22-000774RP Bellsouth Telecommunications, Llc vs. Florida Public Service Commission Status: Closed DOAH Final Order on Wednesday, May 18, 2022.

Summary: Public Service Commission proved Proposed Rule concerning pole attachments was not contrary to the statute, vague, arbitrary or capricious, or in violation of rulemaking procedures and, thus, was not an invalid exercise of delegated legislative authority.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

B ELLSOUTH T ELECOMMUNICATIONS ,

LLC ,

Petitioner , Case No. 22 - 0774RP

vs.

F LORIDA P UBLIC S ERVICE C OMMISSION ,

Respondent,

and

F LORIDA P OWER A ND L IGHT C OMPANY ,

D UKE E NERGY F LORIDA , A ND T AMPA

E LECTRIC C OMPANY ,

Intervenors .

/

F INAL O RDER

Administrative Law Judge Andrew D. Manko of the Division of

Administrative Hearings ( Ñ DOAH Ò ) presided over the final hearing in this

matter, pursuant to sections 120.56, 120.569 , and 120.57 , Florida Statutes

(20 21 ) , 1 on April 19, 2022, in Tallahassee, Florida.

A PPEARANCES

For Petitioner: Jon C. Moyle, Esquire

Karen Ann Putnal, Esquire

Moyle Law Firm, P . A .

118 Nort h Gadsden Street

T allahassee, Florida 32301

1 All references to the Florida Statutes, the Florida Administrati ve Code, the United States

Code, and the Code of Federal Regulations are to the 2021 versions .

For Respondent: Keith Charles Hetrick, General Counsel

Kathryn Gale Winter Cowdery, Esquire

Samantha Cibula, Esquire

Douglas Derek Sunshine, Esquire

Florida Public Service Commission

2540 Shumard Oak Bo ulevard

Tallahassee, Florida 32399

For Intervenors : Daniel Elden Nordby, Esquire

Amber Stoner Nunnally , Esquire

Shutts & Bowen , LLP

215 North Monroe Street , Suite 804

T allahassee, Florida 32301

S TATEMENT O F T HE I SSUE

W hether P roposed Florida Administrative Code Rule 25 - 18.010 (ÑProposed

RuleÒ) constitutes an invalid exercise of delegated legislative authority , in

violation of section 120.52(8)(a), (c), (d), and (e) .

P RELIMINARY S TATEMENT

On March 11, 2022, Petitioner , Bellsou th Telecommunications (ÑAT&TÒ),

filed its Petition for Administrative Determination of Invalidity of Proposed

Rule 25 - 18.010. B ased on the agreement of the parties, the undersigned

scheduled the final administrative hearing for April 19, 2022.

On March 2 1, 2022, Intervenors , Florida Power & Light Company (ÑFPLÒ),

Duke Energy Florida (ÑDEFÒ), and Tampa Electric Company (ÑTECÒ) , filed an

Unopposed Motion for Leave to Intervene in support of Respondent. In an

Order dated March 21, 2022, the undersigned grant ed that motion.

On April 15, 2022, the parties filed three motions: (1) Intervenors filed a

Motion in Limine to exclude evidence as to the standards that may be applied

in resolving pole attachment complaints , including Federal Communications

Commission ( ÑFCCÒ) certification standards, regulations adopted in other

states, and expert testimony as to the interpretation of federal and state law ;

(2) Respondent filed a Motion in Limine to exclude evidence of the FCC

standards ; and (3) Petitioner filed a Motion for Official Recognition as to

other statesÔ regulations. Petitioner responded in opposition to the motions in

limine on April 18, 2022. Th e undersigned granted the Motion for Official

Recognition , but denied the motions in limine because evidence of the FCCÔs

requirements , other statesÔ rules, and expert testimony as to those issues was

relevant to resolving PetitionerÔs argument that the Proposed Rule was

invalid for not m eet ing the FCCÔs requirements .

The final hearing occurred in Tallahassee on April 19 , 2022. Petitioner

presented testimony from three witnesses: (1) Mark Peters, its area manager

for regulatory relations; (2) Cayce Hinton, the director of RespondentÔs o ffice

of i ndustry d evelopment and m arket a nalysis; and (3) Joe Garcia, a prior

commi ssioner and U.S. Congressman . T he undersigned accepted Mr. Peters

and Mr. Garcia as expert witnesses over objection, while confirm ing that the

undersigned would not consider Ð and, indeed, has not considered Ð any

opinions as to how to interpret state and fede ral statutes and rules, which are

legal issues exclusively within the undersignedÔs province . 2 Respondent also

presented the testimony of Mr. Hinton , who was accepted as an expert

without objection . Intervenors presented no witness testimony.

PetitionerÔs Exh ibits 1 through 9 and 16 through 30 were admitted in

evidence. PetitionerÔs p roposed e xhibits 10 through 15 were withdrawn ;

2 The undersigned reaffirms his decision to accept both witnesses as experts as to regulatory

policy and telecommunications . Mr. Peters has the requisite experie nce and training to be

deemed an expert in the telecommunications field and as to pole attachment regulation.

Mr. Garcia has expertise in the telecommunications field generally, as a c ommissioner who

dealt with the FCC, a U.S. Congressman working with cons tituents on telecommunications

issues, and an employee of a company that dealt with telecommunications and utility rates

and restructuring. Though his experience did not involve pole attachments , Mr. GarciaÔs

expert testimony focused on general regulatory subjects with which he has expertise, such as

rulemaking , federal delegation, and how regulations c an impact regulated entities.

PetitionerÔs p roposed e xhibits 31 through 33 , marked solely for impeachment

purposes, were not admitted in evidence. RespondentÔ s Exhibits 1 through 41

were admitted in evidence. Intervenors file d no exhibits.

A two - volume Transcript of the hearing was filed on April 21 , 2022. T he

undersigned granted PetitionerÔs request s to extend the deadline to file

proposed final orders (ÑPFO sÒ) by three days and to enlarge their page limits.

On May 2, 2022, the parties timely filed PFOs, which were duly considered in

preparing this Final Order.

F INDINGS O F F ACT

I. Parties and Standing

1. The Florida Public Service Commission (ÑCommissionÒ) i s the state

agency obligated to Ñregulate and enforce rates, charges, terms, and

conditions of pole attachments È to ensure that such rates, charges, terms,

and conditions are just and reasonable.Ò £ 366.04(8)(a), Fla. Stat. Pursuant to

the requirement in section 366.04(8)(g) that it Ñpropose procedural rules to

administer and implement this subsection,Ò the Commission approved the

Proposed Rule , which i s the subject of the challenge herein.

2. AT&T is a utility pole owner and an attaching entity. It owns o ver

470,000 utility poles in Florida, which it uses to provide voice, video, data,

broadband, and other advanced telecommunications services, and on which it

rents space to other companies, including electric utilities, cable companies,

competitive telepho ne companies, and broadband and wireless providers .

AT&T also affixes its fac ilities to poles owned by other companies in Florida,

including over 640,000 poles owned by investor - owned electric utilities.

3. FPL , D EF , and TEC are public utilities subject t o the jurisdiction of the

Commission , including as pole - owning electric utilities and attaching entities

whose facilities are affixed to poles owned by other companies.

4. The parties agree that AT&T, FPL, DEF, and TEC are substantially

affected by the Pr oposed Rule within the meaning of section 120.56 because

they are all subject to regulation thereunder as pole owners and attaching

entities. Thus, AT&T ha s standing to challenge the P roposed R ule and FPL,

DEF, and TEC have standing to participate in suppo rt of the Proposed Rule .

