*1 FEDERAL COMMUNICATIONS COMMISSION et al. v.
FLORIDA POWER CORP. et al. 25, Argued February No. 85-1658. December 1986 Decided 1987* Inc., 85-1660, Cable, *Together Group et with No. W al. v. Florida al., appeal Corp. Power et also on from the same court.
Marshall, J., opinion Powell, delivered the for a unanimous Court. J., O’Connor, post, p. concurring opinion, J., joined, in filed a which 254.
Deputy argued Solicitor General Wallace for cause appellants in 85-1658. him No. With on the brief were Shapiro, Fried, Solicitor General Harriet S. and D. Jack Jay argued appellants Smith. E. Ricks the cause in for him Fox, No. 85-1660. With on the briefs were Brenda L. Prettyman, Christopher Redding. Jr., E. Barrett and J. Topols argued appellees Allan J. the cause in both appellee Corp. cases and filed a brief for Florida Power Harry Peyton him on the A. With brief was Evertz III. G. Wright appellees Bowman III and Daniel J. filed a brief for Shirley Fujimoto Ralph Alabama Power Co. et al. S. and appellee Tampa A. Simmons filed a brief for Co.† Electric †Paul Glist filed a brief for the Texas Cable TV Association, Inc., et al. as amici curiae urging reversal No. 85-1658.
Briefs of amici curiae urging affirmance were filed for the Edison Elec- Sagett; Robert L. Baum and Jan J. by tric Institute for the Mountain Tollin; L. Andrew Telephone Telegraph States Co. et al. and for Ronald A. Zumbrun H. John Legal the Pacific Foundation Findley. delivered the opinion the Court.
Justice Marshall These cases present consolidated from a appeals de- single cision of the United States Court of for the Eleventh Circuit (the that 47 holding § U. S. C. 224 Pole Attachments Act) effects an unconstitutional without property just compensation.
I The Pole Attachments Act, Stat. 35, as amended, 47 U. S. C. §224, was enacted by Congress as a solution to a perceived danger anticompetitive practices by utilities connection with cable television service. Cable television op- erators, order to deliver television signals their subscrib- ers, must have a physical carrier for the cable; most in- *3 stances underground installation of the necessary cables is impossible or impracticable. Utility company poles provide, under such circumstances, virtually only the practical physical medium for the installation of television cables. Over the past 30 years, utility companies throughout the have country en- tered into arrangements for the of leasing space on to poles operators of cable television systems. These contracts have generally provided for the payment by the cable of a companies yearly rent for on each space to pole which cables were at- tached, the fixed costs of making modifications to the poles and of physical installation of cables being borne the by cable oper- ators. In many States the rates charged the by utility compa- nies for these attachments have not been to subject regulation.
