EPB's handout: Bo Watson's bill harms consumers, kills competition

EPB's handout: Bo Watson's bill harms consumers, kills competition

February 28th, 2013 in Opinion Free Press

Should area customers of Comcast and other cable and telecommunications providers be forced, by state law, to pay higher rates for cable, telephone and Internet service to subsidize EPB's struggling fiber business? Of course not.

But that's exactly what will happen if an ill-conceived bill proposed by state Sen. Bo Watson, R-Hixson, passes through the Tennessee legislature.

Throughout the nation, cable, telephone and Internet providers pay a fee every year to electric providers to rent a portion of electric poles to run the lines necessary to provide their services to homes and businesses. That fee is supposed to be used by electric companies to help install and maintain poles.

Watson's legislation would allow Tennessee's electric cooperatives and government-owned utilities to charge an exorbitant amount for cable and telecommunications companies to use electric companies' utility poles.

Nationally, this "pole attachment fee," as it is known in the industry, averages just over $7 per pole, per year. In Tennessee, however, the average fee charged by electric companies is currently more than $17 annually for each pole -- well more than the amount necessary to cover the cable and telecom companies' portion of the installation and maintenance costs.

If Watson's bill passes, that already hefty $17 average charge will skyrocket to $33 per pole, per year -- making Tennessee's pole attachment fees more than twice as high as any other state in the nation, according to the Federal Communications Commission.

Chattanooga's electric company, EPB, has become a leader in this wacky effort.

EPB's government-owned, taxpayer-funded venture into the fiber businesses has been a disaster. Despite forcing taxpayers and electric customers to spend more than half a billion dollars building the infrastructure to provide cable, telephone and Internet servic, EPB's fiber service is only profitable if you massage the numbers and squint just right.

As a result, EPB needs two things: more money and more customers. If state Sen. Watson's bill passes, EPB would get both.

First, the bill would force Comcast and other area cable and telecom companies to pay millions of dollars more in pole attachment fees that would ultimately subsidize EPB's fiber efforts.

Second, if Watson's dreadful piece of legislation passes, Comcast and EPB's other competitors in the cable and telecom arena would have to raise their rates to cover the outrageous expense of the pole attachment fee hikes. That would drive customers away from the private cable, phone and Internet companies and to EPB.

It's easy to understand why EPB wants to bully cable, telephone and Internet companies who actually succeed in business without handouts from taxpayers and electric customers. The proposed bill would force EPB's competitors to hand over millions of dollars and, ultimately, thousands of customers to EPB.

What is confusing is why Watson wants to help EPB in this effort. After all, Watson is generally regarded as a responsible, no nonsense, small-government lawmaker. Manipulating state government to benefit EPB's fiber-service scheme at the expense of its private, free-market competitors is not something that Watson would normally champion.

The next -- and possibly best -- opportunity to kill the preposterous legislation comes next Tuesday, March 5, when the bill comes before the Senate Commerce Committee. Hopefully the limited government, conservative-minded lawmakers in the committee will stare down EPB's lobbyists and put an end to this unfair, anti-customer, uncompetitive, big government pole attachment bill.