachments, the Commission take final action no later than
180 days after the complaint’s filing date as established under subsection (2)
of the rule. Again, there would be no
impediment to the Commission taking final action in fewer than 180 days if
circumstances allow.
Staff notes that Frontier suggested that a provision be
added to the rule stating: “A party’s right of non-discriminatory access to a pole
under Section 366.04(8), Florida Statutes, is identical to the rights afforded
under 47 U.S.C. 224(f).” This language is a restatement of the requirement of Section
366.04(8)(d), F.S., and for this reason is not needed to implement the statute.
Under Section 120.545(1)(c), F.S., the Joint Administrative Procedure Committee
(JAPC) reviews agency rules, one of the purposes of which is to determine
whether the rule reiterates or paraphrases statutory material. For this reason,
the Commission does not reiterate statutory language in its rules.
Methodology for Establishing Rates and Charges
As described below, a point of disagreement among the
companies participating in this rulemaking was whether Rule 25-18.010, F.A.C.,
should include the FCC’s rate formula set forth in 47 C.F.R. § 1.1406(d) (“FCC
Formula”) as the Commission’s default method of calculating pole attachment
rates. 47 C.F.R. § 1.1406(d) is attached hereto as Attachment B.
Stakeholders in Favor of Adopting the FCC Formula
for Establishing Rates
Crown Castle, CTIA and FIT argue that in resolving
complaints requiring establishment of rates and charges, Rule 25-18.010,
F.A.C., should provide that the FCC Formula is the default method of
calculating pole attachment rates.
Crown Castle believes that access to utility poles and
conduit and streamlined processes and rules that promote the safe, expeditious,
and cost-effective deployment of telecommunications facilities on utility
infrastructure are key to its network expansion efforts. Crown Castle states that regulated pole
attachment rates in Florida have been calculated using the FCC Formula for many
years, making it an appropriate baseline from which a pole owner or attaching
entity may propose an alternative rate in the context of a complaint proceeding.
CTIA states that by codifying the FCC Formula, the
Commission would further the goal of streamlining and encouraging broadband
deployment and would encourage investment by helping to ensure a just and
reasonable rate and, therefore, greater economic certainty for attaching
entities. CTIA states that the FCC Formula for pole attachment rates is
cost-based and has been consistently held by courts and regulatory bodies to be
compensatory and reasonable for pole owners.
FIT believes that the Commission should adopt not only the
FCC Formula, but also, at a minimum, should add explicit language to the draft
rule stating that the Commission will apply all of the FCC’s substantive rules
regarding the rates, terms, and conditions of pole attachments, FCC orders, and appellate decisions, in resolving
pole attachment complaints. FIT states
that the Commission should exclude purely procedural FCC rules so that the
Commission can follow its own procedure. FIT states that the language of
Section 366.04(8)(e), F.S., supports this approach because it requires the
Commission to apply the decisions and orders of the FCC and any appellate court
decisions reviewing an order of the FCC when acting on pole attachment
complaints. FIT states that if the Commission’s
rule does not explain that the FCC rules are the default to be applied, the
Section 366.04(8), F.S., language allowing a party to establish an alternative
rate is unclear. FIT also states that the FCC pole rate rules are transparent
and easy to administer.
FIT further argues that adopting the FCC’s substantive
rules would also help further the Legislature’s goal to “encourage parties to
enter voluntary pole attachment agreements” by giving clear guidance that will
allow parties to negotiate agreements with greater understanding of their
baseline rights, diminishing the likelihood of a dispute. FIT states that
applying the FCC’s rules is supported by sound public policy based on four
decades of experience and that the FCC has well established rules and
precedents governing the maximum just and reasonable annual rental rates that
may be lawfully charged to attaching entities.
Stakeholders Against Adopting the FCC Formula
for Establishing Rates
DEF, FPL and TECO argue against adopting the FCC Formula
as the default rate to be used by the Commission in establishing just and
reasonable rates in pole attachment complaint proceedings. They point out that
the methodology to be used for determining the reasonableness of a rate is a
substantive matter that should not be included in a procedural rule. DEF and FPL
specifically state that adopting the substantive FCC Formula would exceed the Commission’s
legislatively granted authority that limits the Commission to adopting
procedural rules.
