Transcript: Community Broadband Bits Episode 169

Sean Stokes of Baller Herbst Stokes & Lide explains the basics of right-of-way. Listen to this episode here.

 

Sean Stokes: It has to be balanced in terms of its needs and its uses, because obviously it ranges from everything from whether or not you have sidewalks to whether you have poles or ducts along it, whether you have roads and culverts, everything. It's really just that public way that's out there.

Lisa Gonzalez: You are listening to episode one hundred sixty-nine of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I am Lisa Gonzalez. Today we hear from Sean Stokes from Baller Herbst Stokes & Lide, one of the country's leading law firms working on telecommunications law matters. Sean joins Chris this week to discuss right-of-way and pole attachment issues. In addition to a basic tutorial, Chris and Sean talk about the practicalities involved when multiple entities wish to access these public spaces and the poles that inhabit them. Sean and his colleagues have published a number of resources on pole attachment and right-of-way at baller.com. You can also learn more about how these issues have affected some of the communities we follow at muninetworks.org. Now here are Sean and Chris.

Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I am Chris Mitchell, and today I'm speaking with Sean Stokes, a Principal in the Baller Herbst Stokes & Lide law firm. Welcome to the show.

Sean Stokes: Thank you very much. Good to be here.

Chris: Sean, I've been aware of your work for a very long time. You work with Jim Baller, who I got to know, one of the first people I got to know when I was working in this industry. Maybe you can tell people who are not familiar with the law firm, what do you guys do?

Sean Stokes: We're a communications law firm based in DC. We also have an office in Minneapolis, Minnesota. We primarily occupy the space of doing work with municipal, government, community-type entities, all facets of communications, be it telecommunications, broadband, cable television, wireless. As you indicated, we do a lot of work in the community broadband space. We also do a lot of work with municipally-owned utilities both in terms of their forays into providing services to others but also for their internal operations of their networks and keeping the lights on.

Chris: The main thing that you and I are going to be talking about today is rights-of-way management, poles and things like that. Has that been your specialty?

Sean Stokes: Yeah, I think to a certain extent it has. I had been the Associate General Council with an organization called the Utilities Telecommunications Council in the '90s. We represented all stripes of utilities there, the industrial, the public, and the cooperatives, and pole attachments was the common denominator. I've been doing that work for close to twenty-five years.

Chris: One of the folks from Free Press, Matt Wood ... Free Press is an organization that works in concert with us on a number of issues, and he says he can make anything related to pole attachments within a minute, basically, of talking about any subject.

Sean Stokes: It's absolutely true. It's both a cure and cause for insomnia, but it's amazing how much pole attachments in one way or the other, or access to duct or conduit, is integral to so many different projects or it's analogous to what people are trying to do, and just in so many facets of things that you wouldn't expect it to be there.

Chris: Let's take a step back. I'm going to ask you a little bit more about the general rights-of-way, and we're going to narrow back down to pole attachments in a few minutes. When I say the "rights-of-way," often abbreviated ROW, what am I talking about?

Sean Stokes: Generally people are talking about when they talk about right-of-way is thoroughfares, be it streets, sidewalks, roads, owned by and for the public. It can be owned by the state or county or local governmental entities. The federal government even has rights-of-way. It's basically that area both on the ground, above, and underground that has been obtained by those governmental entities for the benefit of the public. It has to be balanced in terms of its needs and its uses, because obviously it ranges from everything from whether or not you have sidewalks to whether you have poles or ducts along it, whether you have roads and culverts, everything. It's really just that public way that's out there.

Chris: Why is that so useful? Why would we want to have the telecommunications companies only be able to work in that area?

