FCC's pole attachment rules upheld by D.C. court

Tools

Telecom service providers overcame a major network cost on Wednesday as the D.C. Circuit Court of Appeals unanimously upheld the FCC's 2011 order that regulates how much utility companies can charge telcos to attach wires to their poles.

A three-judge panel said, in the ruling that was issued on Feb. 26, that the FCC had met the "modest demands" for explaining the changes and therefore "upholding its decision follows ineluctably."

The FCC called for two changes: reducing attachment rates to $7 a foot per year and shortening the timeframe to attach wires and associated equipment to 148 days.

Not surprisingly, the decision drew different responses from electric utilities and telecom advocacy groups.

Although a number of large power companies, including American Electric Power, argued the FCC's rules are unjust, the court said that they did not offer enough compelling evidence to overturn the regulator's ruling.

"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.

All of the RBOCs, including AT&T (NYSE: T), Verizon (NYSE: VZ) and CenturyLink (NYSE: CTL), have said that utility companies have been overcharging them for pole access by $30 million every year.  

Walter B. McCormick, Jr., USTelecom president and CEO, said in a statement that the FCC's order is "a win for competition, a win for consumers, and a win for broadband deployment" because it "provides the certainty and predictability that is so important to investment."

Battles between the owners of utility poles and service providers are an ongoing issue for service providers. For example, Google's (Nasdaq: GOOG) much-talked-about FTTH network had to resolve a dispute with Kansas City Board of Public Utilities, the owner of the city's utility poles, over where exactly it would place its fiber cables along existing utility and telecom rights of way last January.

For more:
- Bloomberg BNA has this article

Special report: Fiber hunter: How to improve Internet access by digging up forgotten fiber lines

Related articles:
Kansas City, Mo., conceding to AT&T, Time Warner Cable
Cox contractor shocked by power line sues Westar Energy