II. State Regulation of Pole Attachments Via Reverse Preemption

5. Pole attachments are Ñany attachment by a public utility, local

exchange carrier communications services provider, broadband provider, or

cable television operator to a pole, duct, conduit, or right - of - way owned or

controlled by a pole owner. Ò £ 366.02(6), Fla. Stat. They include wiring, cable,

and other equipment that are attached to poles to help distribute electric,

cable, communications, and other services to con sumers. For communications

providers like AT&T, they include coaxial cable s , terminals connecting main

lines, and power supplies for cable. For public utilities like FPL, DEF, and

TEC, they can include conductors, transformers, and capacity banks.

6. The FCC generally has jurisdiction with respect to pole attachment

rates, terms, conditions, and access . 47 U.S.C. § 224(b). However, states are

authorized to regulate such matters through reverse preemption. Id. § 224(c).

7. To reverse preempt in this field , a state must certify to the FCC that:

(A) it regulates such rates, terms, and conditions;

and

(B) in so regulating such rates, terms, and

conditions, the State has the authority to consider

and does consider the interests of the subscribers of

the service s offered via such attachments, as well

as the interests of the consumers of the utility

services.

Id. § 224(c)(2). Section 224(c)(3) confirms that a state is not considered to

regulate pole attachment rates, terms, and conditions:

(A) unless the State ha s issued and made effective

rules and regulations implementing the StateÔs

regulatory authority over pole attachments; and

(B) with respect to any individual matter, unless

the State takes final action on a complaint

regarding such matter --

(i) within 18 0 days after the complaint is filed

with the State, or

(ii) within the applicable period prescribed for

such final action in such rules and regulations of

the State, if the prescribed period does not

extend beyond 360 days after the filing of such

complai nt.

8. Federal regulation s detail how the FCC must handle complaint s arising

from state s that have reverse preempt ed . Pursuant to 47 C.F.R. § 1.1405(a),

the FCC must dismiss a complaint for Ñ lack of jurisdiction in any case where

a suitable certificate ha s been filed by a State pursuant to paragraph (b) of

this section . Such certificate shall be conclusive proof of lack of jurisdiction of

[ the FCC ] . Ò Paragraph (b) of the regulation provides as follows:

It will be rebuttably presumed that the state is not

r egulating pole attachments if the [FCC] does not

receive certification from a state that:

(1) It regulates rates, terms and conditions for

pole attachments;

(2) In so regulating such rates, terms and

conditions, the state has the authority to

consider an d does consider the interests of the

consumers of the services offered via such

attachments, as well as the interests of the

consumers of the utility services; and

(3) It has issued and made effective rules and

regulations implementing the state Ô s regulat ory

authority over pole attachments (including a

specific methodology for such regulation which

has been made publicly available in the state).

9. In other words , if a state has filed a certificate that meets the elements

of paragraph (b), that serves as conclusive proof of reverse preemption and

the FCC must dismiss the complaint for lack of jurisdiction . Conversely , if a

state has filed a certificate but it fails to meet all three elements , there is a

presumption Ð which is rebuttable Ð that the s tate has no t reverse preempted

and the FCC is not required to dismiss the complaint for lack of jurisdiction .

10. Even if a state has filed a suitable certificate, paragraph (f) of the

regulation confirms that jurisdiction reverts to the FCC as to an individual

compl aint if the state fails to take final action:

(1) Within 180 days after the complaint is filed with

the state, or

(2) Within the applicable periods prescribed for

such final action in such rules and regulations of

the state, if the prescribed period does not extend

beyond 360 days after the filing of such complaint.

III. The Florida Legislature Authorize d the Commission to Regulat e Pole

Attachments and, as Directed, It Approved the Proposed Rule

11. In 2021, Florida began the process of reverse preemptio n so that it

could start regulating pole attachment s . The Legislature added subsection (8)

to section 366.04, which authorized the Commission to regulate pole

attachments pursuant to the authority granted in 47 U.S.C. § 224.

12. Section 366.04(8) , the imp lementing statute, provides as follows :

(a) The commission shall regulate and enforce

rates, charges, terms, and conditions of pole

attachments, including the types of attachments

regulated under 47 U.S.C. s. 224(a)(4), attachments

to streetlight fixtures, attachments to poles owned

by a public utility, or attachments to poles owned

by a communications services provider, to ensure

that such rates, charges, terms, and conditions are

just and reasonable. The commissionÔs authority

under this subsection includ es, but is not limited

to, the state regulatory authority referenced in

47 U.S.C. s. 224(c).

(b) In the development of rules pursuant to

paragraph (g), the commission shall consider the

interests of the subscribers and users of the

services offered throug h such pole attachments, as

well as the interests of the consumers of any pole

owner providing such attachments.

(c) It is the intent of the Legislature to encourage

parties to enter into voluntary pole attachment

agreements, and this subsection may not b e

construed to prevent parties from voluntarily

entering into pole attachment agreements without

commission approval.

(d) A partyÔs right to nondiscriminatory access to a

pole under this subsection is identical to the rights

afforded under 47 U.S.C. s. 22 4(f)(1). A pole owner

may deny access to its poles on a nondiscriminatory

basis when there is insufficient capacity, for

reasons of safety and reliability, and when required

by generally applicable engineering purposes. A

pole ownerÔs evaluation of capacit y, safety,

reliability, and engineering requirements must

consider relevant construction and reliability

standards approved by the commission.

(e) The commission shall hear and resolve

complaints concerning rates, charges, terms,

conditions, voluntary agr eements, or any denial of

access relative to pole attachments. Federal

Communications Commission precedent is not

binding upon the commission in the exercise of its

authority under this subsection. When taking

action upon such complaints, the commission sh all

establish just and reasonable cost - based rates,

terms, and conditions for pole attachments and

shall apply the decisions and orders of the Federal

Communications Commission and any appellate

court decisions reviewing an order of the Federal

Communicati ons Commission regarding pole

attachment rates, terms, or conditions in

determining just and reasonable pole attachment

rates, terms, and conditions unless a pole owner or

attaching entity establishes by competent

substantial evidence pursuant to proceedin gs

conducted pursuant to ss. 120.569 and 120.57 that

an alternative cost - based pole attachment rate is

just and reasonable and in the public interest.

(f) In the administration and implementation of

this subsection, the commission shall authorize any

pet itioning pole owner or attaching entity to

participate as an intervenor with full party rights

under chapter 120 in the first four formal

administrative proceedings conducted to determine

pole attachment rates under this section. These

initial four proceed ings are intended to provide

commission precedent on the establishment of pole

attachment rates by the commission and help guide

negotiations toward voluntary pole attachment

agreements. After the fourth such formal

administrative proceeding is concluded b y final

order, parties to subsequent pole attachment rate

proceedings are limited to the specific pole owner

and pole attaching entities involved in and directly

affected by the specific pole attachment rate.

(g) The commission shall propose procedural r ules

to administer and implement this subsection. The

rules must be proposed for adoption no later than

January 1, 2022, and, upon adoption of such rules,

shall provide its certification to the Federal

Communications Commission pursuant to

47 U.S.C. s. 224 (c)(2).

13. P ursuant to the LegislatureÔs directive to Ñpropose procedural rules to

administer and implement this subsection,Ò the Commission began the

rulemaking process . It published a Notice of Development of Rulemaking for

Rule 25 - 18.010 in the Florid a Administrative Register (ÑFARÒ) . 47 Fla.

Admin. Re g . 159 (Aug. 17, 2021). The N otice scheduled a rule development

workshop for September 1, 2021 . Copies were sent to all interested persons,

including the Office of Public Counsel (ÑOPCÒ) , AT&T, FPL, DEF, and TEC.

14. R epresentatives for AT&T , FPL, DEF, and TEC attended the

workshop. The Commission received several p ost - workshop comments .

15. Of particular relevance here, the comments addressed the issue of

whether the Commission should adopt FCC methodol og ies for evaluating pole

attachment rates , which are contained in 47 C.F.R. § 1.1406 . 3 FPL, DEF, and

TEC argued against including FCC methodolog ies in the Proposed Rule ; the

Florida Internet and Television Association (ÑFITÒ) advocated for their

adoption . AT&T did not file a comment at that time .

