TABLE OF CONTENTS
I. Introduction and Summary of Comments .......................................................................... 1
II. Background on Pole Attachment Regulation ..................................................................... 4
A. The National Model ............................................................................................................ 4
B. The FCC Formula ............................................................................................................... 5
C. The Current Vermont Rule ................................................................................................. 8
1. Vermont Rents in Comparison to Other States ............................................................... 8
2. The Problem in the Vermont Formula is in its Calculation of Usable Space ................. 8
III. Comments .............................................................................................................................. 8
A. Vermont Poles are Not Different in Kind from Other States.............................................. 8
B. NECTA Supports Adoption of the Federal Formula for Pole and Conduit Rates in
Vermont ...................................................................................................................................... 9
1. Conforming to the National Model Will Help to Overcome Disincentives to
Investment ............................................................................................................................... 9
2. “Cooperative Federalism” ............................................................................................. 10
3. The National Model is Tried and Tested ...................................................................... 11
C. The FCC Formula Provides Answers to the Department’s Questions Asked at the
November 30 Hearing ............................................................................................................... 11
1. How should we determine the costs of a pole? ............................................................. 12
2. Should we divide the costs of the pole equally among the parties?.............................. 12
3. Should the formula cover ILECs?................................................................................. 16
4. Should a utility be permitted to recover more than 100% of the cost of a pole? .......... 18
5. Should regulation be by contract or tariff? ................................................................... 18
6. Should the matter be deferred to 5743? ........................................................................ 18
D. Recommended Changes to Implement Board Proposal and Ensure Non-Discriminatory
Access ....................................................................................................................................... 19
1. Purposes of the Changes ............................................................................................... 19
2. Explanation of Specific Language Changes ................................................................. 22
IV. Conclusion ........................................................................................................................... 24
ATTACHMENTS
Exhibit A.
Exhibit B.
Exhibit C.
Exhibit D.
Exhibit E.
Exhibit F.
Exhibit G.
Comparative Pole Rents
Comparative Methodology
Telephone Accounts
Electric Accounts
“Telecom” Rate
Recommended Rules
Qualifications
STATE OF VERMONT
PUBLIC SERVICE BOARD
REVISED RULE 3.700 (POLE
ATTACHMENTS)
NEW ENGLAND CABLE TELEVISION ASSOCIATION, INC.’S
COMMENTS ON REVISED RULE 3.700 (POLE ATTACHMENTS)
William D. Durand
Robert J. Munnelly, Jr.
NEW ENGLAND CABLE TELEVISION
ASSOCIATION, INC.
100 Grandview Road
Suite 310
Braintree, Mass. 02184
(781) 843-3418
January 18, 2000
NEW ENGLAND CABLE TELEVISION ASSOCIATION INC.’S
COMMENTS ON REVISED RULE 3.700 (POLE ATTACHMENTS)
I. Introduction and Summary of Comments
Pursuant to the Hearing Officer’s November 30, 1999, Order, the New England
Cable Television Association, Inc.1 (“NECTA”) respectfully submits the following comments on
the Board’s proposed revisions to Rule 3.700. The overall thrust of the Board’s proposal is clear
and commendable: to adopt the federal rules for pricing and installing attachments to utility poles
for cable and for telecommunications. NECTA applauds the Board for its initiation of this
rulemaking.
The Pole Attachment Act of 1978 and related FCC regulations were enacted as a
result of repeated efforts by pole and conduit owners to limit cable services, delay cable’s
deployment, force cable operators to lease back facilities owned by the utilities or their affiliates,
or otherwise to use bottleneck control of poles and conduit to constrain facilities-based
competition. Protracted and expensive antitrust litigation was recognized as an insufficient
procedure for remedying these extensive abuses of utility control over essential pole and conduit
facilities.2
1
NECTA is a non profit corporation which serves as a trade association for the cable industry throughout the
New England states. NECTA has acted as the principal negotiator of attachment rates on behalf of its members.
NECTA is very familiar with pole and conduit attachment issues and in a position to bring its experience to bear in
commenting on the proposed regulations.
2
Indeed, in one important piece of pole attachment litigation brought by a cable operator against a local AT&T
operating company prior to effective pole attachment regulation, that operator eventually prevailed in the antitrust
litigation, but by that time--12 years later--it was bankrupt. TV Signal Co. of Aberdeen v. American Tel. & Tel. Co.,
462 F.2d 1256 (8th Cir. 1972); TV Signal Co. of Aberdeen v. American Tel. & Tel. Co., 617 F.2d 1302 (8th Cir. 1980);
TV Signal Co. of Aberdeen v. American Tel. & Tel. Co., 49 R.R.2d 328, 1981-1 Trade Reg. Rep. (CCH) 63,944
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Today’s environment is one in which incumbent telephone companies are faced
with entry into their traditional monopoly local exchange market by facilities-based CLECs that
require access to poles and conduits and in which electric companies have diversified into
telecommunications and video service markets. The incentives for utilities to impede
competition have grown. The Board’s proposed regulations represent a pro-active response to
the need for state policies to govern claims from CLECs and cable operators that utilities are not
affording fair prices or non-discriminatory access.
NECTA endorses the Board’s proposal, which has balanced the interests of cable
and utility customers. NECTA supports the Board’s proposed regulations, with some
amendments. In particular, NECTA specifically recommends that the proposed rules be
augmented to provide more of the operational detail that has been adopted by the FCC and
recently by other State Commissions. NECTA advanced these proposals at the November 30,
1999 hearing through Mr. Glist, a nationally known expert on this subject.3 The inclusion of
more operational details relating to non-discriminatory access will help to reduce the number of
future disputes between pole owners and attachers by providing additional guidance to the
parties. Among these suggestions are:

Presumptions that any pole, duct, conduit, or right-of-way should be deemed
suitable and available for attachment or use through standard makeready
practices and the widely accepted NESC.
