Marcus Cable Associates, L.P. Complainant V. Texas Utilities Electric Company Respondent

Federal Communications Commission

DA 97-1527

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

)

)

Marcus Cable Associates, L.P.

)

Complainant

)

)

P.A. No. 96-002

V.

)

)

Texas Utilities Electric Company

)

Respondent

)

DECLARATORY RULING AND ORDER

Adopted: July 18, 1997

Released: July 21, 1997

By the Chief, Cable Services Bureau:

I. INTRODUCTION

1.

In this Order, we address a complaint and request for declaratory ruling ("Complaint")

brought under Section 224 of the Communications Act, as amended,' by Marcus Cable Associates, L.P.

("Marcus") against Texas Utilities Electric Company ("TU Electric").

Section 224 empowers the

Commission to adjudicate disputes between utilities and cable operators concerning allegedly unjust and

unreasonable pole attachment rates, terms, and conditions.^ Marcus filed its Com.plaint on July 24, 1996.

TU Electric filed a response ("Response") to the Complaint on August 22, 1996. Marcus filed a reply

("Reply") on September 10, 1996.^

2.

Marcus asks the Commission to declare unreasonable and terminate certain provisions in,

and actions related to, a pole attachment agreement ("Agreement") between Marcus and TU Electric.

Marcus requests relief from an Agreement requirement that Marcus give TU Electric written notice of its

provision of nonvideo services and secure from each of its nonvideo service customers a release from

liability in favor of TU Electric and Marcus. Marcus also seeks relief from TU Electric's alleged attempt

to collect information about, and part of the revenues from, Marcus' nonvideo customers and services.

In addition, Marcus asks for actual and punitive damages in an unspecified amount. TU Electric responds

that the complaint is an attempt to camouflage that Marcus has breached a provision in the Agreement

prohibiting Marcus from subleasing its pole attachment rights under the Agreement

ged attempt

to collect information about, and part of the revenues from, Marcus' nonvideo customers and services.

In addition, Marcus asks for actual and punitive damages in an unspecified amount. TU Electric responds

that the complaint is an attempt to camouflage that Marcus has breached a provision in the Agreement

prohibiting Marcus from subleasing its pole attachment rights under the Agreement. TU Electric asserts

that the Commission does not have jurisdiction to resolve a breach of contract dispute and asks that the

complaint be denied or dismissed.

' 47 U.S.C. § 224 (1996).

^ Amendments to Section 224 in the Telecommunications Act of 1996 gave the Commission authority to resolve

pole attachment disputes between utilities and telecommunications carriers, as well. Pub. L. No. 104-104, 100 Stat.

56, codified at 47 U.S.C §§ et seq.

'

TU Electric also filed a supplemental response, at the Commission's request, on December 13, 1996.

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3.

We also consider in this order a request by Marcus for confidential treatment of two of

Marcus' contracts with its nonvideo customers, which Marcus filed at the request of the Commission staff.

TU Electric opposes Marcus' request for confidential treatment.

4.

For reasons discussed below, we find that we have jurisdiction under Section 224 to

resolve the Complaint. We also find that Marcus' request for relief from unreasonable rates, terms, and

conditions of the Agreement is Justified. We order TU Electric to terminate the rates, terms, and

conditions at issue. We grant Marcus' request for a declarator)' ruling and deny its request for actual and

punitive damages. We also grant Marcus' request for confidential treatment.

n. BACKGROUND

5

esolve the Complaint. We also find that Marcus' request for relief from unreasonable rates, terms, and

conditions of the Agreement is Justified. We order TU Electric to terminate the rates, terms, and

conditions at issue. We grant Marcus' request for a declarator)' ruling and deny its request for actual and

punitive damages. We also grant Marcus' request for confidential treatment.

n. BACKGROUND

5.

TU Electric is a utility engaged in the generation, purchase, transmission, distribution, and

sale of electric energy in Texas." TU Electric is affiliated with Texas Utilities Communications Inc.,

which has a 20 percent interest in each of three limited partnerships, the general partner of which is

PrimeCo Personal Communications, L.P. ("PrimeCo").^ The limited partnerships are involved in the

provision of various telecommunications services within Texas, for which they are using TU Electric's

private easements and rights-of-way.^ On November 1, 1995, Marcus, a ffanchised cable operator,^ and

TU Electric entered into a new "CATV Pole Lease Agreement" (the above-referenced Agreement).

According to TU Electric, the Agreement represented its standard pole attachment agreement.® Pursuant

to this Agreement, TU Electric allows Marcus "to maintain its existing Equipment, if any, on Poles solely

for the purpose of providing Service in the Franchised Areas and to attach additional Equipment to Poles

in the future solely for the purpose of providing Service in the Franchised Areas."' The Agreement

defines "Service" as "any transmission service" within the defined ffanchised areas." The transmission

" Complaint at 1.

'

TU Electric Supplemental Response at 8.

'

Id.

'

See 47 C.F.R. Section 522(5) (1996).

'

Response at Declaration of Jack P. Hilliard, Par. 3. According to TU Electric, the Agreement was based in

substantial part upon an agreement that TU Electric initially negotiated for over two years with TCI Cablevision of

Dallas, Inc. TU Electric then made these terms available to other cable companies

1.

'

TU Electric Supplemental Response at 8.

'

Id.

'

See 47 C.F.R. Section 522(5) (1996).

'

Response at Declaration of Jack P. Hilliard, Par. 3. According to TU Electric, the Agreement was based in

substantial part upon an agreement that TU Electric initially negotiated for over two years with TCI Cablevision of

Dallas, Inc. TU Electric then made these terms available to other cable companies. Certain limited changes from

the baseline agreement were made by TU Electric in 1995 (and are reflected in the Agreement with Marcus) in an

effort to address TU Electric's potential liabilities arising from the transmission of data communications on TU

Electric's poles. Response at 2.

" Agreement at 1.

"

Agreement at 2. According to the Agreement, the Franchised Areas are defined as "the cities of Benbrook,

Blue Mound, Burleson, Clebume, Corinth, Crowley, Demon, Duncanville, Edgecliff Village, Everman, Forest Hill,

Fort Worth, Haltom City, Hickory Creek, Highland Park, Hurst, Keller, Kennedale, Lake Dallas, Lake Worth,

Mansfield, North Richland Hills, Richland Hills, Saginaw, Shady Shores, South Lake, University Park, Watauga,

Weatherford, Westover Hills and White Settlement" as well as unincorporated areas of Parker County. Agreement

at 2.

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DA 97-1527

services offered by Marcus include video programming services as well as nonvideo services. Marcus'

primary nonvideo service offering is fiber optic conductor capacity, which Marcus provides over the

excess capacity of its cable system, on mixed-use, commonly sheathed fiber optic and coaxial conductors."

6.

Marcus states that it executed the Agreement under protest because TU Electric had added

a new section

ered by Marcus include video programming services as well as nonvideo services. Marcus'

primary nonvideo service offering is fiber optic conductor capacity, which Marcus provides over the

excess capacity of its cable system, on mixed-use, commonly sheathed fiber optic and coaxial conductors."

6.

Marcus states that it executed the Agreement under protest because TU Electric had added

a new section. Section 13.1 A, that had not been in the parties' prior agreements.'^ Pursuant to Section

13.lA, Marcus is required to indicate on a form entitled "Data Transmission Declaration Form" whether

or not it is transmitting "data other than a TV signal through its facilities attached to TU Electric poles.""

