On December 15, 2023, after more than three years of consideration, and amid the largest ever federal investment in broadband, the Federal Communications Commission (“FCC”) unanimously adopted a new pole-attachment order that dramatically reforms the Commission’s rules and policies governing communications attachments to utility poles.
The FCC’s Fourth Report and Order, Declaratory Ruling, and Further Notice of Proposed Rulemaking introduces entirely new and expedited procedures for the processing of pole access complaints, as well as new restrictions associated with pole owners’ recovery of pole-replacement costs that communications attacher raised more than three years ago. The order also introduces additional pole-owner outside plant disclosure obligations intended to facilitate broadband deployment. The FCC’s order and declaratory ruling is meant “to speed broadband deployment by making the pole attachment process faster, more transparent, and more cost effective.”
“Pole attachments do not always receive the attention they deserve,” FCC Chairwoman Jessica Rosenworcel said, but “they are an essential part of our effort to ensure that high-speed service reaches everyone, everywhere across the country.” Commissioner Anna Gomez agreed: “Utility poles are the unsung heroes of broadband deployment,” she said, adding that the FCC’s order and ruling “takes important steps to increase transparency and provide clarity to pole owners and attachers, so that we are decreasing deployment times and reducing costs.”
First among the FCC’s new rules is the creation of a new intra-agency (and multi-bureau) “rapid response team” to resolve pole attachment disputes that “impede or delay broadband deployment.” Dubbing this new access dispute team the “Rapid Broadband Assessment Team” (“RBAT”), the FCC borrowed heavily from Maine Public Utility Commission rules. The new FCC RBAT rules, among other things, provide summary procedures expediting FCC staff engagement to address pole-access disputes, including through face-to-face meetings between parties, mediation, and possible referral for hearing to an administrative law judge.
With respect to pole replacements costs, the FCC declaratory ruling seeks to clarify (i) what constitutes a “red tagged” pole (i.e., one that the utility already plans to replace for reasons other than lack of capacity to fit a new attachment), and (ii) when pole replacements are not “necessitated solely” by a third party’s attachment or modification request.
The FCC also has issued further notice of proposed rulemaking seeking comment on measures intended to better facilitate high-volume pole attachment applications and make-ready.
Speeding Pole Attachment Dispute Resolution
- The FCC’s new RBAT is meant to “expedite the resolution of pole attachment disputes that are alleged to impede or delay the deployment of broadband facilities and to provide coordinated review and assessment of such disputes.” This process is similar to the “Rapid Response Process” used by the Maine Public Utilities Commission.
- The RBAT – to be comprised of staff from the FCC’s Enforcement Bureau and Wireline Competition Bureau – will promptly review all pertinent information by the parties and recommend a process for resolving disputes, including an abbreviated mediation process, use of the FCC’s Accelerated Docket (which adjudicates issues in under 60 days), and/or other appropriate action.
- To request RBAT review, a party must first notify the Chief of the Enforcement Bureau’s Market Disputes Resolution Division by phone and in writing, after which the party will have to complete an online form detailing the dispute. From there, the RBAT will schedule a meeting with all parties “as soon as practicable” and may also request a written response from the other party. At the initial meeting(s), the RBAT will recommend what it deems the most effective method to resolve the dispute.
- The RBAT will have discretion to decide whether a dispute (or portions of it) is suitable for the Accelerated Docket based on the totality of several criteria, including whether the prospective complainant states a claim under the Communications Act or FCC rules; whether resolution of the dispute will advance broadband deployment especially in an unserved or underserved area; whether the parties have exhausted all reasonable settlement and mediation opportunities; and the number and complexity of the issues and need for discovery. If the case goes to the Accelerated Docket, it will be resolved by the Commission’s Administrative Law Judge in an expedited “minitrial.”
- The new FCC RBAT process will be codified as 47 C.F.R. § 1.1415.
- The FCC said it will “closely monitor” the impact of its new dispute resolution procedures and “consider additional streamlining measures should we observe ongoing delay tactics or other unreasonable practices that hinder the ability of broadband providers to deploy new services or facilities.”
