Overall Vote Recommendation

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

HB 3448 creates a new Chapter 254 in the Utilities Code establishing a statutory framework governing access by certificated telecommunications providers to electric cooperative rights-of-way and distribution poles. The bill requires electric cooperatives to provide telecommunications providers with just, reasonable, and nondiscriminatory access for placing facilities in cooperative rights-of-way, attaching equipment to distribution poles, and obtaining associated building access. It also limits the rates, make-ready costs, and other nonrecurring charges that electric cooperatives may impose by tying those charges to the standards that would apply under Federal Communications Commission (FCC) pole attachment rules if electric cooperatives were subject to federal pole attachment regulation. Where disputes arise, the Public Utility Commission of Texas (PUC) may determine compliant rates and costs through contested case proceedings.

The Committee Substitute further requires certificated telecommunications providers to comply with existing pole attachment requirements applicable to broadband providers and grants the PUC authority to enforce the new chapter, adopt implementing rules, and resolve complaints regarding pole attachment rates and make-ready costs. The legislation also specifies that the new chapter controls over conflicting state law and extends Chapter 15 enforcement provisions to include electric cooperatives for purposes of administering the chapter.

Compared with the originally filed bill, the Committee Substitute narrows the scope of regulation by focusing specifically on certificated telecommunications providers rather than broader categories of communications providers. It also clarifies key definitions, expressly limits the chapter to distribution poles carrying lines of 34.5 kilovolts or less, incorporates existing FCC pole attachment standards as the benchmark for rates and make-ready costs, authorizes the Public Utility Commission to establish those standards through contested case proceedings, and expressly requires telecommunications providers to comply with existing pole attachment obligations under Section 253.0403. These changes provide greater regulatory clarity while more closely aligning the bill with existing federal pole attachment practices.

The Committee Substitute for HB 3448 significantly expands and clarifies the framework established in the originally filed bill. While both versions require electric cooperatives to provide certificated telecommunications providers with nondiscriminatory access to cooperative rights-of-way, poles, and related facilities, the committee substitute strengthens this standard by requiring access to be "just, reasonable, and nondiscriminatory." It also broadens the scope of regulated terms by applying the standard not only to pole attachment rates and terms, but also to conditions of access.

The substitute substantially expands the regulation of charges beyond recurring pole attachment rates. The originally filed bill addressed only the maximum recurring attachment rate by referencing FCC regulations under 47 U.S.C. §224(e). The committee substitute instead references the broader body of FCC pole attachment rules under 47 U.S.C. §224, incorporates the FCC's most recent authorized rate of return for rate-of-return carriers, and adds new limitations on make-ready costs, pole modification expenses, nonrecurring charges, and engineering or pole-loading requirements. It also authorizes the Public Utility Commission (PUC) to establish these allowable costs through contested case proceedings, rather than limiting commission review solely to recurring attachment rates.

The Committee Substitute also adds several new statutory provisions that were absent from the introduced bill. It creates a new construction section directing that undefined technical terms be interpreted according to their customary meaning within the electric and telecommunications industries and adds a conflict-of-law provision specifying that the new chapter controls over conflicting statutes. In addition, it requires certificated telecommunications providers to comply with the existing pole attachment requirements applicable to broadband providers under Utilities Code Section 253.0403, creating reciprocal obligations that were not included in the original legislation.

Finally, the Committee Substitute expands the Public Utility Commission's enforcement authority. Under the introduced bill, the PUC could initiate a contested case to determine whether a pole attachment rate complied with the statutory standard. The substitute requires that a complaint first be filed by either the telecommunications provider or the electric cooperative before opening a contested case and broadens the commission's jurisdiction to include disputes over both pole attachment rates and make-ready costs, reflecting the bill's expanded regulatory scope. Overall, the Committee Substitute transforms the legislation from a relatively narrow rate-setting measure into a more comprehensive framework governing telecommunications providers' access to electric cooperative infrastructure.