Sean Stokes: Really it comes down to a couple of things, one of which being, if it's set there it is a known quantity where the facilities are going to be placed, and it's much easier to organize the rest of community and life around it. If you go back to not the turn of this past century but the prior century and you look at some of those archived photos when telephone service and electric service first started, and you would see just lines of poles and telephone lines running everywhere. That was basically because every discrete use of a telephone or electric lines had its own dedicated facilities to it. It just became incredibly cumbersome to manage the rest of the public way, let alone places outside of the public way. It made more sense to have them in particular lanes and paths and freely accessible to everyone that has those uses, in the same way that you can only drive your trucks in certain places and you can only ride your bike in certain areas, and other places are dedicated for other uses.

Chris: One of the things that I sometimes think is that there's a lot of discussion about whether access to the rights-of-way is too restrictive, and the thought that comes to mind is, well, if it was easier for a cable company or for anyone to negotiate individually with every single landholder to be able to put conduit in or something like that, wouldn't we see that happening? Probably the rights-of-way are actually managed in a way that it really makes life a lot easier for these companies to be able to deploy their networks, even if there are some basic requirements to do a franchise fee or things like that.

Sean Stokes: Yeah, I think that's absolutely right. If you had to go and negotiate with each individual parcel holder, any place where you were not able to reach an agreement could be held hostage by it. It would be a nightmare. It's comparable to when people talk about what you need to do to, say, look at putting in new rail lines for maglev train types of things. Putting aside all the technology aspects of it, they say just the sheer difficulty of obtaining brand new rights to go along that would parallel where the existing facilities are is just monumental. That's the same thing with telecommunications. Everywhere you go you'd have to get individual agreements.

Chris: How is this typically regulated? Is this something that is done at the federal level, the local level, or how is it mixed up?

Sean Stokes: In terms of just talking about the public rights-of-way, that actually is primarily regulated at the state and local level. The federal law, to the extent that you're not talking about federal property, has some general guidelines to it, but they leave most of it to the state and local government. It actually falls underneath the purview of a local governmental police power authority to protect the integrity of facilities and the safety and commerce, et cetera. The regulation portions of it, we tend to focus more on the telecommunications parts of it, but there's all sorts of other entities that are using these, and so the regulation tends to be at the state level. That authority then has usually been given down to the individual local governments, whether it's counties or cities, to administer and adopt their own requirements and regulations, to manage that rights-of-way.

Chris: I think we'll start to get a little bit more complicated as we talk about the poles, because I think the right-of-way is not the pole, right? The pole is an object that's in the right-of-way and itself is treated a little differently from the rest of the right-of-way.

Sean Stokes: Yeah, that's exactly the way to think about it. The right-of-way is the land, the property on which the pole or the conduit is situated. While the state or local government may be the underlying property owner of the right-of-way, the pole is owned by whatever particular entity has set that pole or conduit in that place. Often it's a utility, and of course the utility may be privately owned or it may be publicly owned, so it may even be owned by the same governmental entity that owns the rights-of-way, but they view it as a discrete piece of infrastructure that's in the property. That's where it gets a little bit complicated, because the access to rights-of-way doesn't necessarily, and usually does not, convey what is its specific rights to get on particular poles.

Chris: Who often owns the poles in any given community? Is there a general rule? I assume they were put there by a telephone or electric company originally.

Sean Stokes: Historically, poles have been owned by the incumbent electric utility and incumbent telephone company, meaning the local telephone company. For years they had a cooperative understanding relationship with one another that they both were utilities and their uses didn't tend to interfere with one another. The electric utilities tended to place their facilities on the top of the pole and the communications/telephone companies place theirs lower, and so rather than putting multiple poles for each individual use in the same area, they would typically enter into an agreement where the electric company would own half the pole, say, and the telephone company would own the other half, and they would grant one another reciprocal use to get onto one another's poles. 

That worked fine until you started to get into the situation where other entities wanted to get onto those and you needed to have an arrangement for it. That's still what you have right now, is the poles generally are still owned primarily by the electric and telephone. Over time, the electric companies have ended up owning a larger percentage of the poles, for multiple reasons. They probably own maybe seventy percent of the poles in a given area, and the telephone company owns about thirty percent. Who those entities are that own them in terms of their ownership is varied. As I said, it's always going to be the telephone or electric company, but it may be a municipally-owned electric company or cooperatively-owned electric company or a private electric company. That's generally the breakdown between them.

