BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1027
                                                                  Page  1

          Date of Hearing:   May 18, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   AB 1027 (Buchanan) - As Amended:  May 11, 2010 

          Policy Committee:                              
          UtilitiesVote:13-0
                        Local Government                        9-0

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires local publicly owned utilities (POUs) to make 
          appropriate space and capacity on and in utility poles and 
          support structures available for use by other entities and 
          limits utility charges for use of this space. Specifically, this 
          bill: 

          1)Requires (POU), which includes irrigation districts, to make 
            appropriate space and capacity on and in a utility pole and 
            support structure owned or controlled by the POUs available 
            for use by a cable television corporation, video service 
            provider, or telephone corporation.

          2)Stipulates that the annual fee charged by a POU for the use of 
            a utility pole shall not exceed an amount determined by 
            multiplying the percentage of the total usable space occupied 
            by the pole attachment by the annual costs of ownership of the 
            pole and its supporting anchor. 

          3)Establishes a presumption, subject to factual rebuttal, that a 
            single attachment to a pole by a telecommunications provider 
            occupies one foot of usable space and that an average utility 
            pole contains 13.5 feet of usable space.

          4)Stipulates that the annual fee charged by a POU for use of a 
            support structure shall not exceed the POU's annual costs of 
            ownership, as defined, of the percentage of the volume of the 
            capacity of the structure rendered unusable by the 
            telecommunications provider's equipment.









                                                                  AB 1027
                                                                  Page  2

          5)Requires the POU board to ensure that neither its customers 
            nor the telecommunications providers' customers are subsidized 
            by implementation of the bill's provisions.

           FISCAL EFFECT  

          Negligible state fiscal impact. Any costs of this bill would be 
          borne by POU and telecommunications provider customers. POUs are 
          able to recover their costs through rates charged to their 
          utility customers.

           COMMENTS  

           1)Background  . In 1978, to ensure that telephone companies and 
            electric utilities would not stifle the growth of the 
            then-fledgling cable television industry by charging excessive 
            rates for essential pole attachments, Congress enacted the 
            Pole Attachment Act 1978. The Act did not require utilities to 
            give cable operators access to their facilities but merely 
            limited the rates they could charge if they chose to give such 
            access. Municipal utilities' and co-ops' pole attachments are 
            not subject to the FCC's jurisdiction because they are exempt 
            from the federal Pole Attachment Act. On April 7, 2011, the 
            FCC reformed its pole attachment rules for regulated utilities 
            to "streamline access and reduce costs for attaching broadband 
            lines and wireless antennas to utility poles.

           2)Purpose  . POUs currently have the sole discretion over the 
            rates they charge communications providers for pole 
            attachments. AB 1027 creates a process for POUs to determine 
            pole attachment rates by multiplying the percentage of the 
            total usable space which is occupied by the pole attachment by 
            the annual costs of ownership of the pole and its supporting 
            anchor.

            The provisions of this bill requiring a POU to determine a 
            reasonable relationship between the amount of the fee and the 
            cost of the pole attachment, and the provisions regarding 
            notice, protest, and judicial remedy are almost identical to 
            what is required for cities and counties to set development 
            fee costs under the Mitigation Fee Act.

            According to the author, this bill, sponsored by the 
            California Cable and Telecommunications Association (CCTA), 
            creates a public and transparent process for local publicly 








                                                                  AB 1027
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            owned utilities and irrigation districts to establish fair and 
            reasonable pole attachment rates. Under the current process, 
            cable and telephone companies are often charged very different 
            pole attachment rates, for poles in similar locations, based 
            solely on whether or not the pole is owned by a local publicly 
            owned utility or investor owned utility.

           3)Opposition  . The Northern California Power Authority and the 
            California Municipal Utilities Association claim the cost cap 
            provision would not provide flexibility to determine actual 
            costs, and if their costs exceed the cap, they would 
            essentially be subsidizing the cable or telecommunication 
            equipment provider. According to the Sacramento Municipal 
            Utility District (SMUD), this bill would prohibit POUs from 
            recovering the costs associated with the specialized 
            attachments for cell phone antennas that are placed on top of 
            the utility poles, resulting in higher costs to SMUD 
            ratepayers. The most recent amendments have attempted to 
            address these subsidy concerns.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081