In to response arguments by cable operators that utility companies were their exploiting position monopoly by engag- ing widespread overcharging, Congress the Pole Attach- ments Act authorized the Federal Communications Commis- sion fill to the left gap by state systems of public utilities
Briefs of amici curiae were filed for the Association of American Rail- by Paul A. Cunningham roads Kolson; and Kenneth P. and for Nor-West Cable Farrow, Schildhause, Harold R. by Communications et al. Sol and Siegfried Hesse. pp. Rep. 12-14 95-580, regulation.1 No. S. See operating company any in a State provides cable Act that regulate and conditions terms, rates, the not does which overcharging alleged pole relief from seek attachments “regulate empowered the to Commission, which the before provide pole to attachments for and conditions terms, rates, just reason- and conditions are terms, and rates, that such 224(b)(1). § establishes a The Act 47 U. S. C. . . . .” able pro- rates, determination the Commission’s standard utility just if it assures viding and reasonable “a rate is that providing recovery costs than the additional of not less the by amount determined pole than an nor more attachments, space, or the percentage multiplying the total usable the capacity, which is oc- percentage or conduit of the total duct operating pole sum of the cupied attachment utility capital expenses attributable costs of and actual 224(d)(1). § right-of-way.” pole, or duct, conduit, entire (Florida Corporation appellee Florida Power In 1963, Power) appel- agreement pole with attachment into a entered (Cox). Corporation Power sub- Florida Cablevision lant Cox purposes for similar sequently, 1980, contracted in 1977and Teleprompter Corporation Teleprompter South- with (Acton), (Teleprompter), CATV, Acton Inc. Inc. east, Teleprompter filed a com- respectively.2 In November per pole alleging rent of its 1980 plaint FCC, with February 1981, In Act. under the unreasonable was $6.24 *4 agree- concerning complaint its the rate under filed a Acton July per pole. the Commis- 1981, In was ment, $7.15 which 1 overcharg allegations of investigated previously had The Commission pole jurisdiction because it had no utilities, by but had concluded ing the by or radio” under Com wire not “communications were attachments 151. See Cali § amended, 1064, 47 U. S. C. Act, 48 Stat. munications (1977). Co., 758 Telephone 64 F. C. C. 2d Water & fornia 2 minimum were for a and Acton agreements with Cox Power’s Florida months’ no by party either on six year, thereafter terminable of one term of a minimum term Teleprompter provided for with agreement The tice. notice. on six months’ thereafter years, terminable 57s
249 opin- sion’s Common Carrier Bureau issued a memorandum finding Teleprompter in Acton, ion and order favor of and reforming agreements provide yearly the in to both cases for per pole, ordering rents of and refunds excess rents $1.79 paid filing complaints.3 after the of the Florida Power filed application by during pendency an for review the the FCC; application complaint seeking this filed a revision of the Cox charge agreement, rent under its 1963 which was at that time per pole. set at The Common Carrier Bureau ordered $5.50 agreement provide reformation of Cox’s for rent of $1.79 per pole. September single ap- In FCC, order, 1984the proved the orders of the Common Carrier Bureau all three rejected arguments The cases. Commission constitutional by Takings raised Florida Power under the and Due Process upheld Clauses, and the rate calculations made Bureau. sought
Florida
then
of the
Power
review
FCC’s decision
Appeals
Court of
for the Eleventh Circ
United States
any
uit.4 Neither Florida Power nor
of the intervenors ar
gued
before the Eleventh Circuit that
Pole Attachments
Appeals
nonethe
Act was unconstitutional.5
Court
opinion
per
in a
curiam
that the Pole Attachments
less held
the Fifth Amendment.
250 Act effected a taking court first concluded
The physical occupa it authorized a permanent because property in Loretto v. Telepromp under our decision of property tion (1982). 772 F. CATV Corp., 458 U. S. ter Manhattan the Act under the struck down at 1544. The court then 2d, the FCC to make it authorizes Fifth Amendment because to be of compensation of the amount initial determination “By standards. prescrib under legislatively prescribed paid com just to the ascertainment a rule’ ing ‘binding regard has what usurped stated, “Congress the court pensation,” Id., function.” at judicial has been held an exclusive long 1546. separate noticed operators
The FCC and intervenor cable noted probable jurisdiction from this decision. We appeals decision, and and consolidated the cases argument reverse. We now U. S.
I—I HH At- found at the outset that the Pole The Court of Appeals physical occupation Act authorizes a permanent tachments in Loretto, per under the rule we which, adopted property, 2d, must be 772 F. se paid. for which compensation this for we find premise, at 1543-1544. We with disagree that Loretto has no the facts of this litigation. application
In Loretto we reviewed a New York statute which prohib- owner of rental from with any property “interfer[ing] ited facilities his or upon installation of cable television property that the landlord could cable charge and premises,” provided for access to his the amount “which property only operators shall, by regula- Commission on Cable Television] the [State 458 U. at S., determine to be reasonable.” tion, in Loretto had an purchased apartment 3. The appellant n. the roof of which had mounted cables appellee building upon of cable television serv- boxes for the switching provision Commission on Cable Television ice to tenants. State levied might that a one-time be charge $1 had declared
251 statutory compulsory in landlords property. return for the access to prior Id., at 424-425. We found that our deci- interpreting Takings along sions pur- the Clause, with the poses compelled of the Clause itself, the conclusion that “a permanent physical occupation by government authorized regard public a may without to the interests that it holding serve.” Id., at 426. We reversed the of the New Appeals challenged York Court of that the statute did not property meaning take within the of the Fifth Amendment, and remanded for compensation just consideration of the issue whether paid.
