I was asked this evening if the Pole Attachment Fee story wasn’t old news. It is in a way, the controversy first erupted in September. You might want to read Lonnie Brown’s humorous take to get a sense of the story.
It isn’t even Bright House’s first Pole Attachment Fee problem with a local electric company. In April 2006, Tampa Electric sued Bright House over the fees. In September 2007 Bright House complained about the fee structure to the Federal Communication Commission.
There is actually a FCC formula for that covers setting annual rates for pole attachments, providing the cable company doesn’t provide telecommunications services:
Maximum rate = space factor x net cost of bare pole x carrying charge rate
The space factor is the space consumed by the attachment, out of total usable space on a pole. Generally speaking, a pole is 37.5 feet high, the amount of usable space is 13.5 feet and the amount of space allowed for the attachment is one foot. That means the “space factor” is one foot out of 13.5 feet, or 7.41 percent of that portion of the pole that can generate revenue.
Or, as telecommunications attorney Paul Glist this pencils it out, that means the space allotted to a cable attachment should cover 7.41% of the cost of a pole.
If, however, a pole user also provides telecommunications services, the formula changes.
The definition of space factor becomes space occupied plus two-thirds of the unusable space, with unusable space divided by the number of companies attaching wires to the pole.
The resulting number is divided by the pole height. — Multichannel News
I asked Kevin Cook, Director of Communications for the City of Lakeland, for the city’s cost for a pole. Cook wrote that the city’s cost for a pole and installation is $370. He added that the city arrived at their Pole Attachment Fee using the American Public Power Association’s (APPA) formula to establish pole attachment fees.
Using the FCC formula, and assuming the average pole height, the pole attachment charge would be $26.417 (7.41% * $370.00) per pole. That’s $6.717 per pole more than the city calculated using the APPA formula.
The city contends Bright House has not paid certain fees and costs:
Currently Bright House Networks is behind on their License Application fee in the amount of $ 163,768. This fee is based on 40,942 Attachments at $4.00/pole for existing Attachments (as of September 17th, 2007). The License Application and fee were due to the City on December 31, 2007.
In addition, License Fees for FY 2007-2008 are $20.70/pole and have been billed to Bright House Networks but this fee has not been paid.
A License Application is required for new attachments, renewals, modifications, transfers, or requests for relief. Said License Applications are $100 each and in addition to any other License Fees or amounts that may be due.
To date, Lakeland has not received any of the requested permits, applications, or monies due from Bright House per the Ordinance. T&D Engineering informs me that Bright House has not paid any monies for attachments since September, 2007. It is my understanding that Bright House has not requested any type meeting from the City Attorney’s Office or Lakeland Electric to discuss the Ordinance before or after approval of the ordinance. — Kevin Cook 1/30/08 email
Cook also wrote that Bright House will be in non-compliance if they fail to make a payment by Friday:
Failure by Bright House to make payment of $163,768 by February 1, 2007 will cause Bright House to be in non-compliance per Section 23 of Ordinance 4899 (the “Ordinance’) and subject Bright House to additional charges of $500 plus $1.00 per attachment per day. Lakeland will also begin assessing late charges at the rate of one percent per month on the amount of $ 163,768. In addition, since Bright House has not responded to Lakeland as to whether or not to be billed on a monthly basis, Lakeland can only assume that Bright House owes the City of Lakeland $ 847,499.40 for the FY08 pole attachment fees as laid out in the ordinance. — Kevin Cook 1/30/08 email
I am sure we’ll hear more about this controversy. Cook told me the Ledger also has a story in the works. I expect that Bright House will give the main stream media an answer or two. I look forward to reading the cable company’s response.