June 26, 2018
Little noticed, but important, especially to broadband in rural America, the FCC’s upcoming action to modernize charges for attaching communications equipment to utility poles is likely to be another major step forward in achieving Chairman Pai’s goal of closing the digital divide. It may sound boring, but as the FCC has noted on numerous occasions, utility poles – and the pole attachments that go with them – are a key input for deployment broadband networks throughout the country.
Utility Poles and Broadband Deployment
The integral role that utility poles play in broadband deployments is the main reason that USTelecom has focused so much time and energy over the last several years advocating for important changes to the FCC’s pole attachment rules. USTelecom recently submitted a filing to the FCC that further emphasized the need for the agency to change the way it regulates pole attachments.
ILEC Rate Increases
Over the years, the FCC has made several changes to its rules, with its most substantive change last occurring in 2011. But in a filing submitted to the FCC last year, USTelecom demonstrated that the rates charged to incumbent local exchange carriers (ILECs) for pole attachments have increased even as the pole attachment rates paid by other competitive carriers and cable companies have significantly decreased.
For example, on average, ILECs surveyed in the 2017 USTelecom Survey pay investor owned utilities (IOUs) nearly 9 times what ILECs charge cable providers, and almost 7 times the pole attachment rates ILECs charge CLECs – results even more imbalanced than those from a similar USTelecom survey from 2008. In dollar terms, these ILECs pay an average of $26.12 to IOUs today in Commission-regulated states, compared to cable and CLEC provider payments to ILECs, which average $3.00 and $3.75, respectively.
Pole Attachment Rate Parity
These findings clearly demonstrate that the Commission’s 2011 Pole Attachment Order has not achieved its desired goal of ensuring just and reasonable pole attachment rates for ILECs. It doesn’t make sense that broadband providers of fundamentally identical services making fundamentally similar attachments should be charged such disparate rates. As the FCC has repeatedly emphasized, similar services should be regulated similarly.
While utility poles haven’t changed much in the last 120 years, it’s time for the regulations associated with them to come into the 21st century. Making sure all Americans can access the educational, social and economic opportunities unleashed by broadband internet access is critical to the future of our country. One way for the FCC to achieve this goal is for it to reform its rate structure for pole attachments by ensuring that ILECs can achieve greater rate parity for pole attachments.