Providing Utility Pole Inspection Information
- The FCC’s new rules require a utility to provide attachment applicants, upon request, information contained in the utility’s most recent cyclical pole inspection reports (any report that the utility creates in the normal course of business containing the results of a routine inspection of poles) for the poles covered by the attacher’s application. The utility must furnish the report within 10 business days of the request.
- Utilities also will be required to retain copies, in whatever form they were created, of their pole inspection reports until a new report is created.
- After requesting and receiving pole inspection from a utility related to poles covered in an application, a new attacher may amend an attachment application at any time until the utility grants or denies the original application. When utilities receive an amended application prior to granting or denying the original application, they then can restart the 45-day period for responding to the application on the merits
- The FCC explained that requiring utilities to provide this information about the state of their poles is meant to “help improve the attachment process and potentially reduce disputes.”
- The FCC declined, however, to require utilities to create online pole-information databases or to provide other records such as financial data regarding pole costs, load studies, or data on the age, height, class, and condition of poles. The FCC explained that there are several other ways to obtain that information, including through the new dispute resolution process. The FCC did say it will “continue to monitor the record in this proceeding and will take further action if it becomes clear that voluntary information sharing arrangements are insufficiently promoting broadband deployment.”
- The new rules on pole information will be codified as 47 C.F.R. § 1.1411(c)(4).
Declaratory Ruling on Pole Replacement Costs
- Consistent with Section 224(h) of the Communications Act, the FCC’s current rules provide that when a pole modification, such as a pole replacement, is conducted for the benefit of a particular party, then the benefiting party must assume the costs.
- The existing rule (47 C.F.R. § 1.1408(b)) similarly prevents pole owners from shifting pole replacement costs onto an attacher if the new pole is not “necessitated solely” by an additional attachment.
- The question of allocating pole replacement costs between pole owners and attachers is not new, but is hotly contested.
- Beginning with a 2020 petition for declaratory ruling by the NCTA – The Internet & Television Association, communications providers have asserted that (i) utilities have unfairly passed onto them the entire cost of pole replacements and upgrades, even when certain poles already were due to be replaced for safety reasons; and (ii) this long-standing reflexive cost shift is an acute barrier to broadband development, especially in unserved areas of the country, where costs of construction can be higher.
- Utilities, however, have said that they normally would not replace many of the poles at issue, but for an attacher’s request.
- The FCC’s declaratory ruling expands the Commission’s definition of “red tagged” poles, which under current FCC rules, new attachers are not responsible for pole replacement costs.
- While the FCC previously defined red-tagged poles as being non-compliant with safety standards and already set for replacement, the updated definition is “poles that the utility identifies for replacement for any reason other than the pole’s lack of capacity to accommodate a new attachment.”
- According to the FCC, the old definition was “too restrictive,” but the new definition better accords with cost causation and cost allocation principles.
- The FCC also stresses that “a utility may not evade application of our cost causation and cost replacement policies with respect to a particular pole replacement simply by failing to ‘red tag’ a pole that has safety violations or is otherwise out of compliance with applicable utility construction standards.”
- The FCC’s declaratory ruling also clarifies the phrase “necessitated solely” in 47 C.F.R. § 1.1408(b) with examples of when a pole replacement is not “necessitated solely” by an attachment request.
- These include (1) when a pole replacement is required by applicable law; (2) the current pole fails engineering standards such as those in the NESC; (3) a pole replacement is necessary due to changes in a utility’s internal construction standards; (4) the pole must be replaced due to road expansion or moves, property development, in connection with storm hardening, or similar government-imposed requirements; or (5) the pole already is on a utility’s replacement schedule
- The Commission also makes clear that when a defective pole needs to be replaced with a taller pole to support a new attachment, then the attacher need only pay for the incremental extra cost a taller/stronger pole (not the full cost of an equivalent pole), unless the utility “can sufficiently document that there are incremental make-ready costs specifically associated with having to install a stronger or heavier pole to accommodate the new attachment, in which case the utility is permitted to charge the prospective attacher for such incremental make-ready costs.”