(D.S.D. 1981).
3
Mr. Glist’s qualifications are set forth in Exhibit G.
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
Prohibitions on ILECs and electric utilities favoring themselves or "reserving"
space for future telecommunications use.

Practical deadlines for handling applications, makeready, and joint trenching,
along with accepted rules for reimbursing expenses caused by the applicant,
preferably on a unit cost basis.

Use of qualified personnel and contractors to meet makeready timetables.

Permitting overlashing to expand cable channel capacity, eliminate points of
unreliability, and improve signal quality.

Reserving broader remedial tools to assure that the Department has the full
panoply of remedies needed to remedy or deter any discriminatory or
unreasonable denial of access.
The Board has expressed interest in extending the formula to independently
owned ILECs, which are essentially pole renters outside of their core service area. The FCC
formula for “telecommunications” attachments assumes that there will be more than a single
telecommunications entity on the pole. The telecommunications surcharge applied under that
scenario would would be cost-prohibitive in rural settings. A far better solution would be to
simplify the formula as has California. We recommend that the Board extend the formula to
independently owned ILECs and not impose any “telecommunications” surcharge either cable or
telecommunications providers.
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II. Background on Pole Attachment Regulation
A.
The National Model
Over forty (40) jurisdictions follow the FCC’s approach in handling pole
attachments. Although States are permitted to “certify” their jurisdiction and regulate pole
attachments directly, thirty-two (32) States leave it to FCC to regulate pole attachments. Those that
do must stay within certain federal boundaries established by Section 224 of the Communications
Act.4
4
In order to establish its jurisdiction, the Board must satisfy the conditions of §§ 224(c)(2) and (3), which
provide:
“(2)
Each State which regulates the rates, terms, and conditions for pole attachment shall certify to the
Commission that - (A) it regulates such rates, terms, and conditions; and
(B) in so regulating such rates terms, and conditions, the State has the authority to consider and
does consider the interests of the subscribers of the services offered via such attachment, as
well as the interests of the consumers of the utility service.
(3)
For purposes of this subsection, a State shall not be considered to regulate the rates, terms, and
conditions for pole attachments - (A) unless the State has issued and made effective rules and regulations implementing the State’s
regulatory authority over pole attachments; and
(B) With respect to any individual matter, unless the State takes final action on a complaint
regarding such matter - i.
within 180 days after the complaint is filed with the State or
ii.
within the application period prescribed for such final action in such rules and regulations
of the State, if the prescribed period does not extend beyond 360 days after the filing of
such complaint.”
FCC Rule 1.1414, adds the condition that unless the Board “has issued and made effective rules and regulations
implementing the state's regulatory authority over pole attachments (including a specific methodology for such
regulation which has been made publicly available in the state), it will be rebuttably presumed that the state is not
regulating pole attachments.”
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Since 1996 Telecom Act, every certified State to consider the issue has shifted from
its “home grown” formula to the national model.5
In New England, the FCC formula is used either directly or indirectly in New
Hampshire, Connecticut, Massachusetts, and Rhode Island.6 Nationally, a majority of states that
have "certified" to regulate poles have decided to follow the FCC formula.7
B.
The FCC Formula
In the national model, taking the gross investment in pole plant, less the
depreciation reserve for poles, less accumulated deferred taxes generates the cost of a bare pole.
This net figure is then reduced further by deducting the value of pole appurtenances from which
cable operators derive no benefit (e.g., cross-arms). This figure then is divided by the statewide
total of poles in service, to produce a net cost per bare pole. The next step is to calculate the
carrying charges--maintenance expense, depreciation expense, administrative expense, taxes, and
overall return--expressed as percentages of expenses to plant in service, and multiplying the sum
5
See, e.g., In the Matter of the Proceeding on Motion of the Commission to Consider Certain Pole Attachment
Issues, N.Y. Pub. Serv. Comm'n. Case No. 95-C-0341 (issued and effective June 17, 1997); Consumers Power Co., et
al., Mich. Pub. Serv. Case Nos. U-10741, U-10816, U-10831 at 27, 1997 Mich. PSC LEXIS 26 (Feb. 11, 1997), reh'g
denied, 1997 Mich. PSC LEXIS 119 (April 24, 1997), aff’d Detroit Edison Co. v. Mich. Pub. Serv. Comm’n No.
203421 (Mich. , Court of Appeals ,Nov. 24, 1998); aff’d Consumers Energy Co. v. Mich. Pub. Serv. Comm’n, No.
113689 (Mich. Sup. Ct. Aug. 31, 1999) Order Instituting Rulemaking on the Commission’s Own Motion Into
Competition for Local Exchange Service, R. 95-04-043, I.95-04-044, Decision 98-10-058 (Cal PUC, October 22,
1998), available at www.cpuc.ca.gov/telecommunications/right_of_way.; Cablevision of Boston, et al. v. Boston
Edison Co., Mass. DTE 97-82 (1998) (using 1/13.5). A/R Cable Services. v. Massachusetts Electric Co., Mass. D.T.E.
98-52 (1998) (pricing access to electric utility poles at cost).
6
Maine is the exception that proves the rule. It has a different nominal formula, but actual long-term settlement
rates are close to those derived from the FCC formula. The Maine Legislature and PUC had considered changing the
formula on the books, but these long-term settlements removed the pressure to do so.
7
State PSCs known to be following the federal approach include: California, Idaho, Illinois, Massachusetts,
Michigan, New York, New Jersey, Ohio, Washington.
