The Problem(s) with Poles

By James Erwin

If you want to make any telecom expert’s fingers curl, mention pole attachments. It is an incredibly niche policy area, but exorbitant pole attachment fees and burdensome terms from municipally-owned poles could undermine federal broadband deployment efforts, possibly wasting billions of taxpayer dollars. If Congress and the FCC do not act quickly, rent-seekers could use pole attachments to shake down taxpayers and prevent broadband expansion.

There are an estimated 180 million poles in the United States according to providing telephone service, electricity, and high-speed broadband to American homes. These poles will play a critical role in delivering broadband to unserved areas with funding from the BEAD program. Given the sudden demand for access, pole owners will be inclined to charge steep rates to ISPs receiving tax dollars to attach.

Millions of these poles are privately owned by utility companies and even ISPs themselves. They have a right to dispose of their private property however they see fit, and privately-owned poles are actually beneficial in this process – ISPs that own their own poles are positioned to make attachments cheaply and efficiently to reach unserved areas. They need only consult themselves on how best to use their existing infrastructure.

The problems are with poles owned by municipalities and co-ops. These owners are positioned to rent-seek from the billions in taxpayer dollars that will subsidize buildout in all 50 states. Not only do they have a history of charging exorbitant costs to subsidized projects, but they also often require ISPs to pay the full cost of maintenance or replacement for aging poles as a condition of attaching. Never mind that the broadband company doesn’t own the pole or that often the pole was set to be replaced anyway.

While it’s only fair that broadband providers pay their share for utilizing the pole, it’s not fair to push the entire cost of replacing the pole onto them. This would normally turn a $100 or $200 process into what could be $3,800 dollars a 3,500% increase in the cost of broadband expansion. This shake-down of the taxpayer will also slow down the process and exacerbate labor and materials shortages, undermining the goals of the BEAD program and possibly chilling participation.

To protect taxpayers and head off these problems, Congress and the FCC need to streamline the permitting process for federally-funded projects. The FCC has already reduced some of the red tape to get fiber on poles, but Congress could also impose a shot clock to make sure bids are not bogged down with local governments and co-ops trying to extort as much as they can from ISPs. As NTIA approves state BEAD plans, they should do so with an eye towards state policies that simplify access to rights-of-way and preempt local extortion. There are already laws in 24 states that govern pole attachments, and more states should consider their approach.

Without these reforms, billions could go to waste and millions of Americans could remain unserved. For the good of the nation, such a niche issue as government- and co-op-owned poles should not stand in the way of broadband deployment.