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Joint Use and Pole Attachment Issues

Troutman Sanders LLP

November 7-8, 2007

Columbus, Ohio

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Outline of Today’s Presentation

• Introduction: About Troutman Sanders and Our Team

• Managing Joint Use Issues and Programs

• Format: Quasi-Case Studies and Interactive Session

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Telecommunications and Technology Practice Group

• Charlie Zdebski (D.C. x2909)

• Bob Williams (Atlanta x3438)

• Matt Kirsner (Richmond x1449)

• Ray Kowalski (D.C. x2927)

• Gerit Hull (D.C. x 2890)

• Joe Lawhon (Atlanta x3138)

• Eric Schwalb (D.C. x2891)

• Ben Young (Atlanta x3212)

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Telecommunications and Technology Practice Group Representative Engagements

• Sale of Dominion Telecom to Elantic Telecom• Defense of Dominion Telecom, Elantic Telecom and Dominion Virginia Power

in telecommunications rights-of-way class litigations• Representation of PacifiCorp at the Utah Public Service Commission in a dispute

with Comcast over unauthorized attachments Representation of PacifiCorp in a pole attachment rule making proceeding before the Utah Public Service Commission

• Representation of Lumber Liquidators in 800 Number Regulatory Issues• Representation of a consortium of electric utilities in rule making proceedings

involving access by ILECs (USTA Petition) and utility best practices (Fibertech Petition)

• FCC compliance remediation and licensing work for PSEG, Ameren • Network access charge litigation for PSEG at the New Jersey Board of Public

Utilities, for Dominion Telecom at NY PSC and for United Illuminating at CT DPUC

• Representation of Florida Power & Light and Tampa Electric Company in Florida “hardening docket” regarding wireless attachments

• Regulatory and transactional assistance to Ameren Energy Communications in establishing BPL Internet service company

• Network license and lease agreements for numerous clients

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Telecommunications and Technology Practice Utility Telecom Clients

• AmerenUE• Connectiv• Dayton Power and Light• Dominion Resources Services• Dominion Telecom• Dominion Virginia Power• Florida Power & Light• Franklin Park Communications• Georgia Power Company• Kansas City Power & Light• Mirant Corporation• PacifiCorp• PNM Resources, Inc. • Potomac Electric Power

Company

• Power Line Communications Association

• Public Service Electric and Gas• Savannah Electric and Power

Company• Southern Company Services• Southern LINC• Southern Telecom• Tampa Electric Company• Tucson Electric Company• United Illuminating Company• Virginia Electric and Power

Company

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Typical Joint Use / Pole Attachment Tasks

• Analysis and application of federal regulatory (FCC) rules, decisions, policies and proposals

• Analysis of property rights issues, such as building access, rights-of-way access and easements

• Analysis of State statutes, regulations, policies and proposals regarding regulation of access rights and rates, as well as safety and reliability of the pole infrastructure

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Proposed Strategy to Manage Joint Use and Pole Attachment Issues

1. Define the Goals2. Recognize and Accept the Issues3. Thoroughly Document the Process4. Communicate with the Attachers5. Manage Effectively within your Company6. Review and Update All Agreements7. Diplomatically but Firmly Require

Compliance

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Step One: Define the Goals

1. Financial Goals

2. System safety and integrity

3. Improved administrative operations and efficiency

• Obtain senior management buy-in

• Coordinate with state regulatory goals and issues

Case Studies

• PacifiCorp

• Ameren

• Dominion Virginia Power

• PSE&G

• Southern Company

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Step Two: Recognize and Accept the Issues: Pole Attachment Changes

• 1996 and following– Sign and sue

– Access

– Contracts

– FCC

– Cable

– Rent

– Usable space

– Wireline

• Today– Sign and stay

– Overbuilds

– Permits

– State Regulation

– Telecom

– Sanctions

– Unusable space

– Wireless

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Sign & Sue vs. Sign & Stay

• After access was mandated in 1996, cable companies would “agree” to anything in order to get on the poles

