Straight Talk on Tough Infrastructure Access Issues Charles

Straight Talk on Tough Infrastructure Access Issues Charles A. Zdebski Troutman Sanders LLP Washington, DC (202)274 -2909 Eric B. Langley Balch & Bingham LLP Birmingham, AL (205)226 -8772 June 26, 2008

The Hot Issues • Requests for Wireless Attachments, especially Distributed Antenna Systems (“DAS”) • ILEC Relationships • Getting the Telecom Rental Rate for Cable Phone Service • Waiting for the FCC to Issue Its New Pole Attachment Rules

Background • Pole Attachment Act – 1978 Act – 1996 Act – 2007 FCC NPRM • Who/What It Covers? • State Certification

Wireless Attachments • Under 47 U. S. C. § 224, access to poles must be granted to “cable television systems” and “telecommunications carriers. ” • The U. S. Supreme Court has held that “telecommunications carriers” include wireless carriers as well as wireline carriers.

Wireless Attachments • There is no rental rate formula for wireless attachments stated in the FCC’s rules. • Most utilities charge some multiple of the telecom rate.

Typical Wireless Issues • Whether to allow them at all (despite federal law). • Whether to allow them at the top of the pole or confine them to the communications space. • Whether to installer poles or add pole-top extensions.

Wireless Attachments • Clearly, wireless attachments requested by established cellular carriers must be allowed. • But what about Distributed Antenna Systems – DASs?

What is DAS? • A distributed antenna system (DAS) is a network of spatially separated antenna nodes connected to a common source via a transport medium that provides wireless service within a geographic area or structure. • DAS nodes are remote radiating points interconnected to a base unit (a hub). Typically, a node comprises an antenna and a small radio head mounted on existing distributed structures, such as utility poles. • DAS is a specialized solution where structural, spatial or architectural concerns make it impractical or infeasible to deploy traditional cell sites.

A DAS Node

But…Is DAS Entitled to Access at Regulated Rental Rate? • Not unless the DAS provider is a (certificated) “telecommunications carrier. ” • Many DAS providers are tower companies, who are seeking to offer a “coverage solution” to their telecom customers.

The Open Question: • Whether DAS providers gain access rights by virtue of their customers’ status as telecommunications carriers. • May be answered in pending NPRM, discussed below.

ILEC Relationships • History & Purpose – Infrastructure Cost Sharing – Savings for both parties – Duty to serve certificated areas • Joint Use Agreements – Based on PARITY of ownership – Adjustment/rental rates – Freely negotiated • Joint Ownership

ILEC Relationships • ILECs are now in direct competition with other telephone & internet providers • Economics: – CATV – CLEC – ILEC $7 $15 $35 • ILECs setting fewer poles – Ownership imbalance – Paying more in adjustment rentals • Consequences ILECs re-identifying themselves as attachers rather than infrastructure owners

ILEC Relationships • ILECs want: – Lower rental/adjustment rates – More favorable parity levels – Buy back poles at average embedded cost • USTA Rulemaking petition (Fall 2005) – Message: we are entitled to rate protections in Pole Attachment Act – One of two petitions forming basis of pending rulemaking docket (WC Docket No. 07 -245) • PROGNOSTICATION

The Next Generation of Disputes with Cable: • As cable companies move into wireless communications, look for them to take the position that their wireless attachments are entitled to the cable rate (if that rate still exists). • Also look for a proliferation of unauthorized wireless attachments by cable companies as they acquire spectrum (e. g. , Spectrum. Co, a consortium of Comcast, Time Warner and other cable companies) or implement Wi-Fi or Wi. Max technologies and rush to compete with wireless services offered by telephone competitiors.

Getting the Telecom Rental Rate for Cable Phone Attachments • 47 U. S. C. § 224(e)(1): “The Commission shall…prescribe charges for pole attachments used by telecommunications carriers to provide telecommunications services…” • 47 C. F. R. § 1. 1409(e)(2): “…the [telecom] formula shall apply to all attachments to poles by any…cable operator providing telecommunications services…” • 47 C. F. R. § 1. 1403(e): “Cable operators must notify pole owners upon offering telecommunications services. ”

Cases Seeking the Telecom Rate for Cable Phone Attachments • Comcast v. Georgia Power • Tampa Electric v. Brighthouse • Ameren v. Charter

NPRM: Background • Only FCC pole attachment rulemaking in last decade – Released November 2007 – Published February 2008 • Based on two petitions – USTA (regulated rates for ILECs) – Fibertech (new access rules) • Only one real rule in NPRM (tentative): all broadband attachments at same rate (between Cable and Telecom Rate)

NPRM: At Stake? • ILEC Relationships – Can the FCC regulate? – Should the FCC regulate? • Access Rules – Regulation by rule vs. exception – “nationalization” of engineering standards – Unauthorized attachments • Unification of broadband rate – Where will it land? – Legal and practical issues • Wireless: access + rates

NPRM: Status • Comments: – Initial March 7, 2008 – Reply April 22, 2008 • Now in the ex parte phase • Electric utilities well represented (filed comments + ex parte) • Expectations: what & when? • Consequences: will more states seek certification of pole attachment regulation?

QUESTIONS