- Right-of-Way and Easement Information. The FCC additionally clarifies that in order to enable attachers to effectuate their right of access under Section 224(f) of the Communications Act, utilities must provide potential attachers with a copy of a utility’s easement before a utility can refuse to let the attacher share that easement or require the attacher to obtain its own easement.
- Large Orders. In response to concerns raised by some communications attachers about pole owners refusing to process pole attachment applications for large numbers of poles (more than 3,000) within the FCC’s timelines (47 C.F.R. § 1.1411(g)(3), the FCC’s Declaratory Ruling clarifies that its timelines apply to the first 3,000 poles in an application. Pole owners may then only negotiate extended timelines for poles beyond that first 3,000. The FCC also makes clear that to “negotiate in good faith” for extended timelines “necessarily implies an obligation by the utility to exercise reasonable efforts to accommodate the attachment needs, and utilities may not indefinitely delay or refuse to provide make-ready timelines.”
Further notice of proposed rulemaking (“FNPRM”) On Pole Attachment Applications and Make-Ready
- Large Orders. The FCC seeks comment on further actions to facilitate the processing of pole attachment applications that are submitted in large numbers. Specifically, the Commission seeks input on a proposal to amend 47 C.F.R. § 1.411(g) to provide utilities an additional 90 days for make ready requests exceeding 3,000 poles or 5% of the utility’s poles in a state. The FCC also seeks comment on NCTA’s proposal that the Commission amend its rules to prohibit utilities from limiting the size of an application or the number of poles included in an application.
- Self Help. The FCC seeks comment on whether it should modify its rules to enable attachers to access poles more quickly through “self help” when utilities fail to conduct pole attachment surveys, estimates, or prepare poles for attachments within the FCC’s required “make-ready” time periods.
- Contractors. The FCC further seeks comment on the impact of contractor availability when attachers seek to use their own contractors when conducting self help or one-touch make-ready for surveys and make-ready work.
Conclusion and Next Steps
The FCC’s Report and Order and Declaratory Ruling apply to poles owned by investor-owned utilities in the 27 states that currently adhere to FCC rules regarding pole attachment rates, terms, and conditions. But even in states that have “reverse preempted” the FCC’s pole attachment rules (“certified states”), these new rules and declaratory order still likely will influence state-level efforts to reform pole attachment processes in order to facilitate broadband build-outs, especially in rural and unserved areas. That is especially so in certified states that nevertheless have adopted or closely follow the FCC’s pole attachment rates, terms, and conditions of access, such as Pennsylvania, Florida, and West Virginia. Those negotiating new pole attachment agreements in these states therefore should be mindful of the FCC’s new principles and rules.
Because the FCC repeatedly made clear that it will be monitoring the effect of its new rules and declaratory ruling, along with overseeing its new rulemaking, to the extent pole attachers experience new or further obstacles to broadband deployment, they should consider filing submissions with the Commission in Docket 17-84
The FCC’s new rules will go into effect 30 days after publication in the Federal Register. The declaratory ruling takes effect immediately upon publication. Also, although it is unlikely to delay the new rules’ effective date, we expect pole owners to challenge some or all of the new rules in court.
Initial comments on the FCC’s FNPRM are due February 13, 2024, and reply comments are due February 28, 2024.
Sheppard Mullin’s team of more than a dozen communications infrastructure and pole-attachment attorneys has handled pole attachment matters in more than 40 states—before the FCC, state utility commissions, state legislatures, and various state and federal courts. For example, working with a diverse array of stakeholders before the Maine PUC, our team was instrumental in the PUC’s successful multi-year initiative to overhaul its pole attachment regulations (including its creation of its pole access rapid response team). Our attorneys are also involved in broadband expansion, funding, compliance, and deployment issues in virtually every corner of the nation. We routinely handle commercial and contractual negotiations and disputes, involving facilities and rights-of-way owned and controlled by investor-owned utilities, electrical cooperatives, government-owned utilities, incumbent telephone company pole owners, railroads, and others.
If you have questions about the FCC new pole attachment order, any aspect of pole law and regulation or broadband funding and deployment, please contact us.