Regulatory Reform

Arbitrary Pole Attachment Fees Can Limit the Spread of Broadband

The value of access to broadband is well-known, and discussions of how to increase the spread of broadband most effectively and efficiently are common. But, often not discussed are the many simple ways in which current blockades to the spread of broadband could be removed or new barriers avoided.

Of course broadband does not magically show up in a town, neighborhood or at a home. The ever-changing technology, the large capital investments and the complicated business arrangements necessary to provide broadband are not for the lightly committed. Yet, some of the means necessary to deliver broadband are fairly mundane, such as how and where to string wires to extend the network for home connectivity. These seemingly mundane and taken-for-granted “rights of way” details are critical.

As few people would enjoy seeing a forest of poles because each company that may want to run a wire to your house had to put up their own set of poles, true competition in poles is challenging. Rather, poles are often shared by companies and even various industries.

In general, federal law governs the rates, charges, terms and conditions of attachments by communications companies to poles. The poles can be owned by a variety of organizations, but the federal law does not apply to poles owned by electric or telephone cooperatives, or municipalities. So, various states have enacted laws to level the playing field.

Existing North Carolina law, as one example, allows co-ops to recover costs and specifically empowers them to deny attachment rates if those rates do not allow them to recover costs and earn a fair rate of return. But the cooperatives would like to change current law so they may arbitrarily increase rates to whatever level they deem appropriate, up to 330 percent and with new conditions, skimming money from those who may be competitors in broadband provision. As many electric co-ops and municipalities have begun offering their own broadband services, they would be handed a new tool to skim money from those who are their market-based competitors.

The American Legislative Exchange Council (ALEC) has said broadly of rights-of-way rates, “Rights-of-way fees should be limited to the actual cost of rights-of-way administration, and should be recovered in a competitively neutral manner.”

The alternative is obvious. Because of high costs, customers are denied the opportunity to receive service, slowing the continued roll out of national broadband.

Slowing the broadband rollout stands in absolute opposition to the national, and ALEC, policy of greater broadband deployment across the country. “ALEC urges that the FCC, Congress and state regulatory and legislative bodies refocus their efforts on specific and limited initiatives targeted at enabling broadband providers whose objective is to expand broadband access to unserved households and businesses, rejecting overly prescriptive regulations that would harm innovation, investment, and job growth.”

Government should be asking what it can do to enhance broadband availability and penetration. Requests to affix a new antenna to an existing pole should be welcomed, even encouraged, with rates that are reasonable and designed to encourage greater broadband roll out, not rates designed to benefit the local co-op, municipal electricity company, or government broadband provider.

Perversely, those who lose the most by the allowance of arbitrary fee increases live in those areas which are most difficult to serve already, such as rural or urban. Cost increases make a return on investment for any system, even over the very long term, more remote.

Broadband deployment delays brought on by higher costs result in limited coverage for consumers, deny digital opportunities to many, and limit innovation at the edge of the networks. “The American Legislative Exchange Council believes that widespread efforts to promote broadband adoption, use, and digital literacy are critical to improving the nation’s long-term competitiveness in a global market, and to achieving certain socioeconomic improvements in the quality of American life. Expanding adoption, use and digital literacy skills will allow a greater number of Americans to fully take advantage of the benefits of broadband based applications such as tele-health, energy management and education opportunities online.”

In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth