Alliance News & Events

Alliance Cable

Retransmission Consent negotiations continue to be in the news as broadcasters and pay-tv operators square-off to present their cases to the FCC why current rules should stay as they are, or be revamped to consider current economics and market conditions that create opposite interests, and therefore threaten to disrupt consumer access to high profile programming at the most critical times. If you ask me, this is nonsense of scale. Nonsense, in reference to how this has been allowed to proliferate in the market, and Scale, referencing the size and scope of the problem.

Is it not rocket science, but a regulatory imbalance, which has morphed into headlines of consumers “caught in the middle” of economic debauchery as Cable TV Operators and Broadcasters slug it out in high-profile news outlets for the upper-hand in negotiations? What’s at stake, $1.1 Billion currently and up to $3.6 Billion within the next five years? That is a lot of cash being redistributed via current Retransmission Consent Rules and it’s attracted the attention of broadcasting parent networks wanting a substantial “piece of the pie”. See (Networks Want Slices of a New Pie)

Negotiation Process is Broken

Obviously, when the FCC created these rules, letting broadcasters choose must-carry or negotiate for carriage rights, the telecommunications landscape was very different. Pay TV Operators were not paying for broadcaster carriage rights and local affiliates and their parent networks were not compensated for unique programming, as were their cable programmer counterparts. Retransmission Consent Rules repaired a perceived inequity, and for many years broadcasters and Pay TV Operators negotiated in good-faith to satisfactory conclusions.

In recent years, as broadcasting revenues declined and cable programming grew both in quality and market coverage, broadcasters began looking for additional revenues to prop-up budgets, “bleeding in red-ink”. Henceforth, tougher and more demanding negotiations began to appear at each contract period to step up revenues to fill a void. Broadcast Networks began to take notice demanding an increasing share of those fees from local affiliates. See (Pay TV, Broadcasters Firms File Responses in FCC Retrans Rules Review)

No-Holds Barred, Free-For-All

The result has increased the stakes of these negotiations to the point where a “no-holds-barred free-for-all” is now the norm and not the exception. Recent stand-offs have produced disruption of high profile programming at critical times in consumer viewing. The timing of negotiation periods seem to coincide with these events, therefore creating undue leverage and market dominance in contract renewals. Pay TV Operators trying to hold costs down, while Broadcast Networks use any advantage to extract their perceived worth.

Wild-Wild West

This process is broken and unless rectified by the regulating authority, the FCC, it will continue to be a “wild-wild west” of who blinks first, leaving the consumer to dangle in black-outs and outrage. Succinctly, consumers already consider payments for Pay TV programming to be at an all-time high and current rules threaten to drive those costs even higher. It does not bode well for an administration wanting to increase broadband proliferation, which is usually packaged with Cable TV products, to have incremental costs skyrocket due to competing industry rules that are, at best, archaic based on their 1992 original inception. In essence, consumers feel trapped in a process of no competing choices in broadcaster demands. See (Retransmission Consent Rules)

The Fix

The FCC, as it is charged to do, should impose a moratorium on black-outs and enforce some type of arbitration of which both parties should be required to adhere during these periods. Both local and external markets should be considered separately in negotiations and not denied access to programming based on how many duplicate stations are present. Negotiations should be fair and equitable and not include market dominate broadcaster groups holding leverage over both Pay TV Operators and Local Affiliates to extract absorbent fees. Retransmission Consent Negotiations should not be tied to high-profile events or programming time periods.

It is time to convert nonsense into common sense in contract negotiations by reformulating outdated rules to coincide with current day economics.  The FCC should, “step up to the plate”, and redesign such a regulatory mess.

Article Source: http://www.broadbandconvergent.com/2011/retransmission-consent-nonsense-scale/

Alliance Cable

The FCC Should Quickly Implement the Pole Attachment Recommendations in the National Broadband Plan to Encourage Broadband Deployment, While Fairly Compensating Pole Owners

Pole attachment fees are a significant cost associated with deploying and operating broadband networks. To facilitate broadband deployment, the National Broadband Plan (NBP) recommends that rates for pole attachments “be as low and as close to uniform as possible.” After emphasizing that the cable rate formula (articulated in Section 224(d) of the Communications Act) is “just and reasonable” and “fully compensatory for utilities,” the NBP recommends that the Federal Communications Commission (FCC) “revisit its application of the telecommunications carrier rate formula to yield rates as close as possible to the cable rate.”

NCTA supports this recommendation and other infrastructure-related NBP recommendations, including amending Section 224 to require cost-based rates from all pole owners, improving pole attachment and make-ready dispute resolutions, improving coordination of government construction projects, and reducing fees for access to federal property.

