Jul 16, 2020 — have met that economic criteria could also be allocated to the attacher. NCTA also requests that the Commission clarify that complaints
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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 In the Matter of Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment ) ) ) ) ) WC Docket No. 17 -84 PETITION FOR EXPEDITED DECLARATORY RULING Rick Chessen Neal M. Goldberg Steven F. Morris NCTA Œ The Internet & Television Association 25 Massachusetts Avenue, NW Suite 100 Washington, DC 20001 Maria Browne Davis Wright Tremaine LLP 1919 Pennsylvania Avenue, NW Suite 800 Washington, DC 20006 July 16, 2020
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SUMMARY NCTA Š The Internet & Television Association (ﬁNCTAﬂ) requests that the Commission issue a n expedited declaratory ruling clarifying that , in areas with no access to broadband, pole owners are required to engage in proportionate and equitable allocation of pole replacement costs , and that it is unjust and unreasonable to require attaching entities to bear those costs in their entirety. Pole owners routinely incur pole replacement and upgrade costs, whether prompted by an attachment request or not, and derive significant economic gain , including in the form of ﬁbetterment ,ﬂ even when a pole is replaced ahead of schedule. The Commission should ensure that the cost of re placing a pole in unserved areas is not shifted entirely to the attaching entity, as it often is today, but is instead allocated in a manner that recognizes the limited role the attaching entity plays in causing (as opposed to merely advancing) the costs o f the replacement, as well as the significant benefits the replacement conveys to the pole owner. This result is both mandated by the just and reasonable requirements of section 224(b) of the Communications Act and consistent with the Commission™s orders limiting make -ready costs to those actually caused by the attaching entity as well as with section 1.1408(b) of the Commission™s rules, which requires proportionate sharing of costs among the entities that directly benefit from a modification to pole owner facilities , including the pole owner . In interpreting its rules and orders in this context, NCTA urges the Commission to consider the costs the utility would incur in the regular course as compared to the incremental costs caused by advancing the rep lacement to an earlier date. Attachers should be presumed to be responsible only for the undepreciated cost of the old pole. The most efficient and economically principled way to measure this cost is to use the average net book investment per bare pole derived using the Commission ™s pole attachment rate formula, which can be easily administered by utilities and attachers relying primarily upon publicly available data with
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ii minimal need to escalate disputes to the Commission . Under NCTA™s proposal, the pol e owner would also be provided the opportunity to prove that certain additional costs associated with the new pole would not have been incurred ﬁbut forﬂ the new attachment and specific costs found to have met that economic criteria could also be allocated to the attacher. NCTA also requests that the Commission clarify that complaints regarding pole access disputes that arise in unserved areas will receive expedited consideration under the Accelerated Docket. The Commission™s Accelerated Docket procedures provide a mechanism for addressing pole attachment complaints more expeditiously when circumstances warrant; the Commission should emph asize that disagreements about pole access that inhibit deployment in unserved areas are a priority and therefore should be placed on the Accelerated Docket, with expedited procedural timelines and effective remedies, whenever possible. The clarification s requested by this Petition are consistent with the goals of the Communications Act in removing barriers to broadband deployment; with Commission and Congressional policy prioritizing the expansion of broadband service to unserved areas ( where pole replacem ent costs o perate as a significant barrier) ; and with sound policy and economic principles . Accordingly, the Commission should grant the requested declaratory ruling on an expedited basis.
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TABLE OF CONTENTS SUMMARY ii INTRODUCTION 2 I. WITHOUT EXPEDITIOUS COMMISSION ACTION, THE COSTS AND OPERATIONAL CHALLENGES OF POLE REPLACEMENTS WILL IMPEDE THE DEPLOYMENT OF BROADBAND TO UNSERVED AMERICANS. .5 II. THE COMMISSION SHOULD CLARIFY THAT ITS EXISTING COST ALLOCATION RULES REQUIRE POLE OWNERS TO S HARE IN THE COST OF POLE REPLACEMENT IN UNSERVED AREAS. ..9 A. Requiring Pole Owners to Share in the Cost of Pole Replacements Is Soun d Policy Consistent with the Purposes of the Act and the Commission™s Precedents. .13 B. Pole Owners Are ﬁParties that Directly Benefi t fromﬂ Pole Replacements and Should ﬁShare Proportionately in the Cost.ﬂ ..20 C. To ﬁShare Proportionately in the Cost of the Modificationﬂ Means Paying Only for the Costs the New Attacher Causes. ..22 III. THE COMMISSION SHOULD PRIORITIZE AND EXPEDITE POLE ATTACHMENT COMPLAINTS ARISING IN UNSERVED AREAS. ..27 A. Expediting Resolution of Disputes that Impede Broadband Deployment in Unserved Areas. ..27 B. Mechanism for Directing Pole Replacement. ..29 IV. THE COMMISSION HAS AUTHORITY TO ISSUE THE DECLARATORY RULING REQUESTED. 31 CONCLUSION 34
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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 In the Matter of Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment ) ) ) ) ) WC Docket No. 17 -84 PETITION FOR EXPEDITED DECLARATORY RULING Pursuant to section 1.2 of the Commission™s rules 1 and section 5(e) of the Administrative Procedure Act, 2 NCTA Š The Internet & Television Association (ﬁNCTAﬂ) hereby requests that the Commission issue a n expedited declaratory ruling clarifying the application of it s orders and cost allocation rules to pole replacements in areas that do not have access to broadband to ensure an equitable allocation of those costs between pole owners and attaching entities. The time and expense required to replace aging poles is a significant obstacle to broadband deployment in unserved areas. Clarification of the Commission™s orders and pole replacement cost allocation rule s will facilitate investment and result in expanded broadband access for more people , more quickly , and at more affordable prices. To ensure that the Commission™s decision on this issue is meaningfully implemented by pole owners, NCTA also requests that the Commission declare its intention to : (1) prioritize the resolution of pole access disputes when t hey arise in unserved areas ; and (2) empower the Enforcement Bureau resolving pole attachment complaints to require a utility to replace poles within prescribed time periods . 1 47 C.F.R. § 1.2. 2 5 U.S.C. § 554(e).
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2 INTRODUCTION The gap between those who have internet access and those who do not is one of the many inequities further exposed by the COVID -19 pandemic . In particular, the crisis has demonstrated that reliably fast internet is essential for critical applications like distance learning , remote working, and telemedicine . For example, a recent McKinsey & Company report showed that i f in-class instruction does not resume until January 2021, students who remain enrolled but receive no instruction at all Šas would be the case for many in unserved areas Šcould lose the equivalent of 12 to 14 months of learning, at least four times more lea rning lost than students who receive even just average remote instruction. 3 Similarly, Blue Cross BlueShield of Tennessee (ﬁBCBSTﬂ), the state™s largest insurer, reported 50 times more telemedicine claims from mid -March to mid -May 2020 than during the sa me period the previous year. 4 Long before the COVID -19 crisis, NCTA™s mem bers have been committed to helping to close the digital divide through their own privately funded deployment efforts and through their participation in federal and state broadband support programs . For example, in 2018-19 alone , Charter Communications extended its network to provide broadband to more than 1.5 million additional homes and businesses across its footprint, about 30 percent of which were in rural 3 Emma Dorn et al., COVID -19 and Student Learning in the United States: The hurt could last a lifetime , McKinsey & Company (June 1, 2020), https://www.mckinsey.com/industries/public -sector/ our-insights/covid -19-and -student -learning -in-the -united -states -the -hurt -could -last -a-lifetime?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam &stream=top. 4 Testimony of Dr. Andrea Willis, BlueCross BlueShield of Tennessee Senior Vice -President and Chief Medical Officer, Before the Senate Committee on Health, Education, Labor and Pension (HELP) ﬁTelehealth: Lessons from the COVID -19 Pandemicﬂ (June 17, 2020), https://protect -us.mimec ast.com/s/_P_NCgJQJlc413N4I2_cld?domain=help.senate.gov.
