On June 24, AT&T filed a complaint with the FCC against Duke Energy Carolinas about the rates being charged for pole attachments. AT&T alleges that Duke is charging rates far higher than allowed by law in North and South Carolina. AT&T claims it is entitled to pay “just and reasonable” rates under FCC rules. AT&T is asking that Duke be required to refund overcharges.

It’s an interesting complaint for several reasons. This is more of a partnership complaint than a straight complaint about how pole attachment rates are calculated. AT&T and Duke entered into a Joint Use Agreement (JUA) in 1978 since they share ownership of poles in the region. There are 457,901 poles covered by the JUA, with Duke owning 80% of the poles and the remaining 20% owned by AT&T.

One of the nuances of the case is jurisdiction over pole attachment regulation. North Carolina exercised  reverse-preemption of pole attachments, while South Carolina remains with FCC regulations concerning poles. AT&T claims the FCC has authority over the dispute in both states. I have to wonder why this agreement doesn’t fall partially under North Carolina’s jurisdiction, and if the state has somehow conceded authority to the FCC.

The dispute centers around FCC rules included in 47 U.S.C. § 224 that determine the maximum rate that can be charged for a pole attachment. Those rules calculate two different pole attachment rates, one that applies to cable companies and a telecom rate that applies to everyone else. The maximum rate for telecommunications carriers is designed to ensure that a telecom provider pays a proportional share of both the usable space and unusable space on the pole, divided by the total number of attaching entities. There are specific formulas defined by the FCC for the rate calculation, and calculating the maximum rate is mostly an exercise in gathering the right accounting data to populate the formula.

AT&T alleges that Duke is charging them a rate far in excess of the maximum allowed telecom rate. We can only guess how much higher since the public version of this complaint has redacted the higher rates. I can’t imagine how the public would be harmed by knowing the higher rates. There is a table in the complaint that calculates the average telecom rates from 2023 through 2026 at $10.92.

I characterized this earlier as a partnership dispute. AT&T is complaining that the rates that AT&T and Duke pay under the JUA are disproportionate to the amount of space each uses on the poles, such that AT&T pays far more than Duke on a per-foot basis. AT&T also complains that Duke benefits by being able to offset its costs by fees charged to other attachers, something not available to AT&T. Both of these sound more like complaints related to the old Joint Use Agreement that don’t seem relevant to FCC regulation.

AT&T’s argument is largely based on an FCC Order from 2018 that said that the telecom pole attachment rate applies to all new and newly-renewed joint use agreements, including agreements that are automatically renewed or extended.

You may be asking, if you read this far, why I chose to write about this dispute. There are several reasons. First, it’s always fascinating to get a glimpse behind the curtains of the deals made between big companies that we would otherwise never know about. I’m sure that a fiber builder asking to get on a Duke pole in North Carolina has no idea that the poles in question might actually be owned by AT&T. It’s also interesting to see how a big power company like Duke might decide to overcharge a partner in the pole business. The Joint Use Agreement was reached in 1978, which is ancient history in the corporate world. Somebody at Duke probably got a bonus for increasing pole attachment fees to AT&T in violation of an old agreement they might not even been aware of. Finally, I’m a customer of both Duke and AT&T, and regardless of how it resolves, I’m betting that I won’t see any benefit from the decision. This kind of dispute affects stockholder profits and not rates charged to the public.