Pole Attachment Dispute Involves Claims at Both State Court and the FCC

The FCC’s Enforcement Bureau issued a detailed decision this week (MAW Communications, Inc. v. PPL Electric Utilities Corporation, DA 19-771) addressing the relative rights and responsibilities of a pole-owning electric utility and a telecommunications carrier for the carrier’s unauthorized attachment to the utility’s poles, the carrier’s refusal to pay an invoice for the utility’s make-ready engineering work, and the utility’s refusal to process more attachment applications while the invoice remained unpaid. The FCC’s decision also identified issues that were appropriate for resolution in local court and which issues would be addressed by the FCC.

Background

In 2016, MAW Communications submitted applications to PPL Electric Utilities Corporation (PPL) seeking to make attachment to PPL’s poles for a municipal fiber network MAW was building for the City of Lancaster, PA. PPL performed make-ready surveys and engineering work and invoiced MAW $56,624 for its costs. However, MAW decided not to proceed with the work and refused to pay PPL’s invoice. In 2017, PPL filed suit against MAW in the Lehigh County Court after PPL discovered that MAW had made unauthorized and unsafe attachments to other poles sometime in 2015 or 2016. In April 2018, the court issued an order prohibiting MAW from accessing any of PPL’s poles without PPL’s prior approval, allowing PPL to remove any unauthorized attachments at MAW’s sole expense, and requiring MAW to maintain $75,000 in escrow with PPL to ensure reimbursement of PPL’s costs.

Later in 2018, MAW submitted 142 applications for new attachments, but PPL refused to act on those applications unless MAW paid the 2016 invoice for the make-ready work. In February 2019, MAW filed a complaint with the FCC arguing that PPL’s refusal to process the new applications violated MAW’s right to access PPL’s poles under Section 224 of the Communications Act. PPL defended its refusal as a proper response for MAW’s refusal to pay the 2016 invoice and its failure to replenish the escrow account to $75,000 after PPL drew money from the account to pay for the repair of MAW’s unauthorized attachments.

FCC Decision

The FCC determined that PPL could only refuse to process MAW’s applications for reasons stated in Section 224(f) of the Communications Act, which include capacity, safety, reliability, or engineering practices. According to the FCC, MAW’s refusal to pay the 2016 invoice did not raise any of those criteria, so PPL’s refusal to process MAW’s 2018 applications, was unreasonable. It therefore ordered PPL to process those applications in accordance with the FCC’s new, and tighter, timelines for the processing of pole attachment requests. The FCC recommended that PPL seek relief from the Lehigh County Court for its contract claim on the unpaid 2016 invoice. The FCC suggested that even though PPL could not refuse to process applications due to MAW’s refusal to pay the invoice, the FCC does not expect a utility to “repeatedly” incur expenses for “multiple applications” that the attaching entity has “indicated no good-faith intention to pay.” Unfortunately, the FCC did not explain how refusals to pay for “multiple applications” would justify a utility in denying access when the FCC just held in this case that a refusal to pay is not one of the criteria that may be used to deny access.

The FCC rejected MAW’s other arguments against PPL, such as its request for an order prohibiting PPL from removing MAW’s attachments and directing PPL to allow MAW to access its existing attachments for maintenance, etc. The FCC stated that these requests would conflict with the local court’s April 2018 order that prohibit MAW from accessing PPL’s poles without PPL’s prior approval. The FCC stated that “in the interest of federal-state comity,” it was denying the relief requested by MAW, and suggested that MAW could seek such relief directly from the court. The FCC also rejected MAW’s requests for other relief related to PPL’s pole attachment practices because MAW had not properly framed them in its denial-of-access complaint. Finally, the FCC rejected MAW’s request for compensatory damages because such damages are not available under the FCC’s pole attachment rules.

Conclusion

This decision illustrates the limited circumstances in which the FCC believes a utility may deny access, even to the point of requiring the pole owner to give access to an attaching entity that has refused to pay prior invoices. The decision suggests, without explanation, that a utility might have recourse if it has incurred expenses for “multiple applications” and if the attaching entity has indicated “no good-faith intention” to pay those invoices. Although the FCC recommends that the pole owner bring a contract claim against the attaching entity in local court, attaching entities often use the FCC’s own rules and procedures to forestall or evade resolution of contract claims before the pole owner even has an opportunity obtain a judgment in local court. In the present case, the FCC noted that PPL had recently begun requiring MAW to prepay for make-ready because of MAW’s prior refusal to pay, but that neither party had raised an issue at the FCC as to whether this prepayment policy would be “just and reasonable.” MAW advised the FCC that it intends to file a separate complaint with the FCC to challenge the reasonableness of the rates, terms and conditions in its pole attachment agreement, thus signaling that this dispute is not over at the FCC or in local court. Moreover, either party could request FCC review or reconsideration of this decision, or even eventual judicial review.