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March 5, 2013

Pole Attachment Fee Bills a Tax on Broadband Providers, Will Cost TN $20 Million

 

DALLAS, TX: Tennessee legislators should reject a proposal that would radically increase the "pole attachment fee" for private broadband providers because it would raise the costs and thus slow the spread of broadband competition in the state.

In a letter to Tennessee state legislators, Institute for Policy Innovation (IPI) Policy Counsel Bartlett D. Cleland urged members to reconsider SB 1222 and HB 1111, legislation fervently supported by electric cooperatives and government-owned utilities that would simply use the force of government to enact a significant broadband tax against private sector competitors, and would result in the loss of $20 million of private investment in the state.

“There is no free market for attaching to electric poles,” said Cleland. “The poles are owned by the government, the rents set by the government without any sort of market analysis, and the fees collected are not applied based on real costs.”

“These private sector broadband providers are, in some cases, the government’s competition since some of these same entities are government-owned broadband providers,” said Cleland.

“These biased actions result in service denial to customers and the slowing of national broadband roll-out, and the current proposal will increase the cost for the private sector to invest in Tennessee broadband by $20 million-- certainly decreasing the amount invested,” he said.

Cleland urged legislators instead to consider alternatives such as HB 567 and SB 1049, aimed to create a “just, fair and non-discriminatory system” which would not only establish reasonable rates but also the use of a neutral third party to hear disputes over pole attachment issues, and thereby return greater investment to Tennessee.

The Institute for Policy Innovation (IPI) is an independent, nonprofit public policy organization based in Dallas, Texas. Experts are available for interview by contacting Erin Humiston at (972) 874-5139, or erin@ipi.org


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