1. ©Troutman Sanders LLP 20071 Joint Use and Pole Attachment Issues Troutman Sanders LLP November 7-8, 2007 Columbus, Ohio

2. ©Troutman Sanders LLP 20072 Outline of Today’s Presentation Introduction: About Troutman Sanders and Our Team Managing Joint Use Issues and Programs Format: Quasi-Case Studies and Interactive Session

3. ©Troutman Sanders LLP 20073 Telecommunications and Technology Practice Group Charlie Zdebski (D.C. x2909) Bob Williams (Atlanta x3438) Matt Kirsner (Richmond x1449) Ray Kowalski (D.C. x2927) Gerit Hull (D.C. x 2890) Joe Lawhon (Atlanta x3138) Eric Schwalb (D.C. x2891) Ben Young (Atlanta x3212)

4. ©Troutman Sanders LLP 20074 Telecommunications and Technology Practice Group Representative Engagements Sale of Dominion Telecom to Elantic Telecom Defense of Dominion Telecom, Elantic Telecom and Dominion Virginia Power in telecommunications rights-of-way class litigations Representation of PacifiCorp at the Utah Public Service Commission in a dispute with Comcast over unauthorized attachments Representation of PacifiCorp in a pole attachment rule making proceeding before the Utah Public Service Commission Representation of Lumber Liquidators in 800 Number Regulatory Issues Representation of a consortium of electric utilities in rule making proceedings involving access by ILECs (USTA Petition) and utility best practices (Fibertech Petition) FCC compliance remediation and licensing work for PSEG, Ameren Network access charge litigation for PSEG at the New Jersey Board of Public Utilities, for Dominion Telecom at NY PSC and for United Illuminating at CT DPUC Representation of Florida Power & Light and Tampa Electric Company in Florida “hardening docket” regarding wireless attachments Regulatory and transactional assistance to Ameren Energy Communications in establishing BPL Internet service company Network license and lease agreements for numerous clients

5. ©Troutman Sanders LLP 20075 Telecommunications and Technology Practice Utility Telecom Clients AmerenUE Connectiv Dayton Power and Light Dominion Resources Services Dominion Telecom Dominion Virginia Power Florida Power & Light Franklin Park Communications Georgia Power Company Kansas City Power & Light Mirant Corporation PacifiCorp PNM Resources, Inc. Potomac Electric Power Company Power Line Communications Association Public Service Electric and Gas Savannah Electric and Power Company Southern Company Services Southern LINC Southern Telecom Tampa Electric Company Tucson Electric Company United Illuminating Company Virginia Electric and Power Company

6. ©Troutman Sanders LLP 20076 Typical Joint Use / Pole Attachment Tasks Analysis and application of federal regulatory (FCC) rules, decisions, policies and proposals Analysis of property rights issues, such as building access, rights-of-way access and easements Analysis of State statutes, regulations, policies and proposals regarding regulation of access rights and rates, as well as safety and reliability of the pole infrastructure

7. ©Troutman Sanders LLP 20077 Proposed Strategy to Manage Joint Use and Pole Attachment Issues 1.Define the Goals 2.Recognize and Accept the Issues 3.Thoroughly Document the Process 4.Communicate with the Attachers 5.Manage Effectively within your Company 6.Review and Update All Agreements 7.Diplomatically but Firmly Require Compliance

8. ©Troutman Sanders LLP 20078 Step One: Define the Goals 1.Financial Goals 2.System safety and integrity 3.Improved administrative operations and efficiency Obtain senior management buy-in Coordinate with state regulatory goals and issues Case Studies PacifiCorp Ameren Dominion Virginia Power PSE&G Southern Company

9. ©Troutman Sanders LLP 20079 Step Two: Recognize and Accept the Issues: Pole Attachment Changes 1996 and following –Sign and sue –Access –Contracts –FCC –Cable –Rent –Usable space –Wireline Today –Sign and stay –Overbuilds –Permits –State Regulation –Telecom –Sanctions –Unusable space –Wireless

10. ©Troutman Sanders LLP 200710 Sign & Sue vs. Sign & Stay After access was mandated in 1996, cable companies would “agree” to anything in order to get on the poles Most cable companies are now on the poles Things change: cable is morphing into telecom FCC Response: the Halloween Rule Making triggering a clash of the titans

