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Business & Technology

Cable, electric companies at odds over competing bills

March 16th, 2013 5:33 pm by Hank Hayes

Legislation shelved to the last calendar of a Tennessee House subcommittee usually would not ignite passion in any lobbying group.


But lobbyists for cable TV and power companies are fiercely at odds about their two competing bills on this year’s last calendar in the House Business and Utilities Subcommittee.


“All we are asking for is fairness, reasonableness and predictability,” C. Corum Webb, president and executive director of the Tennessee Cable Telecommunications Association (TCTA), said of the bills.


Attached to the legislation’s fate are future broadband deployments, in addition to the price of local cable TV and power service.


The state says cable companies now pay municipal power companies around $18 per pole to attach their lines, but TCTA contends that rate is much higher than the $7 national average.


One bill backed by the Tennessee Electric Cooperative Association (TECA) would allow an administrative law judge to determine a maximum pole attachment rate, and the state’s Fiscal Review Office estimates at least a quarter of those cable companies could face a $33 attachment fee.


A recent U.S. Court of Appeals ruling, however, upheld a Federal Communications Commission order lowering pole attachment rates to more closely align with rates paid by cable television attachers on poles subject to FCC regulation.


The ruling was viewed as a victory for cable providers and upheld FCC’s plan to establish rates as “low and close to uniform as possible” to promote broadband deployment.


Still, TCTA says the appeals court ruling applied only to poles owned by investor-owned utilities — not poles from municipal and rural power companies supplied by the Tennessee Valley Authority.


“In most of the country, the majority of the utility poles are owned by investor-owned utilities,” Webb said. “However because of TVA and numerous other factors, Tennessee is the reverse. Eighty percent of the utility poles in Tennessee are owned by municipal electrics or electric co-ops. The federal government, many years ago, saw a trend of investor-owned utilities charging exorbitant rates to telephone companies and cable companies to attach to their utility poles. They saw it as poor practice and bad precedent.”


The shared attachment costs are being calculated based on each pole costing $100.


TCTA fears TECA, the lobbying group behind the municipal and rural electric cooperatives. “Our opponent is everywhere and they have been putting pressure on everybody,” Webb said of TECA.


As a result, TCTA has gotten behind a competing bill that would also allow an administrative law judge to resolve pole attachment fee disputes.


And the competing bill also authorizes the administrative law judge to “take into consideration” FCC rules when making a decision.


The state’s Fiscal Review Office says if the administrative law judge adopts FCC rules, pole attachment rates for the cable providers would be lowered to about $8 per pole.


But power rate payers would have to make up the lost pole attachment fee revenue, according to TECA.


“The cable companies want, in essence, a $13 million subsidy that is paid to them by the electric ratepayers of Tennessee,” said David Callis, TECA’s executive vice president and general manager.


TCTA, meanwhile, calculates the additional pole attachment fees would cost its rate payers about $20 million.


“The legislation would force everyone’s cable bills to go up and/or it’s going to severely limit investments in broadband infrastructure going forward,” Webb said.


Russell Byrd, a Comcast lobbyist, argued his company could lose customers from lack of service availability. “They want cable, Internet and phone service. If they can’t get it, they go somewhere else,” Byrd said.


But Callis countered: “It is hard to argue that a media giant like Comcast, which has spent over $30 billion in the past few years to acquire NBC, is still a mom-and-pop business worthy of government protection.”


A compromise on the two bills is being sought, but may not be likely.


TCTA represents 13 cable companies in the state, employs 4,000 people statewide and serves about 1.1 million video customers.


TECA represents 23 rural and suburban, not-for-profit electric distribution cooperatives and their 1.1 million members.


For more, go to www.capitol.tn.gov.


The bill TECA is supporting is HB 1111.


The bill supported by TCTA is HB 567.


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