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of the carrying charges by the net cost per bare pole. This produces an annual carrying cost per
pole. Cable pays for a proportional percentage of the pole plant it actually uses. Thus, the
annual carrying cost is in turn multiplied by the so-called "use ratio," which is the proportion that
the space occupied by cable bears to the "usable space" on the utility pole. Based on extensive
analysis, the FCC has adopted a rebuttable presumption that the average usable space on a utility
pole with cable television facilities is 13.5 feet. The FCC has estimated that cable facilities
occupy approximately one foot of that total usable space (even though in reality cable
attachments on average occupy considerably less). Therefore, cable operators bear 1/13.5, or
7.41%, of the costs of the usable space and of the non-usable space. Tr. 11/30/99, pp. 128-29,
147 (Glist). Exhibit B. Where poles are jointly owned, for example 50/50, the attaching party
pays one- half of the calculated rent to one owner, and one-half to the other. (In the rare instances
when cable operators attach two strands to a pole separated by 12”, under the FCC formula they
would pay for two attachments at one foot each.)
FCC figures on useable space are rebuttable presumptions. Thus, if an attaching
party is using poles that are actually 40’ tall, it may submit proper surveys or inventory reports to
rebut the presumption of 37.5. Likewise, if a utility’s inventory is 35’, it may submit a survey or
inventory report to rebut the presumption. Field measurements may also be used to rebut the
presumptive minimum attachment height of 18’. The formula is thus flexible and can accommodate
the actual circumstances of each utility and attaching party, should the differences be sufficiently
material to warrant a survey or inventory report.
A comparable formula applies to conduits. Conduit is the term that generally refers
to the large concrete or metal (and in very old networks wood) pipe or structures into which a
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number of smaller plastic tubes, known as ducts, are installed. Most ducts are subdivided even
further with a type of device known as inner duct. Conduit runs may contain as many as 12 or more
ducts, with each such duct subdivided still further by four-, five-, or even six-compartment
innerduct. Conduit may also refer to vertical runs within multi-tenant or multistory buildings. The
FCC’s baseline conduit methodology was announced in Multimedia Cablevision, Inc. v.
Southwestern Bell Telephone Company, 11 F.C.C.R. 11,202 (Sept. 3, 1996). It was in turn based on
the Massachusetts DTE conduit decision modeled on the FCC’s pole formula. Greater Media, Inc.,
et al. v. New England Telephone and Telegraph Co., No. DPU 91-218, (Mass. Dept. Pub. Utils.
April 17, 1992), aff’d, Greater Media, Inc. v. Department of Public Utilities, 415 Mass. 409
(1993). In that case, after full adjudication before the Massachusetts Department of Public Utilities,
and appeals to the Massachusetts Supreme Judicial Court, NYNEX was ordered to reduce its rate by
approximately 56% below the rate that it had been charging cable operators previously. The basic
conduit formula for cable allocates the costs of conduit across all duct feet (less maintenance duct).
Because of the standard practice of using “inner duct” to subdivide ducts into smaller portions, it is
presumed that a typical cable installation will use one-half duct.
Under FCC rules scheduled to phase in between 2001-2006, the allocation of costs
to telecommunications providers would be more complex. The costs of “usable” space would be
allocated proportionately, as it is today, while the costs of “unusable” space would be allocated in
the ratio of 2/3 times 1/N, where N is the number of telecommunications providers. For reasons
explained below, NECTA does not recommend that this telecommunications surcharge be applied
in Vermont.
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C.
The Current Vermont Rule
1.
Vermont Rents in Comparison to Other States
Mr. Glist collects a biennial census of pole attachment rents. The data collected
for the 1999 census in shown in Exhibit A. The data show that poles rents are exceptionally high
in Vermont, averaging $11.34, compared with the national average of $4.81 and the regional
average of $8.49 (per solely-owned pole).
2.
The Problem in the Vermont Formula is in its Calculation of Usable
Space
The pole rent differences in Vermont do not arise from differences in standards or
from differences in costs. The Vermont formula “costs” the carrying charge of a pole in the same
basic net-book manner as the national model. The differences in Vermont arise from use of a
formula that does not account for space usage as accurately as national model. Exhibit B. The
older model in today’s Vermont rules is based on a view of minimum attachment height which is
widely rejected and has been supplanted by the new NESC, which allows attachments even of
mainline distribution cable at 15.5’ plus sag. It is also based on view of the separation space
between power and communications as unusable space, when it is in fact its is used for
attachments such as streetlights, and for achieving the minimum height above ground needed for
power lines.
III. Comments
A.
Vermont Poles are Not Different in Kind from Other States
This difference in rental is not because Vermont poles are different in kind from
other New England states. Vermont follows the same pole setting practices. Vermont follows
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the same “makeready” practices,” in which the attaching party pays for all of the utilities
incremental costs of attachment up front at installation. Vermont follows the same National
Electric Safety Code (NESC), as do neighboring states. In Vermont, as elsewhere, the majority
of the pole (at the top) is occupied by electric crossarms, electric primary and secondary lines,
and the NESC separations prescribed between the electric lines of differing voltages. Below
those lines is space for streetlights (usually in the space between power and communications
lines), and communications lines stacked in 12” increments. Normally the ILEC is the lowest
line attachment, with any CLEC usually above ILEC, and cable as the uppermost
communications user. Minimum heights above ground are prescribed by the NESC for differing
applications. In shorthand, communications lines are normally at 18 feet (now stated by the
NESC as 15.5’ plus sag). Power lines require greater height for sag and for higher-powered
circuits. For stability, 6 feet (on a 40-foot pole) is placed underground. These standards apply
throughout New England.
B.
NECTA Supports Adoption of the Federal Formula for Pole and Conduit
Rates in Vermont
1.
Conforming to the National Model Will Help to Overcome Disincentives
to Investment
The Board’s proposal is timely because of the need to encourage deployment of
CLEC facilities in Vermont. The purpose of the 1996 Act is to encourage investment in
competing facilities. The Vermont Telecommunications Plan adopts the same goal. Vermont
needs to take every opportunity to help overcome the rural economics of the State. Mitigating
the inhibiting effects of artificially high pole rents will have three advantages.
