Why Pole Attachment Improvements Remain Elusive

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The FCC adopted an order six years ago designed to equalize the regulated rates paid by telecom providers to attach equipment to utility poles. That has not panned out. In fact, a USTelecom survey about pole attachment rates charged by Investor Owned Utilities (IOUs) points out the opposite. The results show rates charged to Incumbent Local Exchange Carriers (ILECs) have increased even as the pole attachment rates charged by ILECs to competitive carriers and cable companies have significantly decreased. USTelecom urges the Commission to move forward with its proposal to create a presumption that ILECs are entitled to competitively neutral rates when attaching to investor-owned utility (IOU) poles.

A filing shows a “wide disparity in pole rental rates,” according to the trade association. Surveyed ILECs pay IOUs nearly nine times what ILECs charge cable providers, and almost seven times the pole attachment rates ILECs charge CLECs. The 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 and $3.75, respectively, according to the survey.  

ILECs have “inadequate” bargaining power with IOU pole owners to negotiate for better rates. In the 46 states surveyed, USTelecom’s data show that ILECs attach to approximately 13.9 million IOU poles, whereas IOUs attach to only 4.6 million ILEC poles.

Though electric utility attachments occupy more than five times the average amount of space occupied by ILEC attachments, IOUs pay nearly the same rates on average. Thus, ILECs paid aggregate pole attachment rates of approximately $351.8 million to IOUs in 46 states but received only $125.8 million from IOUs, according to the data.

The survey also illustrates the “troubling” decision by the Tennessee Valley Authority (TVA) to substantially increase pole attachment rates charged by electric cooperatives in 2018. TVA’s service territory – covering seven states – is largely comprised of rural areas where the need to deploy broadband is greatest. In all but one TVA state, the rates charged by cooperatives for ILEC attachments exceed the national average cooperative rate of $21.05; In four TVA states, the rates charged by cooperatives exceed the national average of $25.23 charged by IOUs to ILEC attachers. TVA’s decision will increase pole attachment rates to an average of $30, according to USTelecom.

November 28, 2017               

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