16. In accordance with s ection 286.011, Florida Statutes , the Commission

scheduled a public meeting to decide whether to propose the adopt ion of the

Proposed Rule. In advance, the CommissionÔs staff prepared a wr itten

memorandum , also called a s taff r ecommendation . The Commission filed the

recommendation in its public docketing system on October 21, 2021 , in

accordance with its usual practice and procedure.

17. The staff recommendation did not i nclud e the FCC meth odolog y in the

draft of the Proposed Rule. Staff reasoned that the implementing statute

required the Commission to use the first four evidentiary hearings, at which

all interested parties could participate, to establish reasonable and just rates ;

as such, adopting a methodology before conducting those statutorily required

hearings would be premature.

18. The public meeting occurred on November 2, 2022. AT&T and FIT

spoke in favor of adopting FCC methodolog ies ; FPL spoke against adopting

FCC methodolog ies . T he Commission agreed to propose the adoption of the

Proposed R ule as recommended by its staff .

3 The FCC regulation contains several formulas that apply depending on whether the

a ttachment is made by a cable provider providing cable services, or a telecommunications

carrier or cable operator providing telecommunications services, or to a conduit by a cable

operator or telecommunications carrier, and whether the formulas for those attachments

yield higher rates than other formulas contained within the regulation. 47 C.F.R. § 1.1406.

19. On November 4, 2021, t he Commission published a Notice of Proposed

Rule in the FAR. 47 Fla. Admin. Reg. 215 ( Nov. 4 , 2021). The N otice stated

that , Ñ[i]f r equested within 21 days of the date of this notice, a hearing will be

scheduled and announced in the FAR.Ò

20. The Commission also issued a N otice of A doption of the Proposed Rule

(Order No. PSC - 2021 - 0412 - NOR - PU) , which i t sent to all i nterested parties ,

including OPC, AT&T, FPL, DEF, and TEC. It also sent the N otice to the

rules ombudsman in the Executive Office of the Governor , who neither

responded nor offered alternatives.

21. On the same day, the Commission submitted a letter to the Joint

Administrat ive Procedures Committee with a copy of the Proposed Rule , a

detailed written statement of the facts and circumstances justifying the

Proposed Rule , a statement of the extent to which the Proposed Rule relates

to federal standards or rules on the same subj ect , and a copy of the Notice of

Proposed Rule published in the FAR.

22. The Commission scheduled a public hearing for February 1, 2022, to

address suggested changes to the Proposed Rule. On January 25, 2022, the

staff recommendation was filed o n the Commi ssionÔs docket.

23. The staff recommendation suggested changes to paragraphs (1)(f) and

(4)(b) of the Proposed Rule. Initially, these two paragraphs required the

complaint and response to merely explain the methodology that either party

wanted the Commissi on to apply in establishing just and reasonable rates.

More in line with section 366.04(8)(e), the suggested revisions required the

parties to either identify the FCC orders or appellate decisions that should be

applied or, if proposing an alternative cost - based approach, identify the

methodology and explain how it would be just, reasonable, and in the public

interest. Staff recommended these changes to give more specificity to the

filing requirements and ensure that the Commission had the information

neces sary to fulfill its statutory duty under section 366.04(8) .

24. On January 31, 2021, AT&T filed a comment suggesting six changes to

paragraphs (1)(f) and (4)(b). The suggest ions primarily substitut ed or add ed a

few words to make the pleading requirements m ore precise . AT&T did not

suggest that the Proposed Rule adopt FCC methodolog ies .

25. The Commission held the public hearing on February 1, 2022 , but it

did not vote on the suggested changes . Instead, it asked for the matter to be

brought back at another public meeting to consider all evidence and

argument , including those pertaining to AT&TÔs recent suggestions .

26. Pursuant to notice published in the FAR, the Commission scheduled a

public hearing for March 1, 2022 . 48 Fla. Admin. Reg. 30 (Feb. 14, 2022) . On

February 17, 2022, a s taff r ecommendation was filed on the CommissionÔs

docket that recommended changes to paragraphs (1)(f) and (4)(b), including

some suggested by AT&T . At the hearing on March 1, 2022, the Commission

approve d the staff recommended c hanges to paragraphs (1)(f) and (4)(b) .

27. The final version of the Proposed Rule w as published in the FAR.

48 Fla. Admin. Reg. 43 (Mar. 3, 2022) . A ÑNotice of Change to Proposed RuleÒ

(Order No. PSC - 2022 - 0105 - NOR - PU) was sent to all interested parties ,

including OPC, AT&T, FPL, DEF , and TEC.

28. As approved, the Proposed Rule provides as follows:

25 - 18.010 Pole Attachment Complaints

(1) A complaint filed with the Commission by a pole

owner or attaching entity pursuant to Section

366.04(8), F.S., must contain:

(a) The name, address, email address, and

telephone number of the complainant or

complainantÔs attorney or qualified representative;

(b) A statement describing the facts that give rise

to the complaint;

(c) Names of the party or parties agai nst whom the

complaint is filed;

(d) A copy of the pole attachment agreement, if

applicable, and identification of the pole

attachment rates, charges, terms, conditions,

voluntary agreements, or any denial of access

relative to pole attachments that is t he subject

matter of the complaint;

(e) A statement of the disputed issues of material

fact or a statement that there are no disputed

issues of material fact;

(f) If the complaint requests the establishment of

rates, charges, terms, or conditions for p ole

attachments and the complainant proposes the

application of rates, terms, or conditions that are

based upon Federal Communications Commission

(FCC) rules, decisions, orders, or appellate

decisions, the complainant must identify the

specific applicable FCC rules, decisions, orders, or

appellate decisions that the Commission should

apply pursuant to Section 366.04(8)(e), F.S.;

provided, however, that if the complainant requests

an alternative cost - based rate, the complainant

must identify the methodology and explain how the

alternative cost - based rate is just and reasonable

and in the public interest;

(g) If the complaint involves a dispute regarding

rates or billing, a statement of the dollar amount in

dispute, the dollar amount not in dispute, whether

the amount not in dispute has been paid to the pole

owner, and if not paid the reasons why not;

(h) A statement of the relief requested, including

whether a Section 120.569 and 120.57, F.S.,

evidentiary hearing is being requested to resolve

the complaint; and

(i) A certificate of service that copies of the

complaint have been furnished by email to the

party or parties identified in paragraph (1)(c) of

this rule.

(2) The filing date for the complaint is the date that

a complaint is filed with the Commis sion Clerk

containing all required information set forth in

subsection (1) of this rule.

(3) The pole owner or attaching entity that is the

subject of the complaint may file a response to the

complaint. The response must be filed with the

Commission Cler k within 30 calendar days of the

date the complaint was served on the respondent,

unless the Prehearing Officer grants a motion for

extension of time filed pursuant to Rule 28 - 106.204,

F.A.C., or Rule 28 - 106.303, F.A.C., as appropriate.

(4) A response fi led under subsection (3) of this rule

must include the following:

(a) A statement of whether a Section 120.569 and

120.57, F.S., evidentiary hearing is being requested

to resolve the complaint; and

(b) If the complaint requests the establishment of

rat es, charges, terms, or conditions for pole

attachments and the respondent proposes the

application of rates, terms, or conditions that are

based upon FCC rules, decisions, orders, or

appellate decisions, the respondent must identify

the specific applicable FCC rules, decisions, orders,

or appellate decisions that the Commission should

apply pursuant to Section 366.04(8)(e), F.S.;

provided, however, that if the respondent requests

an alternative cost - based rate, the respondent must

identify the methodology a nd explain how the

alternative cost based rate is just and reasonable

and in the public interest.

