V. Access to Poles and Rights of Way
We believe that BPL has the potential to increase broadband competition, which could result in significant public benefits. At the same time, however, we do not want to create a regulatory structure that treats any broadband technology unfairly. As we emphasized in the OIR, it is important to maintain "regulatory neutrality toward different broadband technologies." (OIR, p. 7.)
Some existing broadband providers use electric utility poles and rights of way, so we need to ensure that electric utilities do not discriminate in favor of BPL at the expense of broadband competitors using the same infrastructure. The Commission has existing rules governing access to public utility rights of way and support structures by telecommunications carriers and cable TV companies (D.98-10-058, Appendix A, referred to as the "ROW Order".) Those rules continue to apply to electric utilities with BPL attachments, and we order the electric utilities to apply the ROW Order to determine the terms under which access to poles and rights of way should be granted to BPL companies.
The ROW Order describes the process for negotiating right of way access agreements between electric utilities and telecommunications carriers seeking to place equipment in the electric utilities' rights of way. The rules encourage negotiated outcomes, but provide for a cost-based framework to be applied by the Commission in the case of disputes.34
An essential element of the ROW Order is the requirement that the utility not discriminate in its fees for pole attachments.35 This requirement is applicable to BPL. The pole attachment fee an electric utility charges a BPL company for a given attachment can only differ from the fee charged to another company on the same pole to the degree those differences can be justified by the particular circumstances and do not reflect anticompetitive discrimination.36
PG&E and SCE argue that BPL companies should not be granted mandatory access rights to utility rights of way. (PG&E Opening Comments, p.8, SCE Reply Comments, p.15.) We agree, and are not requiring mandatory access through application of the ROW Order. However, if a utility grants access to a BPL company, the utility must provide equal access to all telecommunications carriers and cable TV companies, priced on a non-discriminatory basis as required by the ROW Order.
A. CCTA's Concerns
The California Cable and Telecommunications Association ("CCTA") notes that the ROW Order requires stricter adherence by telephone utilities than by electric utilities. CCTA goes on to state that "with the emergence of BPL into the marketplace, the Commission must now implement rules that ensure that electric utilities cannot favor their BPL affiliates or partners at the expense of other broadband providers." (CCTA Opening Comments, p.12-13.) Accordingly, CCTA recommends changes to the Commission's existing rules. (Id.)
We recognize that an electric utility's interests in BPL creates new incentives to discriminate against other broadband providers. However, even without CCTA's proposed changes, the ROW Order protects telecommunications providers protection against discriminatory behavior, and we believe this protection is adequate.37 We do not adopt CCTA's proposed changes.
CCTA also notes that the ROW Order says "electric utilities' use of its own facilities for internal communications in support of its utility function shall not be considered to establish a comparison for nondiscriminatory access." (ROW Order). CCTA expresses a concern that an electric utility may blend its internal communications equipment with the BPL system, and therefore a utility's granting of access to itself for its internal communications network would not be subject to the non-discrimination rules in the ROW Order. While we do not know how the installation of BPL systems will unfold over time, it is not the intent of this Commission to waive non-discriminatory access requirement simply by blending internal communications and BPL systems. We will not amend this portion of the ROW Order now, but we acknowledge that there may be the potential for discrimination of the sort described by CCTA despite this Commission's stated position against such matter. Should such discrimination occur, we expect that it will be brought to our attention,38 and we can at that time impose an appropriate remedy.
B. Underground Attachments
SDG&E and Current note that installing a BPL system on underground power lines could require attachment of BPL equipment to the inside or outside of underground or surface transformer enclosures. (SDG&E Opening Comments, p. 10-11 and Appendix A; Current Opening Comments, p. 6.) We do not adopt a specific cost-based formula for such attachments, but note that that ROW Order applies.
SDG&E proposes a cost-based formula to calculate attachment fees for the attachment of what it describes as a typical BPL electronics box to the exterior of a typical SDG&E transformer enclosure. (SDG&E Opening Comments, p.10-12 and Appendix A.)
