You probably don’t give much thought to the wires attached to the utility pole outside of your home or business. Given current efforts by the Tennessee Legislature to increase radically rates that companies providing your Internet service provider must pay to government-owned and subsidized electric monopolies to attach to these poles, perhaps you should.
The expense of obtaining and using electric poles and other rights-of-way to deploy high-speed Internet services can amount to 20 percent of the cost of deploying modern broadband networks. Recently, in order to spur the deployment of high-speed Internet technology, the Federal Communications Commission called for reductions in the rates for pole attachments.
Increased deployment of Internet infrastructure is vitally important. According to Tennessee’s Broadband Task Force, “high-speed Internet access is critically important to Tennessee’s future, especially in jobs, education and health care.” Indeed, it is widely held among economists, development experts and policymakers that the expanded availability and affordability of advanced communications services is vital to economic development.
In direct contradiction to the FCC’s rational policy on reducing pole attachment rates, right now Tennessee’s electric utility monopolies, such as EPB in Chattanooga, want the legislature to significantly increase the attachment rates paid to them by your Internet service provider. Pole attachment rates in Tennessee are already very expensive. The national average rate for pole attachments is about $8 a year for a cable company, whereas the same companies pay an average rate in Tennessee of about $18.55. That’s more than twice the national average, and a significant deterrent to the widespread deployment of high-speed Internet services. Legislation presently being debated risks raising that rate even higher – nearly five times more than the national average.
Normally, it’s the private sector that is accused of charging excessive prices. In the case of pole attachments in Tennessee, however, the guilty party is government. In some cases, including EPB, these government-owned and subsidized electric monopolies provide Internet services in direct competition with private sector Internet providers.