Cable, Telcos Dispute Pole-Attachment Fallout of GAAP Shift; ACA Seeks 5-Year Freeze
Cable and telco groups continued to battle over FCC treatment of pole attachments under a proposed ILEC shift from traditional Part 32 regulatory accounting rules to generally accepted accounting principles (GAAP). The American Cable Association said if the commission ends…
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use of Part 32 data to calculate pole-attachment rates, it should adopt an NCTA proposal to freeze price-cap carrier rates at current levels (see 1702090042). If the FCC adopts an ILEC 12-year transition proposal "in lieu of a rate freeze, at least it should provide that: incumbent carriers cannot increase rates for the first five years of the transition; incumbent carriers must maintain and produce part 32 data during this five year period so it can be compared to rates that would result from the use of [GAAP]; and, incumbent carriers should file with the Commission annually underlying data to show how they derive rates," said an ACA filing posted Thursday in docket 14-130. Telcos acknowledged the shift may cause pole-attachments rates, typically under $10 (per pole attachment per year), to rise "by several dollars, a substantial rate hike," which would be "especially felt" by ACA's members and hinder broadband deployment, the cable association said. The agency is considering streamlining its Part 32 rules at commissioners' Feb. 23 meeting (see 1702020051). A USTelecom filing posted Wednesday called the NCTA arguments "flawed" and Part 32 accounting "a relic of rate of return regulation" that "makes no sense for America's price cap carriers." It said ILECs understood the concerns of cable and others, and proposed "a reasonable transition mechanism" for calculating GAAP pole-attachment rates. The transition proposed by AT&T, CenturyLink and Verizon factored in depreciation, cost-of-removal and any other differences between methodologies, USTelecom said. Freezing rates based on one year's costs "cannot be a realistic alternative to a reasonable, long-term transition," the ILEC trade group said. The telco proposal "is not an effort to increase pole attachment rates; any suggestion otherwise is conflating an argument about problems with the formula used to define rates with a procedural accounting issue," it said. USTelecom said the carriers' confidential submissions back their claims that the transition's rate impact would vary -- rates would "in many cases, go down or not be significantly affected."