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First, it will help reduce a major cost of cable line extensions. As the density of
subscribers gets lower, it takes more poles to reach them. If pole rents are artificially high, it
makes line extension too costly at the margin.
Second, at the margin, a CLEC is going to prefer to deploy plant in states where
cost inputs are more in line with national norms.
Third, even with mainline cable plant, it is economically more rational to plow
cash flow back into plant or product, rather than into disproportionately high pole rents.
2.
“Cooperative Federalism”
There are additional reasons for Vermont to adopt the national model now. With
the breakdown of locally protected monopolies comes the need for "cooperative federalism," in
which investment decisions can be made seamlessly across state lines without unnecessary
regulatory differences. New York is a good example. New York had certified and followed its
own pole formula for 15 years. After the 1996 Act, it studied extensive testimony suggesting
alternative formulas, and adopted in total the federal approach that you have proposed. In
reaching this decision in 1997, the New York Public Service Commission stated:
[we] will use the federal approach as our model for setting pole
attachment rates and regulating pole attachment operations in New
York. Since the enactment of the Telecommunications Act of 1996,
there has emerged a clear need for cooperative federalism in this and
other areas of telecommunications so as to provide consumers the
full benefits available from the development of competitive markets.
* * * By embarking on this course, we hope to make it easier for
service providers to do business by eliminating unnecessary variation
in regulatory requirements. Also, by exercising our authority in this
manner, we make it possible for firms operating nationally to
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compare favorably New York's practices and those followed
elsewhere.8
3.
The National Model is Tried and Tested
The third reason to adopt the federal model is to borrow best practices from sister
jurisdictions. There is great economy in using the national model. The FCC formula has been
tried and tested and refined so much that controversies and the administrative burdens can be
significantly reduced for all players. While the Board has issued comparatively few pole
attachment decisions, the FCC has adjudicated approximately 300 complaint cases, 9 in addition
to the many rulemaking and related orders it has issued in 20 years of pole attachment regulation.
As a result of these refinements, in the jurisdictions that follow the FCC formula, annual updates
in rental calculations are routinely performed, and any accounting issues resolved privately,
without any need for regulatory intervention. Trade associations such as NECTA regularly
review pole rent calculations for power and telephone companies. It is the rare dispute that must
be brought to the FCC. This body of law, could assist the Board in resolving future disputes as
they arise.
C.
The FCC Formula Provides Answers to the Department’s Questions Asked at
the November 30 Hearing
Each of the Department’s questions raised during the November 30, 1999
workshop is answered in the body of law reflected in language of FCC Reports & Orders, and in
some of the refined procedural points developed by sister PSCs that follow the FCC formula.
8
In the Matter of the Proceeding on Motion of the Commission to Consider Certain Pole Attachment Issues,
N.Y. Pub. Serv. Comm'n. Case No. 95-C-0341 at 6 (issued and effective June 17, 1997).
9
Implementation of Section 703(e) of the Telecommunications Act of 1996, Amendment of the Commission's
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We will answer the Department’s series of questions to illustrate how comprehensive the FCC
formula is and how useful its adoption would be to the Board..
1.
How should we determine the costs of a pole?
Every cost element is prescribed by the FCC formula. Each cost element is already
recorded and reported in standard ARMIS accounts (for telephone) and FERC Form 1 accounts (for
power). The sole exception is the number of poles owned by an electric utility, which is available
from Continuing Property Records routinely maintained by the utility. This information is provided
on request, but is not normally reported in Form 1. Occasionally, an electric utility does not report
its depreciation rates on Form 1, but these are ordinarily on file with a PSC from the last
prescription. The specific accounts are shown in Exhibits C and D.
2.
Should we divide the costs of the pole equally among the parties?
The current Vermont formula properly rejects the notion that pole costs should be
divided equally among users who make vastly different uses of the pole. Instead, it uses a cost
allocator in which the costs of the entire pole are divided according to relative usage of the
useable space. If the power industry uses 10 feet of usable space and cable uses 1, cable should
not be paying for ½ of the pole. The current Vermont formula properly accepts this premise.
This is not the time to relitigate the proposition that pole costs should be allocated proportionally
to relative use of the pole. The problem in the Vermont formula is that the calculation of the
usable space is incorrect. Two corrections are required, and a third is optional.
Rules and Policies Governing Pole Attachments, CS Docket No. 97-151 at 8, n. 37 ("1998 FCC Pole Rate Order").
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a.
Should the 40” be considered unusable?
First, the separation space should not be deemed “unusable.” The FCC and state
Commissions have examined copious evidence and have repeatedly reaffirmed that the space is
usable. The treatment was reaffirmed in reconsideration of CC Docket 78-144;10 then in the
Monongahela Power case;11 then again before the FCC in a 1984 rulemaking;12 and in subsequent
litigated cases.13 The underlying record has been updated regularly, twice since passage of the 1996
Telecommunications Act in CS Docket 97-98 and CS Docket 97-151. The FCC affirmed this
treatment again on February 6, 1998.14 For its part, Congress repeatedly has reaffirmed the formula
in 1983,15 1984,16 1992,17 and 1996.18 State pole attachment proceedings have upheld and
reinforced this approach.19 The FCC and State Commission’s have found that the neutral zone is
10
Rules for the Regulation of Cable Television Pole Attachment, 77 F.C.C. 2d 187 (1980).
11
Monongahela Power Co., et al. v. FCC, 655 F.2d 1254 (D.C. Cir. 1981).
12
Petition to Adopt Rules Concerning Usable Space On Utility Poles, 56 R.R.2d 707, 710 (1984).