(5) The Commission will take final action on a

complaint concerning rates, charges, terms,

conditions, and voluntary agreements relative to

pole attachments at a Commission Conference no

later than 360 days after the complaintÔs filing date

as set forth in subsection (2) of this rule.

(6) The Commission will take final action on a

complaint limited to denial of access relative to pole

attachments at a Commi ssion Conference no later

than 180 days after the complaintÔs filing date as

established under subsection (2) of this rule.

Rulemaking Authority 350.127(2), 366.04(8)(g) FS.

Law Implemented 366.04(8) FS.

IV. AT&T Ôs Challenge to the Proposed Rule

29. On March 11, 2022, AT&T filed its Petition challenging the Proposed

Rule. As it argued at the hearing and in its PFO, AT&T contends that

paragraphs (1)(f) and (4)(b) of the Proposed Rule are an invalid exercise of

delegated legislative authorit y under sectio n 120.52(8)(a), (c), (d), and (e) .

AT&T primarily argues that, by failing to adopt a methodology to evaluat e

pole attachment complaints , the challenge d paragraphs are contrary to the

implementing statute, vague, invalid for not following the applicable

rul emaking procedures, and arbitrary and capricious .

30. Three witnesses testified at the hearing. T he testimony provided

background and context to the regulation of pole attachments, the

rulemaking process, the reasons the Commission adopted the Proposed Ru le

without methodologies, and the purported problems associated with that

decision. That said, the resolution of AT&TÔs challenge is largely based on the

interpretation of section 366.04(8) , the Proposed Rule, and provisions of

federal statutes and regulat ions Ð legal questions ex c lusively within the

undersignedÔs province. As such, no weight has been given to any opinion

testimony on such purely legal issues.

31. Mr. Hinton, the director of the CommissionÔs o ffice of i ndustry

d evelopment and m arket a nalysis, testified in both cases - in - chief and spoke

on behalf of the Commission as its party representative . He has worked at

the Commission for 23 years and was heavily involved in drafting the

Proposed Rule in conjunction with a technical analyst and the legal

d epartment. He was approved as an expert without objection as to how the

Commission processes complaints concerning rates, terms, conditions , and

interconnection agreements between telecommunications companies .

32. Consistent with the findings above, Mr. Hi nton credibly testified about

the rulemaking process from the initial notice , the workshops, to the public

hearings culminating in the approval of the Proposed Rule . He discussed

changes to the Proposed Rule that were approved during the process based on

c omments from interested parties , including AT&T. He also confirmed that

the Commission considered the interests of consumers, users, and subscribers

in developing the Proposed Rule, in part by noting changes that were made to

shorten the deadline f or resol ving complaints based on a denial of access.

33. Mr. Hinton explained that t he Proposed Rule lays out the process for

seeking to establish reasonable and just pole attachment rates, terms,

conditions, and access . It sets forth the information that must be included in

a complaint and r esponse, the deadlines applicable to such pleadings , and the

timeline for the resolution thereof . I n essence, i t create s an entry process for

establishing pole attachment rates through an adjudicatory proceeding , much

like the Commission resolves other types of rate issues.

34. Because the Legislature directed the Commission to adopt procedural

rules , the Proposed Rule contains no substantive standards . Instead, as

required by section 366.04(8)(e) and (f) and in line with para graphs (1)(f) and

(4)(b) of the Proposed Rule, the Commission will use the first four evidentiary

hearings, in which all pole owners and attaching entities will be permitted to

participate, to establish precedent on the issue of just and reasonable rates.

Mr. Hinton confirmed that the Commission has not yet developed

methodologies for evaluating pole attachment rates , as it has just started a

steep learning process in this new area of regulat ion .

35. A s it does in other rate cases, the Commission will base its decision s

on the evidence presented, regulatory principles (such as nondiscriminatory,

compensatory, and cost - based approaches), and precedent. In doing so, the

Commission Ð as the Legislature directed Ð will apply FCC orders, appellate

decisions thereon , and the methodologies approved therein, unless a party

that seeks approval of an alternative cost - based approach identifies the

methodology and establishes by competent, substantial evidence that the

alternative rate is just, reasonable, and in the public interest.

36. AT&T presented two experts in the field s of telecommunications and

regulatory policy, Mr. Peters and Mr. Garcia. As detailed below, the experts

offered background information about pole attachments and regulations in

general, and they opine d as to why the Proposed RuleÔs lack of substantive

standards was problematic from a business perspective.

37. Mr. Peters, AT&TÔs a rea m anager for r egulatory r elations , testified at

length about his experience in the field of pole attachments, including t he

fact that he has testified s even times in pole attachment cases before the FCC

and in other states. Mr. Peters discussed pole attachments, what sorts of

equipment are placed on them, and how disputes concerning rates and access

are resolved by the FCC, other states that have reverse preempted, or

through voluntary agreements between pole owners and attaching entities.

38. Mr. Peters acknowledged that the Proposed Rule sets forth a clear

process for resolving pole attachment complaints, the required info rmation in

a complaint and response, and the applicable deadlines. He co nfirmed that

his concern was not about the procedure set forth in the Proposed Rule .

39. Rather, he disagreed with the lack of substan ce , namely, the failure to

set forth standards or methodologies for how the Commission will resolve

complaints, particularly as to alternative cost - based approach es . He detailed

the methodologies included in the FCC regulation and discussed how several

other states that have reverse preempted in this area have adopted similar

methodologies in their regulations . In his opinion, the CommissionÔs failure to

do so here creates uncertainty as to how it will resolve disputes concerning

access and rates, which could adversely affect regulated entitiesÔ investment

decisions and their ability to resolve disputes amicably.

40. Nevertheless, he conceded that Florida is required to neither regulate

pole attachments identically to other states nor adopt the FCC Ôs

methodologies in its rules. He also acknowledged that th e Proposed Rule

requires parties to identify the FCC orders that should be applied and, in the

context of an alternative cost - based approach, tha t the Commission will

resolve that issue only after an evidentiary hearing .

41. Mr. Garcia testified at lengt h about his tenure as a c ommissioner with

the Commission and his experience with the telecommunications industry as

a U.S. Congressman and at an investment firm. He explained that the

CommissionÔs rules are critically important for regulated entities, as t hey

create guardrails for participants that protect consumers.

42. Although he has no experience with pole attachments, he opined

generally that the Proposed RuleÔs lack of substantive standards adversely

affects the ability of regulated entities to know what their investment will be

or predict the cost of service to consumers. He believes the lack of specificity

allow s the Commission to make case - by - case decisions that are not based on

set methodologies and could lead to unfair results favor ing more power ful

companies. Conversely, the FCCÔs formulaic regulations rein in agency

decision - making and help competitors know where they stand when they

enter the market. He believes the Commission has the expertise to adopt a

rule with specific standards and method ologies and should have done so.

43. Although Mr. Peters and Mr. Garcia offered credible testimony about

their experience , pole attachments, and why in their view having more

specificity would help entities from a business perspective, their opinions

about the purported problems with the Proposed Rule were not very helpful

in resolving the predominantly legal questions at issue. For one, as detailed

below, the undersigned finds that the Proposed Rule complie s with the

statutory directive to adopt procedural rule s and to use the first four

evidentiary hearings to establish precedent on the issue of reasonable and

just rates . The Legislature required the Commission to make case - by - case

decisions through chapter 120 evidentiary hearings.

44. The undersigned wa s not persuaded that the Proposed Rule creates

the kind of uncertainty discussed by the witnesses. Indeed, section 366.04(8)

generally requires the Commission to apply FCC orders and appellate

decisions in evaluating just and reasonable rates, which would include

approved methodologies applied to specific factual circumstances. Thus ,

regulated entities generally will be in the same position before the

Commission as they would be before the FCC in arguing about the

reasonableness of rates based on approved m ethodologies. And , although

federal orders and rules need not be applied in an alternative cost - based rate

situation, the Proposed Rule requires the parties to identify and explain the

supporting methodology, in line with the implementing statuteÔs unique

process of requiring the parties to prove at a chapter 120 evidentiary hearing

that the alternative is just, reasonable, and in the public interest.