Attachments to support structures such as transformer enclosures fall under the definition of "pole attachments" in the ROW Order,39 so we do not need to approve a new cost-based method for determining access fees for transformer enclosures, since the ROW Order already describes the methodology that should apply. Furthermore, we note that the ROW Order does not require the Commission to establish cost-based attachment fees unless the utility and company attaching the equipment "are unable to agree upon the terms, conditions, or annual compensation for pole attachments." (ROW Order, VI, B.) At this stage, no party has come before the Commission with a dispute over attachment fees for BPL equipment, so there is no need to approve a specific calculation for SDG&E or any other utility. However, if this Commission discovers attachment fees for transformer enclosures or similar points of attachment are inconsistent with the nondiscriminatory access a healthy market requires, we will seek out cost-based rates in a new proceeding. This determination is consistent with TURN's noting that determining a specific attachment fee is outside the scope of this quasi-legislative proceeding.
Based on the record before us, it appears that there are far fewer underground attachments to utility infrastructure than there are pole attachments.40 This suggests that opportunities for an electric utility to discriminate with regards to transformer enclosure attachments is more limited than is the case for pole attachments. Nonetheless, where opportunities exist for the electric utilities to practice discriminatory behavior, the rules contained in the ROW Order apply.
VI. Use It Or Lose It
PG&E and SCE responded to the OIR's question regarding the possible idling of BPL facilities for anti-competitive purposes by recommending a "use it or lose it approach." As PG&E put it, "The Commission should adopt rules that require entities that acquire rights to a utility's system for the express purpose of BPL provision to begin implementation and service of BPL within a certain period of time, or forego their rights to do so." (PG&E Opening Comments, p. 6.) PG&E and SCE cite as an example the existing rule that requires a Competitive Local Carrier (CLC) to use space within nine months of the date when a request for access is granted, or be subject to reversion of access to the electric utility. (Id., SCE Opening Comments, p. 7.) SCE agrees with PG&E that the Commission should establish similar reversionary rules for BPL use of electric utility assets.
Ambient agrees with the recommendation of PG&E and SCE (Ambient Reply Comments, pp. 25-26), but Current and SDG&E disagree. Current argues that such fears are unfounded (Current Opening Comments, pp. 22-23). SDG&E argues that imposition of an "artificial deadline" would provide the wrong basis for making decisions regarding BPL deployment. (SDG&E Reply Comments, p. 25.)
We are not in favor of a competitor acquiring access to utility infrastructure, only to idle it to gain a competitive benefit, and so we adopt a rule here of five years from the awarding of a contract. SDG&E points out that the technology is changing and developing rapidly, and we do not want to preclude the choice of a slightly slower but significantly better BPL, however it is the stated goal of this Commission to encourage the rollout of BPL as a new path for broadband to the home. The utilities are clearly aware of the possibility of anti-competitive behavior, and should take it into consideration in their contract negotiations with any BPL providers that a timely rollout of this important technology is essential to serious participation in this market. While we would prefer to allow this issue to be addressed in contract negotiations, a delay of greater than five years seems to be a reasonable outer limit for California's broadband market.
34 "These rules are to be applied as guidelines by parties in negotiating rights of way access agreements. Parties may mutually agree on terms which deviate from these rules, but in the event of negotiating disputes submitted for Commission resolution, the adopted rules will be deemed presumptively reasonable." (D.98-10-058, Appendix A, Rule I. A.)
35 "A utility may not charge a telecommunications carrier or cable TV company a higher rate for access to its rights of way and support structures than it would charge a similarly situated cable television corporation for access to the same rights of way and support structures." (D.98-10-058, Appendix A, Rule VI. B. c.)
36 "It is unrealistic to expect that all ROW access agreements will be uniform with respect to prices, terms, or conditions. Differences are acceptable as long as they are justified by the particular circumstances of each situation, and do not merely reflect anticompetitive discrimination among similarly situated carriers." (D.98-10-058.)
37 A complaint may also be filed with the Commission if the electric utilities practice discriminatory behavior with respect to right of way access.
38 Again, a complaint would be an appropriate vehicle for allegations that an electric utility is abusing the internal communications exemption to discriminate against other companies using or seeking access to electric utility rights of way.
39 "'Pole attachment' means any attachment to surplus space, or use of excess capacity, by a telecommunications carrier or a cable TV company for a communications system on or in any support structure owned, controlled, or used by a public utility." (ROW Order, Rule II. C.)
40 For example, according to TURN's table summarizing pole attachment data, only one of the three major electric utilities, SCE, collects revenues from underground attachments. (TURN, Opening Comments, p.29.)