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4 NCTA members , make -ready costs alone (including pole replacements) compris e as much as one third of the total buildout expense in these areas. NCTA therefore requests that the Commission issue a n expedited declaratory ruling clarifying two matters that are critical to facilitating broadband deployment in unserved areas . First , NCTA requests a ruling clarifying that , in unserved areas, where existing utility infrastructure is often near the end of its useful life, it is unjust and unreasonable for pole owners to shift the entire cost of a pole replacement to a new attacher when the pole owner itself derives the predominant financial gain , including in the form of betterment, from replacing and upgrading a pole . The Commission has long made clear that make -ready charges must be just and reasonable and should not recover from new attachers costs the new attacher did not cause. In addition, u nder Commiss ion rule 1.1408 (b) , which governs the modification of facilities, 6 when replacement of an existing utility pole is necessary to accommodate a new attachment, all parties that ﬁdirectly benefit from the modificationﬂ must share ﬁproportionately in the costﬂ of the modification . Pole owners often obtain a windfall by requiring new attachers to pay all costs associated with replacing and upgrading an old pole . Using its declaratory ruling authority , the Commission should make clear that, at least in unserved areas where substantial uncertainty about the lawfulness of this practice is inhibit ing broadband deployment, shifting all pole replacement costs to the new attacher is unjust and unreasonable under 47 U.S.C. § 224 and the Commission™s rules and orders . Second , to better achieve the goal of providing all Americans with access to broadband services, NCTA requests that the Commission declare that it will priorit ize resolution of pole attachment disputes that arise in unserved areas. Under the Commission™s 2017 reforms in this 6 47 C.F.R. § 1.1408(b) .
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5 docket, pole attachment complaints are now eligible for the Commission™s Accelerated Docket procedures. A statement by the Commission tha t accelerated procedures should be invoked in cases where a dispute between a pole owner and an attaching entity impedes the deployment of broadband in unserved areas will help clarify the Commission™s enforcement priorities and guide Commission s taff™s di scretion under section 1.736(d) of the Commission™s rules . Making it clear that the Commission will prioritize pole attachment complaints in unserved areas by placing them on the expedited docket will help ensure that broadband is deployed as expeditiousl y as possible. I. WITHOUT EXPEDITIOUS COMMISSION ACTION, THE COSTS AND OPERATIONAL CHALLENGES OF POLE REPLACEMENTS WILL IMPEDE THE DEPLOYMENT OF BROADBAND TO UNSERVED AMERICANS. Expanding broadband access to all Americans is a critical national priority. 7 The COVID -19 crisis has underscored the economic and social importance of reliable and fast internet access so that all Americans can work and learn remotely. Narrowing the digital divide and expanding broadband access to the country™s unserved areas has a ccordingly been a high priority for the Commission, Congress, and numerous other federal and state agencies. 8 As NCTA members expand their networks into increasingly remote areas, they have experienced first -hand the challenges that face broadband providers that build new wireline facilities in areas that currently lack broadband access. In particular, they have confronted the reality that existing utility infrastructure in many areas is at or near the end of its useful life and 7 Implementation of Section 224 of the Act , Order on Reconsideration, 30 FCC Rcd 13731, 13773 ¶ 4 (2015) (emphasizing the importance of broadband deployment to unserved areas) . 8 Cong. Research Serv., RL30719, Broadband Internet Access and the Digital Divide: Federal Assistance Programs at Summary (Oct. 25, 2019), https://fas.org/sgp/crs/misc/RL30719.pdf (describing the various government programs aimed at closing the digital divide between urban and rural areas).
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6 incapable of supporting new facilities without a significant investment in new poles. For instance, in one major broadband construction project that has included (to date) over five thousand miles of new rural plant, Charter has encountere d situations in which as many as one out of every twelve poles needs to be replaced, with the average replaced pole already several decades into its service life .9 In a major expansion to over 57,000 rural homes and small businesses, pole replacement cos ts alone have accounted for approximately 25 percent of the total cost of construction (including applications, surveys, permitting, labor, and material). Charter™s experience is not unique. In response to its Notice of Proposed Rulemaking in this docket, the Commission received a number of similar complaints about pole owner demands arising during the make -ready process. 