Straight Talk on Tough Infrastructure Access Issues

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

3. 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

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

6. 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.

7. 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.

8. 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 install taller poles or add pole-top extensions.

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

10. 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.

11. A DAS Node

12. 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.

13. 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.

14. 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

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

16. 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

17. 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., SpectrumCo, a consortium of Comcast, Time Warner and other cable companies) or implement Wi-Fi or WiMax technologies and rush to compete with wireless services offered by telephone competitiors.

18. 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.”

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

20. 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)

21. 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

22. 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?

23. QUESTIONS