Local, State or Federal Regulation?

Last week the FCC clarified its intentions for the Broadband Deployment Advisory Committee (BDAC). This group was tasked with exploring a wide range of topics with the goal of finding ways to lower barriers for broadband deployment.

The BDAC was divided into subgroups with each examining issues such as speeding up access to poles and conduits, or how to streamline the morass of local regulations of such things as rights-of-ways that can slow down fiber deployment.

There has been a huge amount of buzz in the industry since the expectation has been that the FCC would act to impose federal rules that ‘fix’ some of the most important impediments to competition. That expectation was bolstered on several occasions by speeches made by new FCC Chairman Ajit Pai that hinted that the FCC was willing to take steps to lower barriers to broadband deployment.

But FCC Senior Counsel Nicholas Degani just clarified that the FCC’s intentions are not to create new regulations, but rather to create ‘model codes’ that they hope that cities and states around the country will use to make it easier to deploy broadband.

We’ll have to wait a while to see if the FCC really can refrain from issuing new regulations. Chairman Pai has said many times that he is in favor of ‘light touch’ regulation and the agency is in the process of relaxing or undoing many of the regulations from the past. But one thing that I have repeatedly seen from regulators over the years is that they love to regulate. It will take major restraint for the FCC to not try to ‘fix’ the many problems that the BDAC is highlighting. This will be the ultimate test to see if they really are anti-regulation.

Frankly, some of the issues that the BDAC has been exploring cry out for some sort of regulatory relief. For example, in some parts of the country it takes so long and is so expensive to get onto poles that it’s nearly impossible to implement a business plan that needs pole access. And it is extremely frustrating for a national company that deploys fiber everywhere to work with local rules that vary widely from city to city.

Part of what is pushing this effort is the fact that everybody expects a massive investment in new fiber over the next decade as fiber is built to bring bandwidth to homes and as we deploy 5G networks. Everybody recognizes that there are impediments that add delay costs to those deployments.

At the same time that the FCC has been looking at the issues there are numerous state attempts to create state regulatory rules to fix some of these problems. A number of states have already created regulations that are aimed at making it easier to do things like get access to poles. But state efforts vary widely in the motivation for new regulations. There are some states that are looking hard at imposing statewide rules that balance the needs of competitors, network owners and municipalities.

But there are other attempts prompted by the big cellular companies and ISPs to run roughshod over the rights of pole owners and municipalities. These efforts are being driven, in part, by model legislation developed by ALEC and funded by the big companies. Many of these rules are attempting to set low nationwide rates for pole attachments and also to force streamlined timelines that ignore local conditions.

Finally, there are efforts being made by many cities to make it easier to deploy broadband. Most cities understand that they need fiber everywhere to remain competitive with other cities. Yet these efforts are often ineffective because cities, by definition, have a lot of stakeholders to satisfy. When a City looks at changing local rules they end up have to give a lot of weight to issues such as the environment, aesthetics, historic preservation, safety, unions and others that make it impossible to create rules that favor fiber deployment over these other concerns.

Fixing these issues is a problem that may never find the right solution. We live in a country where cities across the board have been granted varying degrees of controlling things like rights-of-way that affect network deployments. Fiber deployment is not the first issue that has come along that has pitted federal, state and local regulators against each other when trying to solve the same problems. It’s not unlikely that if either the FCC or the states try to strongarm cities that we will see a pile of lawsuits challenging any egregious decisions. And that just leads to delays since disputed laws don’t go into effect. I hope we can find solutions that don’t lead to those lawsuits, because the worst kind of regulation is one that is in limbo in some court for years. Nobody is likely to make any significant new investment in that environment.

Tackling Pole Attachment Issues

In January the new FCC Commissioner Ajit Pai announced the formation of a new federal advisory committee  – the Broadband Deployment Advisory Committee (BDAC). This new group has broken into sub-groups to examine various ways that the deployment of broadband could be made easier.