A positive response requires Marcus to obtain a release from each of its nonvideo customers indemnifying

both Marcus and TU Electric against claims arising out of Marcus' or TU Electric's "negligence, strict

liability or other fault of any nature."'" Section 13.1 A also requires Marcus to design the release so that

it reads, in capital letters, that the nonvideo services being provided by Marcus "may not be completely

private and are of such a nature that they may be interrupted, lost or limited for many reasons . . .

7.

By letter, dated May 20, 1996, TU Electric asked Marcus to "confirm that all overlashed

cable, situated on CATV cable which Marcus Cable maintains and operates under the terms of the

[Agreement], is owned and exclusively used by Marcus Cable."'^ In a telephone conversation with TU

Electric on June 3, 1996, a Marcus representative confirmed that "while Marcus owns all such overlashed

cable, such cable is nevertheless being 'used' at least in part, by American Communications Services, Inc.

("ACSI") and/or others."'' By letter, dated June 18, 1996, TU Electric requested a meeting with Marcus

to "clarify the nature and extent of any third party usage of Marcus' cable and other equipment, such as

is maintained under the terms of [the] Agreement."" The parties met on July 18, 1996

cable, such cable is nevertheless being 'used' at least in part, by American Communications Services, Inc.

("ACSI") and/or others."'' By letter, dated June 18, 1996, TU Electric requested a meeting with Marcus

to "clarify the nature and extent of any third party usage of Marcus' cable and other equipment, such as

is maintained under the terms of [the] Agreement."" The parties met on July 18, 1996. At that meeting,

according to Marcus, "TU Electric demanded to know where, and to whom, Marcus was providing

nonvideo telecommunications services" and also demanded "a portion of revenues that Marcus derives

" Complaint at Declaration of Pietri.

Complaint at 9.

"

Agreement at Exhibit E.

Agreement at Attachment D. The exception to this indemnification occurs when the negligence of Marcus

or TU Electric or their "agent or agents was the sole proximate cause of such injuries, death of persons and/or

damages to property." Id.

"

Id.

"

Complaint at 10 quoting Letter from Robert L. Ewing, Distribution Planning Manager, TU Electric, to Marcus

Legal Department (May 20, 1996).

"

Id quoting Letter from Robert L. Ewing, TU Electric, to Richard A.B. Gleiner, General Counsel, Marcus (June

18, 1996).

"

Id.

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from provision of non-video telecommunications services."" In response to these demands, Marcus filed

its Complaint.

in. DISCUSSION

8.

The Complaint presents four questions for our consideration: (1) does Section 224

provide the Commission with jurisdiction to review the pole attachment agreement complained of in this

proceeding; and, if so, (2) are TU Electric's requirements for release from liability by Marcus' customers

and for disclosure of nonvideo transmissions over Marcus' facilities reasonable under Section 224; (3) is

TU Electric's effort to collect information about, and money for, third party use of Marcus' cables

permitted under Section 224; and (4) is Marcus entitled to actual and punitive damages because of TTJ

Electric's actions? We answer the first question

elease from liability by Marcus' customers

and for disclosure of nonvideo transmissions over Marcus' facilities reasonable under Section 224; (3) is

TU Electric's effort to collect information about, and money for, third party use of Marcus' cables

permitted under Section 224; and (4) is Marcus entitled to actual and punitive damages because of TTJ

Electric's actions? We answer the first question in the affirmative and the remaining three in the negative.

We also grant Marcus' request for declaratory ruling.

A. Jurisdiction

9.

TU Electric urges the Commission to dismiss or deny Marcus' complaint as a breach of

contract matter outside of the Commission's jurisdiction. According to TU Electric, if Marcus has allowed

a third party to overlash its cable onto a Marcus cable, Marcus has violated the subleasing prohibition in

Section 16.1 of the Agreement.^" Marcus denies that it has violated the sublease prohibition.^'

10.

In the absence of state regulation," Section 224 directs the Commission to "regulate the

rates, terms, and conditions for pole attachments to provide that such rates, terms, and conditions are just

and reasonable . . . ."■' Marcus alleges, and TU Electric does not dispute, that "neither the state of Texas,

nor any of its political subdivisions, agencies or instrumentalities, regulates the rates, terms or conditions

of pole attachments in the manner required by Section 224."^^ The authority conferred by Section 224,

however, does not supplant that of the local jurisdiction when the issue between the parties is a breach

Complaint at Declaration of A.B. Gleiner

ispute, that "neither the state of Texas,

nor any of its political subdivisions, agencies or instrumentalities, regulates the rates, terms or conditions

of pole attachments in the manner required by Section 224."^^ The authority conferred by Section 224,

however, does not supplant that of the local jurisdiction when the issue between the parties is a breach

Complaint at Declaration of A.B. Gleiner. According to the Declaration, "TU Electric representatives at the

meeting offered Marcus a "choice" of acceding to their demands or proceeding to litigation." According to TU

Electric, it had asked Marcus "to explain the nature and extent of any subleasing to third parties of pole attachments"

and "indicated to Marcus that it expected Marcus to make restitution, based on the value or benefits that TU Electric

may have lost by Marcus' breach of contract."

Response at 3 and App. A.

Response at 3.

Reply at 4.

State regulation of the rates, terms, and conditions for pole attachments precludes federal regulation of pole

attachments under certain conditions. 47 U.S.C. § 224(c).

" 47 U.S.C. § 224(bXl).

Complaint at 3.

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of contract not involving unjust or unreasonable contractual rates, terms, or conditions."^ Consequently,

the threshold question before us is whether the issues raised in the Complaint concern a breach of contract

not involving unjust and unreasonable contractual rates, terms and conditions.

11.

Section 16.1 of the Agreement provides that Marcus "shall not, without prior written

consent of TU Electric (a) transfer, assign, delegate or sublet any of its rights or obligations under this

Agreement . . .

On December 18, 1996, Marcus responded to a December 2, 1996 request for

information by the Commission,"^ in which Marcus stated that it is not subleasing its pole attachment

rights and no party is overlashing its facilities onto Marcus' facilities

not, without prior written

consent of TU Electric (a) transfer, assign, delegate or sublet any of its rights or obligations under this

Agreement . . .

On December 18, 1996, Marcus responded to a December 2, 1996 request for

information by the Commission,"^ in which Marcus stated that it is not subleasing its pole attachment

rights and no party is overlashing its facilities onto Marcus' facilities. Marcus stated that it owns all of

the facilities that it attaches to TU Electric's poles, that Marcus "leases some capacity on its cable

television system to certain third parties," and that its "lease of such capacity is functionally identical to

the lease of certain video channel capacity to unaffiliated third parties.""^

12.

In its responsive pleadings, TU Electric has provided no evidence that Marcus has assigned

its rights under the Agreement to attach third parties' equipment to TU Electric's poles. Because the

record shows that Marcus is leasing capacity within its own facilities for transmission services, rather than

allowing a third party to overlash its wire onto Marcus' facilities, the issues raised in the Complaint are

not covered by the sublease prohibition of the Agreement. The issues raised do, however, involve alleged

unjust and unreasonable contractual rates, terms and conditions. We find that we have jurisdiction,

pursuant to Section 224, to regulate the rates, terms and conditions in Marcus' pole attachment agreement

in accordance with the Commission's decisions in Heritage Cablevision Assocs. of Dallas, L.P. v. Texas

Utils. Elec. Co. (^Heritage)'^ and Selkirk Communications, Inc. v. Florida Power & Light Co. {"Selkirk").^"

Appalachian Power Co. v. Capitol Cablevision Corp., 49 RR 2d 574 at para. 7 (1981) ("Section 224 creates

a forum at this Commission to resolve disputes involving pole attachment rates, terms and conditions, based on a

congressional finding of an absence of such jurisdiction at the local level. . .

