Verizon, Frontier may face service disruption due to Florida pole attachment dispute

Verizon (NYSE: VZ) and Frontier Communications customers in Florida might have to deal with a service disruption if the two carriers can't resolve an ongoing dispute over pole attachments with Florida Power and Light (FPL), the state's incumbent utility provider and major pole owner.

FPL sent a letter to Verizon and Frontier, which is purchasing Verizon's wireline operations in Florida, threatening to disrupt service for Verizon's customers by taking steps in 60 days to remove Verizon's facilities from FPL's poles.

Verizon said that FPL's letter to Frontier is "another transparent attempt to use the pending transaction as leverage in this ongoing rate dispute."

At issue is the rate Verizon pays to FPL to access and attach its facilities to FPL's utility poles. Florida Power & Light said in a letter sent to Verizon that the telco has only been paying "25 percent of the attachment rate agreed to in the contract agreed to in the contract between the parties."

Verizon said that it "cannot be in default until this proceeding is resolved," and has asked the FCC to solve the "matter as soon as possible and provide the guidance that the industry needs to avoid similarly contentious disputes going forward."

For its part, the FCC brought clarity to the pole attachment issue in December by granting a joint petition made by members of the cable and telecom industry that would harmonize the attachment rate cost model for pole attachments, which would be at or near the cable rate formula level, providing a level of certainty for service providers.

Despite the FCC's move to realign its pole attachment rules in December, Verizon and FPL have been an ongoing battle over pole attachment rates.

Previously, Verizon said that FPL's Motion for Leave to File was a stalling tactic to deny the telco from providing reasonable rates to attach its wires to the utility company's poles.

Frontier has also seen challenges in pole attachment issues, particularly in the rural areas where it provides service. The telco said in its reply comments to the joint petition for reforming rates that pole attachment "costs are particularly dramatic in the rural areas that Frontier serves, where Frontier must obtain rights to many more additional poles to serve customers spread out over a greater geographic area."

With Verizon and Frontier hoping to complete the wireline transaction in March, the ability for the FCC to resolve this dispute quickly will be key to ensuring that Frontier's new customers won't suffer any service disruptions.

For more:
- see this FCC filing (PDF)

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