The National Broadband Plan (the “Plan”) recommends a number of actions to promote broadband deployment and adoption for wired and wireless networks, including lowering pole access and rental costs and establishing more timely access to poles, conduits and public rights of ways. Recommendations include:

  • Lowering the telecommunications pole rent formula close to the cable television pole formula rate
  • Creating timelines to govern every step of the pole attachment process
  • Lowering right-of-way fees to cost-based level
  • Creating a federal, state, Tribal and local task force to identify right-of-way best practices to speed deployment

Background

Many of the pole attachment related proposals in the Plan have been the subject of discussion in an FCC rulemaking and a related proceeding. (For complete discussion see Davis Wright Tremaine advisories dated 11/21/07 and 8/18/09). On Nov. 20, 2007, the Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking (NPRM) addressing pole attachment rental rates, certain terms and conditions of pole access, and whether Incumbent Local Exchange Carriers (ILECs) are entitled to the protections of Section 224 of the Communications Act (Pole Act). The NPRM raised a host of questions. As reflected in the Plan, one issue was whether to create a single “broadband rate” for pole attachments, and if so, whether that broadband rate should be based on the FCC’s “cable” or “telecom” formula, or some other formula. In addition, the FCC is considering a separate petition filed by a utility seeking to increase the rate for cable operator attachments used to provide VoIP from the cable rate to the telecommunications rate.

The rulemaking also asks whether the FCC should adopt specific rules regarding a number of “terms and conditions” affecting pole attachments. In particular, significant emphasis has been placed on the need for timelines for the completion of make ready, the use of specific construction practices such as boxing and extension arms, the use of contractors to perform make-ready work, access by wireless attachers and other issues pertaining to the process of obtaining access to utility poles.

Access to public rights-of-way and the fees charged by local governments was a subject of much attention at the FCC under Section 253 of the Communications Act in the first few years following the adoption of the 1996 Telecommunications Act. During that time, the FCC issued a few key orders that have been widely followed regarding the scope of local “management” of the public rights-of-way, and the Commission had several public hearings for the vetting of public rights-of-way access issues. More recently, the issue has not been a front burner topic for the Commission. Indeed, the Plan notes that disputes under Section 253 and public rights-of-way cases have languished at the FCC. However, perhaps in the wake of recent court decisions that have narrowed the impact of Section 253, the Commission received comments in the Broadband Plan NOI from providers detailing the delays and expenses that they have faced in trying to access public rights-of-way.

Analysis: pole attachments

To spur broadband deployment, the Plan recommends that the Commission establish rates for all pole attachments by broadband service providers that are as low and as uniform as possible under Section 224 of the Communications Act, and facilitate the timely and efficient access to poles, conduits and rights-of-way by such providers.

Rates

The Plan acknowledges that the amount of pole attachment rent plays a significant role in broadband deployment decisions and that broadband deployment can be encouraged by directly cutting such costs. In addition, the Plan posits that with the convergence of video, voice and data services over shared networks, charging different rates for similar pole attachments based on regulatory classifications (i.e., cable vs. telecommunications), is outdated and has led to significant litigation and uncertainty, which could deter broadband deployment and investment.

Consequently, the Plan recommends that the FCC establish pole attachment rates as low and as close to uniform as possible, in light of statutory limitations. Specifically, the Plan notes that the cable formula “has been in place for 31 years and is ‘just and reasonable’ and fully compensatory to utilities.” The Plan urges the FCC to modify its rules to lower the telecommunications pole formula to yield an attachment rate as close to the cable rate as possible. If implemented, the cable television rate would continue to apply as it has historically to eligible cable system attachments, while attachments by telecommunications carriers (both wireless and wireline) would be subject to an attachment rate that is much closer, if not identical, to the cable pole attachment rate.

The Plan also recognizes that a significant percentage of utility poles are not subject to FCC jurisdiction either because states regulate them (20 have certified to do so) or because the poles are owned by cooperative or municipal utilities that are exempt from the federal Pole Attachment Act. Many of these coop and municipal poles are not subject to any government oversight and as a result, these utilities often charge pole rents far above what investor owned utilities charge. To remedy this, the Plan recommends that Congress revisit the Pole Attachment Act, to eliminate exemptions, to require state rules to meet minimum standards, to “harmonize access policy for all poles, ducts conduits and rights-of-way,” and to ensure that all “broadband service providers” have the same rights to access poles on reasonable rates, terms and conditions.

Terms and conditions

In addition to pole attachment rates, the Plan specifically addresses a number of pole attachment “terms and conditions.” The Plan recognizes that absent regulation, pole owners “have few incentives to change their behavior.” As noted above, the Plan recommends that the FCC adopt a comprehensive timeline for make-ready and all the steps in the pole attachment process. Although the Plan does not specify the timelines, it notes that several states, including Connecticut and New York have established firm timelines for the entire process, which facilitates the deployment of broadband. The Plan states that the timeline should be comprehensive and applicable to all forms of communications attachments, including wireless. Indeed, the Plan notes that the FCC should impose a limit on the time utilities take to “certify” wireless equipment for attachment.

