It's a very unusual summer at the FCC. Usually, the Commission is more interested in beginning their summer vacations than advancing new telecom regulations. This year, however, the agency has been busy, launching proceedings to eliminate access and 8YY arbitrage and advancing nationwide number portability. The action is expected to continue at the Commission's August 2, 2018 meeting when it is expected to adopt a Third Report and Order (Order) and a Declaratory Ruling (Ruling) in Dockets No. 17-84 and 17-79 that will provide a little bit of sunshine to almost everyone in the industry. 

In the Order the Commission will institute a “one-touch make-ready” (OTMR) pole attachment procedure, in which the new attacher could choose to perform all the work itself to prepare a pole for a new attachment. According to the agency, "OTMR should accelerate broadband deployment and reduce costs by allowing the party with the strongest incentive to prepare the pole to efficiently perform the work itself." 
The Order should also please ILECs because the Commission is poised to modify its rules to eliminate the disparities between the pole attachment rates they pay compared to other similarly-situated cable and telecommunications attachers. 

In a separate Declaratory Ruling the Commission will conclude that section 253(a) of the Telecom Act prohibits state and local municipalities from moratoria on telecommunications facilities deployment. While this will please the industry, certain states and communities will likely not be happy with their lost authority

Here are more details about the Order and Declaratory Ruling.

In the current FCC pole attachment rules that were established in 2011, parties such as new entrants to a market have had to follow a multi-step process to attach themselves to existing poles in which existing attachers did the "make-ready" work to get the pole ready for the new attachment. Clearly, however, those existing attachers never have had the same motivation to complete this work as does the new entrant. Thus, according to the Commission having the new attacher do its own make-ready work is much superior, 

OTMR speeds broadband deployment by better aligning incentives than the current multi-party process. It puts the parties most interested in efficient broadband deployment—new attachers—in a position to control the survey and make-ready processes. The misaligned incentives in the current process often result in delay by current incumbents and utilities and high costs for new attachers as a result of the coordination of sequential make-ready work performed by different parties. (Draft Order at para. 22).

The new rules would apply to most of new pole attachments, but do not cover all. OTMR would apply only to simple attachments when “existing attachments in the communications space of a pole could be transferred without any reasonable expectation of a service outage or facility damage and [do] not require splicing of any existing communication attachment or relocation of an existing wireless attachment.” 

For complex attachments, where a service outage is possible if not probable, more detailed rules apply. The Commission uses this Order to also modify those rules to speed up the pole attachment process.

OTMR rules would also apply only to attachments in the "communications" section of the pole. That is usually the middle of the pole which traditionally includes low-voltage communications equipment such as fiber, coaxial cable, and copper wiring. The OTMR rules would not apply to the portion of the pole above the communications section in which more dangerous electrical equipment is usually contained.

In the Order, the FCC tries to ensure that ILECs always pay equitable pole attachment rates. In 2011, the Commission concluded that similarly situated ILECs should pay pole attachment rates that were just and reasonable and equivalent to what other attachers paid. However, because of their historical monopoly position in the industry, it made ILECs prove that they were actually similarly situated to an existing telecommunications attacher before they could obtain access on rates, terms, and conditions that were comparable.

ILECs have repeatedly argued that as their share of the telecom market eroded, their ability to command equitable rates has declined. Therefore, they should not have to prove they were like other attachers. For example, USTelecom conducted a survey of its members and found that:

[I]ncumbent LEC members “pay an average of $26.12 [per year] to [investor-owned utilities] today in Commission-regulated states (an increase from $26.00 in 2008), compared to cable and CLEC provider payments to ILECs, which average $3.00 and $3.75 [per year], respectively (a decrease from $3.26 and $4.45, respectively, in 2008).” (Id., at para 116).

The Commission accepts this argument and therefore, as part of the new pole attachment rules, ILECs will be presumed to have the same standing as other providers and will pay comperable rates, terms and conditions.

We are convinced by the record evidence showing that, since 2008, incumbent LEC pole ownership has declined and incumbent LEC pole attachment rates have increased (while pole attachment rates for cable and telecommunications attachers have decreased). We therefore conclude that incumbent LEC bargaining power vis-à-vis utilities has continued to decline. Therefore, based on these changed circumstances, we agree with both incumbent LEC and electric utility commenters’ arguments that, for new pole attachment agreements between utilities and incumbent LECs, we should presume that incumbent LECs are similarly situated to other telecommunications attachers and entitled to pole attachment rates, terms, and conditions that are comparable to the telecommunications attachers. We conclude that, for determining a comparable pole attachment rate for new pole attachment agreements, the presumption is that the incumbent LEC should be charged no higher than the pole attachment rate for telecommunications attachers calculated in accordance with section 1.1407(e)(2) of the Commission’s rules. (Id., at para 117).

In its Declaratory Ruling, the Commission notes that despite section 253(a) of the Telecom Act which states that “[n]o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service,” some states and localities have adopted moratoria on the deployment of telecommunications services or telecommunications facilities.

These moratoria include both explicit refusals to authorize deployment and delaying tactics that amount to permanent refusals to allow deployment. Thus, to provide regulatory certainty and to speed further broadband deployment, the Ruling makes clear that "such state and local moratoria violate section 253(a) and strike at the heart of the ban on barriers to entry that Congress enacted in that provision." 

As mentioned, some municipalities will not be pleased with this Ruling. However, with the clear language of section 253, it would be an uphill for them to appeal this to the courts and win. 

The Report and Order is expected to take effect 30 days after it is published in the Federal Register. The Declaratory Ruling will take effect upon release.