criminate among the users of the District's poles. Accordingly, the District's pole attachment charges are applied fairly and uniformly to all pole users. For the record, the following parties are currently placing their attachments on the District's poles pursuant to the District's schedule of pole attachment charges: Acme TV Cable Co., Boeing Co., Bonneville Power Administration, Broadview Cablevision, Bud Ricketts, Church of the Good Shepherd, Continental Telephone Co., Crystal Lake Club, Darrington TV Cable Co., Donald W. Schroeder, Everett Cablevision, Everett Trust & Savings Bank, General Telephone Company of the Northwest, Kirstein Oil Co., Liberty Cable Television, Marion Rockwell, Pacific Northwest Bell Telephone Co., Paul Tastad, Port of Everett, Scott Paper Co., U.S. Department of the Navy, Valley Concrete Co., Weyerhaeuser, and Wilbur H. Rainwater. With the exception of several of the cable television companies, all of the above named parties are presently paying for their pole attachments pursuant to the District's schedule of pole attachment charges. Certain of the cable television companies, as we have indicated previously, have refused to pay the current pole attachment charges and the matter is presently pending before the Washington State Supreme Court. In any event, the District believes that a formula which establishes a specific pole attachment charge for cable television or another specific group of pole users will result in discrimination between and among the users of the District's poles. Such a result is likely to follow any legislative formula for determining pole attachment charges for cable television. And if all non-communication pole users are billed at the rates determined under the legislative formula, the pole attachment revenue will be reduced accordingly and the pole owner will be required to absorb a disproportionate cost of owning and maintaining the poles. If anything, the pole owner should be given some special consideration; he should not be required to pay the costs and give the pole users a free ride. The second Constitutional provision of concern is Article VIII, Section 7, of the Washington State Constitution which provides: Credit not to be loaned. No county, city, town or other municipal corporation, except for the necessary support of the poor and infirmed, or become directly or indirectly the owner of any stock in or bonds of any association, company or association. A number of other states have similar constitutional prohibitions. The Washington State Supreme Court has interpreted this provision as prohibiting a municipal corporation to establish adequate charges for the use of its property. Otherwise, the municipal corporation is making a gift of its property. Any legislative formula which would prevent a Washington municipal corporation from establishing an adequate charge for the use of its property would be in violation of the Washington State Constitution. And the District specifically believes that the proposed formula in S. 1547 would not result in adequate consideration for the use of the District's poles. I sincerely hope that the foregoing is responsive to your questions. If you have any additional questions, or require any further information to clarify our position, please let me know. Thank you. Very truly yours, SNOHOMISH COUNTY P.U.D. No. 1, Senator HOLLINGS. The committee will be in recess until 10 o'clock in the morning. [Whereupon, the committee adjourned, to reconvene at 10 a.m. the following day, Friday, June 24, 1977.] COMMUNICATIONS ACT AMENDMENTS OF 1977 FRIDAY, JUNE 24, 1977 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, D.C. The subcommittee was reconvened, pursuant to adjournment, at 10 a.m. in room 235 of the Russell Senate Office Building; Hon. Ernest F. Hollings (chairman of the subcommittee) presiding. Senator SCHMITT [presiding]. We will come to order and continue the subcommittee's hearings on S. 1547, amendments to the Communications Act, and in particular, amendments that would alter the forfeiture provisions of the act, and deal with the very sticky question of pole attachments. This morning we have as witnesses Mr. Alexander J. Kalinski, Mr. A. Joseph Dowd, Mr. Northcutt Ely and Mr. Peter Athanas. I hope I pronounced those names correctly. If not, you can correct them as you come forward. Maybe all four of you gentlemen would like to take the panel's table together and we will get started. I will have questions when you complete your testimony. Are we missing one of our witnesses? STATEMENTS OF ALEXANDER J. KALINSKI, PRESIDENT, NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS; JOSEPH A. DOWD, EDISON ELECTRIC INSTITUTE; ACCOMPANIED BY EDWARD D. FRYE; NORTHCUTT ELY, GENERAL COUNSEL, AMERICAL PUBLIC POWER ASSOCIATION; AND PETER ATHANAS, MEMBER, BOARD OF DIRECTORS, COMMUNITY ANTENNA TELEVISION ASSOCIATION; ACCOMPANIED BY RICHARD BROWN Mr. KALINSKI. Apparently. Senator SCHMITT. Mr. Kalinski, Mr. Dowd, Mr. Ely. Mr. Athanas is not here yet. Mr. ATHANAS. I'm here. Senator SCHMITT. Oh. There you are. Feel free to join us. Mr. ATHANAS. Thank you. Senator SCHMITT. Mr. Kalinski, would you begin and if you would like to summarize your testimony and submit the entire testimony for the record, that would be fine; whichever you prefer. Mr. KALINSKI. Mr. Chairman and members of name is Alexander J. Kalinski, president of the (139) .. my ⚫ion 96-624 O - 77 of Regulatory Utility Commissioners, commonly known as NARUC, and I am here today on behalf of the association. Accompanying me in the room are Paul Rodgers, general counsel of NARUC and Alvina M. McHale, director of congressional relations of NARUC. We will submit, as you have indicated, our prepared remarks on S. 1547, and I will just briefly summarize them. My remarks will be limited to the pole attachment section of the bill. Last year, the NARUC opposed the bill that