11. ©Troutman Sanders LLP 200711 Access vs. Overbuilds Then: most common cable complaint was that undue delay by the pole owner constitutes a denial of access Now: Overlashing – no permission necessary under FCC precedent Suspicion: rampant disregard of the other terms and conditions of the agreement

12. ©Troutman Sanders LLP 200712 Contracts vs. Permits The connection between two otherwise unrelated parties Cable incentive to enter the contract: trespass laws Two main provisions of the contract: payment of rent & applications for attachment permits With contracts in place, the cable incentives are negative: pay more rent for new poles, delay in deployment Results: unauthorized attachments, need for pole audits

13. ©Troutman Sanders LLP 200713 Cable vs. Telecom Not much difference today in services and marketing Yet pole attachment agreements seem stuck in 1996 Cases to watch: AmerenUE v. Charter (Missouri court proceeding to collect the cable rate for phone- to-phone VoIP) and Charter v. AmerenUE (FCC complaint regarding the proper classification of VoIP); also Tampa Electric Company v. Bright House Networks, LLC (same types of cases, but in Florida); Georgia Power v. Comcast (counting entities and attachments)

14. ©Troutman Sanders LLP 200714 Rent vs. Sanctions Then: fights over the rental rate Now: fights over sanctions for violating the access agreement, audit costs Example: Comcast Cable Communications, Inc. v. PacifiCorp, 2004 Utah Lexis 273, involving penalties for 38,919 unauthorized attachments

15. ©Troutman Sanders LLP 200715 Usable Space vs. Unusable Space Applicable to the FCC telecom formula Key: average number of attachers Rebuttable presumptions –5 urban –3 non-urban See, Charter v. AmerenUE and Comcast Cable v. Georgia Power Company regarding the proper method for counting attachments But see, the Halloween rule making

16. ©Troutman Sanders LLP 200716 Wireline vs. Wireless FCC’s “Christmas Card” - December 23, 2004 Public Notice Reiterated obligation to provide access to wireless telecommunications providers. –No presumption of electric utility’s right to reserve space above communications space. –Rules do not allow access fees to be levied against wireless carriers in addition to the statutory pole rental rate. Increased demand for wireless attachments continues and is likely to increase as a result of FCC spectrum auctions.

17. ©Troutman Sanders LLP 200717 Step 3: Document the Process Compile your company’s internal records Obtain solid data from consultants and others Maintain records of communications Case Studies PacifiCorp TECO ACTA v. Entergy Arkansas, EB- 05-MD-004. –Involves challenge to utility's engineering and safety inspections. –Pole owner seeking to enforce engineering and safety standards higher than NESC. –Attacher alleges improper allocation of costs of inspections among attachers on a pole. –Attacher disputes reasonableness of overall costs of inspections.

18. ©Troutman Sanders LLP 200718 Step 4: Communicate with the Attachers Hold meetings Build a working relationship Communicate clearly and effectively Do not act unilaterally unless and until necessary Case Studies PacifiCorp Ameren Dominion Virginia Power Southern Company

19. ©Troutman Sanders LLP 200719 Step 5: Manage Effectively within Your Company Form a team Educate the team members Create internal processes –Communication between departments – accounting, billing, joint use, law, property, distribution –Inventories and maps of poles –Tracking system of attachers and attachments –Use of template agreement Stay the course Case Studies Florida Power & Light Ameren PacifiCorp Southern Company

20. ©Troutman Sanders LLP 200720 Step 6: Review and Update All Agreements Contract standardization Often a hodge-podge of contracts, some decades old There are likely to have been assignments resulting from cable industry consolidation 1996 Telecom Act, FCC rulemakings and precedents have influenced terms Inconsistencies create issues in accounting, land use etc. Create and maintain templates that conform to practices in the field, and in accounting Provide for maximum rates for cable, telecom, joint use, wireless and unregulated Case Studies Dominion Virginia Power Ameren PacifiCorp

21. ©Troutman Sanders LLP 200721 Step 7: Require Compliance Require compliance with agreement terms of safety and payments Hold meetings Document compliance efforts Negotiate creative solutions Case Studies Ameren Georgia Power Florida Power & Light PacifiCorp Tampa Electric Dominion Virginia Power

22. ©Troutman Sanders LLP 200722 The 70’s Are Gone! Good.