Chris: As I understand it, in some places, let's just say we're talking about a community that has two hundred poles, in some cases if it was split fifty-fifty, that would mean the telephone company owns one hundred poles and the electric company owns one hundred poles. In other cases, it means that there's two hundred poles, and every single one of those poles is half-owned by the company, by each. If you wanted to get permission to be on the pole, you'd actually have to secure permission from both pole owners. Is that right?

Sean Stokes: Yeah, that's true. The scenario you're describing is often referred to as joint ownership. That's more rare, but it still happens. Usually the way that that works out, though, is you don't necessarily have to get authority from both entities. Usually whichever entity has the primary control of that pole, or maybe the communications space has been delegated and the administrative responsibility for letting third parties on there. You're absolutely right, as a practical matter there are poles out there in communities where you would actually have to go to both the telephone company and the electric company to get some form of authorization to be on the same pole.

Chris: As a local activist, I want to get access to the rights-of-way from my local government. What do I do if I want to build a little mini fiber network and if I want to let's just say bury it?

Sean Stokes: The caveat I always give on something like this is that each state has its different rules and process for it. From the local government point of view, if you want to just bury it, you don't need to deal with any utility per se, you would simply need access to the rights-of-way. If you were a telecommunications provider, meaning you want to use the fiber that you're going to bury for telecommunication services, you could go to the state, presumably, and get some sort of authorization. That's usually a general authorization to occupy rights-of-way subject to the local government approving it for management purposes. 

If you weren't going to cross that line and actually provide what would be considered regulated telecommunications services, the good news is the state tends to be hands-off. The bad news about it is that you then have to deal with the different permutations of each local government about how they allow people into their rights-of-way. They tend to want to have some type of understanding of the types of facilities you're going to put in there and the services you're going to provide. They cannot generally regulate the services you're going to provide. They can only manage the process of you going in there, in other words, your excavation processes.

Chris: Then can they just arbitrarily deny or ... When I say "arbitrarily," I literally mean arbitrarily. What are the rules around it?

Sean Stokes: It's an interesting question, because we still have this sort of stovepipe regulatory process at the federal and state level where the rights of entities often are defined by the types of services they provide, so cable television companies get franchises, but it tends to be for the entire city, and telephone companies get rights to the public right-of-way if they're providing telecommunications services. Entities that aren't providing either one of those services fall into this no-man's land, and it could be arbitrary, in all honesty. 

One nice thing from the scenario you just talked about is, in the FCC's decision in their Open Internet access order last February, also the net neutrality decision, the big thing they did there, and not to get into the weeds, but is they reclassified broadband internet access as a telecommunications service. While it wasn't clearly the focus of it, one of the things that the FCC did say when it did that was it said that also includes access to public rights-of-way. At least right now, entities that were, say, only providing broadband service that didn't previously fit the definition of telecommunications under your scenario could say, "We're going to put in fiber and just directly bury it," and the local government wouldn't be able to act in that arbitrary manner any longer because now that entity would actually have some federal rights as a telecommunications provider. 

There still are any number of scenarios where someone would say, "Well, I don't want to even do that, I just want to put in fiber and get people connections and whatnot, and I don't want to be in that business," and there I think you could say the local government isn't subject to any particular one standard that they have to follow.

Chris: Is that also true then for poles, or do pole owners have more latitude to just say, "No, I don't want you on my pole."

