FCC’s Proposed Changes to Pole Attachment Rules Raise Significant Issues for Utilities

The Federal Communications Commission (FCC) has issued a draft Notice of Proposed Rulemaking (NPRM) proposing a number of changes to its current pole attachment rules in order to “make it easier, faster, and less costly” for attachers to access and use utility poles for the deployment of new broadband facilities and networks. This draft NPRM is tentatively scheduled to be formally adopted at the FCC’s upcoming Commission Meeting on April 20, 2017.

The rule changes proposed by the FCC in its draft NPRM would have a significant impact on utilities – not only would they further reduce utilities’ ability to recover the costs incurred by pole attachments, these proposed changes could seriously hinder or undermine utilities’ ability to effectively manage the safety and reliability of their electric distribution infrastructure. To the extent the pole attachment regulations in individual states follow the FCC’s rules and rate formulas, these proposed changes would also affect utilities in those states.

In brief, the FCC is proposing to accelerate access to utility poles by:

• Shortening the current timeframes for reviewing applications and performing make-ready work; and
• Accelerating the make-ready process through alternative approaches such as “one-touch” make-ready and expanding the ability of new attachers to perform the make-ready themselves (rather than allowing existing attachers to perform work on their own equipment).

The FCC claims that it recognizes its proposals to accelerate access to poles “could raise meaningful concerns about safety and protection of existing infrastructure.” Thus, among other things, the NPRM requests comment on the need to balance the benefits of the FCC’s proposals against the safety and property concerns of pole owners and existing attachers.

In addition, the FCC is proposing to reduce pole attachment costs for communications companies by:

• Reducing make-ready costs for attachers through increased regulation of utilities’ make-ready charges;
• Further reducing pole attachment rates by excluding capital costs from the FCC’s rate formula; and
• Requiring that the pole attachment rates paid by incumbent local exchange carriers (ILECs) be based on the FCC’s telecom rate formula, unless the pole owner can “demonstrate with clear and convincing evidence” that the ILEC receives benefits that warrant a higher rate.

Other proposed reforms to the FCC’s pole attachment rules include establishing an informal 180-day “shot clock” to resolve pole access complaints and adopting pre-complaint procedures to resolve certain issues in advance. Finally, the FCC is proposing revisions that would provide ILECs a reciprocal right of access to poles owned by competitive local exchange carriers.

In addition to the pole attachment issues discussed above, the NPRM includes proposals for changes to the FCC’s rules on copper retirement and the service discontinuance process for communications carriers. The FCC is also requesting comment on possible measures it could take to prohibit or preempt state and local actions that “inhibit broadband deployment,” such as permitting, access to rights-of-way, and “excessive” fees and costs.

The complete text of the FCC’s draft NPRM is available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-344161A1.pdf.