13
General Television of Delaware, Inc. v. Diamond State Tel. and Tel. Co., PA-84-0015, Mimeo No. 2141 (Jan.
28, 1985); El Paso Cablevision, Inc. v. Mountain States Tel. & Tel. Co., 49 R.R.2d 847 (1981).
14
1998 FCC Pole Rate Order.
15
Communications Amendment Act of 1982, Pub. L. No. 97-259 (1983).
16
Cable Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779 (1984).
17
Cable Television Consumer Protection and Competition Act of 1992 Pub. L. No. 102-385, 106 Stat. 1460
(1992).
18
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).
19
See, e.g., In the Matter of the Proceeding on Motion of the Commission to Consider Certain Pole Attachment
Issues, N.Y. Pub. Serv. Comm'n. Case No. 95-C-0341 (issued and effective June 17, 1997); Consumers Power Co., et
al., Mich. Pub. Serv. Case Nos. U-10741, U-10816, U-10831 at 27 (Feb. 11, 1997), reh'g denied (April 24, 1997); Ohio
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not "dead space," i.e., unusable for any other purpose. The neutral zone can be, and is, used for
street light attachments from which electric utilities derive additional revenues. Cable operators
have paid through makeready to create the neutral space when it is not already in place on joint
use poles. Moreover, the neutral zone exists only for electrical attachments. Just as the
separation space between electrical conductors of differing voltages on the pole is deemed to be
used by electric, so too must the neutral zone, which maintains a prescribed distance from an
electrical line to any other conductors of differing voltages. The neutral zone is also vertical
space required by electric companies to maintain their own minimum clearances above grade.
b.
The presumptive minimum attachment height should be set at 18’
Second, the presumptive minimum attachment height should be set at 18 feet.
1998 FCC Pole Order at ¶ 22 ("The Commission recognized that 18 feet of ground clearance
must be reserved for ground clearance"). This figure was adopted after extensive rulemaking
proceedings (Cable Television Pole Attachments, 72 F.C.C.2d 59, 68, n. 21 (1979); Cable
Television Pole Attachments, Memorandum Opinion & Order on Recon., 77 F.C.C.2d 187
(1980)) and has been reaffirmed repeatedly (Petition To Adopt Rules Concerning Usable Space
on Utility Poles, Memorandum Opinion & Order, RM 4558, 56 R.R.2d 707 at ¶ 11 (1984)); and
was again reaffirmed by the FCC in February 1998. 1998 FCC Pole Order at ¶ 22. The figure is
actually generous to the pole-owning utilities. Under the NESC, the typical clearance for a
communications conductor under NESC Rule 232 is 15.5 feet above grade over a highway, plus
some additional space for sag, depending on the weight of the conductor and length of the span.
Edison Co., et al., No. 81-1171-EL-AIR (Ohio Pub. Serv. Comm'n Nov. 3, 1982); Cal. Pub. Util. Code §767.5 (1996);
Cablevision of Boston, et al. v. Boston Edison Co., Mass. DTE 97-82 (1998) (using 1/13.5). A/R Cable Services. v.
Massachusetts Electric Co., Mass. D.T.E. 98-52 (1998) (pricing access to electric utility poles at cost).
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But that clearance may be reduced to as little as 9.5 feet under differing configurations, such as
along rural roads or in spaces or areas subject only to pedestrian traffic. It is customary in the
communications industry to average those variations in clearance heights into a working
composite of 18 feet, inclusive of all clearances and sags. Petition To Adopt Rules Concerning
Usable Space on Utility Poles, Memorandum Opinion and Order, RM 4558, 56 R.R.2d 707 at ¶
11 (1984) ("Our selection of an 18-foot figure did not turn upon any one factor but rather
reflected various elements such as differing pole heights as well as the differing NESC
standards.") The number is rebuttable with inventories of cable or CLEC attached poles or with
statistically reliable sampling, under well-tested FCC standards.
c.
What is the average pole height?
The third change, which is optional, would be to apply these figures to the taller
poles that are generally deployed in Vermont. The FCC assumed that the poles used by cable were
equally divided among 35’s and 40’s. The resulting calculation was [(35+40)/2]-18-6=13.5 feet of
usable space.
Electric utilities have advised the FCC in FCC Docket No. CC 97-98, that "an
average pole height of between 35 feet and 40 feet is no longer accurate. . . . 35 foot poles have
been replaced with 40 foot and taller poles, to accommodate the demand for space." Their
telephone joint owners (in comments submitted by USTA) have explained that "the demand for
taller poles is derived solely from the increased spatial needs of the electric utilities." A 40-foot
pole has six feet set underground (10% of pole length plus two feet). A 45-foot pole would
ordinarily have 6.5 feet set underground. Using the standard 18-foot ground clearance figure
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produces a usable space figure of 16 and 20.5 feet, respectively. The simple average would be
18.25 feet. We have not conducted a survey for Vermont.
If poles in Vermont are more generally 40’s, 45’s, and 50’s, the usable space
figure would increase. The Board may either take administrative notice of the greater height,
and adopt a presumption of greater height (e.g., 40’ or 45’); or it may follow the national model
and leave it to the parties to rebut in particular cases.
d.
Should the entire pole be considered usable?
This has been answered above. The pole exists in order to create useable space, for
wires, conductors, streetlights, etc. The non-useable space may be subject to incidental use, such as
risers for transitioning from aerial to underground, but such uses should not give rise to a
reallocation of costs inconsistent with the national model.
3.
Should the formula cover ILECs?
The FCC’s authority does not extend to ILEC attachments on power poles,
because of the limits written in to Section 224 at the behest of the electric utility industry.
