Electric Co-ops Association Says Pole Rates Are No Barrier to Entry

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The National Rural Electric Cooperative Association (NRECA) representing over 900 electric cooperatives last week issued a white paper entitled:Pole Attachment Policies and Issues, Broadband Deployment in Rural America Not Impeded by Pole Attachment Rates.”  The NRECA, whose members control a 2.6 million mile distribution network, concluded in the report that charges by commercial operators of prohibitive and exorbitant rental rates on utility poles are “unfounded.”

“Electric cooperatives understand that communications service providers may need access to existing poles and rights-of-way to provide service,” said Brian O’Hara, Regulatory Director of NRECA, “and some have provided such access at cost-based rates to the considerable benefit of communications companies.”  

The NRECA said in its paper that by leveraging the cooperatives’ existing distribution systems, communications companies avoid significant construction and maintenance costs, “generally paying modest cost-based annual fees to access these systems.”  Despite this “tremendous benefit,” the NRECA stated, some for-profit communications companies contend that pole attachment rental rates charged by rural electric cooperatives prevent them from providing broadband services to rural communities. 

According to O’Hara, “These claims are unfounded. Pole attachment rental rates are a fraction of the overall cost to build broadband systems in rural areas. Rather, the major impediments to rural broadband development are low population densities, high capital costs and other major operating expenses in rural areas. Because electric cooperatives are led by and belong to the communities they serve, they are keenly familiar with these challenges.”

Large cable and telecom providers have conceded, per the NRECA, that pole attachment rates are not the major barrier and that eliminating the charge altogether wouldn’t necessarily encourage them to deploy to rural areas.

“Other factors, primarily low population density, are more significant factors,” O’Hara said. “This fact has been supported by analyses by the Virginia State Corporation Commission, a Virginia Hearing Examiner, the Tennessee Broadband Report, the U.S. GAO, the Congressional Research Service and recognized by the FCC’s own Intergovernmental Advisory Committee. All demonstrate that cost-based pole attachment rental rates have little, if any, influence on decisions by cable companies and other for-profit communications companies to invest in advanced broadband infrastructure in rural America.” Comments? Email Us.

By Jim Fryer, Managing Editor, Inside Towers

June 19, 2019

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