Vermont Pole Attachments Dispute Blooms Into VoIP Policy Debate
A Vermont dispute over pole attachment fees has stirred up a larger issue over whether a fixed interconnected VoIP service provided by a cable operator should be regulated like a local exchange service. While FairPoint Communications and cable companies Charter and Comcast have decided to settle disagreements over pole attachment rates in Vermont, the matter has renewed interest in the Vermont Public Service Board’s long-standing proceeding about how the board regulates interconnected VoIP. A ruling there could have ramifications for other states with disputes about regulation of VoIP services.
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The Vermont board had opened an investigation into VoIP services in 2007 (docket 7316), but it remains unresolved. That docket “has been taken under advisement,” the Vermont board's General Counsel June Tierney told us. “This means that the record is being reviewed, following which, in due course, the hearing officer will issue a proposed written decision for comment by the parties. When that process has concluded, the matter will be forwarded to the Vermont Public Service Board for issuance of a final order.”
The question over appropriate regulation of fixed VoIP services has caused conflicts in other states as well. In Minnesota, the issue could be decided in a courtroom. The U.S. District Court of Minnesota is considering a Charter complaint against the Minnesota Public Utilities Commission (see 1510300052) in which Charter said the PUC overstepped its authority by trying to impose state regulations for traditional phone services on VoIP after Charter transferred 100,000 Minnesota customers to an affiliate that provided VoIP phone service not certified by the state commission. The court held a hearing on the PUC’s motion to dismiss on Feb. 23 in St. Paul.
The pole attachment fee structure in Vermont charges LECs more than cable TV providers, despite FCC rules that became effective in March. The FCC lowered pole-attachment rates paid by telco broadband providers to the generally lower levels paid by cable broadband providers, and kept the latter from paying higher telecom rates in the wake of the FCC's 2015 reclassification of broadband as a telecom service under Title II of the Communications Act (see 1602170050). However, under 47 U.S.C. 224, the FCC has authority to regulate rates, terms and conditions for pole attachments only in states that have not claimed their own authority over pole attachments. Vermont and 20 other states have asserted authority to regulate pole attachments, according to an FCC list compiled in 2010. In Vermont, Rule 3.700 gives the state that authority.
In docket 8470 at the Vermont Public Service Board, FairPoint claimed that Comcast and Charter underpaid for pole attachments because they now provide a phone service in addition to cable TV, but still paid only the less-expensive cable TV rate. But the cable companies argued that they paid the correct amount because interconnected VoIP is not a local exchange telephone service. Before the Vermont board could issue an order, however, FairPoint settled the disputes with Comcast and Charter, asking the board to approve their interim rate agreements and dismiss the case.
It didn’t end there, however. In comments dated March 10, the Vermont Department of Public Service (DPS) told the board that it couldn’t support approval of the parties’ proposed interim contract rates, because the rates merely delay resolution of the bigger policy issue regarding the regulatory treatment of VoIP. The Vermont DPS “believes that FairPoint's complaint is inherently intertwined with the VolP issue, and that there cannot be legal clarity on this issue until the Board completes its generic investigation into VolP in Docket 7316,” the DPS said. The VoIP issue “extends beyond the various entities that are parties to this docket. There are numerous pole owners and attaching entities that could potentially be affected by the Board's resolution of this docket.”
As the Vermont DPS predicted, on March 24 another company -- Sovernet Fiber -- intervened to complain that the rates agreed upon by FairPoint, Comcast and Charter would hurt Sovernet. “Under the Proposed Interim Rate Contracts, Sovernet’s competitors will enjoy rates substantially lower than those paid by Sovernet, placing Sovernet at a competitive disadvantage,” it said. Sovernet said it didn’t intervene until now because “the scope of the Docket has changed significantly with the Parties’ request that the Public Service Board approve Proposed Interim Contracts that prospectively alter rates without the benefit of a change in the relevant Tariff.”
While acknowledging the policy debate, Comcast has argued that the Vermont board shouldn’t let that stop it from approving the interim pole attachment rates agreed to by the industry parties. Those rates settle the matter on an interim basis “until either a final decision can be rendered in another regulatory docket or the Board amends the pole rules to establish a unitary rate,” Comcast wrote in reply comments to the Vermont DPS on March 18. The company said it “remains willing to work with interested parties to commence a rule making should it be the selected vehicle to reach the goal of unitary pole attachment rates in Vermont.”