Pole Attachment Development (March 16, 2005)
Ontario Pole Attachment Ruling

Date: Mar 16, 2005

The Ontario Energy Board last week established a very favorable province-wide pole attachment rate of $22.35 per pole ($18.52 in U.S. dollars) for telecom and cable attachers. Ontario's ruling is interesting for a number of reasons.

Ontario's rate considerably exceeds the $15.65/pole ($12.97 U.S.) requested by the Canadian Cable Television Association ("CCTA") or the $15.89/pole ($13.17 U.S.) established in 1997 by the Canadian Radio and Telecommunications Commission ("CRTC"). (The 1997 CRTC decision, you may recall, was overturned in 2003 by the Canadian Supreme Court after a finding that the Commission lacked pole attachment jurisdiction.) Ontario's 's higher rate is attributable primarily to its rejection of the FCC-style cost allocation employed by the CCTA and CRTC. With a refreshing sense of fairness, Ontario rejected FCC-style rates as unduly low and driven by telecommunications policy. Accordingly, instead of allocating costs based on the "proportionate use" of the pole's usable space, Ontario adopted an equal, "per capita" sharing of costs. Ontario reasoned that an equal sharing of common costs better reflected the free market because equal sharing is prevalent in joint use agreements, where electric companies and telephone companies are dependent on each other for access to the other's poles.

Although inapplicable in the United States, Ontario's reasoning, like other favorable rulings from Maine and Oregon, should be highlighted whenever cable companies complain about rates or clamor for additional regulation.

If you have any questions or comments about this ruling, please contact Tom Magee at 202-434-4128 or magee@khlaw.com.