Legislators Seek To Remove Georgia’s Pole Tax

Georgia’s is currently committing broadband suppression via a virtual pole tax.  Separate bills working their way through the House and Senate are aimed at removing barriers that would reduce the cost to deploy high speed internet services.  Supporters of the legislation say it would pave the way to more broadband coverage in rural areas.  Opponents are concerned that rural electric rates would increase as a result.

I won’t pretend to be an expert on utilities law and regulations, and thus will try to oversimplify the problem and proposed solution for the purposes of this post.  We’ll attempt to explain in plain English, or a reasonable facsimile thereof.

Currently, utilities share the same right of way in Georgia, which has become a highway of utilities alongside Georgia’s automotive highways.  Utilities not only share the same space, but some of the same equipment as well. 

At issue are the shared use of utility poles, as no one wants 5 times the current number of utility poles in the same right of way so that each utility wouldn’t have to share.  Instead, utilities usually share the same poles, with various use rates set in statute or regulation owed to those who own them.  Mostly.  Then there’s the EMC’s, who are currently exempt from federal and state oversight on this point, and can thus charge what they want.

Electric Membership Corporations were specifically carved out of federal law in 1978 when the FCC set the formula for how much utilities could charge for other companies to attach equipment to their poles.  In Congressional testimony at the time, it was said that lawmakers would rely on local officials to ensure that their Co-Ops were managed with appropriate political pressure to keep costs low and reasonable, whereas the federal legislation was aiming to keep investor owned utilities in check.

Fast forward to today.  While the numbers vary across the state, Georgia EMC’s charge twice the national average pole attachment fee per pole, about three times what Georgia Power charges, and a staggering six times what AT&T receives on average for attachments to the poles they own. The exemption from regulation that was designed to incentivize EMC’s to keep pole attachment costs low has instead become a path to transfer some of their costs to ratepayers of other utilities.

The pushback from those opposing legislation is that it would drive up utility rates.  Supporters of the bill – again using averages as the formula in each area is a bit different – have come up with a fairly specific percentage of revenues that EMC’s would forgo if the EMC pole tax was leveled to that of other regulated utilities:  0.575%

The rising rate argument appears to suffer from a bit of static analysis.  Presuming more use of their poles during expanded broadband coverage, there will be additional money coming in, so the actual rate could be well less than one half of one percent – a literal rounding error in a customer’s total bill.

Since the advent of the House Rural Development Council, which began a systematic study of the issues facing modern rural Georgia, the loudest and most frequent complaint brought to leaders has been the lack of available and reliable high speed broadband.  It appears many local leaders bringing those complaints are also willing to allow their EMC’s to ask 3 times or more the urban rates paid to deploy broadband where it is plentiful. 

Poll taxes were unnecessary barriers once upon a time in this state.  It’s time to add “pole taxes” to Georgia’s dust bin so that more Georgians can access high speed quality broadband.

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xdogbethebalanceDave BearseIrishPat Recent comment authors
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IrishPat
IrishPat

Jackson EMC CEO Jakins was right when he said every EMC in the state would accept $30 million in savings and promise to build $20 million in Rural Broadband. Senator Gooch’s amendment is good for rural Georgia.

Dave Bearse
Dave Bearse

A weakness in the argument is that Broadband is not a utility.

bethebalance
bethebalance

Sounds like a complicated mess between pole ownership, electric utilities, broadband providers…Perhaps they will solve the problem before the poles themselves become obsolete.
That may be sooner than we all think, with SpaceX’s Starlink on track to provide rural broadband within a year:
https://www.zdnet.com/article/elon-musk-spacexs-internet-from-space-should-be-good-enough-for-online-gaming/

xdog
xdog

I use Dish as my ISP and it’s available anywhere right now. It’s fine for text and video even on my 10 year old box and obsolete OS.