FCC Lowers Pole Attachment Rates for CLECs, Gives ILECs Shot at Challenging Rates

The order “reinterprets” language in Sections 224(a) and (b), which says “providers of communications services” have a right to “just and reasonable” rates. The FCC now says “providers of communications” means CLECs, cable companies and ILECs, FCC officials said. Under Section 224(f), though, only “telecommunications carriers” are entitled to nondiscriminatory access to poles. The FCC believes ILECs don’t count as “telecommunications carriers” under that section, FCC officials said, so ILECs will have a chance -- but not a guarantee -- that they can get lower pole rates through FCC complaints.

Thursday’s order also sets deadlines of 148 days for utility companies to complete attachments, and of 178 days for utilities to attach wireless antennae to the tops of poles. Utilities can obtain an extra 60 days for completing large attachment orders. Under Thursday’s order, when utility companies miss those deadlines, telcos will be allowed to hire independent contractors to do the work. In the 20 states and the District of Columbia where local authorities have asserted jurisdiction over pole attachments, local authorities will be given 180 days to process pole attachment requests, and then the FCC will pre-empt the local authorities. The order removes caps on penalties for unauthorized attachments.

The commission had to act quickly on pole attachments under Section 706 of the Telecommunications Act after it found last year that broadband wasn’t being deployed quickly and efficiently, Genachowski said Thursday. He said in a news conference after the meeting that the current system “has been discouraging investment, slowing down broadband build-out.” Utilities have complained loudly that their concerns were stream-rolled by the commission, but Genachowski said he was sure the order would stand up to legal scrutiny. “It’s another example of stakeholders who disagree on policy grounds with what the commission is doing turning it into a legal argument,” the chairman said. Pole attachments are “the blood and guts” of broadband deployment and “one of the top priorities” at the commission, Genachowski said.

Utility lawyer Jack Richards of Keller, Heckman said the decision was “a zealot’s ruling” by a “broadband-obsessed commission” that showed “a stunning disregard for electric utility concerns.” If the commission wanted to establish a uniform rate for pole attachments, it could reclassify cable as a telecom service under Title II of the Telecom Act and raise the cable rates to that of CLECs, Richards said. The commission’s decision to “reinterpret” the “just and reasonable” parts of Section 224 is probably unlawful, Richards said, saying he was sure “a court would see it that way.” Asked whether his clients would sue over Thursday’s order, Richards said: “We've got to do some talking.”

But Commissioner Meredith Baker said she was satisfied that the commission had “struck the proper balance” between the need to deploy broadband quickly and efficiently and the need to provide a safe and secure national power grid. She urged wireless carriers in particular “to work collaboratively” with power companies. Fixing pole attachment rates was “one of the few concrete steps” the commission could take to help broadband deployment, she said.

Commissioner Mignon Clyburn, a former South Carolina utility regulator, said she struggled most with the provision allowing ILECs to challenge their rates. She briefly considered arguing that ILEC rates should be lowered automatically. “At face value, parity for ILECs is an attractive proposition,” Clyburn said. “However, I was persuaded that joint use agreements [between ILECs and utilities] are not just simple pole attachment contracts: They are joint ownership agreements. Some … are decades old."

Commissioner Robert McDowell, said he, too, would have preferred to see ILEC rates lowered, “but I understand that ILECs … are also pole owners.” “This order still does provide some relief to ILECs and their customers, where appropriate,” he said. McDowell also said he was glad about the commission notice of inquiry, which he hoped “solicits useful information. I caution however, that the FCC should be mindful of its limitations.”

Commissioner Michael Copps said the vote was “not sexy or very exciting” but it was a vital step in deploying broadband -- which, “by the way, is exciting.” “The disparities in pole attachment rates for different providers have also been a source of confusion and litigation, and hopefully the clarity we add today will discourage such outcomes,” Copps said. “The provision in this item of a mechanism to ensure that incumbent local exchange carriers will have a forum to seek Commission remedies for rates that they believe to be unjust and unreasonable is a good step in the right direction."

The order represents “a good first step. … But this game is far from over,” AT&T Assistant Vice President Frank Simone said on the company’s website after the vote. “Remember, as we indicated in our comments in this proceeding, different rates for different types of firms using the same space on a pole makes little sense when the cost of providing the space is the same to the utility pole owner,” Simone wrote. “A benchmark attachment rate that is ‘low and uniform,’ as the National Broadband Plan sought to achieve, would have sent a clear signal to certain pole owners that the days of leveraging these monopoly-era pole attachment agreements to secure escalating attachment revenue from phone companies was over.”

Thursday’s vote was “pro-consumer,” NCTA Vice President James Assey said in a news release. “Adopting low and uniform pole attachment rates and clarifying the rules will provide much-needed regulatory certainty that will permit broadband providers to extend their networks to unserved communities while fairly compensating pole owners,” Assey said.

Tw telecom said Thursday’s order was a victory for CLECs -- and for broadband deployment. The order “significantly improved the ‘Make Ready’ process that utilities must follow when acting on a pole attachment request,” tw telecom said in an email. “The new rules announced today will reduce the time and costs of broadband providers attaching their equipment and infrastructure to poles, greatly improving quality and reducing the time to deploy new broadband services.”