FCC Asked to Eliminate Telecom Rate for Pole Attachments
Time Warner Telecom (TWT) recently filed an ex parte letter and “white paper” asking the FCC to eliminate the higher pole attachment rate for attachments used to provide telecommunications services. The framework for a phased-in telecommunications pole attachment rate was adopted as part of the 1996 Telecommunications Act. TWT made its filings in two proceedings on rulemaking petitions that have been pending since late 2005 that concern possible reform or revision of the FCC’s pole attachment rules, but until now did not have rate issues expressly raised. TWT’s filing thus provides an opportunity for commenters to address the application of the telecommunications pole attachment rates to competitive providers of voice services.
The TWT white paper argues that the higher telecom rate for pole attachments hurts competitive entry into telecom, penalizes cable operators providing telecom services, and ultimately deprives consumers of the benefits of robust competition. TWT offers three ways for the Commission to eliminate the telecom rate under present market conditions.
First, TWT submits that the nondiscrimination provisions in the federal Pole Attachment Act allow the FCC to prevent utilities from charging the higher telecommunications pole attachment rate whenever doing so would discriminate against a market participant. Because it is discriminatory to apply higher rates to telecommunications providers than to competing information service providers, both kinds of providers should be required to pay for pole attachments at no more than the cable rate. Second, TWT submits that the Pole Attachment Act does not require the inclusion of the same utility costs for both the telecommunications rate and the cable rate formulas and that certain carrying charges should be eliminated from the telecom formula to lower the telecommunications rate. Third, TWT submits that the FCC may interpret the Pole Attachment Act to apply the telecom rate only to entities providing telecommunications to end-user subscribers, while exempting carriers leasing fiber to third-party service providers. Under this interpretation, a cable operator with pole attachments could lease fiber to an affiliated telecom provider which is not itself attached to poles, and since neither party would be both an attacher and a telecom provider, neither would pay the telecom rate.
The white paper focuses attention on an important issue for the cable industry as operators continue to deploy telephone and VoIP services to their subscribers. COMPTEL president Earl Comstock also publicly applauded the approach and stated that the FCC needed to eliminate discriminatory pole attachment rates that harm consumers. Coincidentally, at a press conference yesterday FCC Chairman Kevin Martin said that one of the Commission’s priorities this year would be examining how pole attachments fees work.
We intend to file comments in this proceeding on behalf of cable operators and state cable associations supporting TWT’s comments concerning the detrimental public policy of the telecom rate and recommending additional arguments for consideration.