Many fret that the U.S. does not score as high in global comparisons of broadband access and therefore want the government “more involved” in the broadband industry. Some even contend that this supposed lack of broadband access threatens our economy and deprives consumers of vital services needed in today’s employment and business market.
They ignore that government is often the problem.
One example is Tennessee, where a legislative proposal is being considered that would allow the state’s electric cooperatives and government-owned utilities to substantially increase the amount they charge telecommunications companies for attaching antennae to a utility’s poles.
From one perspective that assessment makes sense—the government is merely seeking to skim money from private sector companies, some of whom are competitors in broadband provision.
Objections to the current tax rate cause a pole-owning government entity or co-op to balk at granting access or even to denying any new attachments. The result of such action is obvious: customers are denied the opportunity to receive service, slowing the continued roll out of national broadband.
This proposal would allow rates to rise radically—effectively creating a broadband tax—for pole attachments to 371 percent of the national average, and double the current Tennessee rate, which is already 143 percent higher than the national average. Justification for such a stunning increase is scant, since the electric company’s costs do not increase because of the pole attachments. Of course, higher costs slow investment.
Slowing the broadband rollout stands in absolute opposition to the national policy of greater broadband deployment across the country. Rather, government should be asking what it can do to enhance broadband availability and penetration. Requests to affix a new antenna to an existing pole should be welcomed, even encouraged, with rates that are reasonable and designed to encourage greater broadband roll out, not rates designed to benefit the local co-op, municipal electricity company, or government broadband provider.
And to be clear, this is not an issue of the free market; there is no free market. 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 to any real costs.
Current delays because of high government costs, and the future longer delays brought on by yet even higher costs, result in limited coverage for consumers, denying digital opportunity to many, and limiting innovation at the edge of the networks.
March 4, 2013