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Buford Media Group - Tyler, TX

 

Small cable operators face severe obstacles in the marketplace, including high prices for cable programming and permission to carry local TV signals. The more money that goes out the door to cover these expenses, the less capital there is to invest in broadband, considered by many to be the technology that makes for a better tomorrow in rural America.


Although rising programming costs put intense pressure on cash flow and operating margins, Ben Hooks, CEO of Buford Media, can point to another obstacle in the marketplace that literally put him out of business. The cause? Excessive pole attachment fees charged by unregulated electric cooperatives.

"This is where the government can really fix some things and really not hurt anybody," Hooks said. "If they are really serious about broadband in smaller markets, this situation must be fixed."

Hooks, a past chairman of the American Cable Association who is based on Tyler, Texas, owned a pair of cable systems under the Alliance Cable brand that served the towns of Perryville and Greers Ferry in central Arkansas. In 2009, after many rounds of debate and discussion with the local pole owner about skyrocketing rates, Hooks decided to take down his plant and turn off the systems, ending service for about 600 customers.

Hooks was forced into making such a desperate move because the owner of the poles, First Electric Cooperative in Arkansas, insisted that Alliance Cable pay outrageous sums to remain a customer in good standing. Annual pole rates went from $6.00 per pole in 2003 to $15.55 per pole in 2008. First Electric also demanded a $25 per-pole inspection fee.

"The problem started in 2008, and we removed the plant in 2009. They jacked their rates up real high," Hooks said.

Federal law and many state laws regulate pole attachment fees, a response to concerns that pole owners had a monopoly facility they could exploit by gouging cable operators and other entities seeking to share pole space. But federal law, as well as many state laws, exempts cooperatives from having to adhere to price controls.

"Co-ops aren't regulated, at least in the states I'm in, by anybody," Hooks said. "Tell me why they are any different? What's the difference with a co-op?"

Before pole fees grew to unmanageable levels for him, Hooks had plans to upgrade the Perryville and Greers Ferry systems to offer high-speed Internet access. Affordable broadband available to every American is a major priority of the Obama Administration, which has set aside $7.2 billion in grants and loans to achieve the goal.

"Those towns now will not have broadband service. There's no economic way for anybody to go in there except, I guess, wireless, but that is a highly, highly wooded area," Hooks said, doubting wireless broadband could overcome line-of-sight issues.

In its government advocacy, ACA has urged Congress and the Federal Communications Commission to keep a close eye on pole fees as a major deterrent to broadband infrastructure deployment in rural communities in all 50 states. If co-ops can demand any price they want to rent pole space, Hooks said he won't buy a cable systems if the poles attachments he needs are largely in the hands of unregulated co-operatives.

"I will not look at any cable systems with any interest at all if the majority of the existing cable plant is on a co-op, because they have license just to run you out of town," Hooks said.

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