NCTA Pushes for Closing Section 224 Exemption for Muni, Electric Co-op Poles
Municipal and electric cooperative pole attachment rates either chill rural broadband deployment, and their exemption from Section 224 of the Communications Act needs to end, or those rates are a nonissue. Those are the competing NCTA and National Rural Electric Cooperative Association (NRECA) narratives before the FCC, with NCTA on Monday filing a 49-page study in docket 17-83 documenting notably higher pole attachment rates muni and co-op electric companies charge over investor-owned utilities.
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Muni and electric co-op pole owners serve 27 percent of the U.S. population but aren't covered by Section 224, which allows regulation of investor-owned electric utilities and phone companies, according to the study by former FCC Chief Economist Michelle Connolly and underwritten by NCTA. According to the study, co-ops and munis charge more than double the pole attachment rates charged by investor-owned utilities. It said co-ops average $15.39 per pole annually, while munis average $14.86 and investor-owneds average $6.84. That spread isn't due to economic costs, since any variation would be more due to geography, it said. NCTA said the deployment problem gets magnified when the muni or co-op electric is also in the broadband market, since it can use those pole attachment rates to stifle competition.
In the study, Connolly pushes for congressional removal of the Section 224 exemption as it would stop "monopoly level pole attachment rates" and also increase investment in pole attachment-related communications networks. NCTA emailed that beyond refuting NRECA claims, the report "is meant to more broadly inform decisions about muni and coop pole rates being considered by state governments and Congress." Asked about the Connolly study, NRECA emailed that electric co-ops "are committed to helping bring broadband to rural America. In fact, electric cooperatives in Virginia and Indiana have even offered to waive pole attachment rates entirely if communications companies pledged to bring rural broadband to their entire membership. Those offers were declined.”
At NARUC's policy summit in Indianapolis Monday, NCTA Vice President-External and State Affairs Rick Cimerman mentioned on a panel with CTIA that his association had made the submission. Massachusetts is an exception to the general trend of higher co-op and muni rates "so well done," he told panel moderator and Massachusetts Department of Telecommunications and Cable Commissioner Karen Charles Peterson. "At a minimum, if co-ops are taking broadband subsidies, it ought to be the pole attachment rate that applies," he said. Cimerman also said the cable industry could do a better job marketing its 10G plans (see 1907220066).
Pole attachment rates are negligible when it comes to the overall cost of deploying broadband, NRECA said last month in its own white paper. If it were a notable expense, broadband would be more readily available in rural areas served by investor-owned utilities, but it's not, NRECA said, adding that pole rental rates are "significant savings" to broadband service providers vs. maintaining their own infrastructure. It said electric co-ops have repeatedly offered free or cheaper pole attachment rates to telecoms if they opt to serve the co-op's entire service territory, but no one has taken up the offer -- more evidence pole attachment rates aren't the determining factor in rural broadband deployments, NRECA said.
NRECA was critical when the FCC's Broadband Deployment Advisory Committee in December adopted a model code for states that included regulation of electric co-ops (see 1812070050). NRECA said that BDAC recommendation came despite congressional and FCC regulation that local control of electric co-ops is reason for their being excluded "from one-size-fits-all federal pole attachment regulation."