Texas Supreme Court Rules Against CPS Energy in Case Involving Telecom Competitors

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AT&T is using it's existing infrastructure to provide fiber internet to customers across San Antonio.

Scott Ball / Rivard Report

Telecommunication companies AT&T and Spectrum pay fees to CPS Energy to utilize the utility's poles.

The state’s highest court decided against CPS Energy and AT&T in a more than decade-long case involving CPS Energy’s business dealings with the telecommunications company and its competitor, Time Warner Cable.

In a ruling Friday, the Texas Supreme Court agreed with the Public Utility Commission of Texas (PUC) that by not collecting the same fees from both AT&T and Time Warner Cable, CPS Energy was violating state law by discriminating against one telecommunications provider in favor of another.

The Rivard Report did not receive responses Friday to questions emailed to CPS Energy officials. Spokespersons with TWC and AT&T both said the companies were pleased with the court’s ruling.

“We agree with the court’s conclusion that Texas law doesn’t allow municipally-owned utilities like CPS [Energy] to discriminate in the rates they charge companies to attach to their utility poles,” AT&T spokesperson Dale Ingram said in an email.

The case, first filed in 2008, centers on CPS Energy’s billing and collection efforts for the two telecommunications companies to connect to CPS Energy’s utility poles.

Time Warner Cable, now called Spectrum Communications after its 2016 purchase by Charter Communications, first signed a connection agreement with CPS Energy in 1984, according to filings with the PUC. AT&T, then headquartered in San Antonio, signed a similar deal with the municipally owned electrical and gas utility in 1987.

Both TWC and AT&T initially agreed to a fee of $3.75 per pole attachment, but TWC’s contract included an “escalator clause” that increased its rate to $15.63 by 2007, along with permit application fees. AT&T’s contract had no such clause and no application fees.

However, CPS Energy began billing AT&T $15.63 per pole in 2007. AT&T continued to pay the lower amount, and “CPS Energy did nothing to collect its invoices until January 2009,” according to the ruling.

TWC sued CPS Energy and began paying the lower amount in 2008. That’s the same year AT&T announced it would be moving its corporate headquarters from San Antonio to Dallas.

The ruling reverses a previous decision by the state’s Third Court of Appeals. The case now returns to the 73rd District Court in Bexar County.

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