Among the methods for promoting swifter and less costly make ready, the Plan identifies several proposals currently pending in the existing pole attachment Rulemaking. For example, the Plan suggests the FCC establish a schedule of charges for the most common categories of work, codify the requirement giving attachers the right to use space- and cost-saving techniques such as boxing or extension arms where practical, and allow attachers to use independent, utility approved and certified contractors to perform all engineering assessments and communications make ready. The Plan also recommends that the FCC ensure existing attachers take action within a specified period to accommodate new attachers, and link the payment schedule for make-ready work to the actual performance of that work, rather than up front payments.

The Plan also takes issue with the FCC’s own treatment of pole attachment disputes, recommending that the FCC “institute a better process for resolving access disputes.” In particular, the Plan recognizes that the FCC’s formal process can take years, despite time being of the essence, and it notes ”significant flaws” in the FCC’s attempts to informally resolve attachment disputes through mediation. The Plan recommends that the FCC speed the process and also provide future guidelines for the industry on what constitutes “just and reasonable” practices. In addition, the Plan suggests that the FCC could use its authority to require pole owners to post standards and adopt procedures for resolving safety and engineering disagreements. It even suggests that the FCC award compensation from the date of the denial of access to stimulate swifter resolution of disputes. The Plan also promotes greater availability of information regarding the location and availability of poles and conduits.

All of these issues have been strongly supported by wireless and wireline providers and opposed by pole owners. The Plan’s recommendations stand as a stark rejection of the utilities’ arguments.

Analysis: rights-of-way

The Plan also focuses on improving rights-of-way management and costs. On this topic, the Plan presents primarily recommendations for cooperation among different levels of government and for the adoption of policies that focus on facilitating the deployment of broadband infrastructure over parochial concerns. The Plan recommends initially that the FCC establish a joint task force with state, Tribal and local policymakers to craft guidelines for rates, terms and conditions for access to public rights-of-way. The Plan focuses on the fact that despite past efforts by the National Telecommunications and Information Administration (NTIA) and the National Association of Regulatory Utility Commissioners (NARUC), a coordinated approach to rights-of-way policies has not taken hold. The Plan notes that while Section 253 of the Communications Act prohibits state and local policies that impede the provision of telecommunications services, disputes under Section 253 have “lingered for years,” both before the FCC and the courts.

The Plan is critical of federal, state and local governments that seek to impose “market value” fees. It points out that such approaches fail to consider the benefits that the public as a whole receive from increased broadband deployment, particularly in underserved areas. The Plan concludes that the social value of broadband can cut across political boundaries and as a result, rights-of-way policies and best practices must reach across those boundaries and be developed with the “broader public interest in mind.”

Based on its conclusions, the Plan makes several specific recommended undertakings for a joint task force of state, local and Tribal authorities:

  • Investigate and catalog current state and local rights-of-way practices and fee structures;
  • Identify public rights-of-way and infrastructure policies and fees that are consistent with the national public policy goal of broadband deployment and those that are inconsistent with that goal;
  • Identify rights-of-way construction and maintenance practices that reduce costs for both government and users and that avoid unnecessary delays and costs;
  • Recommend appropriate guidelines for what constitutes “competitively neutral,” “nondiscriminatory,” and “fair and reasonable” rights-of-way practices and fees; and
  • Recommend an expedited process for the FCC to resolve rights-of-way disputes.

The Plan recommends that the task force be required to make its recommendations within six months, to be used by the FCC in a proceeding seeking industry-wide comment.

Analysis: access to federal resources

The final point of the Infrastructure chapter of the Plan addresses “maximizing impact of federal resources.” Recognizing that federal government infrastructure can also play an important role in lowering the costs and speed of infrastructure deployment, the Plan makes four recommendations for action by the federal government. The Plan emphasizes that unlike past permissive policies, the next step should be to require certain changes.

The first two recommendations focus on the Plan’s belief that coordination of infrastructure projects will lead to substantial cost reductions. Specifically, the Plan recommends that the U.S. Department of Transportation (DOT) condition federal financing of highway, road and bridge projects on allowing joint deployment of conduits by qualified parties, and it suggests that Congress consider enacting “dig once” legislation to extend joint trenching requirements to all rights-of-way projects receiving federal funding. The focus of these two recommendations appears to be giving notice to potential parties of upcoming projects to allow for joint trenching and installation of conduits. While the general proposition of allowing joint trenching is probably not controversial, the “dig once” proposal may be problematic. To the extent that “dig once” legislation means that no new installations can be made for some number of years after a new road project, it threatens to exclude new entrants from the market. Indeed, at the same time that it makes the recommendation, the Plan recognizes this risk in a footnote.

The other two recommendations in this last part focus on access to federal rights-of-way and properties. The Plan recommends that Congress consider authorizing federal agencies to set fees for access to federal rights-of-way on a management and cost recovery basis. It also recommends that the executive branch develop master contracts to expedite placement of wireless equipment on federal property and buildings.

We expect the FCC to release a series of notices launching this proceeding and others in rapid succession, and will be monitoring and participating in those proceedings on behalf of our clients.