Florida Set to Enact Law Regulating Electric Cooperative Poles

Once the governor approves HB1221, pole attachments on electric cooperatives' poles in Florida will be regulated in certain circumstances. Specifically, the Florida legislation would subject an electric cooperative to pole attachment regulations by the Florida Public Service Commission ("FPSC") currently applicable only to the state's investor-owned utilities, including Duke Energy Florida and Florida Power & Light, and communications service providers if the cooperative engages in the provision of broadband service directly, or through an affiliate or partnership, or if it accepts funding to deploy broadband to unserved areas in the state. Under the legislation, the rates, charges, terms, and conditions for such cooperatives' pole attachments must be just and reasonable just like attachments on investor-owned utility and telephone poles.

Electric cooperatives across the country are deploying or developing plans to deliver broadband service themselves, or through affiliates or partners. The trouble is that electric cooperative poles are exempt from federal pole attachment rules, leaving their pole attachment rates, terms, and conditions unregulated unless a state steps in to fill the void. In the absence of state law, electric cooperatives have largely unfettered monopoly control over the pole attachment rates, terms, and conditions under which its broadband competitors construct and operate their networks. What's even more troubling is that this comes at a time when broadband providers, like electric cooperatives, are making considerable investments to expand broadband access nationally to underserved and unserved areas where the only poles suitable for attaching broadband facilities are often owned by electric cooperatives. There is no practical alternative to using existing utility poles to deploy plant, which leaves unregulated electric cooperatives free to favor their broadband deployments over those of competing providers that attach to the cooperatives' poles.

In recognition of the potential for unfair competition, several state governments have enacted measures to regulate electric cooperative pole owners and establish level playing fields. Tennessee requires electric cooperatives that provide broadband service to offer unaffiliated providers nondiscriminatory access to the cooperative's poles. Similarly, Pennsylvania requires electric cooperative broadband providers to grant unaffiliated providers rates, terms, and conditions comparable to, and no less favorable than, those offered to their broadband affiliates. Alabama requires that cooperatives offer the same pole attachment rates, terms, and conditions to unaffiliated broadband providers as those governing their broadband affiliates. Florida's HB 1221, which passed both the Florida House and Senate during the legislative session this spring, is expected to be presented to Florida Governor Ron DeSantis and signed into law soon; and, unless vetoed, it will become law with or without his signature after 15 days of being presented.

Electric cooperatives providing broadband service will now be subject to FPSC jurisdiction the same as investor-owned utilities in Florida. The FPSC recently prescribed rules governing investor-owned utility pole attachment rates, terms, and conditions when it certified to self-regulate investor-owned utility and telephone poles to the Federal Communications Commission. Under Florida law and FPSC rules, if a pole attachment complaint is filed, the FPSC will apply rates, terms, and conditions using the FCC's rules and orders, unless a party establishes by competent substantial evidence that an alternative, cost-based rate is "just and reasonable and in the public interest." In addition, the legislation empowers the FPSC to access cooperative's books and records to the extent necessary to hold electric cooperatives accountable. Notably, the legislation legacies contracts currently in existence or signed before July 1, 2023, exempting these agreements from regulation until they are terminated or expire.

Florida has sixteen electric cooperatives owning power distribution poles in the state and almost a third are currently engaged in or are developing broadband service. More will likely follow suit as federal and state funding opportunities continue to be made available for deployment in unserved and underserved communities, where many electric cooperatives operate. If, as expected, Florida joins other states in leveling the playing field for deployment in electric cooperative service areas, unaffiliated providers can likely expect more favorable rates, terms, and conditions than before, which should prove helpful in their provision of service and encourage fair competition. The key will be ensuring that pole owners abide by these regulations in negotiating future agreements and operations.

Davis Wright Tremaine LLP has significant experience in the application of the federal, state, and local laws governing the deployment and operation of communications infrastructure. Please let us know if you would like our assistance in gaining a better understanding of your rights in seeking access to electric cooperative poles in Florida, or elsewhere.