had been holding We “very characterized our in Loretto as narrow.” Id., at 441. The Court of in its decision these holding beyond cases broadened that scope narrow the to legitimately applies. which it For, while the statute we con- specifically required sidered Loretto permit landlords to permanent occupation property companies, of their cable nothing in interpreted by the Pole Attachments Act as the gives companies any right FCC these cases occupy cable to space utility poles, prohibits utility companies on or from re- fusing agreements to enter oper- into attachment with cable The ators.6 Act par- authorizes the FCC, in the absence of 6 Appeals found, The Court of appellees here, contend that “[t]he reality hard of the matter is that if Florida Power desires to exclude the companies, reason, cable they for whatever are powerless to do so . . . be previous cause cases where utilities have companies ordered cable to dis connect, routinely FCC has intervened issuing temporary stays prevent which companies.” exclusion the cable 1537,1543 772 F. 2d (1985). According to General, the Solicitor yet the FCC “has not a taken position” on whether utilities terminate attachment contracts for non- retaliatory Arg. reasons. Tr. of Oral 7. language provides of the Act explicit authority no require FCC to pole operators, access for cable legislative history strongly suggests Congress intended no g., e. See, (1977) such Rep. (The authorization. 95-580, p. S. No. 16 Act system “does not vest within a operator CATV right a utility to access to a pole, bill, reported, nor does the require power company to dedicate a use”). portion pole plant of its to communications We do today not decide application Teleprompter Loretto v. what Manhattan Corp., CATV 252 regulation, charged by public
allel state to review the rents voluntarily utility landlords who have entered into leases company renting utility space poles. tenants on with cable regulating in Loretto, As we observed statutes the economic per takings. and tenants se relations landlords are not Willingham, Bowles Id., 440; 503, at see v. 321U. S. 517-518 (1944); (1921); Block Hirsh, v. 256 U. S. see also Shopping Center, Fresh Pond Inc. v. Callahan, U. S. (1983) (dismissing challenge to rent control ordinance *7 question). Loretto for under long want substantial federal “So regulations require these do not as landlord to suffer physical occupation portion building by of a of his a third they party, analyzed inquiry will be under the multifactor generally applicable nonpossessory governmental activ- added). ity.” supra, (emphasis 440 Loretto, at required acquiescence This element of at is the heart of the concept occupation. As we said Loretto:
“[Property
long protected
expecta-
law has
an owner’s
relatively
that he
tion
will be
undisturbed at least in
possession
property.
require,
of his
To
well,
that
permit
complete
another to
the owner
literally
exercise
dominion
injury.
adds insult to
an
Furthermore, such
occupation qualitatively
regulation
more
is
severe than a
property,
regulation
imposes
of the use of
even a
that
affirmative duties on the
since
owner,
the owner
timing,
have no control over the
extent, or nature of the
(citation omitted).
S.,
invasion.” 458 U.
at 436
Appellees
taking
contend,
essence, that
it is a
under
Loretto for a tenant invited to lease at a rent of
to re-
$7.15
regulated
main at the
rent of
it
invitation,
But
is the
$1.79.
sep-
the rent,
not
that makes the difference. The line which
unambiguous
arates these cases from Loretto is the
distinc-
(1982),
utilities,
tion between a commercial lessee and an with a government license. We conclude that the Court of applying per se Loretto erred rule of to the Pole At- tachments Act.