NECTA has no objection to applying the formula to independently owned ILECs, which are
essentially pole renters outside of their core service area. There are some technical
complications, in that the FCC formula for “telecommunications” attachments assumes that there
will be more than a single telecommunications entity on the pole. Exhibit E are scenarios drawn
at the request of the Hearing officer (Tr. 11/30/99). They illustrate that the special
telecommunications rate that would apply to a rural independent ILEC would be costprohibitive. A far better solution would be to simplify the formula as has California. In late
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1998, the California PUC adopted the federal formula, but declined to apply the
“telecommunications” surcharge.
Since the opening of the local exchange market to competition,
various cable corporations now offer telecommunications services
over those same connections used for cable television service. There
is generally no difference in the physical connection to the poles or
conduits attributable to the particular service involved. In many
cases, a cable operator may not be able to delineate exactly what
particular services are being provided to a customer at a given time
because the customer can use the connection for various services,
depending on the equipment attached to the connection at the
customer’s premises. In such instances, it would be difficult and
impractical to police how a given pole attachment is used to provide
separate services offered over the same pole connection, or to
delineate what portion of the usage was attributable to
telecommunications versus other services offered by a cable
corporation. … Accordingly, to avoid the problems involved in
separately measuring different types of data transmission services
over the same connection, we conclude that the rate prescribed [by
California rule] for cable television pole attachments should apply
where a cable corporation uses its pole attachment to provide
telecommunications services. By applying a consistent rate for use
of cable attachments, including provision of telecommunications
services, we will avoid protracted disputes over how particular
attachments are being used or how separate rates may be prorated
based on different volumes of transmissions over the same
connection. Moreover, such an approach promotes the incentive for
facilities-based local exchange competition through the expansion of
existing cable services.
Having concluded that the statutory rate for cable attachments shall
apply to telecommunications services offered by the cable operator,
we must next consider whether this same rate should be also be
applied to other CLCs, including those not owned by or affiliated
with a cable corporation. Since we are committed to ensuring that all
telecommunications carriers gain access to utility attachments under
nondiscriminatory rates, terms, and conditions, we conclude that all
CLCs should be entitled to comparable pole attachment rates as are
available to those CLCs affiliated or owned by a cable corporation.
The use of the existing cable pole attachment rates for all CLCs will
also avoid the need for further protracted proceedings to prepare cost
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studies and to adjudicate default rates. Accordingly, we will direct
that the same pole attachment rate provisions applicable to cable
operators providing telecommunications services be extended to all
CLCs, including those not owned by or affiliated with a cable
corporation.20
NECTA recommends that the same approach be followed in Vermont.
4.
Should a utility be permitted to recover more than 100% of the cost of a
pole?
A utility should not be permitted to recover more than 100% of the cost of a pole.
The national model and the California variant would assure that practically speaking the utility
would not recover more than 100% of the pole so long as there are fewer than 14 attaching
telecommunications entities. If Vermont is fortunate enough to attract more than 13.5
telecommunications parties to the poles, the issue could be revisited at that time.
5.
Should regulation be by contract or tariff?
Our recommended approach would be to allow contracts but to make them publicly
available so that all parties will have the opportunity to adopt contract solutions on a nondiscriminatory basis. If tariff filings are continued, their specific terms or application should
nonetheless be subject to complaint in a specific case.
6.
Should the matter be deferred to 5743?
No. There is no need for delay. All of the evidence needed to adopt the national
model is available in this docket and through official notice.
NECTA would be pleased to respond to other questions raised in initial comments.
20
Order Instituting Rulemaking on the Commission’s Own Motion Into Competition for Local Exchange
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D.
Recommended Changes to Implement Board Proposal and Ensure NonDiscriminatory Access
NECTA has edited the proposed model, to suggest specific edits which import “best
practices.” As noted above, NECTA recommends simplifying the proposal by eliminating the
“telecommunications” surcharge and by applying it to independent ILECs. A revised version
attached as Exhibit F shows the changes suggested.
1.
Purposes of the Changes
NECTA’s proposed rules are drawn from FCC cases, Orders, and the orders of State
PSC’s (such as California) which have adopted the FCC approach. The principles behind the
recommended changes are all to promote competition and to address the practical, day-to-day issues
which (left unaddressed) could delay the deployment of competitive facilities.
Nondiscriminatory access should be required to any pole, duct, conduit, or
right-of-way, including transmission poles and electrical manholes. If there are particular safety
concerns with a specific installation, it should be addressed in that case, rather than by carving out
entire classes of support structures as “off limits.” All poles, ducts, conduits and rights of way
should be deemed suitable and available for attachment or use. The utility should be assigned the
burden of demonstrating why any facility is not available for joint use under standard makeready
practices and the widely accepted National Electrical Safety Code (NESC).
ILECs and electric utilities may not favor themselves (or their affiliates) over cable
and other competitors. Neither an ILEC nor an electric utility should be permitted to "reserve"
space for telecommunications use in preference over a competitor; however, an electric utility
Service, R. 95-04-043, I.95-04-044, Decision 98-10-058 (Cal PUC, October 22, 1998)
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should be permitted to reserve space for core electric services if the utility has a bona fide
development plan that reasonably and specifically projects a need for that space for core electric
service within one year.
In order to assure timely access to poles, the Department should adopt the FCC and
California PUC deadlines for handling applications and makeready, along with protections for the
business confidences which are often contained in such applications. The Board should remain
available as a forum for promptly resolving claims that a utility is providing faster access to its
affiliates than to its competitor.
Makeready, inspection, and rearrangement costs must be reimbursed based on
actual, reasonable expenses incurred, preferably on a unit cost basis. The applicant should pay for
necessary makeready (but not for correcting preexisting violations, which should be at the cost of
the party causing the violation). If several parties make specific use of the additional space created
through makeready, the modification costs should be apportioned among all parties making specific
use of the additional space.