was introduced in the House, because it gave jurisdiction to the FCC in such a way that States could be precluded from exercising_jurisdiction over pole attachments. That bill did not pass last year. Earlier this year Representative Lionel Van Deerlin, chairman of the House Subcommittee on Communications, suggested to the National Cable Television Association and to NARUC that we discuss the matter and see if we could agree on a proposed draft of legislation which would be acceptable to both associations. This was done in early February; both associations approved the draft which is now before this committee for consideration. Essentially the act provides that the FCC shall regulate the rates, terms, and conditions of pole attachments if a State does not do so. It prescribes a formula whether it's the FCC or a State jurisdiction, that's to be applied to determine the rates, terms, and conditions regarding pole attachments. And the States believe that the present proposed legislation will solve a situation that has been going on for some time. As we understand it, for some 7 years now there has been an attempt to resolve this problem. It is a problem that exists because only seven States at the present time regulate cable television. The cable television industry is still basically in its infancy. The problem is expanding because there are now 12 million cable TV subscribers in the United States, a number which is growing by increasing amounts each year. At the present time there is no forum for resolving the matter of the rates, terms, and conditions for pole attachments. This legislation would resolve that problem. It is a desirable piece of legislation. The NARUC supports it. The National Cable Television Association supports it. And we believe that it provides an equitable solution to a problem that exists and needs to be solved at this time. I'll be happy to try to answer any questions if there are any. Senator SCHMITT. Does your association prefer State regulation to FCC regulation in this area? Mr. KALINSKI. Generally speaking, yes. The reason that only seven States at the present time regulate cable television is that there hasn't been any great demand for State regulation in this area. In my State of New Hampshire, for example, cable television legislation has been proposed on several occasions, but the legislature has not passed it as yet because there hasn't been that much of a problem. In other words, the situation in my State has been such that the legislature hasn't felt it was necessary to take action yet. But since the first time the bill was proposed in our State legislature, there has been a great expansion of cable TV activity and it's just a matter of time before our State, I'm sure, will assume jurisdiction. I'm sure that this is the case in most States. This bill would provide some incentive because if the State did not take jurisdiction under this bill, then the FCC would. In any situation involving local matters, the State jurisdictions almost always historically have taken action. They would prefer to have matters resolved on the local level rather than in Washington when the matters are mostly of local concern and could be handled better at the local level. Senator SCHMITT. Chairman Wiley told us yesterday that the Commission preferred the States exercise this authority and recommended a longer period of time be allowed after passage of the act for the States to assume that responsibility. Do you concur in that, and do you have any other incentives that you might recommend for the States to take action? Mr. KALINSKI. No; I do not concur in that. As I said, it's been 7 years at least that the problem has existed. At the present time there is no forum for a cable TV company to use to have this problem resolved if the State has not assumed jurisdiction. And under this bill, the cable TV industry will either go to the State that has jurisdiction or it will go to the FCC. The bill provides that the FCC shall exercise jurisdiction over those terms and conditions if a State does not do so. Senator SCHMITT. But in most States this would take legislative action. Is it 30 days that the bill provides for? I know in my home State of New Mexico, as a matter of fact, it would be very difficult to have that done within 2 years because of the way the legislature meets and what they deal with on alternative years. So, I think Chairman Wiley's suggestion is that you should give the States, if there were a bill in existence, give them time to comply. Mr. KALINSKI. It may well be, but this bill does not preclude a State from taking jurisdiction at any time. In other words, if the bill passes now and a State assumes jurisdiction 2 years from now, that would exclude the FCC from jurisdiction. The language in this bill is patterned after the existing section of the Communications Act, section 221 (B), for example, excludes and exempts local exchange sevice rates of telephones. Whenever a State assumes jurisdiction under this act, the FCC would no longer have jurisdiction. If a State did not do so, then the FCC would be required to do so. Senator SCHMITT. Do you not think that once the Federal Government was exercising that jurisdiction it would be a great disincentive for the State to assume it? Mr. KALINSKI. I don't believe so. If there is any questions about it, you could amend the bill to clearly specify what I have just said, but I don't believe the present language precludes a State from assuming jurisdiction after the FCC does. Senator SCHMITT. Yesterday the subcommittee was told that in 1971 your association passed a resolution urging the States to assume jurisdiction over pole attachments. Mr. KALINSKI. That's true. Senator SCHMITT. Now we only have, you said seven; I think our information is eight States have done this. Do you think the passage of the legislation itself will act as a stimulus? |