FPL states that FIT is incorrect in arguing that the
“alternative rate” referenced in Section 366.08, F.S., assumes it would be an
alternative to the FCC Formula rate. FPL argues that not all agreements subject
to the Commission’s new jurisdiction use the FCC Formula rate. FPL states that
this is because the Commission’s regulatory jurisdiction under Section 366.08(a),
F.S., is broader than the FCC’s jurisdiction in that cable and
telecommunications attachments to streetlight poles are outside the FCC’s jurisdiction
and that the FCC rates are inapplicable. Additionally, joint use agreements,
which are almost always between incumbent local exchange carriers and electric utilities,
rarely use the FCC Formula because the contract terms are so different from the
terms of pole attachment agreements between competitive local exchange carriers
or cable providers and electric utilities.
FPL states that if the Commission were to adopt the FCC Formula,
existing agreements not utilizing the FCC rate would effectively be required to
do so. Instead, the Commission should allow arm’s-length negotiated agreements
to continue and consider appropriate rates on a case-by-case basis.
FPL and TECO maintain that adopting the FCC Formula is not
supported by Section 366.04(8), F.S., pointing out that Section 366.04(8)(e),
F.S., states that FCC precedent is not binding upon the Commission in the
exercise of its authority. FPL notes
that the statute does not state that the FCC Formula is the default rate
formula or require the Commission to use that formula.
Additionally, FPL and DEF note that Section 366.08(f),
F.S., states that the initial four proceedings in which the Commission
establishes rates are intended to provide Commission precedent on the
establishment of pole attachment rates and help guide negotiations toward
voluntary pole attachment agreements. As stated by DEF: “This indicates that
the legislature intends for precedent to be developed on an ad hoc basis, with
the benefit of factual records, rather than through an initial set of
substantive rules in the absence of any factual record.”
Staff Analysis
The participants quote from different parts of Section
366.04(8)(e), F.S., in arguing whether adopting the FCC Formula in the rule is
consistent with the grant of authority to the Commission. This important
language is as follows:
(e) The
commission shall hear and resolve complaints concerning rates, charges, terms,
conditions, voluntary agreements, or any denial of access relative to pole
attachments. Federal Communications Commission precedent is not binding upon
the commission in the exercise of its authority under this subsection. When taking action upon such complaints, the
commission shall establish just and reasonable cost-based rates, terms, and
conditions for pole attachments and shall apply the decisions and orders of
the Federal Communications Commission and any appellate court decisions reviewing
an order of the Federal Communications Commission regarding pole attachment
rates, terms, or conditions in determining just and reasonable pole attachment
rates, terms and conditions unless a pole owner or attaching entity
establishes by competent substantial evidence pursuant to proceedings conducted
pursuant to ss. 120.569 and 120.57 that an alternative cost-based pole
attachment rate is just and reasonable and in the public interest. (emphasis
added)
The first sentence clearly sets out the Commission’s
jurisdiction and is not in dispute. The statute does not state that the
Commission is required to adopt the rules of the FCC. Staff does not see
internal conflict in the language of paragraph (8)(e), which directs the
Commission in establishing cost-based rates to apply decisions and orders of
the FCC unless a pole owner or attaching entity proves that an alternative
cost-based pole attachment rate is just and reasonable and in the public
interest. Because the FCC’s orders are
presumably based in some manner on its rules, it is likely that one of the
parties to the evidentiary rate proceeding will argue that the FCC Formula
should be followed, presumably based on certain FCC orders or appellate
decisions. However, an argument that the
rates should be established based on application of FCC decisions, orders, and
court decisions may be overcome if the opposing entity meets the statutory
burden of proving an alternative cost-based rate is just and reasonable and in
the public interest.
Staff believes it is significant that Section 366.04(8)(f),
F.S., creates a procedure under which the initial four Section 120.569 and
120.57, F.S., proceedings in which the Commission will establish pole
attachment rates are intended: “to provide [C]ommission precedent on the
establishment of pole attachment rates by the [C]ommission and help guide
negotiations toward voluntary pole attachment agreements.” These four
proceedings are to include any petitioning pole owner or attaching entity as
intervenors “with full party rights.” This
procedure will give all interested entities the opportunity to provide the
Commission with information on methodologies that may be used in establishing
just and reasonable rates. Staff
believes it would be premature to settle on a particular methodology as a
“default” formula in the rule before the Commission has conducted any
evidentiary hearings as contemplated by the statute.