A utility may not specify that only the utility may own an attachment (e.g., fiber
cable) or that only utility crews may perform the necessary work, such as the installation and
maintenance of attachments. Cable and other competitors should be allowed to own the
attachments and to use their own personnel or independent contractors to work on utility facilities if
they are qualified under non-discriminatory, reasonable and objective standards (e.g. OSHA).
Rents would be established in accordance with the national model, without the
complications of a telecommunications surcharge. This simplification would make the formula
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readily applicable to independently owned ILECs as well as to cable operators, regardless of the
services delivered.
The terms and conditions of pole contracts should be filed at the Board/Department
and made available for public inspection and for adoption, much like an interconnection agreement.
“Overlashing” of new fiber to existing strand should be facilitated. Overlashing
does not use more pole space, but it allows cable operators to expand their channel capacity,
eliminate points of unreliability, and improve their signal quality by overlashing new or replacement
conductors and amplifiers to the messenger cable attached to the pole. Like the FCC, the Board
should hold that overlashing is important to implementing the 1996 Act, promotes competition,
increases opportunities for competition in the marketplace, and does not require any advance
permission, notification or payment.
Just as cable operators pay for the makeready needed to accommodate their initial
attachments, the same rules should apply without discrimination to pole owners and to new
entrants, including affiliates of the pole owners. Any entity that adds to or modifies its existing
attachment should bear a proportionate share of the costs incurred in making the pole, conduit or
right-of-way accessible. A party with pre-existing attachments that brings its facilities into
compliance with applicable safety codes and requirements during such modifications will be
responsible for a share of the modification costs.
As in California the Department should require that no licensee may be evicted from
pole or conduit space without specific authorization from the Department.
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Remedies should include injunctive and equitable relief, to assure the Department
with the full panoply of potential remedies needed when denial of access can make the difference
between a competitor gaining a customer or losing it in the long term.
2.
Explanation of Specific Language Changes
We have modified 3.701 (B), which seems to be a vestige of older regime, with
cross-references which no longer work. The accepted federal approach is that the agency stands
ready to receive pole attachment complaints where the parties cannot privately resolve their
disputes. No formal elections are required. It is a good idea to require the filing of contracts to
allow general adoption of negotiated clauses that work. Examples include mechanisms for pole
audits, scheduling, or unit prices.
Section 3.703 includes a clarification that access can also be allowed for long haul
transmission towers, with appropriate safety measures. This promotes state fiber runs.
We have added 3.703 subsections to adopt the mechanical means for achieving nondiscriminatory access to poles.
(A)(2)
If there is reluctance to allow attachment, it must be grounded in the
National Electrical Safety Code.
(A)(3)(4)
To level the field, utility may not declare space as an off limits
"reserve" space for its own use. An electric utility may reserve space for its core business.
(B)
Mechanics of the application process are taking the best from all
jurisdictions.
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(B)(1) Requests for information of general availability must be answered within 10
days (20 if a field survey is required).
(B)(2) Maps are made available.
(B)(2) Confidentiality agreements provided to protect sensitive information
(B)(4) Promotes (but does not compel) electronic application procedures
(B)(4) Makeready deadlines are established, with a preference for unit costs for
standard makeready, rearrangement, and inspection functions. This will minimize delays incident
to time and materials billing.
(B)(4) Attaching parties have the right to use approved contractors or otherwise
qualified personnel to facilitate prompt construction.
(B)(5) No additional application, notice or payment is required for a attaching party
to overlash facilities to existing attachments, provided that such overlashing meets generally
accepted engineering standards.
(D)
This has been modified for temporary stays. There may be no eviction
without Board order. A utility should not dispossess a party from an essential facility to which they
are already.
(E)
If there is a distinction between cable and telecommunications, this notice
would be adjusted to conform with Marcus Cable Associates, L.P. Texas Utilities Electric
Company, 12 FCC Rcd. 10362 (1997). In that case, the FCC recognized that a disclosure of
telecommunications services and customer locations was competitively sensitive information. If
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there is a distinction between cable and telecommunications, NECTA would have no objection to
billing reconciliation after 2001, but the information must be kept away from the utilities’
commercial divisions.
After Section 3.704, we have added a Response pleading, so that Board will have
option of summary decision, staff conferences with parties, and mediation. These are all expedited
routes that speed up dispute resolution. We recommend a regime that can move quickly, with a
minimum of paper, and a minimum of hearing time. CLECs and cable operators need to build
quickly in today’s market. If the Board needs to adopt a specific process for a “rocket docket,” it
should do so.
3.705(a) NECTA questions whether 360 days should be the default. It is more
conventional to specify 180 days.
3.706 We have added the option of injunctive or equitable relief. This is needed for
fair resolution of access disputes, because refunds don’t make a party whole.
We recommend deleting grandfathering of old CLEC pole rents from 3.705(E).
There is no reason to lock in rents that were established when there was no regulatory recourse. If
they are just and reasonable, they stand. If not, they should be modified. There is no reason that a
new CLEC should get a just and reasonable rate and an old one not. Such disparities would lock in
economic distortions in a competitive market.
IV. Conclusion
For the foregoing reasons, the Board should adopt its proposed rules with the
additional changes set forth Exhibit F.
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Respectfully Submitted
_______________________
William D. Durand
Robert J. Munnelly, Jr.
NEW ENGLAND CABLE TELEVISION
ASSOCIATION, INC.
100 Grandview Road, Suite 310
Braintree, Mass. 02184
(781) 843-3418
January 18, 2000
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Note on Qualifications
I, Paul Glist, am a Partner with the law firm of Cole, Raywid & Braverman, L.L.P.,
located at 1919 Pennsylvania Avenue, N.W., Washington, D.C. 20006. I have specialized in cable
television and communications law since 1978. I have served as a faculty member of the Practicing
Law Institute for over 10 years, where I teach cable regulation, telecommunications, franchising,
and other communications topics. Part of my expertise is in pole attachments. I am actively
involved with outside plant engineers in the deployment of competitive telecom plant in accordance
with the NESC. Much of my time is spent in the field and in consultation with engineers over plant,
poles, and conduit. I therefor have considerable practical experience with what is on poles and how
it gets there.