10 These comments echo concerns that have been brought 9 Much of the data regarding the aging of existing pole infrastructure is held confidential by pole owners and is not available for public inspection. However, a partial review of depreciation information publicly available in electric utility Federal Energy Regulatory Commission Form 1 filings shows average service lives for poles of 44 -50 years. Duke Energy Ohio, Inc., FERC Financial Report FERC Form No. 1: An nual Report of Major Electric Utilities, Licensees and Others and Supplemental, 337 (Quarter 4, 2016) ( showing an average service lifespan for poles of 50 years); Pacific Gas and Electric Company, FERC Financial Report FERC Form No. 1: Annual Report of Maj or Electric Utilities, Licensees and Others and Supplemental , 337.1 (Quarter 4, 2019) ( showing an average service lifespan for poles of 44 years). Indeed, in the context of utility pole resiliency programs, state agencies have found significant aging even in urban areas. See Ron Galperin, L.A. Controller, It Only Takes a Spark: Enhancing DWP™s Wildfire Prevention Strategy , at 2, 16 (Nov. 20, 2019), https://lacontroller.org/wp -content/uploads/It -Only -Takes -A-Spark -Enhancing -DWPs -Wildfire -Prevention -Strategy_ 11.20.19.pdf (finding that 30 percent of poles already beyond their 65 -year service life and in need of replacement); see also H. Lee Willis & Randall R. Schrieber, AGING POWER DELIVERY INFRASTRUCTURE 1 (2d ed. 2013) (ﬁAmerica™s electric utility systems ar e growing older. In many systems, significant portions of the equipment and facilities in service date from the economic boom following WWII, or from the sustained growth period of the 1950s and 1960s that many American cities and towns experienced. A lot of equipment installed then, and still in service today, is between 50 and almost 70 years old.ﬂ). 10 See, e.g. , Comments of Lumos Networks Inc., Lumos Networks of West Virginia Inc., and Lumos Networks LLC at 15, WC Docket No. 17 -84 (filed June 15, 2017) (averring that it regularly ﬁencountered situations in which it has been made to absorb the entire cost of survey and make -ready work merely because it happened to be the first attacher requesting
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7 to the Commission in past complaint proceedings. 11 For example, in a Commission pole attachment complaint proceeding initiated by Cox Communications in 2014, Cox identified unreasonable pole attachment replacement policies being employed by Nevada Energy that would have required Cox to pay to replace numerous poles in connection with an overlashing project despite their compliance with NESC construction requirements. 12 Just last year, Crown Castle filed a pole attachment denial of access complaint with the Commission seeking to address Commonwealth Edison Company™s (ﬁComEdﬂ) refusal to permit Crown Castle to attach to poles that had been previously identified by ComEd as needing replacement, unless and until access to a certain route or to certain pole linesﬂ); Init ial Comments of Lightower Fiber Networks at 12, WC Docket No. 17 -84 (filed June 15, 2017) (explaining that, in its experience, pole owners typically ﬁexpect the new attacher to pay all of the costs of make -readyﬂ and will then often seek additional remuneration from existing attachers for costs they already recouped). 11 See, e.g. , Crown Castle Fiber LLC v. Commonwealth Edison Co. , Pole Attachment Complaint for Denial of Access, ¶¶ 121 -134, FCC Proceeding No. 19 -169, Bureau ID No. EB-19-MD-004 (filed June 19, 2019) (ﬁ Crown Castle Complaint ﬂ) (alleging improper shifting of pole replacement costs involving poles scheduled for replacement onto new attacher); Knology, Inc. v. Georgia Power Co. , Memorandum Opinion and Order, 18 FCC Rcd. 24615, 2 4629-32 ¶¶ 36 -40 (2003) (complainant Knology showed that it was charged the full cost of Georgia Power™s pole replacements, despite ample evidence that Knology was not alone in creating the need for those replacements); Fiber Technologies Networks, L.L.C. v. Baltimore Gas & Electric Co. , Complaint, File No. EB -14-MD-006 (filed Apr. 10, 2014) (seeking relief from Baltimore Gas & Electric Co.™s unreasonable practice of shifting pole replacement costs, ranging from $15,000 to $25,000 per pole, to attachers); Zito Media v. Pennsylvania Electric Co. , Complaint, FCC Proceeding No. 17 -316, Bureau ID No. EB -17-MD-006 (filed Nov. 13, 2017) (exposing alleged utility error in shifting pole replacement betterment costs to attachers). 12 Cox Communications Las Vegas, Inc . v. NV Energy, Inc. , Complaint, FCC Proceeding No. 14-267, File No. EB -14-MD-017 (filed Dec. 18, 2014) (addressing NVE™s attempt to shift pole replacement costs to Cox in connection with overlash project despite fact that overlash did not cause pole to be come non -compliant and numerous poles failed NVE newly adopted heightened constructions standard) ; see Cox Reply to Response to Pole Attachment Complaint at 1 (ﬁ Yet NVE has adopted a new Grade B policy, which it seeks to apply on as ‚as encountered ™ basis in a manner that would delay Cox™s deployment of competitive broadband services until after poles are replaced. ﬂ) (filed Feb. 20, 2015).
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