45. Based on the weight of the credible evidence, the undersigned finds

that the Commission properly enga ged in rulemaking , considered the

interests of regulated entities and their consumers , made changes to the rule

based thereon , and ultimately approved the Proposed Rule based on that

robust process. The Commission adopt ed a procedural rule and reasonably

c hose not to include methodolog ies s o that it could develop precedent on those

substantive standards through the unique adjudicatory process mandated by

the Legislature. Accordingly, the undersigned cannot find that the Proposed

Rule is illogical, unreasona ble, despotic, or arbitrary and capricious.

C ONCLUSIONS O F L AW

46. DOAH has jurisdiction over the subject matter and the parties to this

proceeding . §§ 120.56, 120.569, and 120.57(1), Fla. Stat.

47. AT&T challenges paragraphs (1)(f) and (4)(b) of the P r oposed R ule as

an invalid exercise of delegated legislative authority , in violation of

section 120.52(8)(a), (c), (d), and (e). AT&T asserts that the failure to adopt a

methodology for evaluating pole attachment complaints renders the Proposed

Rule contrar y to the implementing statute, vague, invalid for not following

the applicable rulemaking procedures, and arbitrary and capricious.

48. Section 120.56 (1)(a) provides that Ñany person substantially affected

by È a proposed rule may seek an administrative de termination of the

invalidity of the rule on the ground that the rule is an invalid exercise of

delegated legislative authority.Ò O ther substantially affected persons may

join in the proceeding as intervenors. Id. § 120.56(1)(e).

49. To meet the Ñ substanti ally affected Ò test, a person must prove by a

preponderance of the evidence that the proposed rule Ñ will result in a real

and immediate injury in fact Ò and Ñ that the alleged interest is within the

zone of interest to be protected or regulated. Ò Jacoby v. F la. Bd. of Med. ,

917 So. 2d 358 , 360 (Fla. 1st DCA 2005).

50. The parties stipulate that AT&T and Intervenors are substantially

affected by the challenged provisions of the P roposed R ule. Thus, there is no

dispute that AT&T has standing to challenge the P roposed R ule and

I ntervenors have standing to participate in defense of the P roposed R ule.

51. T he Commission then must Ñ prove by a preponderance of the evidence

that the proposed rule is not an invalid exercise of delegated legislative

authority as t o the objections raised .Ò £ 120.56(2)(a), Fla. Stat. A

preponderance of the evidence has been defined as Ñthe greater weight of the

evidence,Ò or evidence that Ñmore likely than notÒ tends to provide a certain

proposition. Gross v. Lyons , 763 So. 2d 276, 2 80 n.1 (Fla. 2000). The P roposed

R ule is not presumed to be valid or invalid. § 120.56(2)(c), Fla. Stat.

52. Section 120.52(8) defines an i nvalid exercise of delegated legislative

authority as Ñ action that goes beyond the powers, functions, and duties

dele gated by the Legislature , Ò which includes any of the following:

(a) The agency has materially failed to follow the

applicable rulemaking procedures or requirements

set forth in this chapter;

* * *

(c) The rule enlarges, modifies, or contravenes t he

specific provisions of law implemented, citation to

which is required by s. 120.54(3)(a)1.;

(d) The rule is vague, fails to establish adequate

standards for agency decisions, or vests unbridled

discretion in the agency;

(e) The rule is arbitrary or ca pricious. A rule is

arbitrary if it is not supported by logic or the

necessary facts; a rule is capricious if it is adopted

without thought or reason or is irrational È .

53. First, AT&T contends that the Proposed Rule is invalid because it

contravenes th e implementing statute , in violation of section 120.52(8)(c).

5 4 . ÑIn interpreting statutory language, [one] begin[s] with the language

of the statute.Ò Page v. Deutsche Bank Tr. Co. Americas , 308 So. 3d 953, 958

(Fla. 2020) . As the Florida Supreme Court has explained, Ñ we Ó adhere to the

Ósupremacy - of - text principleÔ: ÓThe words of a governing text are of paramount

concern, and what they convey, in their context, is what the text means.ÔÒ Id.

(quoting Advisory Op. to Governor re Implementation of Amendment 4, the

Voting Restoration Amendment , 288 So. 3d 1070, 1078 (Fla. 2020) ). And, if

the text is unambiguous, courts Ñpresume that a legislature says in a statute

what it means and means in a statute what it says there.Ò Page , 308 So. 3d at

958 (quoting Conn . Nat Ôl Bank v. Germain , 503 U.S. 249, 253 - 54 (1992) ) .

5 5 . Section 366.04(8)(b) and (g) direct the Commission to Ñpropose

procedural rules to administer and implement this subsection,Ò Ñconsider the

interests of the subscribers and users of the services off ered through such

pole attachments, as well as the interests of the consumers of any pole owner

providing such attachmentsÒ in developing such rules, and Ñprovide its

certification to the [FCC] pursuant to 47 U.S.C. s. 224(c)(2)Ò once they are

adopted. The statute creates a unique regulatory process by directing the

Commission to Ñhear and resolve complaints concerning rates, charges,

terms, conditions, voluntary agreements, or any denial of access relative to

pole attachmentsÒ through chapter 120 formal ad ministrative proceedings

and to allow Ñany petitioning pole owner or attaching entity to participate as

an intervenor with full party rights under chapter 120 in the first four formal

administrative proceedings conducted to determine pole attachment rates

under this section.Ò £ 366.04(8)(e) and (f), Fla. Stat.

5 6 . The Proposed Rule is consistent with those express statutory dictates.

Based on the Findings of Fact above, the Commission considered the

interests of subscribers, users, and customers and made c hanges to the

proposed language based thereon in developing the Proposed Rule . The

Commission thereafter adopted a procedural rule setting forth a process for

the resolution of pole attachment complaints , including the information to be

included in a compl aint and any response thereto, the deadlines associated

with those pleadings, and the deadline s for the Commission to resolve such

complaints. As dictated by the statute, t he Proposed Rule requires the parties

to either identify the FCC decisions, orders, and appellate decisions on which

the Commission should rely or, if seeking approval of an alternative cost -

based approach, explain the methodology therefor and how that approach is

reasonable, just, and in the public interest. In short, t he Proposed Rule

a dopts procedures governing pole attachment complaints that are consistent

with, not in contravention of, the plain and unambiguous text of the statute.

See Fla. Prepaid Coll. Bd. v. Intuition Coll. Sav. Sols., LLC , 330 So. 3d 93, 97 -

99 (Fla. 1st DCA 2021) (holding that an agencyÔs rules did not modify,

enlarge, or contravene the implementing law where the statute granted the

agency Ñbroad powers that specifically includes the adoption of procedures to

govern contract dispute proceedingsÒ and it adopted rul es that Ñset forth the

procedures to govern such contract dispute proceedingsÒ).

5 7 . Nevertheless, AT&T argues that section 366.04(8) required the

adoption of rules that meet federal certification standards and that the

Proposed Rule falls short by: (1) failing to adopt a specific methodology for

evaluating pole attachment rates; and (2) failing to reference the interests of

subscribers, users of the services, and consumers of pole owners or providing

a means for those interests to be heard within the adj udicatory process .

These arguments must be rejected because they are inconsistent with the

plain text of the implementing statute and the provisions of federal law.

5 8 . As just discussed, the statute only required the Commission to adopt

procedural rules to implement its regulatory authority and to consider the

interests of consumers, users, and customers in developing those rules, which

it did, and to file its certification with the FCC once those rules were adopted.

