Enabling competition from Google Fiber means FCC must reconsider pole attachment pricing

Sean Buckley, FierceTelecomGoogle Fiber's (NASDAQ: GOOG) plans to bring its 1 Gbps service into Salt Lake City and Nashville by using existing utility poles in each city not only sheds light on its ongoing buildout strategy, but also shows how important access to utility poles at reasonable rates is key to expanding broadband services.

In Salt Lake City, Google will deploy 600 miles of fiber, which will be attached to more than 20,000 utility poles which will then be attached to a point of presence on the ring.

The Nashville fiber deployment will have a similar configuration as Salt Lake City, with some differences. It plans to deploy 3,200 miles of fiber, install 18 fiber huts, and attach fiber to at least 100,000 utility poles.

While the service provider did not reveal the terms of the agreements, the Internet giant has cited gaining rights of way to utility poles as a key issue in what cities it will target with its 1 Gbps service.

Google Fiber has had various run-ins with local utilities and telcos over pole access. In December 2013, AT&T (NYSE: T) said  that it does not have to provide access to Google Fiber in Austin. The telco's decision was later overturned when Austin's City Council, which owns the remaining 80 percent, drafted an ordinance to make AT&T open up the poles.

Earlier, Google Fiber had to resolve a dispute with the Kansas City Board of Public Utilities, the owner of the city's utility poles, over where exactly it would place its fiber cables.

During the Spring COMPTEL event, Google's VP of access Milo Medin said that local utilities and incumbent telcos and cable operators should not be allowed to delay the "make ready" process when a competitor wants to build out fiber in a new region on existing poles. 

Regardless of what deals Google Fiber was able to make, pole attachment and the associated fees continues to be a big issue for cable and competitive telcos alike.  

Middle mile provider Independent Optical Networks (ION) and regional competitive provider First Light Fiber have run into similar issues. ION, a middle mile provider serving rural upstate New York and Vermont, said that the lack of available utility staff delayed the buildout of some portions of its network build by 90 days or more. PEG Bandwidth expressed a similar issue, adding that in rural areas the problem is even more challenging.

First Light Fiber encountered the cost issue of dealing with a utility that was deploying Class 2 poles in order to meet a state mandate for safety and reliability. In a 10 mile stretch along a 60 mile route, it would have cost the company $788,000, a price that would make it hard to generate revenue to pay back its investment.

Despite the challenges service providers face, industry associations are working to ensure the FCC is paying attention.

COMPTEL, the advocacy group for competitive providers, recently filed a joint petition with Level 3 Communications asking the FCC resolve the lingering issue over pole attachment rates for cable and telecom providers. The two commenters asked the FCC to grant the pending petition for reconsideration of the regulator's 2011 Pole Attachment Order.

Separately, the Cable & Telecommunications Association and the American Cable Association (ACA) have also asked the FCC to provide further clarification on the issue.

With the FCC's net neutrality order now in effect, cable operators could potentially see utility companies seeking possible rate increases. This is because the new rules also classify cable operators as telecommunications providers under Title II provision of the net neutrality order. 

Although the FCC's 2011 Pole Attachment Order eliminated the majority of pole attachment price differential between cable companies, a utility like National Grid or American Electric Power could get higher telecom rates if it can successfully refute rebut the FCC's presumptions regarding the average number of entities attached to the utility's poles.

Another potential issue lies at the state level where states can regulate how utilities charge for access to their facilities. Already, 20 states and the District of Columbia state regulations for pole attachment pricing are already in place.

Gaining access to rights-of-way and access to poles can, according to COMPTEL's estimates, be up to 20 percent of deployment costs. Reducing the disputes between utilities and service providers can also reduce the costs.

While the FCC has a lot on its plate this year, including court challenges to its new net neutrality rules and a host of multibillion-dollar acquisitions to review, if they're serious about driving competition they need to make the pole attachment issue a priority.--Sean

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