BILL ANALYSIS �
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
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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