Minor Violation Rules Certification
Pursuant to Section 120.695, F.S., the agency head must
certify for each rule filed for adoption whether any part of the rule is
designated as a rule the violation of which would be a minor violation. Violation
of Rule 25-18.010, F.A.C., would not result in economic or physical harm to a
person or have an adverse effect on the public health, safety, or welfare or
create a significant threat of such harm. Thus, staff recommends that the Commission
certify Rule 25-18.010, F.A.C., as a minor violation rule.
Conclusion
Based on the foregoing, staff recommends that the
Commission should propose adoption of Rule 25-18.010, F.A.C., Pole Attachment
Complaints, as set forth in Attachment A. Staff also recommends that the
Commission certify Rule 25-18.010, F.A.C., as a minor violation rule.
Issue 2:
Should this docket be closed?
Recommendation:
No, the docket should not be closed. After the
proposed rule has been filed with the Department of State for adoption and
becomes effective, staff intends to bring a recommendation to the next
available Commission Conference for the Commission to issue a certification
order as required by Section 366.04(8)(g), F.S. (Cowdery, Harper)
Staff Analysis:
If no requests for hearing, information regarding
the SERC, proposals for a lower cost regulatory alternative, or JAPC comments
are filed, the rule should be filed with the Department of State for adoption. After
the rule becomes effective, staff intends to bring a recommendation to the next
available Commission Conference for the Commission to issue a certification
order as required by Section 366.04(8)(g), F.S. The certification order will be
provided to the FCC as required by 47 U.S.C. § 224(c)(2), as described in the
Case Background.
25-18.010 Pole Attachment Complaints
(1)
A complaint filed with the Commission by a pole owner or attaching entity
pursuant to Section 366.04(8), F.S., must contain:
(a)
The name, address, email address, and telephone number of the complainant or
complainant’s attorney or qualified representative;
(b)
A statement describing the facts that give rise to the complaint;
(c)
Names of the party or parties against whom the complaint is filed;
(d)
A copy of the pole attachment agreement, if applicable, and identification of
the pole attachment rates, charges, terms, conditions, voluntary agreements, or
any denial of access relative to pole attachments that is the subject matter of
the complaint;
(e)
A statement of the disputed issues of material fact or a statement that there
are no disputed issues of material fact;
(f)
If the complaint requires the Commission to establish just and reasonable
cost-based rates, terms, and conditions for pole attachments, the complaint must
contain an explanation of the methodology the complainant is requesting the
Commission to apply.
(g)
If applicable, the dollar amount in dispute;
(h)
A statement of the relief requested, including whether a Section 120.569 and 120.57, F.S., evidentiary
hearing is being requested to resolve the complaint; and
(i)
A certificate of service that copies of the complaint have been furnished by
email to the party or parties identified in paragraph (1)(c) of this rule.
(2)
The filing date for the complaint is the date that a complaint is filed with
the Commission Clerk containing all required information set forth in
subsection (1) of this rule.
(3)
The pole owner or attaching entity that is the subject of the complaint may
file a response to the complaint. The
response must be filed with the Commission Clerk within 30 calendar days of the
date the complaint was served on the respondent, unless the Prehearing Officer
grants a motion for extension of time filed pursuant to Rule 28-106.204,
F.A.C., or Rule 28-106.303, F.A.C., as appropriate.
(4)
A response filed under subsection (3) of this rule must include the following:
(a)
A statement of whether a Section 120.569 and 120.57, F.S., evidentiary hearing
is being requested to resolve the complaint; and
(b)
If the complaint requires the Commission to establish just and reasonable
cost-based rates, terms, and conditions for pole attachments, the response must
contain an explanation of the methodology the respondent is requesting the
Commission to apply.
(5)
The Commission will take final action on a complaint concerning rates, charges,
terms, conditions, and voluntary agreements relative to pole attachments at a
Commission Conference no later than 360 days after the complaint’s filing date
as set forth in subsection (2) of this rule.
(6)
The Commission will take final action on a complaint limited to denial of
access relative to pole attachments at a Commission Conference no later than
180 days after the complaint’s filing date as established under subsection (2)
of this rule.
Rulemaking
Authority 350.127(2), 366.04(8)(g) FS.
Law Implemented 366.04(8)
FS. History-New__________