For over 30 years, the courts, the FCC, and state regulators have repeatedly found that the cable rate formula fully and fairly compensates pole owners for pole costs.

The Supreme Court, many other courts, the FCC, and state regulators have upheld the formula used to calculate cable pole attachment rates as just and reasonable. They all have found that the rate fully compensates utilities for the appropriate amount of all pole-related costs attributable to the attaching party, including administrative, maintenance, and tax expenses, as well as depreciation and a rate of return (see attached list of cases). The FCC, with the approval of the Supreme Court, has determined that the cable rate formula is also appropriate for attachments that are also used for cable broadband service. In addition to allowing for fair rent payments, the cable formula provides the flexibility necessary for pole owners to recover extraordinary costs (like those incurred from weather events like ice storms, hurricanes and tornados). Attaching parties also separately pay the pole owner for the “make-ready” costs attributable to attachment of facilities on the pole.

The cable rate formula encourages broadband deployment, particularly in rural areas with low household densities, and should be applied to all similarly situated broadband providers.

The pole attachment rate formula applicable to cable modem service has been a success and has helped enable cable operators to reach 93% of the country. Deployment of new facilities and upgrades to existing service will continue to be needed, so the FCC must ensure that broadband providers continue to pay only the reasonable costs for attachments. Applying this formula to all similarly situated broadband providers will further encourage broadband deployment. Conversely, applying the telecom rate formula to cable operators would overcompensate pole owners and double or triple the rate cable operators pay for every pole attachment used in providing broadband service. This approach would penalize past investments in broadband by raising the associated pole attachment rates and discourage future investments, especially in rural areas where the ratio of homes passed to poles is greatest.

FCC rules already ensure that the safety and integrity of poles are protected.

Safety and reliability of the electrical grid and the broadband networks are of paramount concern to pole attachers, utilities and consumers. Accordingly, FCC rules expressly allow utilities to deny access to poles “for reasons of safety, reliability and generally accepted engineering purposes.” Ensuring fair attachment rates for broadband will not compromise safety and integrity.

Over the past three decades, the current cable pole attachment regime has facilitated the growth and development of cable networks while ensuring fair compensation for pole owners. It has been consistently upheld despite repeated challenges by electric utilities. NCTA supports the NBP’s conclusion that all similarly situated broadband providers should have the opportunity to attach under the same rates, terms, and conditions that pole owners currently make available to cable operators.

Examples of FCC, State and Court Decisions Confirming the Reasonableness of Cable Rate Formula

Supreme Court
NCTA v. Gulf Power, 534 U.S. 327 (2002) – affirming FCC decision to apply the cable rate formula to attachments used by a cable operator to provide broadband services
FCC v. Florida Power, 480 U.S. 245 (1987) – finding that FCC regulation of pole attachment rates is not an unconstitutional taking of property and that the cable rate formula is not confiscatory

Courts of Appeals
Alabama Power v. FCC, 311 F.3d 1357 (11th Cir. 2002), cert. denied, 124 S.Ct. 50 (2003) – affirming FCC’s decision that utility’s rates were unreasonable and that the cable rate formula provides just compensation and is not an unconstitutional taking of property
Southern Co. Services v. FCC, 313 F.3d 574 (D.C. Cir. 2002) – affirming FCC’s implementation of changes to Section 224 that were adopted as part of the Telecommunications Act of 1996
Texas Utilities Electric Co. v. FCC, 997 F.2d 925 (D.C. Cir. 1993) – affirming FCC’s decision to apply cable rate formula to non-video attachments
Monongahela Power v. FCC, 655 F.2d 1254 (D.C. Cir. 1981) – affirming FCC’s original rules implementing the cable rate formula contained in Section 224(d)

Federal Communications Commission

A) Rulemakings

Implementation of Section 703(e) of the Telecommunications Act of 1996; Amendment of Rules and PoliciesGoverning Pole Attachments, 16 FCC Rcd 12103 (2001) (Consolidated Reconsideration Order) – rejecting utilities’ arguments that regulation of pole attachment agreements no longer is necessary and reaffirming the validity and importance of the FCC’s rate formulas
Implementation of Section 703(e) of the Telecommunications Act of 1996; Amendment of Rules and Policies Governing Pole Attachments, 15 FCC Rcd 6453 (2000) (Fee Order) – reaffirming the use of rate formulas based on historical costs and declining to modify the usable space presumptions
Implementation of Section 703(e) of the Telecommunications Act of 1996; Amendment of Rules and Policies Governing Pole Attachments, 13 FCC Rcd 6777 (1998) (Telecom Order) – establishing the telecom rate formula and deciding that the cable rate formula will continue to apply when a cable operator provides commingled cable and Internet services
Amendment of Rules and Policies Governing the Attachment of Cable Television Hardware to Utility Poles, 2 FCC Rcd 4387 (1987) – making minor adjustments to the cable rate formula and clarifying that make-ready fees may not recover costs already recovered in the annual pole rental fee
Petition to Adopt Rules Concerning Usable Space on Utility Poles, 56 Rad. Reg. 2d 707 (1984) – declining to reconsider assumptions underlying the cable rate formula adopted in 1978-80

B) Adjudications*

FCTA v. Gulf Power, 22 FCC Rcd 1997 (ALJ 2007) – rejecting utility arguments that poles were at full capacity and therefore it was appropriate to charge an unregulated attachment rate
FCTA v. Gulf Power, 18 FCC Rcd 9599 (EB 2003) – granting complaint that utility violated FCC rules by unilaterally imposing attachment rate and finding that payment of rent based on cable rate formula plus make-ready expenses exceeds just compensation
Teleport Communications Atlanta v. Georgia Power, 16 FCC Rcd 20238 (EB 2001), affirmed 17 FCC Rcd 19859 (2002) – granting complaint that utility violated FCC rules by using its own formula to calculate pole attachment rates rather than using cable or telecom rate formula and reaffirming that both formulas provide just compensation to pole owners
RCN Telecom Services of Philadelphia, Inc. v. PECO Energy Co., 17 FCC Rcd 25238 (EB 2002) – rejecting utility’s $47.25 pole attachment rate as unjust and unreasonable and calculating a maximum just and reasonable annual cable rate of $6.79 per pole attachment
Nevada State Cable Television Ass'n v. Nevada Bell, 17 FCC Rcd 15534 (EB 2002) – affirming a Cable Services Bureau Order that calculated a maximum per pole attachment rate of $1.26 for poles owned by Nevada Bell
Cable Television Ass'n of Georgia v. BellSouth Telecommunications, 17 FCC Rcd 13807 (EB 2002) – finding unjust and unreasonable an annual pole attachment rate of $5.03 and setting the proper rate at $4.27
ACTA v. Alabama Power, 15 FCC Rcd 17346 (EB 2000), affirmed 16 FCC Rcd 12209 (2001) – granting complaint that utility’s proposed attachment rate was unreasonable and affirming that cable rate formula plus the payment of make-ready expenses provides the pole owner with compensation that exceeds the just compensation required under the Constitution
TCTA v. GTE Southwest, 14 FCC Rcd 2975 (CSB 1999) – reaffirming that a utility cannot recover in make-ready charges any costs that it recovers through the annual pole fee
Time Warner Entertainment v. Florida Power & Light Co., 14 FCC Rcd 9149 (CSB 1999) – rejecting a pole attachment rate of $6.00 as unjust and unreasonable and calculating the maximum just and reasonable rate at $5.79 per pole
Texas Cable & Telecommunications Association, et al. v. Entergy Services Inc., et al., 14 FCC Rcd 9138 (CSB 1999) – ordering Entergy to reimburse cable company complainants the difference between the parties prior negotiated rate of $3.50 and a non-negotiated rate of $4.34 per pole charged by Entergy
Heritage Cablevision v. Texas Utilities Electric Co., 6 FCC Rcd 7099 (1991) – finding that it is unreasonable for a pole owner to charge a cable operator higher pole attachment rates for attachments that carry commingled cable and data services; see also Selkirk Communications v. Florida Power & Light, 8 FCC Rcd 387 (CCB 1993); WB Cable Assoc. v. Florida Power & Light, 8 FCC Rcd 383 (CCB 1993)

