Supreme Court Won’t Hear Challenge to Pole Attachment Order
The FCC pole attachment order survived judicial review, as the Supreme Court on the first day of its term declined to hear the case. American Electric Power had appealed the February decision by the U.S. Court of Appeals for the D.C. Circuit, which upheld the rules (CD Feb 27 p9). It’s a big win for telcos and cable providers, which will soon see lower costs and reduced delays when attaching lines to utility poles, said Stifel Nicolaus. AEP and other electric utilities had said the rules, if upheld, could shift hundreds of millions of dollars in cost to electric ratepayers. DTE Electric, Minnesota Power, National Grid and South Carolina Electric & Gas told the Supreme Court in seeking review that the new rules could mean “billions of dollars” in pole ownership and maintenance costs are shifted from ILECs to electric utilities (CD July 8 p3).
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"Today’s decision essentially cements the order into law,” said Stifel’s Christopher King and David Kaut in a report Monday. The decision will be good for the Bells and other ILECs, giving them savings on pole attachments over time, the analysts wrote investors. “This regulatory backstop gives ILECs new leverage to negotiate pole-attachment terms with power companies.” The process will take time, they wrote. “Some pole-attachment agreements could last for quite some time, potentially delaying the impact of the FCC changes. We believe that the ILECs probably will often not get their rates pushed all the way down to the cable level, but the gap will narrow over time."
Whether this decision is bad for the electric utilities depends on what the FCC decides to do, said Keller Heckman attorney Thomas Magee, who filed an amicus brief on behalf of power companies supporting the challenge. The commission has asserted jurisdiction over the rates, terms and conditions of the joint-use relationship, so “conceivably anything in the contract is subject to change by the FCC,” he told us. So far, the commission has only indicated that it wants to look at the rates, he said. “But what they're ignoring is that the rates are just one part of dozens of rights and responsibilities between the pole owners.”
USTelecom said it’s “pleased that the Supreme Court has rightly put a final stake in the efforts of the electric utility industry to delay the FCC’s implementation of the statute’s clear directive.” Vice President Glenn Reynolds said he’s “hopeful that these companies will now come to the table to negotiate reasonable attachment rates and conditions and, where they continue to refuse, that the FCC will move quickly to enforce its pole attachment rules."
The decision “removes any doubt about wireless providers’ rights to attach equipment to utility poles to expand and enhance wireless networks to benefit consumers,” said Scott Bergmann, CTIA vice president-regulatory affairs, in a statement. “The wireless industry continues to aggressively pursue the deployment of small cells and distributed antenna systems (DAS) to meet wireless subscribers demands, maximize spectrum efficiency and bolster network resiliency. We believe the FCC’s underlying action to ensure wireless access to utility poles, along with last week’s NPRM advancing temporary towers, DAS and small cell rollouts, are the types of FCC proceedings that truly serve the public interest.”