Summary of the Committee Version of the Bill

HCS HB 1361 -- UTILITIES

SPONSOR: Pollock

COMMITTEE ACTION: Voted "do pass" by the Committee on Utilities

by a vote of 18 to 0.

This substitute allows telecommunications companies or rural

electrical cooperatives to attach, maintain, and operate their

equipment on another’s pole in order to promote, encourage, and

facilitate the deployment of electrical smart grid technologies,

broadband communications, and similar advanced technologies in

rural areas of the state under specified terms and conditions.

Currently, pole attachment rules are enforced by the Federal

Communications Commission (FCC). No attachment can be made

without a written agreement between the pole owner and the

attaching entity. The provisions of the substitute must be

interpreted in a manner consistent with FCC rules for pole and

conduit attachments unless otherwise specified.

The attaching party must give notice to a pole owner of the

intent to attach and the specific location of the attachment, and

the owner, unless otherwise agreed, must respond within 15 days

with specified exceptions. If proper notice is not given, the

parties may determine a penalty or, if the parties cannot agree

on a reasonable penalty, it must equal 25% of the pole rate for a

maximum period of 12 months. The attaching entity must pay for

any damages and modification costs incurred by the pole owner to

facilitate attachments, and the continued reliability and safety

of the pole owner’s system must have priority over the

attachments.

A pole owner must be entitled to a reasonable rate for permitting

attachments that may be specified by contract, but the rate must

not exceed reasonable costs to the pole owner’s system as

calculated in a manner similar to the FCC rules for pole and

conduit attachments. Additional costs may be charged upon a

showing of inefficiencies in its maintenance of its system caused

by attachments. An existing contract must remain in full force

for its full term. The substitute specifies cost limitations for

new contracts which may be enforced in circuit court, and also

allows the use of non-binding mediation to resolve rate disputes.

A pole owner may collect interest and penalties on the amount

determined to be owed to him or her in court but must give 45

days’ notice prior to filing a collection action. 

A pole owner may allow an attachment under the scope of its

existing property easement with the property owner if the

attachment does not unreasonably burden the property owner or

cause a diminution in value to the property owner’s property. A property owner retains the right to file suit for diminution in

value, lack of use of property, and physical damages to property

caused by the use and installation of poles and attachments.

However, evidence of revenues or profits derived by

telecommunication providers or rural electrical cooperatives from

providing these services is not admissible in any proceeding by

the property owner to recover damages.

The provisions of Section 523.283, RSMo, must continue to govern

and apply to all easements or right-of-way interests acquired

after August 28, 2006, and these provisions cannot be construed

to abrogate or conflict with the provisions of Chapter 523 or to

confer the power of eminent domain on any entity not granted that

power prior to August 28, 2012.

The substitute contains a nonseverability clause and if any

provision of the substitute is held to be invalid for any reason,

the remaining provisions will be invalid.

FISCAL NOTE: No impact on state funds in FY 2013, FY 2014, and

FY 2015.

PROPONENTS: Supporters say that the bill will help expand rural

broadband coverage in a cost-effective manner. The bill does not

expand the power of eminent domain and reflects agreements over

infrastructure use by utilities regulated by the Missouri Public

Service Commission. Most pole owners and telecommunications

companies agree to shared use, but in a few instances there is a

need for a legal process to bring about a resolution.

Testifying for the bill were Representative Pollock, Association

of Missouri Electric Cooperatives, and CenturyLink.

OPPONENTS: Those who oppose the bill say that property rights

should be protected so that land owners can receive just

compensation for new uses of their property. The bill contains a

requirement that easements must expressly state that poles cannot

be used for broadband technology in order to be enforced. This

is the opposite of traditional protection for property rights

which forces an owner and user to come to an agreement. There is

ongoing litigation over whether new uses such as broadband which

go beyond the terms of existing easements are a taking of

property that is compensable under the state or federal

constitution.

Testifying against the bill were Fred O’Neil; and Heidi Dearhoff.

OTHERS: Others testifying on the bill say that the use of

agreements to expand rural broadband is fine if a land owner is

compensated for any actual damages or restricted use that occurs to the property.

Testifying on the bill was Missouri Farm Bureau.

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