State Public Utility Commissions

Alaska
In the Matter of the Consideration of Rules Governing Joint Use of Utility Facilities and Amending Joint-Use Regulations Adopted Under 3 AAC 52.900 – 3 AAC 52.940, Order Adopting Regulations, 2002 Alas. PUC LEXIS 489 (Alas. PUC Oct. 2, 2002) – finding that the cable rate formula “provides the right balance given the significant power and control of the pole owner over its facilities” and that “changing the formula to increase the revenues to the pole owner may inadvertently increase overall costs to consumers . . . .”
California
Order Instituting Rulemaking on the Commissions Own Motion Into Competition of Local Exchange Service, R.95- 04-043, I.95-04-044, Decision 98-10-058, 1998 Cal. PUC LEXIS 879, pp. 53-56, 82 CPUC 2d 510 (Oct. 22, 1998)
(internal citations omitted) – finding “that the adoption of attachment rates based on the [cable rate] formula provides reasonable compensation to the utility owner, and there is no basis to find that the utility would be lawfully deprived of any property rights.”
Connecticut
Petition of the United Illuminating Company for a Declaratory Ruling Regarding Availability of Cable Tariff Rate for Pole Attachments by Cable Systems Providing Telecommunications Service and Internet Access, Docket No. 05-06-01, pp. 5-6, 2005 Conn. PUC Lexis 295 (Dep’t of Pub. Util. Control 2005) – upholding cost-based attachment rate and finding that the provision of additional services by a cable operators does not impose costs on the pole owner.
District of Columbia
Formal Case No. 815, In the Matter of Investigation Into The Conditions For Cable Television Use of Utility Poles In The District of Columbia, Order No. 12796 (2003) – finding that FCC regulations should be followed in determining reasonable rates
Massachusetts
A Complaint and Request for Hearing of Cablevision of Boston Co., D.P.U./D.T.E. 97-82 at 18-19 (Apr. 15, 1998) – finding that FCC formula “meets Massachusetts statutory standards as it adequately assures that [the utility] recovers any additional costs caused by the attachment of [] cables . . . while assuring that the [attachers] are required to pay no more than the fully allocated costs for the pole space occupied by them.”
Michigan
In the Matter of the Application of Consumer Power Company, Case Nos. U-10741, U-10816, U-10831 at 27, 1997 Mich. PSC Lexis 26 (1997), rehg denied, 1997 Mich. PSC LEXIS 119 (April 24, 1997), affd Detroit Edison Co. v. Mich. Pub. Serv. Commn, No. 203421 (Mich. Court of Appeals, Nov. 24, 1998); affd Consumers Energy Co. v. Mich. Pub. Serv. Commn, No. 113689 (Mich. Sup. Ct. Aug. 31, 1999) – adopting FCC standard and finding that the FCC cable rate formula aligns pole rates in Michigan “more closely with other states that already adhere to this standard.”
New Jersey
Regulations of Cable Television Readoption with Amendments: N.J.A.C. 14:18, Docket No. CX02040265 (2003) – affirming use of a cost-based attachment rate and adopting the FCC formula
New York
In the Matter of Certain Pole Attachment Issues Which Arose in Case No. 94-C-0095, 997 N.Y. PUC Lexis 364 (1997) – adopting FCC approach to pole attachments
Proceeding on Motion of the Commission as to New York State Electric & Gas Corporations Proposed Tariff Filing to Revise the Annual Rental Charges for Cable Television Pole Attachments and to Establish a Pole Attachment Rental Rate for Competitive Local Exchange Carriers, Case 01-E-0026 (2001) – rejecting a higher telecom rate formula based on concerns that competition would suffer
Ohio
Re: Columbus and Southern Electric Company, 50 PUR 4th 37 (1982) – adopting the FCC cable formula for attachments by cable operators
Oregon
Oregon Rulemaking to Amend and Adopt Rules in OAR 860, Divisions 024 and 028, regarding Pole Attachment Use and Safety, AR 506; 510 at p. 10 (2007) – adopting FCC cable rate formula and finding that “the cable formula has been found to fairly compensate pole owners for use of space on the pole.”
Utah
In the Matter of an Investigation into Pole Attachments, 2006 Utah PUC Lexis 213 (2006) – adopting the FCC cable rate formula following a comprehensive pole attachment rulemaking, later codified at UTAH ADMIN. CODE R746- 345-5(A) Pole Attachments (2006).
Vermont
Vermont Policy Paper and Comment Summary on PSB Rule 3.700 (2001) at 6 – finding that a reduction in pole attachment costs to cable companies will lead to increased deployment of advanced services and “lead to cable services becoming available in some additional low-density rural areas. . . . [Thus creating] even more value for Vermonters as cable TV companies are increasingly offering high-speed Internet service to new customers.”

* This list only includes examples of adjudications following the Supreme Court’s 1987 decision in Florida Power. There are literally dozens of decisions prior to Florida Power applying the cable rate formula and finding that rates proposed by utilities were unreasonable.

