Pole Attachment Order May Result in Uniform Rate
An upcoming FCC order on pole attachments leaves some industry officials worried and others hopeful about the fate of pole attachment rates. The items are circulating at the FCC and will focus on “ensuring nondiscriminatory, just and reasonable access to utility poles,” the commission said when the May 20 meeting preliminary agenda was released. “We need a regime that is essentially going to set pole rates that are as low as possible, while still providing appropriate rental costs from pole owners,” NCTA Executive Vice President James Assey told us.
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Under the current statute, cable companies attach lines to poles at a rate lower than what telecom companies pay to attach their lines. NCTA, tw telecom and some other groups and telcos are urging the commission to decrease the telecom rate to at or close to the cable rate. “While we support the commission trying to be more transparent and showing people the rules they're proposing, I'm not sure this is the kind of proceeding they need to be concerned with,” said Don Shepheard, a tw telecom vice president. “They've already gone through this. They have a full complete record they need to move ahead with the order.” The market rates aren’t justified for wireless attachment owners, said Mike Saperstein, PCIA director of government affairs. “We want the utilities to stop subjecting us to market rates and the FCC to adjust them to what they should be.”
Section 224 of the Communications Act allows state commissions to set rates that they deem reasonable. “The states have the ability to opt in,” said National Association of Regulatory Utility Commissioners General Counsel Brad Ramsay. “But if a state commission doesn’t like what the FCC is doing, they can fix it.” The National Broadband Plan recommends that Congress amend the statute to extend the commission’s jurisdiction over the nation’s 134 million poles. About 85 million poles are owned by co-operatives, municipalities and non-utilities, the plan said.
"Some pole owners say that the statute doesn’t guarantee access to poles,” said Vice President Josh Seidemann of the Independent Telephone & Telecommunications Alliance. “But it does guarantee that once you have access, rates must be just and reasonable.”
Lowering rates is a “one-size-fits-all solution” that “generally wouldn’t suit our members very well,” said Tracey Steiner, senior corporate counsel for the National Rural Electric Cooperative Association. Some electric cooperatives serve areas with no more than two consumers per mile, and there isn’t enough revenue to recover investment in such remote areas, she said. “The current statute recognizes the difference in our business model and the areas we serve."
The Utilities Telecom Council thinks parity is needed, but said adjusting rates to the cable level is not the solution. “We think it’s a good idea to have uniform rates, but it shouldn’t be down to the cable rate,” said council attorney Brett Kilbourne. Cable companies “have revenues that dwarf the utility industry.” The FCC should also address rates for VoIP, which is a “catch me if you can” opportunity, he said. Because there’s no official FCC classification of cable VoIP, “cable companies refuse to pay telecom rates for VoIP,” he said. “A uniform rate would preempt game-playing.”
In the interim, the FCC could do more to quell the uncertainty of how to apply rates, which often results in litigation, Assey said. “The best thing the commission can do is develop a record and policy that relies on cost-based rates and provide us with certainty so that we're not spending time litigating in court.”