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Monday, June 15, 2009

Infrastructure Deployment Reform Needed to Achieve Sustainable Broadband Goals & Avoid Waste

StimulatingBroadband.com 06/15/09 Boston by Alan D. Mandl, Esq.* - The availability of funds for broadband expansion under the American Recovery and Reinvestment Act of 2009 creates an opportunity to move toward the national goal of extending broadband capability to geographic areas that remain unserved or underserved. Several states, such as Vermont, California, Massachusetts, North Carolina, New York have adopted programs to promote and fund broadband expansion.

The National Telecommunications and Information Agency (NTIA) and the Rural Utilities Service of the US Department of Agriculture (RUS) have been authorized to fund broadband expansion grants. These agencies are expected to shortly issue grant application guidelines to kick off the grant application process. All grants are expected to be awarded by October 1, 2010.

Before large amounts of grant funds are expended, aggressive federal and state actions are needed in order to better assure that federal and state funds are not wasted as a result of inefficient infrastructure deployment policies of the type that have plagued private sector efforts to build telecommunications networks.

The imperative to expand the reach of broadband facilities creates an opportunity for the federal and state governments to implement forward-looking infrastructure deployment policies that will benefit not only underserved and underserved areas, but also served areas.

This article addresses the need for revised federal and state rules governing access to poles and conduit in order to assure prompt broadband expansion, efficient use of federal grant funds and sustainable broadband services.

Reduce the Cost of Network Deployment

Access to Poles
Before new lines can be constructed and attached to utility poles in an unserved area, a costly process called “make ready” must be performed. The utility poles to which new lines will attach must be inspected to assure that there is room for a new attachment and that all lines, existing and new, are properly separated in accordance with the National Electrical Safety Code (NESC) and utility safety standards. The condition of poles to carry new lines, the height of existing poles and the need for relocations of existing lines all factor into the work that must be done to ready a pole for a new attachment.

Make ready work has been a chronic source of delay and cost for attaching entities.

A party wishing to attach to utility poles must first enter into a pole attachment agreement with the pole owners (often pole are owned jointly by an electric and incumbent telephone company). The cost of make ready work is determined by a survey of a proposed route by pole owners and the attaching party. The cost of the survey generally must be paid upfront by the attaching party. Once a make ready cost estimate is provided by the pole owners to the attaching party, the attaching party must pay for the make ready cost estimate before any work is done, with a true-up performed after actual make ready work has been completed. Once all pole owners have completed make ready work and inspected the work, the pole s involved will be released to the attaching party so it can construct its attachments.

Some pole owners have adopted unit costs for the specific types of work required to perform make ready. In other cases, pole owners have provided a fuzzy cost estimate or sketchy details on the make ready work to be performed. It is not uncommon for a dispute to arise whether an attaching party is being asked to pay for fixing up existing network problems that are not caused by its proposed attachments. Informal efforts to resolve such disputes can delay a project or could cause an applicant to go to the end of the line if it does not meet the deadline for the make ready payment.

Once the estimated cost of make ready work is paid upfront, the pole owners perform that work. Generally, they are obligated only to make reasonable efforts to complete that work within six months of receipt of payment. In order to break the logjams caused by existing make ready practices, the FCC and those states regulating the rates and terms for pole attachments should take the following actions:

- Adopt and enforce strict time lines for make ready work-several states have adopted regulations setting deadlines for make ready work based upon the number of pole attachments requested in a request to attach (e.g., Vermont)

- Adopt regulations to assure that an attaching entity is not forced to pay for costs that are not caused by its proposed attachments, such as curing existing non-compliant conditions or paying based upon excessive cost inputs. Third party verification of proposed make ready charges may help eliminate potential disputes and might be feasible to require in the case of new builds supported by federal or state funds. The application of unit cost charges for make ready work could help eliminate disputes between attachers and pole owners and add greater certainty to make ready charges. However, care still must be taken to assure that unit costs are reasonably developed and applied.

- Pole owners should be required to develop and maintain geographic information system (GIS) information regarding pole locations, and conditions and the number of attachments on their poles, with the cooperation of attaching entities. Some utilities already have employed GIS in this manner and shared information with attaching parties, such as cable operators. Periodic updating of GIS information is needed in order to benefit all stakeholders.

