The American Cable Association strongly supports ending the federal exemption that allows electric cooperatives and municipally owned utilities to charge small cable operators excessive fees to access their poles, conduits, and other bottleneck facilities that are critical elements in the deployment of broadband networks and other advanced communications services in historically unserved and underserved communities.
"In state after state, small cable operators encounter exorbitant pole attachment pricing by electric co-ops and municipal utilities that benefit from an anti-consumer, three-decades-old exemption that is truly harmful to the goal of universal and affordable broadband access," American Cable Association President and CEO Matthew M. Polka said. "We agree with the Federal Communications Commission that Congress should remove the exemption, helping to create a level playing field that ensures that millions of consumers are not injured by a regulatory loophole that has no place in the current market environment."
On April 5, ACA sent a letter to the FCC explaining that in many states, ACA member companies are required to pay excessive pole rates to co-ops and municipal utilities, increasing the cost of broadband deployment in small markets and rural areas and imposing a disproportionately negative impact on rural subscribers. ACA asserted that high pole rates slow the delivery of broadband in sparsely populated rural areas.
ACA sent its letter to the FCC in support of 13 state cable associations that gave the FCC a detailed filing on March 18 highlighting the fact that unregulated co-ops and municipal utilities often double and triple their rate schedules and seek compensation that greatly exceeds the level sought by investor-owned utilities subject to federal price caps. The state associations' filing also stated that exempt pole owners receive fair compensation at rate levels far below the actual fees they insist that small cable operators pay.
"No economic theory supports the dramatically higher pole attachment rates cooperatives and municipal utilities seek," Polka said.
The nation's nearly 900 electric cooperatives alone control 42 million poles, a vast inventory which cable operators need to access in order to extend their wireline broadband facilities deep into rural communities. In 1978, Congress regulated pole rates, concerned that cable operators would be denied access and didn't have sufficient funds to buy millions of poles for themselves. The law, however, included definitions that exempted pole fees charged by electric co-ops and utilities owned by subdivisions of the states.
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