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Infrastructure

Big Fight Over Costs of Pole Attachments Pits New Entrants Against Utilities

Many of the commenters urge the FCC to change the standards it uses for cost-sharing of pole replacements.

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Photo of FCC Headquarters

WASHINGTON, September 15, 2022 – Pole attachers claim that utility companies place undue burden on attachers regarding the cost of pole replacements for broadband wires.

These broadband companies seeking to put fiber on utility poles made these comments in response to the Federal Communications Commission’s March notice seeking comment. The agency particularly asked about situations where an attacher should not be required to pay for the full cost of a pole replacement and what the proper allocations of costs in those situations should be.

It is also seeking comment on whether the Commission should require utilities to share information with potential attachers on pole conditions.

Complaints from new entrants

The Schools, Health and Libraries Broadband Coalition said in its comments to the FCC that “the current model does not provide a clear framework for both the pole owner and attachers to achieve equitable and balanced cost allocation solutions.”

Under the current model, pole owners are not required to share information regarding the age of the pole, tagged status, replacement, and maintenance schedules. “Without such transparency, the attacher maintains little recourse to contest these costs, aside from blindly questioning them,” read SHLB’s comment.

Furthermore, pole owners frequently leverage their superior bargaining position to insist that an attacher must purchase a new pole for the utility and pay for its installation, claimed the NCTA in its petition, despite admonitions that charges must be reasonable and limited to costs accrued during the attachment process.

Even in the case of make-ready costs, utility pole owners benefit from pole replacements as much as attachers, said T-Mobile in its comments. Oftentimes, poles will need to be updated regardless of attachments, it said. It argued that because both parties benefit, both should contribute to the costs associated.

“Pole replacement charges are substantial drivers of rural broadband deployment costs, and they frequently delay projects that then must be rerouted or redesigned,” said Charter Communications, a cable and spectrum internet service provider, claiming that the unpredictability of costs disrupt project budgets.

“These largely unregulated charges have the potential to impede the success of federal and state broadband deployment programs, and place at risk the national priority to connect all Americans to quality, high-speed broadband,” said Charter.

Utilities say attachers get big benefits

The Utilities Technology Council refuted this argument, saying in its comments that the benefits of pole replacements are “insignificant” for utilities in comparison to the great benefit it provides to attachers. Indeed, access to pole infrastructure per FCC-regulated pole rental rates provides a significant saving to communication companies compared to the cost of deploying and maintaining their own pole infrastructure or undergrounding, added Edison Electric Institute.

Replacements are reimbursed at cost by attachers to ensure that the costs of broadband are not borne by electricity customers, Edison Electric continued. The Council urged the FCC to review disputes on a case-by-case basis, claiming that requiring utilities to share in replacement costs will ultimately delay broadband deployment.

Many of the commenters participating in comments before the FCC also participated in a contentious Broadband Breakfast Live Online discussion on the topic on April 27, 2022.

Cable industry petition kicked off the controversy

The Commission’s notice comes in response to a petition filed by the NCTA – the internet and television association in 2020 which urged the Commission to declare that pole owners share in the cost of pole replacements. It also asked that pole attachment complaints arising in unserved areas should be prioritized in the Accelerated Docket, which allows for a faster resolution of an appeal.

The Communications Act of 1934 grants the FCC authority to regulate the rates and conditions of pole attachments. It specifies that an attacher which adds to or modifies its attachment “shall bear a proportionate share of the costs incurred by the owner in making such pole… accessible.”

In 1996, the FCC clarified the ruling, saying that any party which benefits from a modification like a pole replacement is responsible for the cost of the modification. The Wireline Infrastructure Order of 2018 further clarified that new attachers “are not responsible for the costs associated with bringing poles or third-party equipment into compliance with current safety and pole owner construction standards to the extent such poles or third-party equipment were out of compliance prior to the new attachment.”

Last year, the Wireline Competition Bureau issued the Pole Replacement Declaratory Ruling which stated that it is inconsistent with the Communications Act for utilities to impose the entire cost of a pole replacement on an attacher when it is not the sole cause of the replacement – even if it would benefit from the replacement.

Infrastructure

Utilities Coalition Warns Against Shifting Cost of Replacing Poles

‘Utilities have been willing to perform these voluntary pole replacements because they have been compensated for it.’

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Photo of linemen on a pole from 2015 by Lisa Meiman

WASHINGTON, January 23, 2023 – A coalition consisting of 37 electric utility companies serving 31 million households is warning the Federal Communications Commission that shifting the cost burden of replacing wood poles to house communications equipment onto utilities will make them less likely to take voluntary action to help telecoms expand.

The Coalition of Concern Utilities said in a letter Thursday that the FCC’s current study into whether it should order utilities to share in the cost of replacing poles should factor what those utilities have been doing on a voluntary basis – “prematurely” replacing their poles for telecoms despite it diverting resources from “system reliability, grid modernization and clean energy initiatives.

