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Rationalized Pole Attachment Rates is a Win for Broadband

08.06.2018

Late Friday, the FCC released its order modernizing various rules governing pole attachments. The FCC’s order addresses a range of issues, including one-touch make ready and timelines associated with pole attachment processes. Most significant to many of our members is the FCC’s adoption of fundamental changes to the agency’s rate structure governing incumbent local exchange company (ILEC) pole attachments. These rate reforms are a potential game changer that will substantially increase broadband deployment and competition. The Commission’s willingness under Chairman Pai to dig in to the nuts-and-bolts of broadband deployment is a ground shifting approach to buoying the wireline infrastructure needed to efficiently and effectively deploy more fiber – and carry 5G traffic – so our nation’s broadband providers can continue connecting communities. 

USTelecom has advocated extensively for rate reforms, focusing specifically on the vast rate disparities for pole attachments between ILECs, CLECs and cable attachers. By surveying our members about pole attachment rates that covered millions of poles, we were able to demonstrate in a credible, fact-based, way that the current regulatory scheme governing ILECs rates for pole attachments fundamentally skewed the playing field and obstructed fiber deployment. For example, USTelecom found that in some instances, ILECs paid pole attachment rates 1,000% higher than their CLEC – and 1,800% higher than their cable – competitors. The vast disparity in pole attachment rates bolstered the logical argument that similarly situated attachers should pay similar pole attachment rates for similar access. 

By recognizing the impact of these rate inconsistencies, the FCC took an important step toward further expanding investment in broadband deployment. Specifically, the FCC’s order concludes that when determining comparable pole attachment rates for new pole attachment agreements, the presumption is ILECs should not be charged a higher rate than a CLEC competitor. The FCC’s final order makes it crystal clear that “new” agreements includes agreements that are automatically renewed, extended, or in evergreen status, after the effective date of its order. At long last, there is a path forward to begin modernizing decades-old agreements with utilities that ILECs have been locked into for years. 

By clarifying that new rates should apply to new, and newly renewed agreements, the FCC’s action will likely accelerate competitive rate parity. What does that mean? Our nation’s providers are better positioned to bring more broadband benefits to consumers and communities faster and push broadband connectivity further into rural America.

Utility poles haven’t changed much in the last 120 years. However, last week’s decision to reform the rate structures associated with those poles is significant move toward expanding 21st century connectivity.