By Katie McAuliffe
Broadband deployment is at the forefront of many Americans minds especially since the NTIA is in the process of distributing $65 million taxpayer dollars to connect the unconnected.
The process of attaching equipment to utility poles is one of the many ways providers can get broadband to Americans, but skirmishes between pole owners and would be attachers often delay deployments and unreasonably increase deployment costs.
Fortunately, the Federal Communications Commission is finally taking up the issue. Americans for Tax Reform is looking forward to participating in the process that seeks comment on questions concerning the allocation of pole replacement costs between owners and attachers and ways to expedite the resolution of pole replacement disputes.
When companies try to expand broadband into hard-to-reach and far-apart locations, they have to make huge capital expenditures in technology and infrastructure, which sometimes can run for hundreds of miles or more. While new federal funding is supposed to ease this burden, a lot of the money goes toward something Congress never anticipated and taxpayers often overlook: replacing utility poles.
There are approximately 185 million utility poles across the American landscape that are often leveraged as a huge expense and barrier to expanding broadband networks into rural areas. Members of Congress may be shocked to learn that enormous chunks of private and government broadband funding are not spent on fiber optic cable, but rather on poles in rural areas.
There is an unfortunate incentive for utilities, municipalities and cooperatives to maximize the costs of pole attachments — be it by blatantly charging excessive, anticompetitive attachment rates or by making the terms and conditions of attachment exceedingly difficult, such as requiring companies to pay unnecessary pole replacement or maintenance costs — to discourage competitors from using their poles to deliver services.
Too often, utility companies refuse to pay to replace their equipment and poles, no matter how old and outdated. Instead, they demand that broadband companies cover the cost of replacing their aging utility poles. Never mind that the broadband company doesn’t own the pole or that sometimes the pole needed to be replaced anyway.
This expense misdirects private capital, congressional efforts and taxpayer dollars by making it harder for broadband companies to reach rural areas in two main ways. First, it leads to wrangling between the utility company and the broadband company, which delays getting high-speed internet to rural areas. Second, it skims finite private capital, as well as resources provided by taxpayers, that were intended for broadband, which means that fewer rural families ultimately get connected. The whole process contributes substantially — in some cases, as high as 25 percent — to the total cost of a rural broadband project.
Today, pole attachers are required to absorb costs that are not caused by their attachments. This can delay the deployment of broadband networks if the financial resources available for deployments are depleted by these costs. A lack of timely and cost-efficient pole attachments and replacements acts as an impediment to broadband deployment. Right now, unfair policies imposed by pole owners are costing Americans anywhere from $491 million to 1.86 billion in foregone economic gains. Now is the best time to implement changes to these practices and help bridge the divide for millions of Americans. During one deployment project in New York, Charter Communications found that pole replacement costs constituted 25 percent of the total costs.
Utility poles are vital conduit in rural areas where it is a comparably cheap way of delivering service as opposed to burying the cables. The beginning of a rulemaking proceeding so that the FCC can develop a record on the challenges of pole attachments and pole replacement and evaluate whether there needs to be action taken to better allocate costs among attachers and pole owners.
By Katie McAuliffe