On the regulatory side, I have participated extensively in each of the rulemakings
and request for rulemakings which the Federal Communications Commission has undertaken
concerning pole attachments, including

CC Docket 78-144, the original rulemaking;

RM-4558, the reexamination of useable space;

CC Docket 86-212, fine-tuning of carrying charges;

Part 31 to Part 32 conversion;

CS Docket 96-166, extending the rules to CLECs;

CC Docket 96-98, access to poles;

CS Docket 97-98, fine-tuning of carrying charges;

CS Docket 97-151, the rate for telecommunications carriers after 2001.

Each of the Court appeals incident to these rulemakings.
I have testified as an expert witness on pole attachments before the Massachusetts
Department of Public Utilities/Massachusetts Department of Telecommunications and Energy in AR Cable Services, Inc., et al. v. Boston Edison, DTE 97-82, decided on April 15, 1998 and A-R
Cable Services, Inc., et al. v. Mass Electric, DTE 98-52, decided on November 6, 1998 and in DTE
98-36, pending decision. I have testified as an expert witness before the New York PSC, In the
Matter of Certain Pole Attachment, CASE 95-C-0341,1997 N.Y. PUC LEXIS 639.
I served as outside expert in the proceedings before the California Public Utilities
Commission, leading to Competition for Local Exchange Service, Decision 98-10-058, October 22,
1998
I have also served as counsel to the cable operator or CLEC in the majority of all
complaint cases filed since 1978 at the FCC. I serve as outside rate analyst for cable systems and
for state cable television associations in reviewing and negotiating pole rates for more than 10 years.
I serve as counsel to the National Cable Television Association in various matters,
including the development of the language and formula in the 1996 Telecommunications Act pole
attachment provisions.
Subscribed and sworn to under penalty of perjury.
________________________
Paul Glist
January 13, 2000
FORMULA FOR ELECTRIC UTILITY POLE RENT
(FERC Form 1)
Net Investment
Net Cost A/C 364
of a
=
Gross Pole
Bare Pole (A)
Investment
Investment**
-
Accumulated
Depreciation
Reserve (Poles)
Deferred Income Taxes (Poles)*
.15 of Net Pole
Number of Poles
Carrying Charges
Depreciation
Expense
+
Administrative
Expense
+
Maintenance
Expense
=
Depreciation Rate
for Gross Pole x
=
Total Administrative and General Expenses Administrative (Accounts 920 – 935)
Gross Plant Investment - Depreciation Reserve - Accumulated Deferred
(Electric Plant)***
(Electric Plant)
Income Taxes (Electric Plant)*
=
A/C 593
Investment in
A/Cs 364 + 365 + 369
+
Normalized
Taxes
=
(Expressed
As A Percentage
of Net Plant
Investment)
+
Rate of Return =
= Annual
Carrying Cost (B)
Gross Pole Investment
Net Pole Investment**
- Depreciation in
A/Cs 364 + 365 + 369
- Accumulated
Deferred Income Taxes
Related to A/Cs 364 +
365 + 369*
A/C (408.1 + 409.1 + 409.1 + 410.1 + 411.4) - 411.1
Gross Plant - Depreciation Reserve - Deferred Income Taxes*
Rate Last Authorized by PSC
Use Ratio
Use Ratio (C)
=
Space Occupied by Cable (1 foot)
Total Useable Space (13.5 feet)
Maximum Rate
Maximum Rate =
(A) x (B) x (C)
*
Deferred taxes are treated here as a rate base deduction.
**
For purposes of these calculations Net Pole Investment equals Gross Pole Investment minus the
Depreciation Reserve Related to Poles minus Accumulated Deferred Income Taxes Related to
Poles.
***
For companies which have multiple operations, such as gas, electric and/or nuclear power,
typically, in calculating the administrative expenses component, only the investment relating to
electric operations is utilized. However, in the computation of the taxes component, the total
gross plant investment of all of the company's operations is utilized. The taxes paid by the utility
generally relate to its entire operations.
FORMULA FOR TELEPHONE UTILITY POLE RENTS
(FCC ARMIS)
Net Investment
Net Cost A/C 2411
of a
=
Gross Pole
Bare Pole (A)
Investment
Investment**
-
Accumulated
Depreciation
Deferred Income Reserve (Poles)
Taxes (Poles)*
.05 of Net Pole
Number of Poles
Carrying Charges
Depreciation
=
Depreciation Rate
Gross Pole Investment
Expense
for Gross Pole Inv.
x
Net Pole Investment**
+
Administrative =
Total Administrative and General Expenses
Gross Plant Investment - Depreciation Reserve - Accumulated Deferred Income Taxes
+
Maintenance
=
A/C 6411 - [(A/C 6411(ad))+(A/C 6411(ae))]
Expense
Net Pole Investment
Normalized
Taxes
=
A/C 7200
(Expressed
Gross Plant - Depreciation Reserve - Deferred Income Taxes*
As A Percentage
of Net Plant
+
Investment)
Rate of Return =
Rate Last Authorized by PSC
= Annual
Carrying Cost (B)
Use Ratio
Use Ratio (C)
=
Space Occupied by Cable (1 foot)
Total Useable Space (13.5 feet)
Maximum Rate
Maximum Rate =
(A) x (B) x (C)
*
Deferred taxes are treated here as a rate base deduction.
**
For purposes of these calculations Net Pole Investment equals Gross Pole Investment minus the
Depreciation Reserve Related to Poles minus Accumulated Deferred Income Taxes Related to
Poles.
Expense