Electric Utilities Have Critical Role in Broadband Infrastructure Deployment

Electric utilities will play a critical role in new broadband infrastructure deployment under the Infrastructure Investment and Jobs Act of 2021, known as the Infrastructure Act. Whether access to the internet occurs via wired or wireless facilities, pole attachment agreements among pole owners, electric utilities, and broadband providers—usually telecom and cable companies—will play a vital role in bridging the digital divide.


Pole Attachments Regulations

The Federal Communications Commission (FCC) first regulated pole attachments in 1978, when it required pole owners to charge cable operators just and reasonable rates, terms, and conditions for pole attachments. In 1986, to promote facilities-based telecommunications services competition, the Pole Attachment Act expanded the scope of the FCC’s oversight to include any local exchange carrier or an electric, gas, water, steam, or other public utility “who owns or controls poles, ducts, conduits, or rights-of-way used, in whole or in part, for any wire communications.” The FCC has determined that “lack of reliable, timely, and affordable access to physical infrastructure—particularly utility poles—is often a significant barrier to deploying wireline and wireless services.”

Floyd R. Self

The FCC has developed a comprehensive set of regulations governing pole attachments for cable and telecommunications providers and their co-mingled broadband services. These regulations preempt state law and establish a baseline for rates, terms, and conditions that are just and reasonable.

However, a state may “reverse preempt” regulation of pole attachments by certifying to the FCC that it regulates rates, terms, and conditions for pole attachments and that its state regulations consider the interests of consumers. Currently, 22 states and the District of Columbia have certified to the FCC that they regulate pole attachments, with most adopting rules that are the same or substantially similar to the FCC regulations.

By having clear policies for pole attachment rates, terms, and conditions, it should be easier to successfully negotiate pole attachment agreements. Where parties cannot agree, complaints to the FCC, or state utility commissions with oversight, generally must be resolved within a year, with complaints involving a denial of access required to be resolved sooner, usually within 180 days.

Funding for Broadband

The Infrastructure Act allocates $65 billion for broadband, of which $42 billion is designated for network buildout—this is separate from the billions in funding authorized for electric grid resilience. The FCC estimates more than 14 million Americans lack access to reliable, high-speed broadband, including 20% of rural households. The White House in announcing the plan in November 2021 wrote: “Broadband internet is necessary for Americans to do their jobs, to participate equally in school learning, health care, and to stay connected.” BroadbandNow, a group that provides a database of internet service providers, estimates more than 42 million Americans lack high-speed internet access.

Each state will receive at least $100 million in grants, with the balance allocated based upon each state’s underserved and high-cost locations. Electric, telecom, and cable utilities—along with local governments and other entities—are expected to compete for these grants. Disputes between pole owners and attachers will likely be amplified and litigated, as aerial wires attached to poles is often the easiest and most economical way to deploy broadband facilities. Key pole attachments issues include:

Denial of Access. Access to poles can be denied on a nondiscriminatory basis for safety, reliability, and engineering reasons, but most denials of access should be solvable through the make-ready process.

Make-Ready Charges. Pole attachers must pay for costs they cause in making a pole ready to add its facilities, but they are not required to pay for correcting existing violations or changes that benefit the pole owner. The FCC clarified in January 2021 that “utilities may not require requesting attachers to pay the entire cost of pole replacements that are not necessitated solely by the new attacher and, thus, may not avoid responsibility for pole replacement costs by postponing replacements until new attachment requests are submitted.”

Timeliness. Requiring new negotiated agreements, long permitting processing periods, limits on the number of applications, and additional make-ready requirements will delay buildouts.

Duplicative Poles. Once electric utilities put lines underground, or erect new poles to meet storm-hardening requirements, disputes arise over whether the pole attachers will move to the new poles, be required to buy the old pole, or just continue to pay rent on the old pole.

Rates. While 47 U.S.C. section 224(e) and the FCC’s rules provide formulas for setting rates, the inputs to the formulas are often disputed.

There is a clear public policy preference for good faith negotiations to establish pole attachment agreements and resolve problems. It remains to be seen whether $42 billion can paper over these pole attachment issues so electric utilities and pole attachers can work together to enable the speedy deployment of needed broadband infrastructure. ■

Floyd R. Self is a partner in the Tallahassee, Florida, law office of Berger Singerman LLP, where for more than 35 years he has represented a wide spectrum of utilities, businesses, local governments, and associations in energy, land use, telecommunications, water, and technology issues.

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