Electric utility pole attachments

On April 7, 2017, I posted an update on a regulatory issuance by the Federal Communications Commission ("FCC" or "Commission") seeking comment on a Petition for Declaratory Ruling submitted by Mobilitie, LLC ("Mobilitie Petition"), a company that "build[s] and operate[s] networks and infrastructure" which are then used by communications providers to facilitate broadband and network services. Since that post, the Commission has issued two Notices of Proposed Rulemakings ("NPRM") and Notices of Inquiry ("NOI") relevant to broadband siting, and these issuances may affect state and local electric utility pole attachment regulations. Below is a summary of the activity at the FCC over the past few months.

In its petition, Mobilitie asserts that local government right-of-way (“ROW”) regulations and zoning requirements delay or prevent the ability of wireless carriers to deploy small cell wireless facilities. After publishing it and seeking comment on the petition in a Public Notice, the FCC received over 600 comments. Some carriers suggested in their comments that the Commission reinterpret and expand its well-established statutory authorization to assert jurisdiction over electric utility poles under Section 253 of the Communications Act. See 47 U.S.C. § 253. Generally, Section 253 pertains to government-owned right-of-way ("ROW"), and it allows the Commission to preempt state laws that create "barriers to entry" for telecommunications companies. The Commission has specific statutory authority over electric utility pole attachments under Section 224 of the Communications Act; however, this provision specifically exempts municipal and cooperative utilities from regulation. See 47 U.S.C. § 224(a)(1).

On April 20, the Commission approved two NPRMs and NOIs at its regular open meeting relevant to the Mobilitie Petition. Commonly known as the Wireline NPRM/NOI and Wireless NPRM/NOI, these issuances propose to revise several regulations related to broadband siting. The Commission also references the Mobilitie Petition in the Wireless NPRM/NOI (see, e.g., pp. 3333, 3338), suggesting the correlation between the proposals therein and the questions asked in the Mobilitie Petition. Among other things, the Wireline NPRM/NOI and Wireless NPRM/NOI propose to make substantial revisions to pole attachment regulations and impose strict shot clocks telecommunications infrastructure applications. The Wireline NPRM/NOI and Wireless NPRM/NOI also pose several probing questions indicating the Commission's willingness to use its authority under Section 253 of the Communications Act to circumvent the specific pole attachment authority laid forth in Section 224. Pursuant to a consolidation order issued by the Commission, initial comments on both documents were due on June 15, and reply comments are due on July 17.

The proposals and lines of questioning in both the Wireline and Wireless NPRM/NOIs create a chasm between state and local governments and electric utilities on the one hand, and telecommunications companies on the other. This trend is evident based on comments on both the Mobilitie Petition and the first round of comments on the NPRM/NOI.

  • Several states and local governments and their trade associations (usually, entities that administer ROW) oppose some of the FCC's proposals with respect to siting proposals. Associations representing states and local governments say, among other things, that the proposed regulations will affect cities' and states' abilities to ensure safety, functionality, and character of a community (i.e., taking away all local control completely removes the ability for communities to make decisions that are best for those communities/areas). Cities and states are in a better position to make decisions about local ROW than the federal government. They also argue that application shot clocks are unnecessary and burdensome, as processes already exist for telecommunications companies to challenge failure to act - they just choose not to use these remedies on a widespread basis. Proposals that arbitrarily reduce application processing times will cost cities and states additional time and money for no significant benefit. See, e.g., Comments of National League of Cities.
  • Several electric utilities and their trade associations oppose the FCC's attempt to lower pole attachment fees and make ready costs under Section 224. Among other things, electric utilities argue that proposals to reduce pole attachment costs below the already artificially low costs does not take into account decisions made by the electric utilities with telecommunications attachers in mind. For example, utilities argue that, in order to allow telecommunications companies to collocate on their poles (i.e., telecom "wires" and fiber), electric utilities purchase poles that are large enough to do so. Communications companies should pay their proportional amount of the pole and upkeep to the pole, and removing capital costs (which are clearly part of the costs that should be shared) from these fees will place the financial burden on electric ratepayers, who ultimately bear the costs of capital improvements to utility infrastructure. Some electric utilities also oppose the reduced timeline for approving applications, as this arbitrarily adds additional burdens to already tight timelines - costing additional money in labor that will, again, be passed on to ratepayers. Municipal and cooperative utilities, which make up about 30% of the electric industry, also argue that the Commission cannot preempt state and local pole attachment laws using its authority under Section 253. "Coops" and "munis," as they are commonly known, are exempt from FCC pole attachment regulation under Section 224, as they operate on a non-profit basis and are regulated at the state and local level already. As such, they argue that any attempt to regulate these poles under any section of the Communications Act would be in clear contravention of well-established federal law. Notably, issues raised by electric utilities brings into question several principles: agency deference, statutory construction, statutory interpretation, and constitutional law (i.e., as the Commission noted on p. 5 of the Wireline NPRM/NOI, Fifth Amendment takings issues). See, e.g., Comments of the American Public Power Association, Comments of the National Rural Electric Association, Comments of the Edison Electric Institute, and Comments of the Utilities Technology Council.
  • Several telecommunications companies and their trade associations encourage the FCC to lower pole attachment rates, impose shot clocks on siting applications, exercise jurisdiction over municipal utilities, and preempt state and local ROW laws. Many of the companies argue that some states and localities impose burdens on carriers by charging rates that the companies view as too high, impose moratoria on siting applications, and fail to respond to applications within a reasonable time. The telecommunications companies identify a few examples of siting issues with cities, states, and utilities. They assert that, as a general matter, siting issues are widespread across all cities, states, and municipal utilities. The companies imply that these issues prevent them from deploying next generation broadband technology to rural areas, saying that reduced siting fees and more beneficial regulations would allow them to connect cities that are otherwise disconnected from the world wide web. They argue that the FCC should streamline siting of broadband technology, as well as regulate municipal and cooperative utility poles. They argue that the FCC should remove jurisdiction from states and localities altogether because the processes that currently exist at the state and local level are not sufficient to ensure what they, as mostly for-profit, publicly traded corporations, believe is timely and fairly priced attachments for broadband technology. See, e.g., Comments of CTIA and Comments of Verizon Wireless.

As noted above, comments on these issuances were due on June 15, and reply comments are due on July 17. The Commission may act on its proposal to use its authority under Section 253 to preempt state and local laws that are seen as "barriers to entry" for the telecommunications companies, but this will likely only allow the Commission to preempt state and local ROW laws. The Commission did not, in its Wireless and Wireline NPRMs/NOIs, specifically propose to preempt state and local pole attachment laws that are set pursuant to Section 224 of the Communications Act. Rather, the Commission sought additional information about its ability to do so. The Commission will likely need to issue an additional Notice of Proposed Rulemaking proposing to preempt state and local pole attachment laws under Section 253 (or any of the other various authorities mentioned in the documents or comments, such as Section 4, Section 303, Section 332, etc.).

If the Commission decides that it has authority to regulate poles in broader statutory authorization, it will effectively nullify the municipal and cooperative exemption in Section 224, and it will possibly upend the ability for states to "reverse preempt" federal law also in Section 224. As municipal and cooperative utilities have never been regulated by the FCC, this will be a major shift for these, often small, electric utilities.