Imbalanced Pole Access Prices Penalize ILECS – Study

Pity the ILEC.

At a time when operators of every ilk deploy more and more fiber, incumbent local exchange carriers (ILECs) pay far more for pole access than competitive local exchange carriers (CLECs) or cable companies, according to a USTelecom survey. This pricing imbalance exists despite a 2011 regulatory effort by the Federal Communications Commission and ongoing attention to the difficulties associated with pole attachment in some regions. The result: a more time-consuming, expensive process for delivering high-speed broadband connectivity to customers whenever providers use pole attachment for their fiber.

ILECs pay an average of $26.12 today in states regulated by the FCC, the recent USTelecom survey found. On the other hand, cable pays an average of $3 and competitive local exchange carriers (CLECs) pay $3.75, according to the report.

The industry organization last week sent its survey and a cover letter to the FCC, detailing the study's findings and what it wants the government to do about the discrepancy.

"These findings clearly demonstrate that the Commission's 2011 Pole Attachment Order has not achieved its desired goal of ensuring just and reasonable pole attachment rates for ILECs," USTelecom wrote. "The results of the 2017 USTelecom Survey show that the Commission should expeditiously 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."

Under the 2011 Pole Attachment Order, the FCC unanimously adopted an order impacting the 30 states where it regulates pole attachment rates, terms and conditions. The order, designed to limit rates and improve access, lowered the telecommunications pole rate formula to approximate the cable pole attachment rate in most cases and generated new guidelines that could increase penalties for unauthorized attachments. Additionally, it formed timelines to rule almost all steps of the pole attachment make-ready process for wireline and wireless attachments, allowing the use of contractors if timelines were not met, and allowed ILECs to petition the FCC for lower regulated attachment rates on a case-by-case basis.

But the evidentiary burden for ILECs is heavy, wrote attorneys Jay Ireland, Chris Fedeli and Jim Tomlinson of Davis Wright Tremaine in a company blog.

"ILECs will have to prove that they are similarly situated to cable or CLECs. ILEC complainants are expected to provide evidence that overall deals offered to other attaching entities are more favorable than the overall terms and conditions that they are afforded," they wrote. "And, the Commission may consider the ILECs' own attachment agreements with utility joint users and third-party attachers as further evidence of what is reasonable. Highly relevant to the FCC's consideration will be the ILECs' lack of bargaining power vis-à-vis the pole owner."

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— Alison Diana, Editor, UBB2020. Follow us on Twitter @UBB2020 or @alisoncdiana.