Fcc v. Florida Power Corp., 480 U.S. 245 (1987)

Federal Communications Commission v. Florida Power Corp.

No. 85-1658.

Argued December 3, 1986
Decided February 25, 1987 *
480 U.S. 245

APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR

THE ELEVENTH CIRCUIT

Syllabus

The Pole Attachments Act (Act) empowers the Federal Communications Commission (FCC), in the absence of parallel state regulation, to determine "just and reasonable" rates that utility companies may charge cable television systems for using utility poles as the physical medium for stringing television cable (47 U.S.C. § 224(b)(1)). The Act, in effect, also provides a range of reasonableness within which the FCC may set rates when it indicates that a minimum reasonable rate is equivalent to the marginal cost of providing pole attachments, while the maximum reasonable rate is determined by computing the fully allocated cost of the construction and operation of each pole to which cable is attached (47 U.S.C. § 224(d)(1)). Upon the complaints of three cable operators alleging that the yearly per-pole attachment rentals charged them by appellee Florida Power Corporation -- $7.15, $6.24, and $5.50, respectively -- were unreasonable, the FCC’s Common Carrier Bureau issued orders reforming each of the pole attachment agreements to provide for yearly rents of $1.79 per pole. These orders were upheld by the FCC, which rejected appellee’s constitutional arguments under the Takings and Due Process Clauses. However, on review, the Court of Appeals held that the Act violated the Fifth Amendment. The court first concluded that the Act authorized a permanent physical occupation of property, constituting a per se taking for which compensation must be paid under Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419. The court then struck down the Act under the Fifth Amendment on the ground that its authorization to the FCC to make initial rate determinations under prescribed standards usurped an exclusively judicial function.

Held:

1. The Act does not authorize a taking of property within the meaning of the Fifth Amendment. Pp. 250-254.

(a) The Court of Appeals erred in applying Loretto’s narrow per se rule, since the element of required acquiescence is at the heart of the concept of occupation under Loretto, whereas nothing in the Act, as interpreted by the FCC, requires utility companies to give cable companies space on utility poles or prohibits utility companies from refusing to enter into attachment agreements. Since the Act clearly contemplates voluntary commercial leases, rather than forced governmental licensing, it merely regulates the economic relations of utility company landlords and cable company tenants, which regulation is not a per se taking under Loretto. Pp. 250-253.

(b) The FCC order did not effect a taking under traditional Fifth Amendment standards, which permit governmental regulation of rates chargeable on the use of private property devoted to public purposes so long as the rates set are not confiscatory. Here, the rate imposed was calculated according to the Act’s maximum rate formula, which is not confiscatory since it provides for the recovery of fully allocated costs, including the actual cost of capital. Pp. 253-254.

2. Because the Act does not authorize a taking under the Fifth Amendment, it is unnecessary to review the Court of Appeals’ holding that the Act is unconstitutional. P. 254.

772 F.2d 1537, reversed.

MARSHALL, J., delivered the opinion for a unanimous Court. POWELL, J., filed a concurring opinion, in which O’CONNOR, J., joined, post, p. 254.