Elec. Co. (^Heritage)'^ and Selkirk Communications, Inc. v. Florida Power & Light Co. {"Selkirk").^"

Appalachian Power Co. v. Capitol Cablevision Corp., 49 RR 2d 574 at para. 7 (1981) ("Section 224 creates

a forum at this Commission to resolve disputes involving pole attachment rates, terms and conditions, based on a

congressional finding of an absence of such jurisdiction at the local level. . . . Although the Commission's

jurisdiction encompasses certain practices growing out of a contractual relationship between a utility and a cable

operator, it does not extend to adjudication of the legal impact of the failure of a party to fulfill its contractual

obligations. . . . [A]s we read both the legislative history and the statute itself, Congress has nowhere expressed its

intent that this Commission be accorded the authority to preempt local jurisdiction in such matters.")

Marcus Complaint at Ex. 5.

In considering a pole attachment complaint, the Commission may "request that one or more of the parties

make additional filings or provide additional information." 47 C.F.R. § 1.1409(a) (1996).

Marcus' Response to Bureau's Information Request.

See Heritage Cablevision Assocs. of Dallas. L.P. v. Texas Utils. Elec. Co., 6 FCC Red. 7099 (1991), recon.

dismissed, 7 FCC Red. 4192, aff'd sub nom. Texas Utils. Elec. Co. v. FCC , 997 F.2d 925 (D.C. Cir. 1993).

'"Selkirk Communications, Inc. v. Florida Power & Light Co. ("Selkirk") 8 FCC Red. 387 (1993).

10366

tion." 47 C.F.R. § 1.1409(a) (1996).

Marcus' Response to Bureau's Information Request.

See Heritage Cablevision Assocs. of Dallas. L.P. v. Texas Utils. Elec. Co., 6 FCC Red. 7099 (1991), recon.

dismissed, 7 FCC Red. 4192, aff'd sub nom. Texas Utils. Elec. Co. v. FCC , 997 F.2d 925 (D.C. Cir. 1993).

'"Selkirk Communications, Inc. v. Florida Power & Light Co. ("Selkirk") 8 FCC Red. 387 (1993).

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13.

In Heritage,^^ a pole attachment complaint proceeding, the Commission adopted an

expansive definition of "cable services" for purposes of defining the scope of protection afforded cable

system operators attaching their facilities to utility poles under Section 224 of the Act, as amended in

1978.^^ In that case, Tele-Communications, Inc. ("TCI") alleged that TU Electric unjustly and unreason

ably imposed a separate charge for the attachment of facilities employed to provide nonvideo broadband

communications services, for example, data transmission services, in addition to the regulated rate TU

Electric had assessed TCI and its predecessors to attach equipment used to provide more conventional

cable television services to its subscribers.

14.

The Commission, "for purposes of clarity" defined the terms "conventional" or "traditional"

cable services as used in Heritage, "to refer to the delivery of television broadcast signals, cablecast or

access programming, or other video programming by cable television systems to subscribers

ssors to attach equipment used to provide more conventional

cable television services to its subscribers.

14.

The Commission, "for purposes of clarity" defined the terms "conventional" or "traditional"

cable services as used in Heritage, "to refer to the delivery of television broadcast signals, cablecast or

access programming, or other video programming by cable television systems to subscribers. Excluded

from this category are nonvideo and other services not associated with the provision or selection of

conventional or traditional cable services, such as electronic mail delivery, facsimile transmissions and

other data transmission services."" The Commission rejected TU Electric's challenge to the Commission's

jurisdiction to resolve the dispute under Section 224, on the grounds that Congress had not intended

Section 224 "to reach only those pole attachments supporting equipment employed exclusively (italics

original) to distribute television broadcast signals and otlier video programming.""

15.

On appeal, the Court of Appeals for the District of Columbia Circuit affirmed the

Commission's decision in Texas Utilities Electric Company v. FCC {"TUEC v. FCC")?^ The court held

that although Section 224 was ambiguous as to whether the Commission's regulatory authority extended

to cables used to transmit nonvideo communications, the Commission had reasonably interpreted the Act

to conclude that its authority extended to cables transmitting nonvideo communications.'^ The court also

noted that the Commission's interpretation was limited by the facts of the case before it: a cable operator

seeking Commission-regulated rates for all pole attachments within its system; where the cable operator

is not maintaining separate video and data networks, but rather is commingling data and video over a

single set of transmission cables. In Selkirk, the Commission, citing Heritage, held that it has jurisdiction

" Heritage Cablevision Associates of Dallas, L.P., and Texas Cable TV Association, Inc. v

ing Commission-regulated rates for all pole attachments within its system; where the cable operator

is not maintaining separate video and data networks, but rather is commingling data and video over a

single set of transmission cables. In Selkirk, the Commission, citing Heritage, held that it has jurisdiction

" Heritage Cablevision Associates of Dallas, L.P., and Texas Cable TV Association, Inc. v. Texas Utilities

Electric Company, Memorandum Opinion and Order, 6 FCC Red 7099 (1991) (Heritage), recon. dismissed, 1 FCC

Red 4192 (1992), affirmed, Texas Utils. Eiec. Co. v. FCC, 997 F.2d 925 (D.C. Cir. 1993).

"

Pub. L. No. 95-234, § 6, 92 Stat. 33, 35 (codified as amended at 47 U.S.C. § 224). Heritage, 6 FCC Red

at 7101-02. The Supreme Court has found that Congress enacted this legislation "as a solution to a perceived danger

of anticompetitive practices by utilities in connection with cable television service." FCC v. Florida Power Corp.,

480 U.S. 245, 247 (1987). By conferring jurisdiction on the Commission to regulate pole attachments. Congress

sought to constrain the ability of telephone and electric utilities to extract monopoly profits from cable television

system operators in need of pole space. Id. at 247-48. See also Alabama Power Co. v. FCC, 773 F.2d 363, 364

(D.C. Cir. 1985)

"

Heritage, 6 FCC Red at 7099 n.2.

"

Id. at 7102.

"

997 F. 2d 925 (D.C. Cir. 1993).

"

Texas Utils. Elec. Co. v. FCC, 997 F.2d 925, 932-935.

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ongress

sought to constrain the ability of telephone and electric utilities to extract monopoly profits from cable television

system operators in need of pole space. Id. at 247-48. See also Alabama Power Co. v. FCC, 773 F.2d 363, 364

(D.C. Cir. 1985)

"

Heritage, 6 FCC Red at 7099 n.2.

"

Id. at 7102.

"

997 F. 2d 925 (D.C. Cir. 1993).

"

Texas Utils. Elec. Co. v. FCC, 997 F.2d 925, 932-935.

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under Section 224 to regulate the rates charged for pole attachments that support equipment employed to

provide nonvideo services in addition to video and other traditional cable television services." In the

Telecommunications Act of 1996 ("1996 Act"),^* Congress codified the Commission's holdings in

Heritage and Selkirk by amending Section 224. Section 224 now requires the Commission to apply the

same formula currently used to determine a reasonable rate for any pole attachment used by a cable system

solely to provide cable service to "the rate for any pole attachment used by a cable system or any

telecommunications carrier ... to provide any telecommunications service.""

16.