I—i I—I HH remaining question, whether under traditional Fifth challenged Amendment standards the order FCC effected property, readily answered. It is of course set- beyond dispute regulation chargeable tled of rates from employment private property public devoted to uses is constitutionally permissible. Illinois, See Munn v. 94 U. S. (1877); Cases, 133-134 Permian Basin Area Bate 113, regulation 747, U. 768-769 Such of maximum S. prices “may, consistently Constitution, rates or with the limit stringently investment, the return recovered on for inves- provide only tors’ interests one of the variables the con- long Id., stitutional calculus of reasonableness.” at 769. So confiscatory, as the rates set are not the Fifth Amendment imposition. Joseph Yards does not bar their St. Stock Co. v. (1936); States, Basin, 298 U. see Permian United S. *8 supra, at 770. previously provides Act, noted,
The Pole Attachments range the under- of reasonableness within which FCC ratesetting. provides take The Act that the minimum rea- equal providing pole rate is to “the additional costs of sonable maximum attachments,” while the reasonable rate is to be “by multiplying percentage calculated the of the total usable percentage capacity, space, or the of the total duct or conduit occupied by pole by which is the attachment the sum of the utility operating expenses capital the and actual costs of right-of- pole, or duct, conduit, attributable to the entire 224(d)(1). § way.” The minimum is 47 U. S. C. measure marginal equivalent the of while attachments, thus to cost statutory fully maximum measure is determined the operation pole the construction and of the allocated cost of which cable is attached. evidently interpreted provide
The FCC has the statute to pole when it reduces the contract rate attachments, that for may only it reduce to the maximum rate allowed under the Arg. imposed by statute. Tr. of Oral 10. The rate according in this was Commission case calculated to the stat- utory fully formula for the determination of allocated cost. App. Appellees to Juris. Statement of FCC 23a. have not seriously argued, pro- nor could it contended, viding be that a rate recovery fully including for the allocated cost, capital, confiscatory.7 Accordingly, actual cost of is we hold regulatory challenged that the the FCC order below does not taking property effect a under the Fifth Amendment.
IV Because we hold that the Pole Attachments Act does not property meaning authorize a within the of the holding Appeals, Amendment, Fifth of the Court of unconstitutionally ju- the Act is void because it constrains the just compensation takings, dicial determination of neces- sarily falls.8 The decision of the Court of
Reversed.
joins,
with whom Justice
Powell,
Justice
O’Connor
concurring.
join
opinion,
only
generally
I
the Court’s
and write
to state
my understanding
scope
judicial
toas
review of rates
agency.
agree
determined
an administrative
I
that the
regulatory
challenged FCC
order
these cases does not effect
7In
interpretation
statute,
view of the Commission’s
of the
and use
fully
case,
of the
allocated cost measure in this
we have no occasion to
constitutionality
consider the
of the minimum rate allowable under the
statute.
*9
disposition
takings question
Our
of the
unnecessary
makes it
to review
Appeals’ holding
on the merits the Court of
Congress
that
not estab
compensation
lish standards under which the initial determination of
will
authority subject
judicial
be made
an administrative
to final
review.
property.
an unconstitutional
In the Court’s brief
discussion of “traditional Fifth Amendment standards,” it
quotes
single
sentence from the Permian Basin Area Rate
(1968),
regulation
Cases,
I do not that this isolated sentence from Nat- any appropriate ural Gas is more to be viewed as the stand- quotes ard than the sentence from Permian Basin the Court today. My point only judicial review of rates chal- lenged taking property just compensation without involves careful of the statute, consideration relevant the action of the *10 regulatory complex commission, and a of other factors. The clearly comport rates before us with the In Constitution. my purpose by selecting quotation view no is served a sin- gle standing meaningless sentence that, alone, is at best.