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

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.