We find that the dispute as to the rates, terms and conditions of the Agreement is within

the scope of both Heritage and Selkirk. Marcus has requested that we review the rates, terms and

conditions of a pole attachment agreement concerning pole attachments that support equipment and cables

used to distribute botli traditional cable services and data transmissions. Because the Commission has

already found that it has jurisdiction to review the rates, terms and conditions of these types of pole

attachment agreements, we will review the rates, terms and conditions of the Agreement at issue here.

B. Section 13.lA Terms and Conditions

17.

We next consider Marcus' request for relief from the nonvideo disclosure and the

nonvideo customer release and indemnification requirements of Section 13.1A of the Agreement ("Section

13.lA Requirements")

rates, terms and conditions of these types of pole

attachment agreements, we will review the rates, terms and conditions of the Agreement at issue here.

B. Section 13.lA Terms and Conditions

17.

We next consider Marcus' request for relief from the nonvideo disclosure and the

nonvideo customer release and indemnification requirements of Section 13.1A of the Agreement ("Section

13.lA Requirements"). Under Section 13.lA, Marcus must furnish TU Electric with a completed form

(Attachment E of the Agreement) indicating whether or not Marcus transmits nonvideo data through

facilities attached to TU Electric's poles. By checking the "yes" box, Marcus triggers the Section 13.1 A

Requirements and, consequently, under the Agreement it must secure from each of its nonvideo customers

a signed indemnification and release, using the form appended to the Agreement as Attachment D.

Attachment D is one-and-a-half pages long, approximately two-thirds of which is printed entirely in an

upper case font noticeably larger than the mixed-case type face used for the remainder of the Agreement.

The upper case portion of the form warns signatories that Marcus' nonvideo services may not be

completely private and that they may be interrupted or lost for a variety of reasons other than negligence,

"including, but not limited to, dialing errors, power failures, malfunctioning of wireline services or

equipment, interruptions in company interconnections to wireline exchange carriers and interexchange

carriers, and electronic or atmospheric interference." Attachment D then continues by requiring Marcus'

customers to indemnify and release TU Electric and Marcus from almost every possible circumstance of

"

In Selkirk, the equipment in question included "coaxial cable lashed to an aerial support strand which in turn,

is attached at a single point to the [utility] pole. In addition to its coaxial facilities, [the cable operator]... deployed

fiber optic cable in certain parts of its system

ng Marcus'

customers to indemnify and release TU Electric and Marcus from almost every possible circumstance of

"

In Selkirk, the equipment in question included "coaxial cable lashed to an aerial support strand which in turn,

is attached at a single point to the [utility] pole. In addition to its coaxial facilities, [the cable operator]... deployed

fiber optic cable in certain parts of its system. This fiber optic cable, like the coaxial cable, is overlashed to the

aerial support strand without the need for additional guying or anchoring." Selkirk at par. 6.

"

Pub. L. No. 104-104, 100 Stat. 56.

"

47 U.S.C. Section 224(d)(3) (1996). We note that this subsection of Section 224 will remain in effect until

the effective date of regulations which the Commission must prescribe, no later than two years after the date of

enactment of the 1996 Act, "to govern the charges for pole attachments used by telecommunications carriers to

provide telecommunications services, when the parties fail to resolve a dispute over such charges." 47 U.S.C. Section

224(eXl).

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liability.

40

18.

Marcus alleges that the real purpose behind Section 13.1A is to enable TU Electric to gain

competitively sensitive information, destroy Marcus' efforts to deploy fiber optic communications facilities

and market nonvideo services, and destroy or interfere with Marcus' nonvideo customer relationships.*"

Marcus explains that providing TU Electric with the executed copies of Attachment D is tantamount to

providing it with Marcus' entire nonvideo customer list, complete with the customers' names, addresses,

and locations, as well as the locations where Marcus possesses excesses capacity."*^ Marcus argues that

other provisions in the Agreement that require Marcus to indemnify TU Electric, provide it with insurance

coverage of $10 million, and post a bond of $20 per pole, are more than sufficient to shield TU Electric

from liability.''^

19

o customer list, complete with the customers' names, addresses,

and locations, as well as the locations where Marcus possesses excesses capacity."*^ Marcus argues that

other provisions in the Agreement that require Marcus to indemnify TU Electric, provide it with insurance

coverage of $10 million, and post a bond of $20 per pole, are more than sufficient to shield TU Electric

from liability.''^

19.

TU Electric dismisses Marcus' concerns about the disclosure of nonvideo service

information by explaining that TU Electric does not need to obtain information from Attachments D and

E in order to be able "to determine who else is offering and advertising non-video service," and that the

information is not sensitive."*" TU Electric justifies its requirement for a release and indemnification from

Marcus' nonvideo customers by claiming that TU Electric bears a higher risk of liability with data

transmission services than with traditional video services."' TU Electric also states that it has "recently

amended its standard form of pole attachment contract to reduce the insurance requirements imposed upon

cable companies."""^

20.

We disagree with TU Electric's assertion that the indemnification found in the Agreement

is inadequate to protect its interests. A review of the Agreement reveals that it provides extensive

indemnification of TU Electric by Marcus including, but not limited to, claims arising out of Marcus'

breach of the agreement or arising out of the "attachment, maintenance, replacement, relocation, repair,

modification, removal, use or operation of, or in any way arising out of . . .[ejquipment . . . installed for

the purpose of supporting [ejquipment on or in the vicinity of the poles.""'' Marcus must also indemnify

TU Electric against any claims "arising out of, relating to, caused by or incident to any Texas Utility's

Party sole or concurrent (a) negligence; (b) strict liability in tort; (c) breach of warranty, express or

"° Complaint at para. 36 and Ex. 5 (at Section 13.lA, Attach. D, and Attach. E)

for

the purpose of supporting [ejquipment on or in the vicinity of the poles.""'' Marcus must also indemnify

TU Electric against any claims "arising out of, relating to, caused by or incident to any Texas Utility's

Party sole or concurrent (a) negligence; (b) strict liability in tort; (c) breach of warranty, express or

"° Complaint at para. 36 and Ex. 5 (at Section 13.lA, Attach. D, and Attach. E).

"' Id. at para. 28, 30, 37.

Reply at para. 39.

Complaint at para. 29 and n. 5; Reply at para. 24-28.

44 Response at 8-9; TU Electric Supplemental Response at 4. TU Electric asserts, moreover, that it has never

used, nor will it ever use, the information required by Section 13.1 A for competitive purposes

Response at 8.

Response at Declaration of Milliard, par. 3.

Agreement at 17.

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implied; or (d) other fault of any nature."^^ In addition, Marcus must furnish a bond or other security "of

not less than the greater of $10,000 or $20.00 per pole" which "is subject to increase at any time and from

time to time to such amount as TU Electric may reasonably determine to be necessary."^' Because of the

all-encompassing nature of the Agreement's indemnifications in favor of TU Electric, we find that TU

Electric has failed to show that the general insurance and bond requirements of the Agreement are

inadequate to protect its interests.^"

21.

TU Electric also claims that the 1996 amendments to Section 224 "make it absolutely

essential for a utility to know whether a pole is being used by a cable system solely for video or for other

purposes, because different rates will apply.

This argument is based upon Section 224(d)," as amended

by the 1996 Act and Section 224(e)," which was added by the 1996 Act

ate to protect its interests.^"

21.

TU Electric also claims that the 1996 amendments to Section 224 "make it absolutely

essential for a utility to know whether a pole is being used by a cable system solely for video or for other

purposes, because different rates will apply.