Nowhere in the plain and unambiguous t ext of section 366.04(8) is there a

requirement that the Commission adopt rules that meet federal certification

standards, even if those standards required the adoption of a specific

methodology or an avenue for subscribers, users, and consumers to be hear d

within the adjudicatory process (they do not, as explained below) . Had the

Legislature intended to impose such requirements, it knew how to do so. See

Cason v. Fla. DepÔt of Mgmt . Servs. , 944 So. 2d 306, 315 (Fla. 2006) (ÑIn the

past, we have pointed to language in other statutes to show that the

Legislature Óknows how toÔ accomplish what it has omitted in the statute in

question.Ò) (quoting Rollins v. Pizzarelli , 761 So. 2d 294, 298 (Fla. 2000) ) .

59 . For example, section 409.905(6)(b), Florida Statutes, required the

Agency for Health Care Administration (ÑAHCAÒ) to Ñimplement a

prospective payment methodology for establishing reimbursement rates for

outpatient hospital services.Ò And, AHCAÔs failure to follow that express

directive and adopt a methodolog y rendered the rule invalid because it

contravened the implementing statute. S. Baptist Hosp. of Fla. v. Ag . for

Health Care Admin. , 270 So. 3d 488, 504 (Fla. 1st DCA 2019) . Conversely

here, the Legislature did not expressly require the Commission to adopt a

methodology so as to ensure compliance with federal standards, even though

it knew how to impose such a requirement if it intended to do so.

6 0 . It is true that section 366.04(8) grants the Commission the authority

to regulate pole attachments and is a n effort by the Legislature to reverse

preempt in this area. But, to interpret section 366.04(8) as directing the

Commission to adopt a rule that meets the federal certification standards

requires the undersigned to improperly veer from the plain and unamb iguous

text and add words to the statute that the Legislature chose to omit. See, e.g. ,

Fla. Hosp. v. Ag. for Health Care Admin. , 823 So. 2d 844, 848 (Fla. 1st D CA

2002) (Ñ Courts are not at liberty to add words to statutes that were not placed

there by the Legislature. Ò). Worse yet, that interpretation sets a dangerous

precedent that c ould render a proposed rule invalid for contravening an

implied directive that is not stated in the text of the implementing statute.

6 1 . S ection 366.04(8) cannot be interpr eted to implicitly require that the

Proposed Rule ensure successful certification with the FCC. However, even if

an implicit requirement could be read into the statute, the Proposed Rule is

sufficient to meet those standards.

6 2 . Contrary to AT&TÔs argume nt, a state can become certified under

federal law without adopting a specific methodology in a rule. A state is

authorized to reverse preempt the regulation of pole attachment rates, terms,

and conditions under 47 U.S.C. § 224(c), entitled ÑState regulato ry authority

over rates, terms, and conditions; preemption; certification ; circumstance s

constituting state regulation . Ò Section 224(c)(2) provides that a state seeking

to regulate in this area must certify to the FCC that: (1) Ñit regulates such

rates, te rms, and conditionsÒ; and (2) Ñin so regulating such rates, terms, and

conditions, the State has the authority to consider and does consider the

interests of the subscribers of the services offered via such attachments, as

well as the interests of the cons umers of the utility services .Ò Section

224(c)(3) confirms that a state cannot be deemed to be regulating pole

attachment rates, terms, and conditions unless: (1) Ñthe State has issued and

made effective rules and regulations implementing the StateÔs regul atory

authority over pole attachments Ò; and (2) as it relates to an individual

matter, Ñthe State takes final action on a complaint È within 180 days after

the complaint is filed Ò or Ñ within the applicable period prescribed for such

final action in such ru les and regulations of the State, if the prescribed period

does not extend beyond 360 days after the filing of such complaint .Ò

6 3 . Importantly, there is no provision in section 224(c) that requires a

state to adopt a specific methodology in its rules, mu ch less to certify that it

has done so. Thus, the Proposed RuleÔs failure to incorporate a specific

methodology does not contravene section 366.04(8), even if that statute were

interpreted to require compliance with the federal certification standards.

6 4 . AT&T incorrectly suggest s that federal law require s a state to adopt a

methodolog y in its rules to become certified based on its interpretation of FCC

regulations and the fact that other states that have successfully filed their

certifications have adopte d methodologies in their rules. However , the FCC

regulation on which AT&T relies , 47 C.F.R. § 1.1405(b), solely focuses on how

the FCC will handle a complaint where a state has certified that it is

regulating in this area . That regulation provides that, if a complaint is filed

with the FCC and the state failed to certify that its rules include a specific

methodology, there is a rebuttable presumption that the state is not

regulating pole attachments . The fact that the presumption is rebuttable

confirms that a state can still be deemed to be regulating in this area by

filing a certification that meets the dictates of section 224(c) .

6 5 . A lthough the FCC has approved certifications filed by other states

that have adopted methodologies in their rules , that doe s not mean that

every state is required to do so to become certified . Indeed, AT&TÔs witnesses

acknowledged that Florida was not required to adopt either the FCCÔs

methodologies or those adopted by other states. Further, the FCC has

rejected similar argume nts about the sufficiency of a stateÔs certification ,

finding that it lacked jurisdiction where the certification met the dictates of

section 224(c) and the party had failed to exhaust its state administrative

remedies before filing a complaint with the FC C. As the FCC noted :

While we believe that a regulatory scheme should

be specific enough to put the parties on notice as to

how a complaint will be handled, we will not look

behind a certification unless we have evidence that

a party is unable to file a c omplaint with the state

Commission or the state Commission has failed to

act on a complaint within the prescribed period .

In the Matter of Cert . by the M d. Pub. Serv. Comm Ô n Concerning Regul. of

Cable Television Pole Attachments , No. ENF - 85 - 46, 1986 WL 29 1472, at *2

(OHMSV Apr. 8, 1986) ; accord In the Matter of Cert . by the L a. Pub. Serv.

Comm Ô n Concerning Regul. of Cable Television Pole Attachments , 1 F.C.C.

Rcd. 522 (1986) (approving LouisianaÔs certification, despite the stateÔs

failure to adopt a speci fic methodology in a rule, because it met the formal

requirements of section 224(c) , no evidence had been presented that a party

had been unable to file a complaint with the state based on a failure of its

procedures or that the state had failed to timely resolve complaints, and, in

such circumstances, the FCC would neither Ñprejudge a stateÔs regulatory

scheme for pole attachments once the state has filed a certificationÒ nor Ñlook

behind a certification Ò).

6 6 . AT&T also argues that the Proposed Rule Ñ mak es no mention of

consumer interests or how they will be addressed in complaint proceedings , Ò

which is required under federal law. Even if section 366.04(8) could be

interpreted as implicitly directing the Commission to ensure that the

Proposed Rule me e t s f ederal certification requirements (it should not ), th e

argument is not supported by the plain language of 47 U.S.C. § 224(c).

Section 224(c) does not require a state to mention in a rule the interests of

consumers, subscribers, or users or provide a means for them to be heard

within the complaint process; rather, the law merely requires the state to

certify that it has Ñ the authority to consider and does consider Ò those

interests in regulating pole attachments and to generally adopt rules

concerning its reg ulatory authority . S ection 224(c) leaves it to the state to

decide how they will consider those interests in regulating pole attachments.

6 7 . Consistent with that discretion, the Legislature directed the

Commission to : (1) consider those interests in deve loping procedural rules,

which the Findings of Fact above establish is exactly what it did in

developing the Proposed Rule ; (2) allow all pole owners and attaching entities

to partic ipate in the first four adjudicatory hearings, whereby their

interests Ð and , a fortiorari , the interests of their users, subscribers, and

consumers Ð can be considered as the Commission develops precedent for how

it will regulate pole attachments in the future ; and (3) ensure that the rates

approved are just, reasonable, and, in th e context of an alternative rate, in

the public interest . Because t he statute require s the Commission to consider

the interests of consumers, users, and subscribers in developing its rules ,

allow a ll interested parties to appear in the first four precedent - setting

hearings, and ensure rates are reasonable and just (and in the public interest

as to alternative rates), the undersigned cannot conclude that the Proposed

Rule Ôs failure to more specifically address those interests undermines the

CommissionÔs abil ity to successfully file its certification.

