Barriers to Broadband Deployment
Pole attachment fees are payments made to utility pole owners by broadband providers for attaching plant infrastructure to utility poles. Virginia code §56-41.1 states joint use of poles should be encouraged to the maximum extent possible. Electric cooperatives are preventing rural Virginians from accessing broadband technology by using their monopoly position to charge broadband providers outrageously high rates to use their poles. Electric co-op rates are unregulated and, in some cases, their rates are as much as five times higher than the regulated rates charged by traditional investor-owned electric utilities like Dominion and AEP.
These exorbitant rates make it financially unfeasible to expand broadband into some rural areas. Virginia’s electric cooperative-owned poles provide power to about one-third of the land mass of Virginia. As a result, this situation limits the benefits broadband can provide, such as economic development, telemedicine, telecommuting, smart grid, distance learning and other critical services which the citizens in unserved areas of Virginia desperately need.
Ultimately, broadband providers have no choice but to pay these exorbitant rates or are forced to make a business decision not to expand broadband into many areas of Virginia because the service would simply be unaffordable to consumers.
Encouraging the use of existing infrastructure and right-of-way in delivering telecommunications or utility services is a long-standing principle of Virginia law to prevent construction of duplicative infrastructure (thereby creating savings for ratepayers and customers) and encourages the consolidation of infrastructure for environmental and land use purposes. Cooperatives and telecommunications providers are required to negotiate in good faith for a contract for pole attachment rates. If good faith negotiation fails to produce a mutually agreeable outcome, the matter then goes to the State Corporation Commission (SCC) to determine reasonable rates, terms, and conditions. The SCC should use Federal Communications Commission (FCC) principles and existing case law when setting the rates, terms and conditions. The FCC formula for setting pole attachment fees has been upheld by the Supreme Court as being just and reasonable and fully compensatory.