This argument is based upon Section 224(d)," as amended

by the 1996 Act and Section 224(e)," which was added by the 1996 Act. Under the amendments to

Section 224(d), the Commission is required to prescribe regulations for pole attachment rates charged by

a utility to a cable system providing other than solely traditional cable services, as well as rates charged

by a utility to a telecommunications carrier not party to an existing pole attachment agreement. Section

224(e)(1) requires the Commission to prescribe new regulations by February 8, 1998.^'' The new

regulations, however, will not become effective until February 8, 2001."

22.

TU Electric is correct in its assertion that the amended Section 224 requires the

Commission to prescribe regulations, in the future, to govem the "charges for pole attachments used by

telecommunications carriers to provide telecommunications services.

TU Electric may also be correct

''Id

■" Agreement at 21.

See Agreement at Section 13.1 (licensee's general obligation to indemnity TU Electric against all claims

arising out of Licensee's breach of the Agreement as well as indemnifying TU Electric for all claims "arising out

of, relating to, caused by or incident to any Texas Utilities' Party; sole or concurrent (a) negligence; (b) strict liability

in tort; (c) breach of warranty, express or implied; or (d) other fault of any nature"); Sections 14.1 -14.7 (describing

the insurance to be provided by licensee to TU Electric including Workers' Compensation insurance with a statutory

limit; primary employer's liability insurance with a $100,000 liability limit, public liability and property damage

insurance, with a requirement of a $5,000,000 liability limit for less than 10,000 equipment attachments and a

$10,000,000

any nature"); Sections 14.1 -14.7 (describing

the insurance to be provided by licensee to TU Electric including Workers' Compensation insurance with a statutory

limit; primary employer's liability insurance with a $100,000 liability limit, public liability and property damage

insurance, with a requirement of a $5,000,000 liability limit for less than 10,000 equipment attachments and a

$10,000,000 liability limit for more than 10,000 equipment attachments, as well as comprehensive automobile

insurance with a liability limit of $5,000,000 per occurrence); and Section 14.8 (which requires the licensee to furnish

a bond or other security "of not less than the greater of $10,000 or $20.00 per pole" which "is subject to increase

at any time and from time to time to such amount as TU Electric may reasonably determine to be necessary.").

" Response at 8 - 9.

" 47 U.S.C Section 224(d).

" 47 U.S.C. Section 224(e).

47 U.S.C. Section 224(e)(1).

" 47 U.S.C. Section 224(e)(4).

" 47 U.S.C. Section 224(e)(1).

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Federal Communications Commission

DA 97-1527

in its assertion that, when the regulations prescribed by the Commission under Section 224 become

effective, a utility pole owner will need to know "whether a pole is being used by a cable system solely

for video or for other purposes."" Because these regulations have yet to be written, however, it would

mere speculation for us to formulate what informational requirements, if any, may be incorporated into

the regulations. Under our existing regulations, Marcus is under no obligation to TU Electric to disclose

any information regarding the lease of its capacity to third parties. On a forward-looking basis, Marcus

may need only disclose that it is providing telecommunications services. Therefore, because Marcus has

already disclosed to TU Electric that it offers telecommunications services, TU Electric's reliance on the

amended Section 224 to compel additional information from Marcus is misplaced.

23

ose

any information regarding the lease of its capacity to third parties. On a forward-looking basis, Marcus

may need only disclose that it is providing telecommunications services. Therefore, because Marcus has

already disclosed to TU Electric that it offers telecommunications services, TU Electric's reliance on the

amended Section 224 to compel additional information from Marcus is misplaced.

23.

TU Electric's own involvement in the provision of telecommunications services also makes

suspect the inclusion of the Section 13.1 A Requirements in the Agreement. TU Electric acknowledges

that it is affiliated with TU Communications and admits that TU Communications' partnerships with

PrimeCo are engaged in the provision of telecommunications services." TU Electric does not deny, or

admit, that TU Communications and PrimeCo will compete directly with Marcus in the provision of such

services." We find that the likelihood of direct competition between Marcus and TU Communications

magnifies the unreasonableness of the Section 13.1 A Requirements. The Section 13.1 A Requirements'

exaggerated warning to nonvideo customers, excessive indemnification required from, and, specific

identification of, nonvideo customers, and their location on Marcus's system, seem to exist only to

interfere with, if not to destroy, Marcus' relationship with those customers. Consequently, the Section

13.1 A Requirements appear to be an attempt by TU Electric to interfere with the provision of

telecommunications services offered by a potential, or actual, competitor. We find, therefore, that the anti

competitive motive behind the Section 13.lA Requirements only adds to their unreasonableness.

24.

Consequently, we find that TU Electric has failed to make a sufficient showing that there

is a reasonable basis for the Section 13.1 A Requirements in the Agreement. TU Electric has failed to

show that the general insurance and bond requirements of the Agreement are inadequate to protect its

interests

ompetitive motive behind the Section 13.lA Requirements only adds to their unreasonableness.

24.

Consequently, we find that TU Electric has failed to make a sufficient showing that there

is a reasonable basis for the Section 13.1 A Requirements in the Agreement. TU Electric has failed to

show that the general insurance and bond requirements of the Agreement are inadequate to protect its

interests. TU Electric has also failed to show Aat Section 224, as amended, requires the disclosure of the

names of Marcus' nonvideo transmission customers. Lacking such showings, we find that the Section

13.1 A Requirements are unjust and unreasonable under Section 224. Accordingly, we order TU Electric

to terminate both the nonvideo service notification and the customer indemnification and release

requirements of Section 13.lA.

C. Request for Third Party Information and Additional Payment

25.

We next turn to the issue raised by Marcus in its complaint concerning TU Electric's July

18, 1996 requests for information about Marcus' third party endeavors and for payment. TU Electric calls

the request^ payment "restitution" for Marcus' breach of the Agreement." Marcus argues that TU

Electric's demand for a portion of Marcus' revenues from its nonvideo services is an excessive attachment

"

Response at 9.

"

Supplemental response at 8.

"

Id. at 9.

"

TU Electric Response at 3.

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Federal Communications Commission

DA 97-1527

rate and notes that the Commission's current pole attachment rate formula applies to both video and

nonvideo communications." TU Electric disputes Marcus' interpretation of the charge, stating that, in

TUEC V. FCC, the U.S. Court of Appeals for the District of Columbia Circuit "emphasized that a cable

system could not use rights available to it for the benefit of the services provided by separate entities, even

if these entities were acquired by the cable system."" We find that TU Electric's request for restitution

is an unreasonable rate.

26

arcus' interpretation of the charge, stating that, in

TUEC V. FCC, the U.S. Court of Appeals for the District of Columbia Circuit "emphasized that a cable

system could not use rights available to it for the benefit of the services provided by separate entities, even

if these entities were acquired by the cable system."" We find that TU Electric's request for restitution

is an unreasonable rate.

26.

We also disagree with TU Electric's characterization of the TUEC v. FCC opinion. In

both Heritage and Selkirk, the Commission held that a utility cannot increase its pole attachment charges

simply because nontraditional cable services are being provided. In TUEC v. FCC, the court upheld the

Commission's finding that "a cable operator may seek Commission-regulated rates for all pole attachments

within its system.

The court determined that Section 224 "is aimed at the rates charged for pole

attachments, not the content of the transmissions carried over the attachments."" The court also noted

that TU Electric had attempted to charge the cable operator, in TUEC v. FCC, a surcharge for the

nonvideo communications carried over fiber optic cable attached to the coaxial cable, but not for the data

transmission services that it provided over coaxial c-able to local schools, fire and police departments, and

offered no basis for the disparate treatment."

