VoIP Debate Muddies Vermont Plan to Update Pole-Attachment Rate Method

The fee structure in Vermont charges LECs more than cable-TV providers, despite the FCC about three years ago lowering pole-attachment rates paid by telco broadband providers to levels paid by cable broadband providers (see 1602170050). It's one of 20 states and the District of Columbia that regulates pole attachments and doesn't follow FCC rules. Vermont’s method lets pole owners bill traditional phone service providers for using 2 feet of usable space on a pole, but requires them to bill cable providers for 1 foot. Consolidated says it’s unfair for cable to get a discount when it's using the space for VoIP services that compete with traditional voice services (see 1603310021). Cable says interconnected VoIP isn't a local exchange phone service. The PUC is separately weighing how to regulate interconnected VoIP (see 1804020031).

When Vermont asked entities to submit data on how many attachments are subject to each tier, cable and other pole riders reported more attachments as 1 foot (costing less), while Consolidated and other pole owners reported more as 2 feet. Using weighted averages, the Department of Public Service Oct. 14 calculated an occupied-space presumption of 1.732 feet based on owner data and a presumption of 1.145 feet based on rider data. Since attachers reported 106,651 fewer attachments than the owners, DPS calculated a third occupied space presumption of 1.395 feet by starting with attachers’ estimates and then assuming the remaining 106,651 would be charged $2.

Pole rider “submissions demonstrate that the only ‘dispute’ over pole attachments in Vermont arises from the regulatory avoidance engaged in by Comcast and Charter,” commented Consolidated and seven other ILECs. “The Commission should no longer indulge Comcast’s and Charter’s efforts to flout the PUC’s rule, to withhold lawful payments from the [pole owners] with impunity, and to run out the regulatory clock waiting for a favorable change in the law or the rule.” Vermont DPS’s 1.395-foot presumption “reflects a deliberate policy decision” to accept pole riders’ figures and reject owner’s, complained the ILECs.

CLECs urged the PUC to avoid a VoIP classification debate. "Reliance upon the information produced by [owners] and [attachers] on the number of 1 foot and 2 foot attachments would result in the Commission’s deciding how VoIP attachments should be classified under its existing Rule 3.706(D)(1) and causing future pole attachment rates to exceed their fully allocated costs,” CANNE said. It urged a single presumption of usable space occupied for cable and CLEC attachments. Unless otherwise controlled by contract, the PUC should assume space occupied by an attachment is 1 foot for attachers that aren’t ILECs or electric utilities, CANNE said. If the pole owner “conducted a study of the space actually occupied by a particular type of attachment (including safety space),” it should be “the amount defined in a tariff, but in no event less than 1 foot.” That won't shift costs to owners or ratepayers, CANNE said.

Proposing a rate based on 1.395 feet would be “contrary to the fundamental tenets of pole attachment regulation, which require pole rates be determined using a formula that is fully (but not overly) compensatory, while administratively efficient,” said Comcast and Charter. The plan would “perpetuate the supra-compensatory rates that have existed in Vermont for years,” the two said. Adopting a uniform 1-foot rate would lower costs and spur broadband deployment, they said. CenturyLink said it would be consistent with the FCC and many other states.