Author (1)

Drew Darby

Contact the Author

Rep. Drew Darby

Capitol Phone:

(512) 463-0331

Capitol Office:

CAP GW.12

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), HB 3448 is not expected to have a significant fiscal impact on the state government. The Public Utility Commission of Texas, which is responsible for enforcing the bill and resolving disputes involving pole attachment rates and related costs, anticipates that any administrative responsibilities created by the legislation can be managed using existing personnel and resources. As a result, the bill is not expected to require additional appropriations or new state funding.

The LBB also concludes that the bill would have no significant fiscal implication for local governments. Although the legislation establishes a new regulatory framework governing access by certificated telecommunications providers to electric cooperative rights-of-way and distribution poles, the anticipated administrative and enforcement activities are not expected to create meaningful costs for counties, municipalities, or other local governmental entities.

Overall, the fiscal analysis indicates that implementation of HB 3448 can be accommodated within existing agency budgets and staffing levels, with no significant financial impact on either state or local government.

Vote Recommendation Notes

HB 3448 seeks to address disparities in pole attachment rates by requiring electric cooperatives to provide certificated telecommunications providers with just, reasonable, and nondiscriminatory access to cooperative rights-of-way and distribution poles. While intended to promote telecommunications deployment, particularly in rural Texas, the bill accomplishes this by expanding the Public Utility Commission's authority to regulate commercial relationships between private entities and by imposing statutory limits on the prices, terms, and conditions electric cooperatives may negotiate for access to infrastructure they own or control.

Although the LBB anticipates no significant fiscal impact to state or local government, the bill nonetheless expands the scope of government by granting the Public Utility Commission new regulatory jurisdiction, rulemaking authority, and enforcement responsibilities. It also increases the regulatory burden on electric cooperatives by subjecting pole attachment rates, make-ready costs, and access conditions to state oversight and complaint-driven adjudication. While telecommunications providers may benefit from greater pricing certainty, the legislation shifts decision-making from voluntary contractual negotiations to government regulation.

From a limited-government perspective, the bill also raises concerns regarding private property rights. Electric cooperatives would lose discretion to establish rates and conditions for access to infrastructure they own, with allowable charges effectively benchmarked against federal regulatory standards despite Congress having exempted cooperatives from direct FCC pole attachment regulation. Rather than allowing competition and private negotiation to determine access terms, the bill substitutes state oversight for market bargaining and establishes a precedent for regulating prices and contractual relationships between private parties.

Because the legislation expands regulatory authority, limits the contractual discretion of private property owners, and increases state involvement in commercial negotiations without reducing the overall regulatory footprint, Texas Policy Research recommends lawmakers vote NO on HB 3448.

Individual Liberty: The bill does not directly affect the personal freedoms of individuals. It primarily governs commercial relationships between certificated telecommunications providers and electric cooperatives and does not create new mandates, restrictions, or penalties on private citizens.
Personal Responsibility: The bill neither encourages nor discourages individual responsibility. It does not expand government benefits or reduce individual accountability, instead focusing on the regulation of business relationships.
Free Enterprise: The bill replaces private negotiation with government-established standards for pole attachment rates, make-ready costs, and access conditions. By empowering the Public Utility Commission to determine what constitutes permissible commercial terms, the legislation limits the ability of market participants to negotiate freely and substitutes regulatory oversight for voluntary contractual agreements.
Private Property Rights: Electric cooperatives own or control the poles and rights-of-way subject to the bill. The legislation restricts their ability to determine the price and conditions under which others may access their infrastructure by imposing state-defined standards and allowing regulatory review of disputes. While ownership is not transferred, the owner's discretion over the use of its property is reduced.
Limited Government: The bill expands the authority of the Public Utility Commission by granting new rulemaking, enforcement, and adjudicatory powers over disputes involving electric cooperatives and telecommunications providers. Although the fiscal impact is minimal, the legislation increases the scope of state regulation and establishes additional government oversight of private commercial transactions.

Related Legislation

SB 1251 (Same As)

View Bill Text and Status