The record before us shows that Marcus is leasing

capacity to third parties within its facilities; such third parties may be nonvideo as well as video providers.

According to Marcus, however, TU Electric requests only a portion of revenues derived from the provision

of nonvideo telecommunications services." There is no allegation that TU Electric requested a portion

of revenues derived from the provision of video services. For pole attachment purposes under the existing

rules, we find no reason to differentiate between the transmissions being sent through Marcus' facilities,

whether they are data transmissions or video transmissions such as leased access

sion

of nonvideo telecommunications services." There is no allegation that TU Electric requested a portion

of revenues derived from the provision of video services. For pole attachment purposes under the existing

rules, we find no reason to differentiate between the transmissions being sent through Marcus' facilities,

whether they are data transmissions or video transmissions such as leased access. Because the facts before

us show that Marcus has done nothing more than provide both nontraditional and traditional cable services

as part of its transmission services, we find TU Electric's request for payment based on Marcus' revenues

from nonvideo services to be unjust and unreasonable under Section 224.

27.

We also find TU Electric's attempt to obtain information about Marcus' third party

endeavors to be unjust and unreasonable. Marcus states that TU Electric asked Marcus to "disclose the

parties to whom, and location on Marcus' networic at which, Marcus provides non-video services.""

According to TU Electric, it sought information about "the nature and extent of any subleasing to third

parties of pole attachments ... to determine the extent of the breach and as a means toward bringing

"

Marcus Reply at para. 12.

"

Response at 6.

997 F.2d at 934 (emphasis omitted).

"

997 F.2d at 934. TU Electric had argued that the Commission should not "regulate pole attachment rates for

equipment used to carry nonvideo communications when it does not have jurisdiction to regulate the nonvideo

communications themselves." 997 F.2d at 933.

"

997 F.2d at 935.

"

Complaint at Declaration of A.B. Gleiner.

67 Complaint at 11.

10372

onse at 6.

997 F.2d at 934 (emphasis omitted).

"

997 F.2d at 934. TU Electric had argued that the Commission should not "regulate pole attachment rates for

equipment used to carry nonvideo communications when it does not have jurisdiction to regulate the nonvideo

communications themselves." 997 F.2d at 933.

"

997 F.2d at 935.

"

Complaint at Declaration of A.B. Gleiner.

67 Complaint at 11.

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Federal Communications Commission

DA 97-1527

Marcus in compliance with its agreement."'* We have not found subleasing that would be prohibited by

the Agreement. Consequently, we find that TU Electric's request for additional information is motivated

by the same anti-competitive interests that motivated TU Electric to include the Section 13.1 A

Requirements in the Agreement. Beyond its allegation regarding the possibility of subleases, TU Electric

has failed to provide a reasonable basis for requiring information about Marcus' provision of nonvideo

services to third parties. Consequently, we find TU Electric's attempt to obtain information about such

services to be an unjust and unreasonable term.

D.

Request for Declaratory Ruling

28.

In its Complaint, Marcus requests that the Commission issue a declaratoiy ruling that (1)

TU Electric's actions violate the legislative intent and public interest objectives of the 1996 Act; (2)

terminates the provision requiring cable operators to secure the customer release set forth at Section 13.1A

in all TU Electric pole attachment agreements; and (3) terminates the provision contained in Section 13. lA

and Attachment E of all TU Electric pole attachment agreements requiring cable operators to disclose their

provision of nonvideo services." Given the standardized nature of TU Electric's pole attachment

agreements,'" we agree that declaratory relief is appropriate in this situation. Because of their anti

competitive effect, we find that these provisions are unreasonable terms and conditions in any TU Electric

pole attachment agreement

le attachment agreements requiring cable operators to disclose their

provision of nonvideo services." Given the standardized nature of TU Electric's pole attachment

agreements,'" we agree that declaratory relief is appropriate in this situation. Because of their anti

competitive effect, we find that these provisions are unreasonable terms and conditions in any TU Electric

pole attachment agreement. Consequently, we will terminate, in all TU Electric pole attachment

agreements, the provision requiring cable operators to secure the customer release set forth at Section

13.lA, as well as the provision contained in Section 13.lA and Attachment E requiring cable operators

to disclose their provision of nonvideo services.

E.

Request for Actual and Punitive Damages

29.

Also in its Complaint, Marcus asks the Commission to award actual and punitive damages

because of TU Electric's actions." Other than the request itself, Marcus has not attempted to substantiate

its claim for damages with any showing. We find that while Marcus is entitled to the other relief granted

in this order, it has failed to show that it is entitled to damages, actual or punitive. Consequently, its

request for such damages is denied.

rV. REQUEST FOR CONFroENTIALITY

30.

In order to assess the nature of the relationship between Marcus and ASCI and any other

third parties relevant to this case, the Commission, on December 2, 1996, asked Marcus for copies of all

agreements Marcus has entered into for the sale or resale of capacity on facilities subject to the

Agreement. On December 18. 1996, Marcus submitted partial copies of four agreements. Two are copies

of excerpts from its franchise agreements with the cities of Fort Worth and Hurst, Texas. Marcus also

submitted, under seal and request for confidentiality, copies of two partially redacted agreements with

Response at 3.

Complaint at 16.

™ See Declaration of Milliard at par. 2.

"

Complaint at 16.

10373

ement. On December 18. 1996, Marcus submitted partial copies of four agreements. Two are copies

of excerpts from its franchise agreements with the cities of Fort Worth and Hurst, Texas. Marcus also

submitted, under seal and request for confidentiality, copies of two partially redacted agreements with

Response at 3.

Complaint at 16.

™ See Declaration of Milliard at par. 2.

"

Complaint at 16.

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Federal Communications Commission

97-1527

ACSI,^and TCG Dall^ ("TCG"), respectively/^ Citing Sections 0.457 and 0.459 of the Commission's

Rules, Marcus asks that we refrain from making the submitted ACSI and TCG agreements available for

public inspection. On December 31, 1996, TU Electric filed an opposition to Marcus' request for

confidentiality.

Marcus filed a reply on January 10, 1997.''

'

f

for confidential treatment of its agreements with ACSI and

TCG by explaining that the agreements contain "proprietary information which includes trade secrets and

commercial information", as well as "highly sensitive infoimation on the contract terms, network route

maps, and other data." Marcus further describes the agreements as including "the specific facilities and

routes over which Marcus' customers' communications will be carried, negotiated wholesale transport

rates, technical and confidential transport standards [note omitted] and other information

According

to Marcus, allowing anyone other than Bureau staff access to the agreements would cause Marcus and ite

customers "substantial and irreparable competitive injury."'® Marcus argues that requiring cable operators

to disclose competitively sensitive materials to the veiy competitors who pose the greatest threat would

undermine the Commission's confidentiality procedures." Marcus explains that the competitor that

concerns it the most is TU Electric.®"

•

™

opposes Marcus' request for confidentiality and asks the Commission not to

pennit Marcus partial redaction of the agreements

at requiring cable operators

to disclose competitively sensitive materials to the veiy competitors who pose the greatest threat would

undermine the Commission's confidentiality procedures." Marcus explains that the competitor that

concerns it the most is TU Electric.®"

•

™

opposes Marcus' request for confidentiality and asks the Commission not to

pennit Marcus partial redaction of the agreements. TU Electric argues that Marcus has not met the

burden of proof required by the Commission's rules.®' TU Electric also maintains that denying it access

to the agreements would interfere with the due process requirements of the Constitution and the

Both agreements were originally entered into by Sammons Communications, Inc., Marcus' predecessor The

redacted copies of the agreements submitted by Marcus provided us with sufficient information regarding the

relationship between Marcus and the third parties relevant to this case. We note, however, that the Commission

always has the right to require unredacted copies of such agreements, if necessary.