• Most cable companies are now on the poles

• Things change: cable is morphing into telecom

• FCC Response: the Halloween Rule Making triggering a clash of the titans

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Access vs. Overbuilds

• Then: most common cable complaint was that undue delay by the pole owner constitutes a denial of access

• Now: Overlashing – no permission necessary under FCC precedent

• Suspicion: rampant disregard of the other terms and conditions of the agreement

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Contracts vs. Permits

• The connection between two otherwise unrelated parties

• Cable incentive to enter the contract: trespass laws• Two main provisions of the contract: payment of rent

& applications for attachment permits• With contracts in place, the cable incentives are

negative: pay more rent for new poles, delay in deployment

• Results: unauthorized attachments, need for pole audits

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Cable vs. Telecom

• Not much difference today in services and marketing• Yet pole attachment agreements seem stuck in 1996• Cases to watch: AmerenUE v. Charter (Missouri

court proceeding to collect the cable rate for phone-to-phone VoIP) and Charter v. AmerenUE (FCC complaint regarding the proper classification of VoIP); also Tampa Electric Company v. Bright House Networks, LLC (same types of cases, but in Florida); Georgia Power v. Comcast (counting entities and attachments)

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Rent vs. Sanctions

• Then: fights over the rental rate

• Now: fights over sanctions for violating the access agreement, audit costs

• Example: Comcast Cable Communications, Inc. v. PacifiCorp, 2004 Utah Lexis 273, involving penalties for 38,919 unauthorized attachments

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Usable Space vs. Unusable Space

• Applicable to the FCC telecom formula• Key: average number of attachers• Rebuttable presumptions

– 5 urban– 3 non-urban

• See, Charter v. AmerenUE and Comcast Cable v. Georgia Power Company regarding the proper method for counting attachments

• But see, the Halloween rule making

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Wireline vs. Wireless

• FCC’s “Christmas Card” - December 23, 2004 Public Notice

• Reiterated obligation to provide access to wireless telecommunications providers.– No presumption of electric utility’s right to reserve space

above communications space.– Rules do not allow access fees to be levied against wireless

carriers in addition to the statutory pole rental rate.

• Increased demand for wireless attachments continues and is likely to increase as a result of FCC spectrum auctions.

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Step 3: Document the Process

• Compile your company’s internal records

• Obtain solid data from consultants and others

• Maintain records of communications

Case Studies• PacifiCorp• TECO• ACTA v. Entergy Arkansas, EB-

05-MD-004.– Involves challenge to utility's

engineering and safety inspections.

– Pole owner seeking to enforce engineering and safety standards higher than NESC.

– Attacher alleges improper allocation of costs of inspections among attachers on a pole.

– Attacher disputes reasonableness of overall costs of inspections.

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Step 4: Communicate with the Attachers

• Hold meetings• Build a working

relationship• Communicate clearly

and effectively• Do not act unilaterally

unless and until necessary

Case Studies• PacifiCorp• Ameren• Dominion Virginia

Power• Southern Company

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Step 5: Manage Effectively within Your Company

• Form a team

• Educate the team members

• Create internal processes– Communication between

departments – accounting, billing, joint use, law, property, distribution

– Inventories and maps of poles

– Tracking system of attachers and attachments

– Use of template agreement

• Stay the course

Case Studies• Florida Power & Light• Ameren• PacifiCorp• Southern Company

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Step 6: Review and Update All Agreements

• Contract standardization• Often a hodge-podge of contracts,

some decades old• There are likely to have been

assignments resulting from cable industry consolidation

• 1996 Telecom Act, FCC rulemakings and precedents have influenced terms

• Inconsistencies create issues in accounting, land use etc.

• Create and maintain templates that conform to practices in the field, and in accounting

• Provide for maximum rates for cable, telecom, joint use, wireless and unregulated

Case Studies• Dominion Virginia Power• Ameren• PacifiCorp

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Step 7: Require Compliance

• Require compliance with agreement terms of safety and payments

• Hold meetings• Document compliance

efforts• Negotiate creative

solutions

Case Studies• Ameren• Georgia Power• Florida Power & Light• PacifiCorp• Tampa Electric• Dominion Virginia

Power

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The 70’s Are Gone!

Good.