Google Fiber is having problems getting onto poles in many parts of the Bay Area and the issues they are having make for a good primer on the very confusing rules for regulating different kinds of entities.
Google Fiber has only publicly announced that they are bringing service to parts of San Francisco. But they have also been talking to Palo Alto, Santa Clara, San Jose, Mountain View and Sunnyvale. Google has no significant pole issues in Palo Alto where the poles are owned by the City, nor in Santa Clara where the poles are mostly owned by the City and a few by AT&T.
The problems come in the other cities. In California a lot of poles are owned by what is called the Northern California Joint Pole Association which is owned by Comcast, Time Warner and AT&T. That group is disputing Google’s right to get on their poles.
The issue is purely a regulatory one. Google claims they are a cable TV company. The kind of company you are matters when it comes to poles. Many years ago the FCC and the industry worked out very specific rules for attachments to poles. Poles are divided into specific zones where various kinds of companies can place cables. The telephone incumbent has the lowest space. At the top is the power company, and historically the cable company fit between telco and power lines. Anybody else who gets on a pole has to fit somewhere in the middle, and in different parts of the country this is sometimes between the cable company and the power company and sometimes between the telco and the cable company.
The first problem Google faces is that by declaring themselves as a cable company, the pole rules only assume that there is one such company. So they can’t claim the ability to get into the cable space, which in all of these cities is already taken by an incumbent cable provider.
Google has always said that they don’t want to register as a CLEC, or competitive telephone company. And until the company announced a trial for voice service a few weeks ago they didn’t offer voice anywhere. But from a regulatory perspective, if Google was a CLEC they would have the right under law to connect to poles, which was guaranteed in the Telecommunications Act of 1996. But I don’t believe there is any similar law that would provide a second cable company the same right, and that has to be the basis for the pole owners to deny access to Google.
Of course, the companies in the association have a very vested interest in delaying Google Fiber from getting into their markets, so it’s only natural they would fight this. It’s actually somewhat rare for cable companies to own any substantial number of poles, but in this consortium two of the owners are cable companies.
AT&T has argued to the California PUC that they don’t believe that Google Fiber qualifies as a cable company and is using that distinction to deny Google access to these poles. There are generally two ways for a company to become certified as a cable company. They have to register with the FCC, which is a very rubber-stamp process, or they have to get a local cable TV franchise from the city where they want to provide service.
But California added a twist to that process. In 2006 the legislature passed a bill that allows companies to get a statewide cable franchise, which is the reason that the California PUC is involved in this dispute. That original law was passed for the benefit of Verizon and AT&T, so that they could provide a competitive cable TV alternative to the incumbents. Under the statewide rules a company only needs to notify a city 10 days before they first are going to offer cable TV service and there are no more regulatory requirements at the city level. A competitive cable TV provider has no obligation to serve an entire community and can serve only where they choose.
Early indications are that the California PUC is siding with the pole owners and might not be buying Google Fiber as a cable company. But even if they are a cable company I don’t know that this gets them access to poles. When AT&T and Verizon became statewide cable providers they already had access to poles. If Google Fiber was a CLEC they would automatically have the right to pole access, but Google apparently doesn’t want to take on the other obligations that come with being a CLEC. The dispute is going to be resolved in one of two ways – either a court will decide this if Google wants to pursue it, or Google will just walk away from those markets and pursue some of the other hundreds of markets that want their fiber.