Court Rejects Gulf Power’s Constitutional “Just Compensation” Challenge to Pole Attachment Rental Rates

On Feb. 21, 2012, the United States Court of Appeals for the D.C. Circuit issued its opinion in Gulf Power Co. v. FCC summarily denying the electric utility’s challenge that the federal statutory rental rate for cable company attachments to utility poles fails to provide “just compensation” in violation of the Fifth Amendment’s Takings Clause. The court’s opinion thus affirms the Federal Communications Commission's (FCC) 2011 Decision in favor of Florida Cable Telecommunications Association, Comcast, Cox, Brighthouse and Mediacom.

The court’s ruling is the latest win for the cable industry defending the constitutionality of the Pole Attachment Act and related FCC rules as well as recent pole reforms. This dispute began when Gulf Power sought a pole attachment rate more than five times the maximum allowed under the FCC formula for cable attachments. Gulf Power claimed its poles were at “full capacity” and that other buyers were willing to pay a higher rate, the two circumstances the 11th Circuit had held in a related case (Alabama Power v. FCC) were necessary before a pole owner could collect higher pole rents on a “just compensation” theory.
 In the agency proceedings, an FCC Administrative Law Judge (ALJ), and then the full Commission, found Gulf Power had not met its burden of proving full capacity because routine make-ready could have been and was used to accommodate additional attachments. The FCC and ALJ also found Gulf Power failed to prove there were any other attachers precluded from attaching, or that Gulf Power was foreclosed from putting the space to a higher valued use for its own operations.

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