Sean Stokes: They do to a certain extent. The federal pole attachment regulations apply to only telecommunications services and cable television services as defined by federal law and interpreted by the FCC. Up until the FCC's Open Internet order, if you were purely a broadband provider, stand-alone broadband provider neither offering telecommunications nor cable service, you had no federal pole attachment rights under the federal scheme. Similar to what I just talked about with getting access to rights-of-way, broadband providers now specifically have pole attachment rights under the FCC's Open Internet order, and so they couldn't deny access to those facilities if you were just going to provide broadband. Someone who say is just a dark fiber provider, they do not have any enforceable federal pole attachment rights against the telephone and electric utilities who own poles. 

Then, the second part of it is, under the federal structure of regulation of pole attachments, it's somewhat unique. Individual states can opt out of the federal rules if they say that, "We will regulate that instead." If you're in a state that does that, you'd have to look and see what the state does and how they regulate it to see whether or not you can obtain access and under what terms and conditions. There's twenty-one states that have opted out on the FCC's regulation of pole attachments.

Chris: I think this is also where it gets even trickier, in that you can have pole owners that say, "Oh, sure, yeah, absolutely, come on our pole. Oh, but it's going to take us a while to figure out which poles can accommodate you," and you'll have to do this thing called make-ready. What is that all about?

Sean Stokes: You're absolutely right. Make-ready is essentially all of the work that is necessary to make a pole accessible and available to accommodate a new attachment. If you picture an existing utility pole that, say, towards the bottom has a telephone company attachment and a little bit above that has a cable company attachment and up on top has an electric, if you or I wanted to come along and attach near where those communications were, the pole owner would have to take a look at the cable and telephone facilities that are already there, take a look at its electric facilities, the age of the pole, the size, et cetera, and figure out what work if any would be necessary to accommodate your proposed attachment.

In all honesty, that's the single biggest cost of pole attachments. There are annual rates, and people can debate the impact of those rates, and I'm sure the lower they are the happier people that are attaching to the poles would be, but most people would tell you the more significant issue is the cost of getting onto those poles itself and having that make-ready work completed both in terms of the cost and the time, because you will want to make sure that that can be done in a relatively quick period of time, and that can be very difficult. The FCC has specific requirements and shot clocks, if you will, that the utilities have to follow in terms of how quickly they will review a proposed pole attachment and then getting an estimate out and how quickly the work will get done. Even that, it's a pretty complicated dance with a lot of moving parts. In all honesty, a lot of the slow-down comes not as much from the utility but from the existing other attachments, because they have no particular incentive to move, particularly if that new facility's going to be competing directly with them.

Chris: What is a ballpark figure, if you have one? I understand it can range terrifically, but what's the difference in costs between just getting on a pole that already has space available and having to do a lot of make-ready? Is it five times more expensive, ten times more expensive per pole?

Sean Stokes: I would say, certainly if you came to a pole that was pristine and you didn't need to do any additional make-ready on it as compared to a pole where you needed to do significant make-ready but wanted to use the same pole, so in other words move the telephone company line down and the cable company line up and clear some vegetation, et cetera, it's probably five times as much. That's probably a good number. It could be considerably more than that, however, in a lot of markets where the poles either are smaller poles and they are already relatively fully occupied, in which case it's not just a question of rearranging existing facilities on a pole so much as it is taking that pole down and replacing it with a taller, larger pole. 

Of course, that would entail all of the rearrangement costs as well as the actual costs of setting and owning, putting in a new pole. There your number can go up to ten times as much. Then you multiply that out per pole if you're talking in an area where a large percentage of the poles need to be replaced, and the costs get up very quickly.

Chris: This is where I can put in my plug for what Fort Collins is doing and what a number of other places have done, which is to have a long, multi-decadal plan for getting rid of poles, putting everything underground. It's fantastically expensive to put electricity underground especially, and it's pretty expensive to do just communications, but over time I'd sure love to see everything going underground with lots of extra conduit and duct space, because it's just an aesthetic beauty issue, but also it just strikes me that poles just don't have the ability that we want them to to be able to facilitate more competition because of these types of games that can be played.

