With FCC net neutrality rules now in effect, pole attachment rates could be on the rise for cable companies, according to industry observers. Pole attachment rates traditionally are higher for telecom companies and now that cable companies are also being classified as telecommunications providers under Title II of the FCC's Open Internet Order, which went into effect Jan. 12, it's likely they will see their rates increase.
The FCC's Pole Attachment Order, issued in 2011, eliminated most of the pole attachment rate differential between cable companies and telecom companies that previously existed. At Lexology.com, attorneys James W. Tomlinson and James F. Ireland wrote: "However, under the telecom formula, a utility can obtain higher telecom rates if it is able to rebut the FCC's presumptions regarding the average number of entities attached to the utility's poles."
The FCC has stated that it hopes to avoid "an outcome in which entities misinterpret today's decision as an excuse to increase pole attachment rates of cable operators." An FCC staff member confirmed to FierceInstaller that the agency is well aware of the rate implications of the net neutrality order and is actively considering what can be done. However, to date, the FCC has not taken concrete action to prevent this outcome, leaving the door open to utility companies and other entities for possible rate increases.
Level 3 and competitive telecom industry advocacy group COMPTEL recently filed comments asking the FCC to resolve the pole attachment issue. The National Cable & Telecommunications Association and the American Cable Association also have been urging the FCC to take action.
In most cases, rate increases are not likely to occur immediately. Barring further FCC action, as pole attachment contracts come to an end, utility companies may be able to negotiate higher rates with cable companies.
An FCC staff member said that the pole attachment rates paid by wireless companies is unlikely to be affected.
One other federal regulation could reduce the impact of these changes: The 2011 Pole Attachment Order allows states to regulate pole attachment pricing. In 20 states and the District of Columbia, the FCC staff member indicated, state regulations for pole attachment pricing are already in place.
For more:
- see this legal analysis.
- see this FCC public notice.
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