- A single pole attachment rate should apply to all attachments, whether they are used for high speed Internet access, voice services or video services. Some states adhere to this approach, while others as well as the FCC have directed that a higher rate apply to attachments not used solely for cable service (Internet access service would be covered by the cable service rates to the extent provided by a cable operator). A single rate places a lower cost burden upon a party building out a network to reach an unserved area. It also supports the goal of sustainable broadband deployment. Case after case has recognized that while pole attachment rental revenues are a small fraction of a pole owners revenues, they represent a very significant portion of the revenues of the attaching party. This would be especially true in the case of a buildout in an unserved area with low population density.

- A rapid response process should be developed to address any situations that are causing undue deployment delays and to complement the existing complaint process, which is simply too costly and takes too long (up to six months) to be of any immediate usefulness; this is especially critical where federal and state funds are being spent. The rapid response concept has been used in some states to help resolve quickly disputes between incumbent local exchange carriers and competitive local exchange carriers (e.g., Maine).

- Adoption of practices to facilitate high speed Internet deployment should be taken in to account in setting electric rates. Incentives and penalties should be considered among performance measures used to assess utility efficiency.

- Consideration should be given to deploying state and federally funded infrastructure in the power space on utility poles in order to minimize make ready costs and speed deployment of new facilities, consistent with NESC safety standards.**

- Joint construction guidelines should be implemented to cover situations in which multiple parties invest in shared infrastructure. This approach has been used by the Cities of Boston and Cambridge, Massachusetts, and the State of California Department of Transportation for new conduit construction and may be adaptable to enable shared wireless facilities or other joint use facilities that will be privately owned.

Access to Conduit
In the case of conduit, private builders of infrastructure depending upon access to telephone company conduit have faced several obstacles, all of which would impair any broadband expansion initiative that depends upon access to conduit. For example, some telephone companies have maintained archaic conduit maps and records in paper format. The updating of these maps is unreliable. When a private party wants access to conduit, it is forced to play “pin the tail on the donkey” and guess whether spare capacity exists in a desired location. That party must pay the conduit to advise it whether any spare capacity exists. Guess wrong, and the party must guess (and pay) again. This type of problem has stalled and raised the cost of building out fiber networks.

-The FCC and the states must step in and direct that record keeping practices of conduit owners be upgraded and that the guessing game process be improved upon, if not eliminated. Better electronic records can and should be kept and maintained in an updated fashion, to the extent practicable. This type of information also is important to municipalities, as it enables them to direct builders of fiber to available conduit locations and avoid unnecessary excavation of the public ways. Some municipalities, such as Boston and Cambridge, where the demand for conduit is great, have adopted policies that facilitate access to conduit through the identification of spare capacity. More needs to be done by the FCC and the states to implement reforms for conduit access practices of conduit owners.

The above measures are critical to implement where an entity receiving federal or state funds is building out fiber and other infrastructure for the use of service providers. Funding is limited and grant recipients are accountable to the public to expend grant funds in an efficient and economical manner.

Conclusion
Given the short time before the issuance of broadband stimulus application rules, both the FCC and the states should promptly implement infrastructure access measures that will help reduce the costs and delays associated with broadband expansion, assure prudent and effective use of grant funds and promote the goal of sustainable broadband deployment.


* Alan Mandl is a partner with the Boston and Lincoln, Massachusetts firm, Smith & Duggan LLP. He has worked on wireless and landline telecommunications infrastructure deployments on behalf of private and public clients, including permitting of wireless facilities, construction of intra-municipal fiber facilities, joint and individual conduit build outs, pole attachment agreements and pole and conduit rate issues, and the use of publicly owned conduit infrastructures and rights of way. He may be reached at amandl@smithduggan.com.


** Construction of broadband infrastructure in power space on poles in unserved areas could lower costs for both smart grid and broadband expansion programs. Significant make ready work costs and delays could be reduced. Ownership and maintenance terms would need to be worked out in accordance with applicable law and safety considerations. Incentives to electric distribution companies to partner in this manner should be considered.
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