"

47 C.F.R. §§ 0.457, 0.459 (1996).

"

TU Electric Opposition to Request for Confidential Treatment ("TU Electric Confidentiality Opposition").

75

Marcus Reply to Opposition to Request to Withhold Information from Public Inspection ("Marcus

Contidentiality Reply ).

"

Marcus Confidentiality Request at 1 - 2.

"

Marcus Confidentiality Reply at 4-5.

'® Id at 7.

'" Id Marcus notes that in the TU Electric Supplemental Response, TU Electric refuses to disclose the extent

ot Its investment in PnmeCo, claiming that such information is sensitive. Id at n. 6.

r'S

J^eP'y at 6. See also Marcus Request to Withhold Information from Public Inspection

(

Marcus Confidentiality Request").

"

TU Electric Confidentiality Opposition at 3 - 4.

10374

y at 4-5.

'® Id at 7.

'" Id Marcus notes that in the TU Electric Supplemental Response, TU Electric refuses to disclose the extent

ot Its investment in PnmeCo, claiming that such information is sensitive. Id at n. 6.

r'S

J^eP'y at 6. See also Marcus Request to Withhold Information from Public Inspection

(

Marcus Confidentiality Request").

"

TU Electric Confidentiality Opposition at 3 - 4.

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Federal Communications Commission

DA 97-1527

Administrative Procedure Act that TU Electric be afforded notice of the evidence against it and an

opportunity to respond.'^ Finally, TU Electric claims that access to the redacted information in the

agreements may be necessary to determine the true nature of the relationships between Marcus and the

third parties, for purposes both of the instant case and a separate, ongoing proceeding before the

Commission involving TU Electric and TCG."

33.

Section 0.459 of the Commission's rules allows a person who is submitting information

to the Commission to request that such information not be made routinely available for public inspection.^''

The standards of this section are govemed by the Freedom of Information Act ("FOIA"), and the

requesting party must show "by a preponderance of the evidence" that non-disclosure is consistent with

the pertinent provisions of the FOIA.*'

34.

Exemption 4 of the FOIA permits the Commission, in its discretion, to withhold from

disclosure any documents containing either (I) trade secrets or (2) information which is (a) commercial

or financial, and (b) obtained from a person, and (c) privileged or confidential.*^ Commercial or financial

information is privileged or confidential if either (I) disclosure of the information is likely to impair the

government's ability to obtain necessary information in the future or (2) disclosure is likely to cause

substantial harm to the competitive position of the person from whom the information was obtained.*^

The Court of Appeals for the District of Columbia later reaffirmed this test, but limited it to those ca

ileged or confidential if either (I) disclosure of the information is likely to impair the

government's ability to obtain necessary information in the future or (2) disclosure is likely to cause

substantial harm to the competitive position of the person from whom the information was obtained.*^

The Court of Appeals for the District of Columbia later reaffirmed this test, but limited it to those cases

involving information that persons were required to provide the govemment. **

35.

The Commission has said, "the entity or person seeking confidentiality must show that

substantial competitive injury is likely to result from disclosure. Wliile an elaborate economic analysis

need not be made to establish the likelihood of substantial competitive injury, 'conclusory and generalized

allegations' cannot support nondisclosure."*' Instead, the requesting must party demonstrate by a

*■ TU Electric Confidentiality Opposition at 4 - 6.

*' TU Electric Confidentiality Opposition at 6. The referenced proceeding is In re TCG Dallas, Motion for Cease

and Desist Order, PA 96-007 (filed Nov. 19, 1996).

, 84

85

86

87

47 C.F.R. § 0.459(a).

47 C.F.R. § 0.459(d)). See also 5 U.S.C. § 552, et seq. (FOIA).

5 U.S.C. § 552(b)(4).

See Nat'I Parks and Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).

** See Critical Mass Energy Project v. NRC, 975 F.2d 871 (D.C. Cir. 1992). In cases involving financial or

commercial information that was supplied voluntarily to the govemment, Exemption 4 applies if the provider would

not customarily release the information to the public. Id. at 879-880.

National Exchange Carrier Ass 'n, Inc. (Release of Common Line Pool Audit Report), 5 FCC Red 7184 (1990)

(quoting Aar7 Parks and conservation Ass'n v. Kleppe, 547 F.2d 673, 680-81 (D.C. Cir. 1976)).

10375

inancial or

commercial information that was supplied voluntarily to the govemment, Exemption 4 applies if the provider would

not customarily release the information to the public. Id. at 879-880.

National Exchange Carrier Ass 'n, Inc. (Release of Common Line Pool Audit Report), 5 FCC Red 7184 (1990)

(quoting Aar7 Parks and conservation Ass'n v. Kleppe, 547 F.2d 673, 680-81 (D.C. Cir. 1976)).

10375

Federal Communications Commission

DA 97-1527

preponderance of the evidence the likelihood of competitive harm.'" Moreover, the Commission will not

honor "casual" requests for confidentiality."

36.

We find that Marcus has made a sufficient showing tliat its agreements with ACSI and

TCG ("agreements") are exempt from mandatory public disclosure under Exemption 4 of the FOIA which

protects "confidential" commercial and financial information.'^ Because release of these agreements could

cause substantial competitive harm to Marcus, we find that the agreements qualify as "confidential"

information under the second prong of Exemption 4 which protects information if disclosure is likely to

cause substantial harm to the competitive position of the person from whom the information was obtained.

The Commission has previously granted confidential treatment for tariff support data and rejected efforts

of a competitor to secure access to such data in Southwestern Bell Telephone Company ("SWBT').^^ In

that order, the Commission found that disclosure of confidential information "could substantially harm the

competitive position of SWBT by assisting competitors in preparing marketing strategies to use indirect

competition with SWBT."^* The Commission has also denied attempts to secure access to confidential

commercial telecommunications lease agreements submitted to the Commission in Thomas N. Locke

{"Locke").^^ In Locke, the Commission gave confidential treatment to building leases between U.S. West

and various tenants, accepting U.S

sisting competitors in preparing marketing strategies to use indirect

competition with SWBT."^* The Commission has also denied attempts to secure access to confidential

commercial telecommunications lease agreements submitted to the Commission in Thomas N. Locke

{"Locke").^^ In Locke, the Commission gave confidential treatment to building leases between U.S. West

and various tenants, accepting U.S. West's contention that "release of the information could give

prospective or current tenants or leasing competitors valuable insight into how U.S. West structures and

prices its leasing operations."'"

37.

We find that the rationale of the holdings in SWBT and Locke apply to the facts presently

before us. Marcus is attempting to protect sensitive commercial information, i.e., the terms and conditions

of its agreements with third parties, from public inspection, and specifically, from a competitor. We have

previously commented on the competitive positions of TU Electric, and its affiliates, and Marcus in the

provision of telecommunications services. We have found that TU Electric's attempts to obtain

information about Marcus' nonvideo customers is anti-competitive behavior motivated by a desire to

interfere with Marcus' relationships with its nonvideo customers. To release the terms and conditions of

Marcus' agreements with its customers to the public, and to TU Electric in particular, would only

disadvantage Marcus to a greater degree as it attempts to compete with TU Electric and its affiliates in

the provision of telecommunications services.

