Keeping Rates Technology Neutral | Citizens Against Government Waste

Keeping Rates Technology Neutral

The WasteWatcher

Americans across the nation are increasingly accessing broadband services using a variety of tools and connecting not only through wireline services, but also with their wireless devices.  As demand grows for increased connectivity, so does the need to expand the infrastructure these devices rely upon.

To meet this demand, wireless carriers often find it necessary to lease space on existing utility poles because of local zoning restrictions and the high cost of building dedicated stand-alone poles.  Unfortunately, utility pole owners and operators often view pole attachment leases as a means to line their coffers by charging high rates – or worse, use unreasonable negotiation tactics as a means of keeping wireless carriers off of poles entirely.  The pole attachment fees charged to broadband providers, regardless of the type of technology, as well as denial of access to publicly owned rights-of-way, have the potential to inflate the cost of network construction or result in suboptimal network construction that potentially degrades the quality of broadband networks available to consumers.

The National Broadband Plan (NBP) found that existing poles, conduits, rooftops and rights-of-way play an important role in expanding broadband networks.  Following the release of the NBP, the Federal Communications Commission (FCC) revamped its formula for pole attachment leasing rates.  Section 224 of the Communications Act authorizes the FCC to set this formula, however, states that certify that they have regulatory authority over rates, terms, and conditions over access to poles, ducts, conduits, and rights-of-way are exempt from using the FCC’s formula.

Arkansas is one of the states that self-certifies that it regulates pole attachments, exempting the state from the FCC’s formula.  On October 27, 2015, the Arkansas Public Service Commission (PSC) will be reviewing utility pole attachments rates (Docket #15-019-R) in order to determine whether wireless providers should be charged the same rate or a higher rate for pole attachments as wired communications providers.  The PSC will also have the opportunity to prevent utilities from demanding unreasonable contact terms or otherwise delaying implementation.

According to an article in the Democrat-Gazette, 35 percent of Arkansans rely exclusively on wireless service for their telephone needs.  If the PSC determines that wireless providers must pay higher rates on pole attachments than other broadband providers, wireless consumers in Arkansas could see their bills increase to offset the higher cost of infrastructure improvements.  Or worse, they may see network investments directed to other states with pole use policies that encourage broadband deployment.

As states review policies governing rates for pole attachments, public utility commissions should review the FCC formula when determining if their own rates are fair and equitable.  Keeping rates on pole attachment leases technology neutral is a first step.

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