 

Article Source: http://www.ncta.com/IssueBriefs/Pole-Attachments.aspx?view=2

Alliance

Agriculture Secretary Tom Vilsack announced the selection of 22 projects in 10 states to receive $13.4 million in broadband community connect grant funds. "The Obama Administration recognizes that modern technology is critical to the expansion of business, education, and health care services in rural areas and the competitiveness of the nation's small towns and rural communities," Vilsack said. "The President and USDA are committed to bringing broadband services to communities, including isolated ones, so rural residents have access to quality economic, social and educational opportunities." USDA Rural Development's Community Connect program provides financial assistance to furnish broadband service in unserved, often isolated, rural communities. The grants are used to establish broadband service for critical facilities such as fire or police stations, while also providing service to residents and businesses. The project must also include a community center that provides community residents with free broadband service for the first two years. For example, the Yurok Tribe, located on a reservation along the northwest coast of California has been selected to receive a $564,000 grant to provide wireless broadband services to the Yurok Reservation. A community center will be refurbished to provide free Internet access to tribal residents, enabling them to participate in online education and training programs. Free Internet access will also be provided to the tribal police and volunteer fire departments. Nexus Systems, Inc. was selected to receive a $924,308 grant to provide wireless broadband services to Enterprise, La. The volunteer fire department and the community center will receive free broadband service for two years. Nexus Systems will also provide the community with web-based services such as web hosting and video conferencing services for public meetings. USDA's Community Connect program is making a significant difference in rural communities. In 2006, Alaska Power & Telephone Company received a $1,031,133 grant to establish a wireless broadband system in the Native community of Kasaan. Providing service to the remote, Southeast Alaska community required the construction of an antenna system on a mountaintop. The grant provided laptop computers and video conferencing services to the community center. A server was installed so local residents could store personal files. Prior to USDA's funding, the community was served by a satellite link that severely limited telecommunications service. The new wireless service has improved connectivity and attracted cellular telephone companies who are putting in infrastructure for more dependable mobile telephone service. An August 2009 USDA Economic Research Service report supports the idea that "investment in broadband Internet access leads to a more competitive economy." The report, available at http://www.ers.usda.gov/Publications/ERR78/ERR78.pdf , notes that rural communities with broadband Internet access had greater economic growth than communities without it. The study also finds that broadband use fosters community involvement, enhances the provision of services such as health and education and expands household income opportunities.

The following is a complete list of 2009 Community Connect broadband grant recipients. Funding of each recipient is contingent upon the recipient meeting the conditions of the grant agreement. (Recipient communities in parentheses)

Arkansas:

Buford Communications I, LP dba Alliance Communications Network - $681,070

(Rondo)

Buford Communications I, LP dba Alliance Communications Network - $735,020

(Aubrey)

Buford Communications I, LP dba Alliance Communications Network - $667,120

(LaGrange)

California:

ORCA Broadband Inc. - $550,950 (Hornbrook)

Yurok Tribe - $564,000 (Klamath)

Round Valley Indian Tribes of the Round Valley Indian Reservation - $474,886

(Covelo)

Colorado:

PC Telcorp, Inc. - $402,666 (Sedgwick)

Idaho:

Pend Oreille Valley Network, Inc. - $834,164 (Clark Fork)

Louisiana:

Nexus Systems, Inc. - $924,308 (Enterprise)

Missouri:

Turkeyfoot Construction, LLC, dba Lake Communications - $471,905

(Brownington)

New Mexico:

Agavue, LLC - $550,950 (Manzano)

Agavue, LLC - $550,950 (Los Cerrillos)

Oklahoma:

@Link Services, LLC - $535,998 (Shamrock)

@Link Services, LLC - $577,618 (Kildare)

3 Brothers Networks LLC - $223,417 (Marble City)

Wichita Online, Inc. - $597,000 (Cooperton)

Wichita Online, Inc. - $498,500 (Yeager)

Wichita Online, Inc. - $498,500 (Clearview)

Texas:

281 Communications Corporation, Inc. - $601,736 (Lometa)

Virginia:

Inter Mountain Cable, Inc. - $997,015 (Hurley)

The Wired Road Authority - $837,453 (Grant)

Techcore Consultants II, dba Almega Cable - $610,300 (Carbo)

USDA Rural Development's mission is to increase economic opportunity and improve the quality of life for rural residents. Rural Development fosters growth in homeownership, finances business development and supports the creation of critical community and technology infrastructure. Further information on rural programs is available at a local USDA Rural Development office or by visiting www.usda.gov/rus/telecom/commconnect.htm.

 

Article Source: http://www.firegrantshelp.com/official-announcements/603747-Agriculture-Secretary-Vilsack-Announces-13-4-Million-in-Community-Connect-Broadband-Grants/