I spoke last week to the Sub-Committee for Competitive Access to Broadband Infrastructure, i.e. poles and conduits. This group might have the hardest task of all because getting access to poles has remained one of the most challenging tasks of launching a new broadband network. Most of the issues raised by a panel of experts at the latest meeting of this committee are nearly the same issues that have been discussed since the 1996 Telecommunications Act that gave telecom competitors access to this infrastructure.

Here are some of the issues that still make it difficult for anybody to get onto poles. Each of these is a short synopsis of an issue, but pages could be written about the more detailed specifics involved each of these topics:

Paperwork and Processes. It can be excruciatingly slow to get onto poles for a fiber overbuilder, and time is money. There are processes and paperwork thrown at a new attacher that often seem to be done for no other reason than to slow down the process. This can be further acerbated when the pole owner (such as AT&T) is going to compete with the new attacher, giving the owner incentives to slow-roll the process as has been done in several cities with Google Fiber.

Cooperation Among Parties. Even if the paperwork needed to get onto poles isn’t a barrier, one of the biggest delays in the process of getting onto poles can be the requirement to coordinate with all of the existing attachers on a given pole. If the new work requires any changes to existing attachers they must be notified and they must then give permission for the work to be done. Attachers are not always responsive, particularly when the new attacher will be competing with them.

Who Does the Work? Pole owners or existing attachers often require that a new attacher use a contractor that they approve to make any changes to a pole. Getting into the schedule for these approved contractors can be another source of delay if they are already busy with other work. This process can get further delayed if the pole owner and the existing attachers don’t have the same list of approved contractors. There are also issues in many jurisdictions where the pole owner is bound by contract to only use union workers – not a negative thing, but one more twist that can sometimes slow down the process.

Access Everywhere. There are still a few groups of pole owners that are exempt from having to allow attachers onto their poles. The 1996 Act made an exception for municipalities and rural electric cooperatives for some reason. Most of these exempt pole owners voluntarily work with those that want access to their poles, but there are some that won’t let any telecom competitor on their poles. I know competitive overbuilders who were ready to bring fiber to rural communities only to be denied access by electric cooperatives. In a few cases the overbuilder decided to pay a higher price to bury new fiber, but in others the overbuilder gave up and moved on to other markets.

Equity. A new attacher will often find that much of the work needed to be performed to get onto poles is largely due to previous attachers not following the rules. Unfortunately, the new attacher is still generally on the hook for the full cost of rearranging or replacing poles even if that work is the result of poor construction practices in the past coupled with lax inspection of completed work by pole owners.

Enforcement. Perhaps one of the biggest flaws in the current situation is enforcement. While there are numerous federal and state laws governing the pole attachment process, in most cases there are no remedies other than a protracted lawsuit against a pole owner or against an existing attacher that refuses to cooperate with a new attacher. There is no reasonable and timely remedy to make a recalcitrant pole owner follow the rules.

And enforcement can go the other way. Many of my clients own poles and they often find that somebody has attached to their poles without notifying them or following any of the FCC or state rules, including paying for the attachments. There should be penalties, perhaps including the removal of maverick pole attachments.

Wireless Access. There is a whole new category of pole attachments for wireless devices that raise a whole new set of issues. The existing pole attachment rules were written for those that want to string wires from pole to pole, not for placing devices of various sizes and complexities on existing poles. Further, wireless attachers often want to attach to light poles or traffic signal poles, both for which there are no existing rules.

Solutions. It’s easy to list all of the problems and the Sub-Committee for Competitive Access to Broadband Infrastructure is tasked with suggesting some solutions to these many problems. Most of these problems have plagued the industry for decades and there are no easy fixes for them. Since many of the problems of getting onto poles are with pole or wire owners that won’t comply with the current attachment rules there is no easy fix unless there can be a way to force them to comply. I’ll be interested to see what this group recommends to the FCC. Since the sub-committee contains the many different factions from the industry it will be interesting to see if they can come to a consensus on any issue.