+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
The U.S. Court of Appeals for the District of Columbia Circuit upheld the Federal Communications Commission's 2011 decision to order changes to the rates that utilities can charge telecommunications providers to string their wires on utility poles, in what amounts to a small victory for the FCC as the agency continues to encourage the spread of high-speed internet access throughout the country (American Electric Power Service Corp. v. FCC, D.C. Cir., No. 11-1146, 02/26/13).
In the ruling handed down Feb. 26, a three-judge panel of the court said the FCC had met the “modest demands” for explaining the changes and therefore “upholding its decision follows ineluctably.”
Among the most notable changes the FCC made was setting a new rate that utility-pole owners can charge to telecom providers--$7 per foot per year, about the same as what cable operators pay.
As the agency explained, past decisions by the commission had yielded rates for cable operators of about 7.4 percent of the annual pole cost, with rates for telecom providers ranging between 11.2 percent and 16.9 percent. In trying to eliminate the disparity, the FCC gave utilities the option of charging the higher of either the cable rate, or the original “telecom rate” with a cost factor multiplied by fractional coefficients--66 percent for urban poles, and 44 percent for rural poles.
The FCC also required utilities to allow telecom providers to attach lines and equipment to poles within 148 days of a request, and within 178 days for wireless antennas.
American Electric Power and other power companies filed suit to overturn the FCC's decision, but the court said the agency was justified to act.
“Although [American Power] challenges this policy justification, they offer neither theory nor fact to contradict the commission's fundamental proposition that artificial, non-cost-based differences in the prices of inputs among competitors are bound to distort competition, handicapping the disfavored competitors and at the margin causing market share and capital to flow to less efficient firms,” Judge Stephen F. Williams wrote for the court.
Over the past 10 years, some utility companies have sharply raised their pole-attachment rates, charging what government officials and telecom providers say is the equivalent of monopoly rents.
The former Bell operating companies claim they have been overcharged by up to $350 million a year.
The issue has been of critical importance to the FCC's “Broadband Acceleration Initiative.” The agency's 2010 National Broadband Plan highlighted the current pole-attachment process as a potential hindrance to increased broadband build-out.
In a statement, USTelecom Association President and CEO Walter B. McCormick Jr. said the ruling now “provides the certainty and predictability” to invest in expanding networks.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).