Cities can't just ignore federal law on utility poles

Ever since the passage of the Telecommunications Act of 1996, deployment of advanced telecommunications infrastructure has been a national priority. In fact, Section 706 of the Telecommunications Act of 1996 specifically directs the Federal Communications Commission (FCC) and each state commission with regulatory jurisdiction over telecommunications services to "encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans."

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However, broadband deployment is not as easy a task as it seems — network construction is enormously expensive and there are a variety of practical factors, like various government permissions, a provider must address.

One of these factors is the little-known, but highly important, issue of how broadband providers may attach their wires to utility poles, which are mostly owned by private companies. To provide guidance, Congress set forth a detailed framework to govern this process in Section 224 of the Communications Act.

While perhaps not the most perfect statutory paradigm, Section 224 is the nonetheless the law of the land. When a new provider seeks space on a pole, for instance, the FCC's rules require it to apply to the pole owner, which in turn will tell the new provider whether other carriers' facilities need to be moved to make room for the new provider. It is then up to the new provider to coordinate any necessary "make ready" moves with the existing attachers so the new provider can attach to the pole. Sensibly, by law, each existing provider has responsibility to oversee the movement of its own facilities. In other words, each provider maintains control over its own property.

It's a practical approach: The last thing a provider wants is a competitor messing with its network. Broadband networks are expensive and outages are costly to consumers. 

But the internet makes people do crazy things.

For example, at the urging of Google Fiber, there is a growing movement among several city governments to ignore federal law by enacting local pole attachment ordinances. These ordinances — referred to as "one touch make ready" ordinances — permit new providers to perform all the required work in the make-ready process themselves, i.e., move other parties' wires without permission using uncertified workers.

While I certainly have sympathy for efforts to reduce barriers to broadband entry, there are several compelling problems with such "one touch" ordinances.

First and foremost, such ordinances are most likely unconstitutional.

It is a black-letter legal maxim that federal law trumps state and local laws. Thus, given Congress's detailed paradigm set forth in Section 224, it is highly unlikely that one-touch-make-ready ordinances would survive judicial scrutiny. (To wit, when Louisville, Kentucky passed such an ordinance in February, 2016, AT&T sued the Louisville Metro Government in federal court. The court recently denied Louisville's motion to dismiss AT&T's suit.) In the face of such a glaring conflict of federal and local law, local municipalities should not incur such a huge litigation risk (and waste precious taxpayer dollars in defending such suits) until the legal disputes are settled.

There are also a wide range of compelling policy reasons why one-touch-make-ready ordinances make little sense.

To begin, regulating pole attachments should be left to the experts at the FCC, not local municipal governments. Indeed, the last time the FCC sought to update its pole attachment rules in 2011, it solicited reams of public comments from a broad and diverse range of interested parties, including dozens of communications providers (both large and small), electric companies and cooperatives, a wide variety of industry associations, consulting groups, and state regulators.

Given such a substantial record from such a wide range of stakeholders, the FCC was able to issue a comprehensive 144-page order setting forth detailed national guidance for pole attachment agreements. Those rules balance the interests of pole owners, existing attachers and new attachers/entrants in a manner which, the FCC believed, best serves the nation's overall interests and encourage broadband deployment. In contrast, having a patchwork of individual local ordinances is not a nationwide solution to a nationwide problem.

Such ordinances also raise significant safety concerns. You don't need to be an expert with power tools to understand that allowing a third-party to move established facilities on poles — particularly with no notice to the owner of said facilities — increases the likelihood of a service outage, including 911 service, and increases the possibility of facilities damage and personal injury.

If experience has taught us anything, I am pretty confident that no matter how many promises are made or how good the intentions, a competitor is never going to exercise the same level of care in moving its rival's facilities that the rival would exercise over its own facilities.

Moreover, such ordinances raise serious issues of labor and contract law. Many carriers have labor agreements with the Communications Workers of America, which specifically provide that the carrier's make-ready work is performed by union-represented workers. However, these one-touch ordinances would allow make-ready work to be performed by third parties, taking work away from union employees. Regardless of what you may feel about unions, deliberately promoting labor unrest is probably not the best way to encourage more broadband deployment. (Just look at the six-week strike Verizon just had to endure this summer.)

Which brings me to the point of the pencil: If local governments really want to help reduce barriers to broadband infrastructure investment, then there are a host of things they can do to be constructive.

For starters, perhaps local governments could redouble their efforts to streamline cell-phone tower approval rather than use these proceedings to extract ridiculous concessions. Indeed, due to widespread municipal recalcitrance, a few years back the FCC was forced to write rules to bring the cities to heel (rules, by the way, that were upheld in court).

Cities can also stop threatening private investment with dreams of municipal broadband glory. As demonstrated by a recent comprehensive study on the topic, municipal broadband requires massive taxpayer subsidies, is predatory to private investment and contributes nothing to expanding economic output.

Like it or not, broadband is a difficult and, more to the point, an expensive business, so identifying and removing policy-relevant barriers to entry remains a constant challenge. Nonetheless, there are detailed laws which govern our conduct which must be respected, not just for economic reasons, but to protect our health and safety. Having municipalities pass ordinances which are nakedly intended to circumvent those laws and abridge private property rights in the name of promoting "competition" achieves none of these goals.

Spiwak is the president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, a nonprofit 501(c)(3) research organization that studies broad public-policy issues related to governance, social and economic conditions, with a particular emphasis on the law and economics of the digital age.


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