Utilities Need Market Compensation and Access Control for Attachments to Infrastructure

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Electric utilities, with some exceptions, are required by federal and state law to provide nondiscriminatory access to competitive telecommunications carriers and cable companies for “pole, duct and conduit” attachments at rates, terms and conditions that are just and reasonable. But utilities do not receive just compensation for pole attachments because the law restricts the rent they may charge to amounts that are below the real cost of the use. Moreover, access regulations, as broadly imposed by the Federal Communications Commission, require non-utility access and limit utilities’ control over their own infrastructure to an extent that threatens electric safety and reliability and homeland security. Reform of pole attachment regulation is badly needed.

Under current law, the FCC has jurisdiction to review pole attachment complaints. The states may regulate pole attachments themselves and effectively reverse preempt the FCC’s jurisdiction. In theory, utilities receive full compensation for pole attachments and may deny access for reasons of safety, reliability, capacity and generally accepted industry practices. In practice, utilities are shortchanged and have virtually no defense against unreasonable access. Utilities may not profit from pole attachments; but far from this, the cost-based rate for attachments falls far short of covering all the costs of pole attachments. Cable companies pay only for the cost of the space that they occupy on the pole and nothing for the rest of the pole that supports their attachments. Telecommunications carriers pay a portion of the costs of the rest of the pole, but this falls far short of the actual costs imposed on utilities.

As bad as the regulated rate is, the access regulations are worse. Utilities must provide mandatory access to poles, ducts, conduits and rights-of-way that they own or control for wire communications. The FCC has interpreted the scope of access to include, not only access for all kinds of attachments, but access by non-utility workers as well as access to maps and other records of critical infrastructure systems. Utilities theoretically may deny access, but the FCC has rarely if ever upheld an access denial. Even when utilities have caught unauthorized attachments, the FCC has defended the trespasser. All this potentially compromises electrical safety and reliability and homeland security.

In order to protect critical infrastructure from being compromised, pole attachment reform is needed. Pole attachment regulation is a vestige of 1970’s start-up subsidies that is badly out of date in today’'s nationwide, multi-service telecommunications environment. Such subsidies –paid by the electric customer – are unwarranted when the communications industry is consolidating and the FCC is freeing it from any access and interconnection obligations. Pole attachment regulation is eating away at critical infrastructure. It i’s time for carriers to pay their fair shares and for utilities to regain control over their own systems.