Sean Stokes: I think you're absolutely right. I think underground in most situations is far preferable. Certainly, if you can have a forward thinking plan that when you're going underground you move everything underground and you install additional conduit space to accommodate reasonably foreseeable growth, it just makes so much sense, similar to the dig once policies, that every time you're going to open up your public rights-of-way for a project, notify all of the entities around that have a existing or perceived future need for it and try and get them to go in at that time. It really can cut down the costs for those individuals, but more importantly, as you said, it not only benefits competition but it creates a situation where you don't have these games that can be played that you do have with poles.

Chris: Thank you so much for coming on. Let me ask you if there's anything else that we should include in our right-of-way basics conversation.

Sean Stokes: One thing I would say is that there's two things on the poles that are happening that are pretty interesting. One of them just happened in Connecticut. There, a number of advocates for community broadband and others were able to get space set aside on utility poles. They call it municipal gain. Basically, that is an attachment space on every utility pole that municipalities, governmental entities are entitled to obtain access to for virtually any purpose. That's just a great, great, forward thinking type of law.

Chris: I'm curious how that gets operationalized. Does that mean that every pole suddenly has space, or that as poles are replaced they will then have space? In practice, what does that mean right now for those Connecticut towns?

Sean Stokes: That is one of the issues that they are working through. In Connecticut, I think they have a benefit of prior to that they had existing right, but it was narrowed to police and fire use that came as the compensation for the use of the public right-of-way of letting a electric company or telephone company set a pole, that certain space on that pole was set aside for municipal purposes. At that point, it was narrowly tailored, so what they've done is they've broadened it out and made it explicit for any purpose. You're absolutely right, there's going to be a lot of devil in the details. 

If they look at an existing pole and say there is no gain that's on there, I would think that there's two ways that they're going to look at that. One, as you said, is, at least going forward, new poles will have that installed and built into it. Second, if you come along as a municipality and you want to get onto space where there isn't a defined space available on that, I think you would have a strong argument to say, "I'm not going to pay for that make-ready or I'm only going to pay some reasonable accommodation for that make-ready because that space, I'm already entitled to it, I have a reservation there."

Chris: Great. What was the other point you wanted to make?

Sean Stokes: More and more, as a bit's a bit and fiber's fiber, it makes no sense to continue to have this stove type of thing that one type of service gets access and another doesn't. I think it makes more sense to say any fiber, for example, or any similarly situated facility, should be able to be accommodated. That way you would eliminate issues that some people have run into, that they want to install dark fiber but they can't obtain access. In particular, the electric utilities should have no particular concern about what that service is being used for as long as it's legally authorized, and telephone companies, to the extent they own the poles, they shouldn't be able to use their anti-competitive motivations to keep somebody from putting those types of facilities on. I think that that's one that it just makes sense to broaden who obtains access and make it available to anybody that has similar types of facilities.

Chris: I think right now they pay different rates also, depending on which bucket of regulation you fall into. Is that right?

Sean Stokes: That's absolutely right. To show how ridiculous that is, the FCC, because of the way the federal statute was written, there was a cable formula and a telecommunications formula. It doesn't really matter what the costs are, just know that the cable formula was substantially less than the telephone formula. The way that the FCC implemented it, though, they said if a cable company provides internet access also it continues to get the cable company rate, but if a telephone company provides internet access, that'll be at the telephone rate. You basically had completely arbitrary price differences, particularly as the consumer is concerned. It's the exact same service coming from both entities, but one costs more than the other, which makes no sense. There's no operational need for that difference from the utility pole owner's perspective.

Chris: I think that your explanation at least gives us a chance to make sense of the rights-of-way, so thank you for coming on and basically helping us to understand it.

Sean Stokes: Happy to do it.

Lisa: Follow us on Twitter. Our handle is @communitynets. Check us out on Facebook. Search for Community Broadband Networks. Send us your ideas for the show. E-mail us at podcast@muninetworks.org. Thank you bkfm-b-side for the song Raise Your Hands, licensed through Creative Commons, and thank you for listening.

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