As has become common in the United States, an incumbent telecom operator is wielding a lawsuit to waste a bunch of time and money in the name of impeding broadband progress and competition.
News that AT&T is suing the city of Louisville, Kentucky over a new local ordinance that would make it easier for Google Fiber to enter the market broke late last week. The lawsuit cites Federal Communications Commission provisions that are actively being revised to support exactly what Louisville is doing, and the lawsuit seems—at best—to be a short-term roadblock that will cost the city a lot of money to litigate.
Which is exactly the point, of course: AT&T is building out its own GigaPower fiber service in Louisville—if it can slow down (or stop) the deployment of Google Fiber, it’ll have a head start.
At issue is an ordinance called “one touch make ready,” which allows third parties (Google or a contractor, in this case) to physically move AT&T’s cables on utility poles to make room for Google’s cables so long as the move can reasonably be suspected not to disrupt service. In cases where a service disruption is possible, AT&T will have 30 days to move its cables (if AT&T fails to act, Google or a contractor can move the cables themselves).
The ordinance, passed last year, is widely considered to be a no-brainer: The Federal Communications Commission recently found that incumbent blockades—like the one AT&T is doing now—lead to significant and unnecessary cost increases and delays for new entrants into markets.
"Delays can result from existing attachers’ action (or inaction) to move equipment to accommodate a new attacher, potentially a competitor"
According to the FCC, a recent fiber deployment in West Virginia cost $4,200 per mile and took 182 days; the company, FiberNet, estimates it would have cost $1,000 per mile and would have taken much less time if a law like Louisville’s had been in place. The FCC estimates that figuring out these rights-of-way problems costs, on average, 20 percent of any given fiber rollout.
Last week, Joanne Hovis, who does fiber feasibility studies throughout the US, told me “Google Fiber doesn’t go anywhere where they’re not going to have a strong partner and facilitator in the city,” and given Google’s immediate response to the AT&T lawsuit, it seems unlikely that the company will deploy fiber there until this lawsuit is resolved.
Such roadblocks are common throughout the country. Big telecom companies and their lawyers have rewritten laws throughout America to make it legally complex to enter the market if you’re a competitor. When a state or municipality dares to challenge incumbents by building their own networks or by encouraging others to enter (as Louisville has done here), they’re hit with lawsuits that are exceedingly expensive, onerous, and obstructionist as well as public relations blitzes that are often misleading.
We’ve seen this time and time again: Telecom companies and organizations that represent them helped pass laws in 21 states that make it difficult or illegal for cities to build their own internet networks. When two cities (Wilson, North Carolina and Chattanooga, Tennessee) filed petitions with the FCC to preempt these laws, the FCC was met with widespread criticism from the incumbents. The agency is currently litigating various lawsuits.
For being forward-thinking, Louisville has been saddled with a new legal problem that will surely cost taxpayers thousands upon thousands of dollars and will surely waste months
In Louisville, AT&T argues that its “authority to occupy” the utility poles in the city “stems from an irrevocable, perpetual, statewide franchise granted by Kentucky’s General Assembly in 1886, not a franchise granted by Metro Louisville.” Besides invoking a 130-year-old agreement, AT&T also notes that the “ordinance conflicts with and is preempted by the pole attachment regulations of the Federal Communications Commission.”
The idea that the FCC would not support Louisville’s ordinance is a dubious argument. Large swaths of the FCC’s 376-page National Broadband Plan suggest that laws like one touch make ready are precisely what the FCC would like to encourage cities and states to pass.
The plan says that “delays can result from existing attachers’ action (or inaction) to move equipment to accommodate a new attacher, potentially a competitor,” and says that “ensuring service providers can access these resources efficiently and at fair prices can drive upgrades and facilitate competitive entry” is one of the FCC’s goals. It also specifically notes that third-party contractors should be allowed to move wires.
“The FCC should implement rules that will lower the cost of the pole attachment ‘make-ready’ process,” the plan notes. “The make-ready process requires not only coordination between the utility that owns the pole and a prospective broadband provider, but also the cooperation of communications firms that have already attached to the pole. Each attaching party is generally responsible for moving its wires and equipment, meaning that multiple visits to the same pole may be required simply to attach a new wire. Reform of this inefficient process presents significant opportunities for savings.”
And so, for being forward-thinking, Louisville has been saddled with a new legal problem that will surely cost taxpayers thousands upon thousands of dollars and will surely waste months. Sounds like par for the course.