6 8 . Based on the Findings of Fact, the Commission established by a

preponderance of the evidence that the Proposed Rule do es not contravene

the implementing statute . Thus, the Proposed Rule is not invalid under

section 120.52(8)(c) .

69 . Second, AT&T contends that the Proposed Rule is vague, fails to

establish adequate standards, and vests unbridled discretion in the agency

based on its failure to adopt methodolog ies or criteria for resolving pole

attachment com plaints, in violation of section 120.52(8)( d ) .

7 0 . Ñ An administrative rule is invalid under section 120.52(8)(d) if it

requires the performance of an act in terms that are so vague that men of

common intelligence must guess at its meaning .Ò S W . Fla. Water Mgmt. Dist.

v. Charlotte Cnty. , 774 So. 2d 903, 915 (Fla. 2d D CA 2001) . ÑThe fundamental

concern of the vagueness doctrine is that people be placed on notice of what

conduct is illegal.Ò State v. Rawlins , 623 So. 2d 598, 600 (Fla. 5th DCA 1993) .

However, where the challenged rule is not penal in nature, Ñthe fundamental

concern of the vagueness doctrine is not threatened . Ò Fla. E. Coast Indus. ,

Inc. v. State, Dep Ô t of Cmty. Affs. , 677 So. 2d 357, 362 (Fla. 1st DCA 1996) .

7 1 . A proposed rule is also invalid if it Ñcreates discretion not articulated

in the statute it implements.Ò Fla. Pub. Serv. Comm Ô n v. Fla. Waterworks

Ass Ô n , 731 So. 2d 836, 84 3 (Fla. 1st D CA 1999) (quoting Cortes v. B d. of

Regents, 655 So. 2d 132 , 138 (Fla. 1st DCA 1995) ). As previously st ated :

An administrative rule which creates discretion not

articulated in the statute it implements must

specify the basis on which the discretion is to be

exercised. Otherwise the Ñ lack of ... standards ... for

the exercise of discretion vested under the . .. rule

renders it incapable of understanding ... and

incapable of application in a manner susceptible of

review.Ò

Cortes , 655 So. 2d at 138 (quoting State v. Couch, 507 So. 2d 702 (Fla. 1st

DCA 1987) ) (omissions in original). Ñ [N] o rule is properly inva lidated simply

because Ó governing statutes, not the challenged rule, confer ... discretion. Ô Ò

Fla. Waterworks Ass Ô n , 731 So. 2d at 84 3 ( quoting Cortes , 655 So. 2d at 138).

7 2 . Further , Ñ Florida courts have previously recognized that executive

agencies may exercise some discretion without breaching their authority .Ò

Fla. E. Coast Indus . , 677 So. 2d at 36 1. Because Ñit may not always be

practical or desirable to draft detailed or specific legislation,Ò the L egislature

may allow an agency Ñto administer legisl ative policy since the agency

possesses the expertise and flexibility to deal with complex and fluid

conditions.Ò Id. A n agencyÔs discretion is not considered to be unbridled where

its rules, albeit lacking in specific criteria, provide an adjudicatory pro cess

and its decisions are subject to judicial review. See id. at 360 - 61 (holding that

rules concerning urban sprawl did not vest unbridled discretion where the

implementing statute granted the agency discretion and such discretion was

constrained by an ad judicatory process for evaluating urban sprawl plans

and the fact that the agencyÔs decision s were subject to judicial review).

7 3 . A s directed by the implementing statute, the Commission adopted a

procedural rule setting forth the process by which it will evaluate pole

attachment complaints. The Proposed Rule identifies the information the

parties must include in a complaint and response, the deadlines for filing

such pleadings, and the timeline within which the Commission must resolve

such complaints. The re is nothing in the Proposed Rule that is ambiguous,

confusing, or requires a person of common intelligence to guess at what is

required to engage in the complaint process Ð a point conceded by AT&TÔs

witness. T he Proposed Rule also does not threaten the fu ndamental concern

of the vagueness doctrine because it is not penal.

7 4 . T he Proposed Rule also does not grant the Commission unbridled

discretion . S ection 366.04(8) directed the Commission to adopt a procedural

rule to resolve pole attachment complaints a nd mandated the use of a unique

adjudicatory process to establish precedent on the establishment of rates. The

Proposed Rule creates no more discretion than already granted by the

Legislature in sec tion 366.04(8) .

7 5 . Moreover, section 366.04(8) requires t he Commission to apply FCC

orders and appellate decisions reviewing such orders in determining just and

reasonable rates, terms, and conditions. It cannot be ignored that those

federal decisions will detail the approved methodologies and criteria that may

be used to resolve pole attachment complaints. The CommissionÔs discretion

is , thus , not unbridled, but rather constrained by the statutory requirement

to apply federal decisions in resolving complaints. T hat fact also undermines

any suggestion that the Pr oposed Rule is vague given that the federal

decisions that the Commission must apply detail the methodologies and

criteria approved by the FCC.

7 6 . AT&T relies heavily on the fact that section 366.04(8) authorizes the

Commission to approve alternative cost - based rates without applying f ederal

decisions . However, section 366.04(8) precludes the Commission from doing

so unless a party establishes by competent, substantial evidence that they

are just, reasonable, and in the public interest in a chapter 120 evi dentiary

proceeding. Thus, even with alternative rates, the CommissionÔs discretion is

constrained by the statutorily mandated adjudicatory process (including the

first four such proceedings being open to all interested parties) and the fact

that its decis ions are subject to judicial review under section 120.68. See Fla.

E. Coast Indus. , 677 So. 2d at 36 1 - 62 (holding that urban sprawl rules did not

vest unbridled discretion in agency where, among other things, there is an

adjudicatory process in place for e valuating urban sprawl plans and such

decisions were subject to judicial review).

7 7 . Based on the Findings of Fact, the Commission established by a

preponderance of the evidence that the Proposed Rule is not invalid under

section 120.52(8)(d) for being va gue, failing to establish adequate standards

for agency decisions, or vest ing unbridled discretion in the Commission. The

Proposed Rule followed the statutory directives, clear ly set s forth the process

for filing and resolving complaints, and grants the Co mmission no more

discretion than already granted by the Legislature .

7 8 . Third, AT&T contends that the Proposed Rule a s invalid because the

Commission failed to materially follow the applicable rulemaking procedures ,

in violation of section 120.52(8)(a) .

79 . An invalid exercise of delegated authority under section 120.52(8)(a)

typically exists where the agency fails to materially follow the statutory

procedures in promulgating the rule being challenged, such as timely and

adequately publishing notices, accepting comment s , and holding public

hearings. See, e.g. , Fernandez v. DepÔt of Health , 223 So. 3d 1055, 1058 (Fla.

1st D CA 2017) (holding that proposed rule was not invalid where, among

other things, the evidence confirmed that the agency followed the a pplicable

rulemaking procedures by publishing notices, accepting comments from

interest ed parties, holding ten public hearings, and publishing the revised

proposed rule). It is about the propriety of the rulemaking process, rather

than the substance of the rule as proposed .

8 0 . H ere, AT&T conceded at the hearing that it was not challenging the

CommissionÔs process in adopting the Proposed Rule. That alone undermines

any suggestion that the Proposed Rule is invalid under section 120.52(8)(a).

