Federal District Court Rejects Utility Effort to Collect Telecom Pole Attachment Rent

01-07_BiennialDeadline(AttachB).pdfOn March 8, 2010, the U.S. District Court for the Eastern District of Virginia ruled that neither the Communications Act of 1934 nor regulations of the Federal Communications Commission (FCC) create a private right of action for pole attachment rate disputes. The ruling came in an order granting Comcast’s motion to dismiss in Virginia Electric and Power Company v. Comcast of Virginia, Inc., et al.

Virginia Electric and Power Company (“Dominion”) sued Comcast to collect telecommunications rent for every pole to which Comcast is attached in Virginia. Comcast had paid Dominion the cable rate for every pole attachment, and paid the telecommunications rate for those poles actually used to provide specific telecommunications services, not including interconnected voice over Internet protocol (VoIP). The court dismissed Dominion’s complaint for lack of subject matter jurisdiction.

Background

The Telecommunications Act of 1996, among other things, established two rates for communications attachments to utility poles where one had existed previously: a rate for attachments used to provide cable service, and a second, higher rate for attachments used to provide telecommunications service. As cable operators introduced telecommunications service and interconnected VoIP service over their cable systems, utility pole owners began claiming entitlement to the higher telecommunications rate for virtually all cable system pole attachments.

With the success of VoIP in the market, recent disputes have focused on whether VoIP is a telecommunications service subject to the higher pole attachment rate, and on the number of poles that are subject to the higher rate when only a limited amount of telecommunications service is being provided over a cable system. The disputes have spawned regulatory proceedings at the FCC (please see our previous advisories dated Aug. 18, 2009, Nov. 21, 2007, and Jan. 22, 2007) as well as litigation in state and federal courts.

The litigation 

Dominion filed a lawsuit in the U.S. District Court for the Eastern District of Virginia (popularly known as the “Rocket Docket” for its efficiency and speed to decision) seeking several million dollars in damages from Comcast for alleged underpayment of pole attachment rent. Although Dominion pled breach of contract and other state law claims, it also made the novel claim that Comcast’s alleged violations of the Communications Act and an FCC regulation were actionable federal claims meriting relief in federal court. Dominion may have filed in federal court both to avoid unfavorable Virginia state law that classifies VoIP as an "information service," and to take advantage of the court’s unusually swift calendar to obtain discovery.

In its motion to dismiss the lawsuit, Comcast argued that a utility’s claim for payment of pole attachment rent was not a viable claim under federal law, but rather a matter of state contract law or otherwise within the FCC’s jurisdiction. Comcast further argued that the federal statutes and regulations Dominion invoked as the basis of its claims did not include any private right of action.

The decision

The court granted Comcast’s motion to dismiss on the grounds that the court had no jurisdiction over the federal claims under 47 U.S.C. § 224 (which governs the FCC’s pole attachment authority), 47 C.F.R. § 1.1403 (which requires a cable operator to notify a utility upon commencing the provision of telecommunications service), or under 47 U.S.C. §§ 206 and 207 (which authorize certain suits against common carriers for damages).

The court held that no private right of action in federal court exists under § 224(e). The court also held that Dominion's claims that Comcast owed the telecommunications pole rate for 100 percent of its attachments to Dominion's poles, and that Comcast failed to notify Dominion that it was providing telecommunications services, were not actionable under Sections 206 and 207 of the Act.

The court declined to exercise supplemental jurisdiction over the state law allegations, and never reached the potential alternative relief of a stay of the court case while the FCC considers related pole attachment issues. The court also did not rule on any issue related to Comcast’s provision of interconnected VoIP service or the manner in which telecommunications pole attachments should be counted. Although Dominion’s complaint did not mention VoIP, had it been successful, Dominion’s theory could have resulted in Comcast’s payment of the higher telecommunications rate for almost every one of its attachments to Dominion poles—creating an end run around the VoIP classification and pole attachment rental issues squarely before the FCC in other proceedings.

Dominion may appeal the decision, or it may re-file its complaint in state court or at the FCC.

Davis Wright Tremaine represented Comcast in these proceedings. Should you have any questions concerning the impact of this decision, please let us know.