38.

Contrary to TU Electric's contentions, we also find that withholding access to the

agreements from public disclosure does not interfere with the due process requirements of the Constitution

TKR Cable of Ramapo, 11 FCC Red. 3538 at para. 10 (1996).

"

See 47 C.F.R. § 0.459(c); Western Cities Broadcasting, Inc., 6 FCC Red. 3599, 3600 (1991).

"

See 5 U.S.C. Section 552(b)(4).

"

Southwestern Bell Telephone Company, Tariff FCC No. 73, DA 96-1927, released November 19, 1996

s to the

agreements from public disclosure does not interfere with the due process requirements of the Constitution

TKR Cable of Ramapo, 11 FCC Red. 3538 at para. 10 (1996).

"

See 47 C.F.R. § 0.459(c); Western Cities Broadcasting, Inc., 6 FCC Red. 3599, 3600 (1991).

"

See 5 U.S.C. Section 552(b)(4).

"

Southwestern Bell Telephone Company, Tariff FCC No. 73, DA 96-1927, released November 19, 1996.

Id. at par. 3.

"

In the Matter of Thomas N. Locke, 8 FCC Red 8746 (1996).

Locke at par. 4.

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Federal Communications Commission

DA 97-1527

and the Administrative Procedure Act. We have already found that TU Electric has no basis to require

from Marcus its nonvideo customers' names, addresses, and specific locations on Marcus' cable system.

Consequently, TU Electric has no obvious right to review the even more specific terms of the agreements

between Marcus and two of its nonvideo customers.

V. CONCLUSION

39.

We find that Section 224 empowers the Commission to regulate the rates, terms, and

conditions of the pole attachment agreement at issue, and that TU Electric's requirements for release from

liability by Marcus' customers and disclosure of nonvideo transmissions over Marcus' facilities to be

unreasonable under Section 224. Therefore, we terminate the unreasonable requirements of Section

13.1 A and Attachments D and E of the pole attachment agreement to the extent indicated herein. We

also grant Marcus' request for a declaratory ruling terminating those provisions in all TU Electric pole

attachment agreement. We

'further find that under Section 224 TU Electric's requirement that Marcus

provide information about, and payment for, third party use of Marcus' cables is unreasonable. We also

find that Marcus has failed to make a sufficient showing to support its request for actual and punitive

damages and, consequently, we deny Marcus' request

those provisions in all TU Electric pole

attachment agreement. We

'further find that under Section 224 TU Electric's requirement that Marcus

provide information about, and payment for, third party use of Marcus' cables is unreasonable. We also

find that Marcus has failed to make a sufficient showing to support its request for actual and punitive

damages and, consequently, we deny Marcus' request.

Moreover, we find that Marcus has made a

sufficient showing to support its request to maintain the confidentiality of the copies of its agreements with

third party customers that were submitted in response to a Commission request for additional information.

Therefore, we grant Marcus' request for confidential treatment of the copies of the two third party

agreements it submitted.

VI. ORDERING CLAUSES

40.

Accordingly, IT IS ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 224, and Sections 1.2 and

1.1401 through 1.1416 of the Commission's rules, 47 C.F.R. §§ 1.2 and 1.1401 through 1.1416, that the

complaint of Marcus Cable Associates, L.F. against Texas Utilities Electric Company IS GRANTED to

the extent indicated above.

41.

IT IS FURTHER ORDERED, pursuant to Sections 4(1), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 224, and Section 1.1410 of

the Commission's rules, 47 C.F.R. § 1.1410, that the request by complainant for actual and punitive

damages IS DENIED.

42.

IT IS FURTHER ORDERED, pursuant to Sections 4(i) and 4(j) of the Communications

Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and Section 1.2 of the Commission's rules, 47

C.F.R. § 1.2, that the request for declaratory ruling by complainant IS GRANTED.

43.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 224, and Section 1.1410(a)

of the Commission's rules, 47 C.F.R

cations

Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and Section 1.2 of the Commission's rules, 47

C.F.R. § 1.2, that the request for declaratory ruling by complainant IS GRANTED.

43.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 224, and Section 1.1410(a)

of the Commission's rules, 47 C.F.R. § 1.1410(a), that the requirement that complainant secure the

customer release and indemnification set forth in Section 13.1A and Attachment D of the pole attachment

agreement IS TERMINATED, effective upon release of this order.

44.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 224, and Section 1.1410(a)

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Federal Communications Commission

DA 97-1527

of the Commission's rules, 47 C.F.R. § 1.1410(a), that the requirement that a cable operator secure the

customer release and indemnification set forth in Section 13.1 A and Attachment D of the pole attachment

agreement IS TERMINATED in all TU Electric pole attachment agreements, effective upon release of this

order.

45.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 224, and Section 1.1410(a)

of the Commission's rule.s, 47 C.F.R. § 1.1410(a), that the provision contained in Section 13.lA and

Attachment E of the pole attachment agreement requiring complainant to disclose its provision of nonvideo

services IS TERMINATED, effective upon release of this order.

46.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 1540), and 224, and Section 1.1410(a)

of the Commission's rules, 47 C.F.R

in Section 13.lA and

Attachment E of the pole attachment agreement requiring complainant to disclose its provision of nonvideo

services IS TERMINATED, effective upon release of this order.

46.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 1540), and 224, and Section 1.1410(a)

of the Commission's rules, 47 C.F.R. § 1.1410(a), that the provision contained in Section 13.lA and

Attachment E of the pole attachment agreement requiring a cable operator to disclose its provision of

nonvideo services IS TERMINATED in all TU Electric pole attachment agreements, effective upon release

of this order.

47.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 403 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 403, and Section 0.459 of

the Commission's rules, 47 C.F.R. § 0.459, that the request by complainant to withhold from public

inspection the redacted copy of its agreement with American Communication Services, Inc., as submitted

to the Commission during this proceeding, IS GRANTED.

48.

IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 403 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), and 403, and Section 0.459 of

the Commission's rules, 47 C.F.R. § 0.459, that the request by complainant to withhold from public

inspection the redacted copy of its agreement with TCG Dallas, as submitted to the Commission during

this proceeding, IS GRANTED.

49.

IT IS FURTHER ORDERED, pursuant to Section 1.3 of the Commission's rules, 47

C.F.R. § 1.3, for the purposes of this proceeding. Sections 0.453(n) and 0.455(d), 47 C.F.R. § § 0.453(n),

0.455(d), as to the Marcus agreements with ASCI and TCG Dallas submitted to the Commission during

this proceeding, ARE WAIVED.

50.

As required by Section 0.459(d) of the Commission's rules, 47 C.F.R. § 0.459(d), a copy

of this ruling has been forwarded to the Commission's Office of General Counsel.

51

.3, for the purposes of this proceeding. Sections 0.453(n) and 0.455(d), 47 C.F.R. § § 0.453(n),

0.455(d), as to the Marcus agreements with ASCI and TCG Dallas submitted to the Commission during

this proceeding, ARE WAIVED.

50.

As required by Section 0.459(d) of the Commission's rules, 47 C.F.R. § 0.459(d), a copy

of this ruling has been forwarded to the Commission's Office of General Counsel.

51.

This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated

by Section 0.321 of the Commission's Rules, 47 C.F.R. § 0.321.

FEDERAL COMMUNICATIONS COMMISSION

Meredith J. Jones

Chief, Cable Services Bureau

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