The FCC’s advisory BDAC group looking at pole attachment issues gathered prices for wired and wireless pole attachments. Their goal was to understand the range of attachments prices and to see if the group could come up with a consensus pricing recommendation to the FCC. Wired pole attachments are the annual fee that the owner of a wired network (telco, cable company, fiber) pays for each place one of their wires connects to a pole. Wireless pole attachments are the fees charged for putting some kind of wireless transmitter on a pole.
There were no surprises for wired pole attachments. The group looked at 577 different attachments and found that the average price was $17.58 per year for each wired pole attachment while the median was $15.56. These are similar to the prices I see all over the country.
Wireless attachments varied a lot more. The BDAC group looked at 407 samples of wireless pole attachment prices from around the country and the average price was $505.56 while the median price was $56.60. For the median to be that low means that the sample was stacked with low readings.
That’s easy to understand if you look at wireless pole attachment rules around the country. Three states – Arizona, Indiana and North Carolina have capped the annual price of a wireless pole attachment at $50 per year, while Texas capped it at $20. Other states like Colorado, Delaware and Virginia cap rates at actual cost. For the median price to be that low means that just less than half of the of the 407 same prices were likely from this group of states. And this means that that no conclusions can be drawn from the results of the BDAC’s sampling – it was definitely not a random or representative sample – yet the BDAC group summarized the results as if it was, and even calculates a standard deviation.
Thirteen states have already acted to limit the cost for wireless attachments, mostly through legislation. Florida and Rhode Island have capped the cost of a wireless pole attachment at $150; Minnesota set the rate at $175 and Ohio set the maximum rate at $200. Kansas says the rate must be ‘competitively neutral’ and Iowa caps the rate at the FCC rate.
One of the biggest issues with arbitrarily setting wireless pole attachment rates is that the wireless devices being put onto poles vary by size and can use between 1 and 10 feet of pole space. Regulators have traditionally used the concept of allocating costs by the amount of usable space taken by a given connector, and in fact uses the term ‘pole real estate’ to describe the relationship between space used and price paid. Any attachment that uses more of the pole real estate should expect to pay more for the attachment – largely in a linear relationship.
The results of the sample might have been more valid has the group not included prices for places where the legislators have capped or limited rates. Also, the big wireless companies are part of the BDAC group and I have to suspect that they brought in the worst case examples they could find where they are paying the highest prices. This exercise proved nothing other than that the price for wireless connections are higher in states where the rates are not capped.
It’s not surprising, but the BDAC group was unable to secure a consensus on prices or pricing methodology for the FCC. Unsurprisingly the network operator – those who attach to poles – think rates should be cost based. Pole owners think rates ought to be market based.
There are, of course, many other factors to consider in setting pole attachment rates. In the case of wireless connections there are concerns about the safety of working near the wireless devices after storm damage. There are also significant concerns in cities about aesthetics.
The battle in setting these rates is still heating up. An additional fifteen states – AK, CA, CT, GA, HI, IL, ME, MO, NE, NM, PA, WA and WI – have considered pole attachment legislation that didn’t pass. There is the possibility of the FCC trying to set rates and there have been drafts of several bills in Congress that have considered the idea. Since this seems to be the primary focus of the wireless companies there will be a lot of lobbying on the issue.
No surprise that BDAC clouded the rates. I haven’t seen the study but I’d be willing to bet that they rolled up attachment fees on existing utility poles (paid to the pole owner) with rates for street lights and traffic signals to come up with their average. This is a perfect example of how a camel is just a horse designed by committee. Trying to get a consensus based rate established that both the tenant and landlord will agree is not likely to happen any time soon. Too many stakeholders tugging against one other. In this scenario, the only people that are benefitting are the lobbyists and law firms that get paid far more in billable hours by perpetuating the problem rather than implementing a rational solution.