8 1 . Neverth eless , AT&T argues that the law required the Commi s sion to

adopt substantive criteria in the Proposed Rule , which was feasible, because

it cannot evaluate rate complaints based on unadopted criteria . AT&T is

correct that Ñ[a] n agency statement that meets t he Chapter 120 definition of

a rule, but which has not been promulgated in accord with section 120.54

Ó constitutes an invalid exercise of delegated legislative authority and,

therefore, is unenforceable. ÔÒ Coventry First, LLC v. State, Off. of Ins. Reg ul . ,

38 So. 3d 200, 203 (Fla. 1st D CA 2010) (quoting Dep Ô t of Rev . v. Vanjaria

Enters., Inc., 675 So. 2d 252 (Fla. 5th DCA 1996) ).

8 2 . However, this is not an unadopted rule challenge . The evidence

confirmed that the Commission has not yet evaluated any compl aints or

developed methodologies that it may apply in the future. Rather , it intends to

follow the unique process mandated by section 366.04(8)(f) Ð i.e. , opening up

the first four hearings to all interested parties to provide Ñprecedent on the

establishment of pole attachment ratesÒ Ð to gain substantive knowledge in

this new area of regulation so that it can develop the methodologies it will

apply going forward. E ven if AT&TÔs argument on this issue were viable

under section 120.52(8)(a) , it must be rejected because the Commission has

not yet developed a specific methodology that could be deemed an agency

statement required to be ado pted in a rule.

8 3 . Based on the Findings of Fact, the Commission established by a

preponderance of the evidence that it compli ed with the rulemaking

procedures ; thus, the Proposed Rule is not invalid under section 120.52(8)(a).

8 4 . Fourth, AT&T contends that the Proposed Rule is arbitrary and

capricious , in violation of section 120.52(8)( e) , because the Commission made

no mean ingful effort to develop methodologies in the Proposed Rule, which is

required under federal law and creates uncertainty in this field of regulation .

8 5 . ÑA rule is arbitrary if it is not supported by logic or the necessary facts ;

a rule is capricious if i t is adopted without thought or reason or is irrational .Ò

§ 120.52 ( 8 ) (e), Fla. Stat. A determination is not arbitrary or capricious if it is

justifiable Ñunder any analysis that a reasonable person would use to reach a

decision of similar importance.Ò Drav o Basic Materials Co. v. DepÔt of Transp. ,

602 So. 2d 632 , 635 n.3 (Fla. 2d DCA 1992).

8 6 . As previously discussed, t he Legislature did not direct the Commission

to adopt a specific methodology in its procedural rule . Instead, it opted for a

unique adjudic atory process in which the Commission will use the first four

hearings to develop precedent for use in subsequent cases . Within that

adjudicatory process, the Commission must generally apply FCC and federal

appellate decisions in evaluating rate s , which ar e based on the methodologies

included in the FCC regulations. And, if a party requests an alternative cost -

based rate, the Proposed Rule requires that party to explain why the

methodology supports the alternative rate so the issue can be resolved in a

chap ter 120 evidentiary proceeding , as required by the implementing statute .

8 7 . AT&T lastly suggests that the CommissionÔs future decisions on rate

complaints will be arbitrary and capricious because the regulated community

has no knowledge of what methodolo gies will be used. However, it would be

improper at this point Ñto speculate that the [Commission] will act arbitrarily

and capriciously when the [Proposed] rule does not mandate such result and

can be applied reasonably.Ò Fla. Prepaid Coll. Bd. v. Intuiti on Coll. Sav.

Sols., LLC , 330 So. 3d 93, 97 - 99 (Fla. 1st DCA 2021) . This is particularly so

where the Proposed Rule simply tracks the LegislatureÔs directive to use the

first four hearings to develop precedent on the issue of reasonable and just

rates. See Hasper v. Dep Ô t of Admin. , 459 So. 2d 398, 400 (Fla. 1st DCA 1984)

( holding that a rule is not rendered invalid merely because an agency may

erroneously apply it in the future, particularly where the rule does not

mandate an application contrary to the en abling statute) . AT&TÔs argument

is a premature attempt to speculate that the Commission will ultimately act

in an arbitrary and capricious manner in the future, which is not a viable

attack on the validity of the Proposed Rule.

88. Based on the Findings o f Fact, the Commission established by a

preponderance of the evidence that the Proposed Rule is not arbitrary or

capricious. The Commission adopted a procedural rule that follow s the

statutory directive to use the first four evidentiary hearings to establi sh

precedent on reasonable and just rates . T he Legislature did not direct the

Commission to adopt a methodology and it did not act illogically,

unreasonably, or irrationally in refusing to do so. See generally Bayonet Point

Hosp . , Inc. v. DepÔt of HRS , 490 So. 2d 1318, 1320 (Fla. 1st DCA 1986) (noting

that Ñ[t]he agency rulemaking function involves the exercise of discretion and

this court will not substitute its judgment for that of the agency on an issue

of discretion, unless the statutes mandate the adop tion of the requested

rule.Ò). Thus, the Proposed Rule is not invalid under section 120.52(8)( e ) .

O RDER

Based on the foregoing Findings of Fact and Conclusions of Law, Proposed

Rule 25 - 18.010 does not constitute an invalid exercise of delegated legislativ e

authority as to the object i ons raised by Petitioner. Therefore, it is O RDERED

that the Petition is Dismissed.

D ONE A ND O RDERED this 1 8 th day of May , 2022 , in Tallahassee, Leon

County, Florida.

S

A NDREW D. M ANKO

Admin istrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1 8 th day of May , 2022.

C OPIES F URNISHED :

Keith Charles Hetrick, General Counsel Jon C. Moyle, Esquire

Florida Public Service Commission Moyle Law Firm, P.A.

2540 Shumard Oak Boulevard 118 North Gadsden Street

Tallahassee, Florida 32399 - 0850 Tallahassee, Florida 32301

Karen Ann Putnal, Esquire Douglas Derek Sunshine, Esquire

Moyle Law Firm, P.A. Florida Public Service Commission

118 North Gadsden Street 2540 Shumard Oak Boulevard

Tallahassee, Florida 32301 Tallahassee, Florida 32399 - 0850

Samantha Cibula, Esquire Kathryn Gale Winter Cowdery, Esquire

Florida Public Service Comm ission Florida Public Service Commission

2450 Shumard Oak Boulevard 2540 Shumard Oak Boulevard

Tallahassee, Florida 32399 - 0850 Tallahassee, Florida 32399 - 0850

Daniel Elden Nordby, Esquire Amber Stoner Nunnally, Esquire

Shutts & Bowen LLP Shutts & Bowen, LLP

215 South Monroe Street , Suite 804 215 South Monroe Street , Suite 804

Tallahassee, Florida 32301 Tallahassee, Florida 32301

Ken Plante, Coordinator Adam Teitzman, Commission Clerk

Joint Administrative Procedures Office of the Commission Clerk

Commmittee Florida Public Service Commiss ion

Pepper Building, Room 680 2540 Shumard Oak Boulevard

111 West Madison Street Tallahassee, Florida 32399 - 0850

Tallahassee, Florida 32399 - 1400

Braulio Baez, Executive Director Anya Owens, Program Administrator

Florida Public Service Commission Margaret Swain

2540 Shumard Oak Boulevard Florida Administrative Code & Register

Tallahassee, Florida 32399 - 0850 Department of State

R.A. Gray Building

500 South Bronough Street

Tallahassee, Florida 32399 - 0250

N O TICE O F R IGHT T O J UDICIAL R EVIEW

A party who is adversely affected by this Final Order is entitled to judicial

review pursuant to section 120.68, Florida Statutes. Review proceedings are

governed by the Florida Rules of Appellate Procedure. Such proceeding s are

commenced by filing the original notice of administrative appeal with the

agency clerk of the Division of Administrative Hearings within 30 days of

rendition of the order to be reviewed, and a copy of the notice, accompanied

by any filing fees prescr ibed by law, with the clerk of the d istrict c ourt of

a ppeal in the appellate district where the agency maintains its headquarters

or where a party resides or as otherwise provided by law.