Virginia Legislature Eyes Pole Attachment Dispute; Risks of Telecom Deregulation Warned
Cable and telecom companies in Virginia back a state legislative proposal to cap pole attachment rates, while co-ops are pushing their own measures in the state legislature, officials told us. Meanwhile, the State Corporation Commission raised concern over the proposed 2011 Telecom Modernization bill. Legislation sponsored by Del. Bill Janis (R) would alter the current arrangement by making the State Corporation Commission the arbiter of disputes between co-ops and companies seeking to link to their poles. The bill would cap the rates that co-ops can charge at an amount not higher than what regulated utility companies charge for similar pole connections.
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Telecom companies and co-ops have been fighting over pole attachment rates for many years, said Ray LaMura, president of the Virginia Cable Telecommunications Association. Partly helped by a broadband stimulus grant, the state has accelerated broadband deployment, triggering lengthy negotiations with co-ops over attachment rates, he said. Electric co-ops in Virginia are exempted from rate regulation, and the prices they charge are far beyond reasonable, he said. He asked the co-ops to offer a report on actual pole costs, but hasn’t received an answer, LaMura said. Rates can vary wildly, ranging from $20 to $50 per pole, he said.
The telecom industry has brought the issue to the governor’s broadband council, said Duront Walton, executive director of the Virginia Telecom Industry Association. The telecom industry identified pole attachment cost as a major barrier to broadband deployment in the state, he said. The co-ops are backing a bill in a defensive move, Walton said. The measure proposed that placing an unauthorized attachment to utility poles owned by an electric co-op is a “Class 1 misdemeanor.” The measure also requires cable-TV systems to adhere to conditions and standards when attaching to an electric co-op’s poles. These conditions and standards include payment for unauthorized attachments, standards for over-lashings, evidence of authority to occupy the right-of-way, and nondiscriminatory access to broadband services. A cable system that violates safety and response provisions is subject to fines of up to $10,000.
Lower pole attachment rates that don’t reflect the actual costs of maintaining the poles and rights-of-way of the co-ops will reduce revenue that co-ops use to offset the costs of providing electricity, said a Virginia, Maryland and Delaware Association of Electric Cooperatives spokesman. That means increasing electric rates to consumer-members while subsidizing for-profit cable providers, he said. Because of the nonprofit business model, electric co-ops were excluded from federally mandated pole attachment rates, he said. Current fees are charged by the co-ops based on and negotiated in good faith between them and cable and telecom companies, he said. The cable companies claim that co-op pole attachment rates are a barrier to extending universal broadband access in Virginia, he noted: “If this so, why are so many areas of Virginia served by investor-owned utilities devoid of this service?” Cable companies in other states have also backed similar proposals, said a National Rural Electric Cooperative Association spokesman.
Meanwhile, a staff analysis by the Virginia State Corporation Commission of the proposed 2011 Telecom Modernization bill has raised some serious concerns about the effect of the bill, especially for the 4 million customers with traditional wireline service and for Virginia businesses. One of the proposed changes would “alter significantly” the service obligations of public utility phone providers like Verizon, by eliminating requirements that Verizon or another provider extend wireline service to a residential customer if that customer can obtain service from another source, including a wireless company, it said. Another section of the proposed legislation would “detariff” the competitive and non-competitive service of phone companies, meaning the lists of prices, rates, terms and conditions of service would be eliminated, the report said. The Communications Workers of America has raised similar concerns, urging legislators to reject the measures.