“Despite these disincentives to prematurely replacing poles for communications companies, utilities for four decades have been willing to perform these voluntary pole replacements because they have been compensated for it,” the letter said.

Traditionally, pole owners can invoice to a telecommunications company the cost of replacing the entire pole if it feels the equipment to be attached would warrant it.

The coalition added that submissions to the commission to “modify this longstanding, carefully balanced and successful cost reimbursement mechanism would cause many utilities to reconsider, for the first time in four decades, whether dropping everything to perform voluntary and premature pole replacements is worth the time, effort and expense.”

Shifting even some part of the cost to the utilities would likely be absorbed by them, the coalition argues, because the utilities will be “hard-pressed” to justify to state utility commissions “how pole replacements solely necessitate by communications attacher requests is a benefit to electric rate payers.”

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Broadband Mapping & Data

NTIA Working on State Guidance for Further Map Challenges After BEAD Allocation: Official

An agency official said states have asked for guidance on how to handle local challenges.

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Photo of NTIA Senior Policy Advisor Sarah Morris at the U.S. Conference of Mayors

WASHINGTON, January 19, 2023 — A senior advisor to the National Telecommunications and Information Administration said Thursday that the Commerce Department agency is working on crafting guidance for states about how to approach local map challenges after it allocates the $42.5 billion from its flagship broadband program. 

The NTIA is preparing to allocate money to the states from the Broadband Equity, Access and Deployment program, following the closing of the deadline Friday to challenge the Federal Communications Commission’s maps on which that funding is dependent. The agency, which has already decided on a base of $100 million for each state, has said it expects to allocate all remaining funds by June 30. 

Sarah Morris, a senior advisor to NTIA head Alan Davidson who was expected to appear at the Conference of Mayors Thursday but could not – said the agency has fielded questions from state officials about how to handle local challenges to the underlying data – including areas that are served and unserved – that props up the FCC’s map. 

“The states have had a lot of questions about how to do this and we are working on guidance for them,” Morris said to a conference room containing mayors from cities across the country. “So we appreciate your [mayors] input as well as we’re thinking through how much guidance and what type of guidance…as states come up with their own state challenge process.” 

Morris added that the NTIA knows there are a lot of other data sources that determine served and unserved areas and that the states will have “more flexibility” in the challenge process, as the FCC is generally constrained by legislation for mapping data. 

What cities can do now for BEAD preparation

Morris also advised cities on what to do now to prepare for when the BEAD allocations are made. 

“Document the connectivity challenges in your communities…we want to make sure those needs are reflected in the five-year plan,” she said, alluding to the applications for BEAD funding. 

She also urged, as many before her have, for the mayors to meet with their state broadband offices, which she called the “center of gravity” for federal broadband funding.  

Finally, she also asked for the mayors help “spread the word. It’s not easy reaching the unconnected and we want to make sure that folks understand the good work that is possible within these programs and that people feel connected, not just the leaders and politicians in the state, but really the folks on the ground in communities, that they understand what’s happening and feel connected to these programs.” 

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Funding

Mayors Urged to Get Moving on State Conversations for Federal Broadband Funding

Time is running out to have cities’ voices heard at state broadband roundtables.

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Photo of Scott Woods (left) and Jase Wilson

WASHINGTON, January 18, 2023 – Representatives from a company that helps internet service providers and local governments get federal broadband money urged mayors of cities across the country Wednesday to quickly get involved in the process by actively engaging their state broadband offices or get left behind.

Scott Woods and Jase Wilson, vice president for community engagement and strategic partnerships and CEO, respectively, at Ready.net told the 91st United States Conference of Mayors in Washington that time was running out to have their voices heard at state roundtables.

Woods noted that the current version of the Federal Communications Commission’s maps are “overstated,” meaning there are inaccuracies in it. But if cities don’t have a plan or don’t come to the state broadband offices and plead their case for better connectivity, they will be left out.

The pair asked the packed conference hall at the Capitol Hilton whether they had conversations with their state broadband offices, but the vast majority did not raise their hands.

“The opportunity is now,” Wilson urged, adding the company’s Broadband.money has created a site and a broadband audit allowing mayors to get them up to speed. Broadband.money is a sponsor of Broadband Breakfast.

The National Telecommunications and Information Administration, which administers the $42.5 billion Broadband Equity, Access and Deployment program, has said that the accurate delivery of the money to connect the underconnected will be contingent on the readiness of the FCC map, which had a deadline to challenge its contents on January 13, 2023.

Each states is expected to be allocated at least $100 million by June 30, with many states receiving much, much more. After the June 30 kickoff, entities, including cities, can apply for a piece of the pie.

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