Daniel Frizzell, the director of engineering at Blue Ridge Mountain EMC, left, explains the way in which Blue Ridge Mountain EMC provides internet services to rural areas with Jeremy Nelms, manager of Blue Ridge Mountain EMC, listening. Jenna Eason / Jenna.Eason@coxinc.com
Photo: The Atlanta Journal-Constitution
Photo: The Atlanta Journal-Constitution

Rural power companies would fund cable internet under Georgia bill

Year after year, Georgia legislators grasp for ways to bring internet service to rural residents who lack high-speed access.

And time and again, they come up with plans that have so far failed to make a difference. There are an estimated 1.6 million Georgians without reliable internet connections, according to the state government.

Now lawmakers want to force nonprofit rural electricity companies — and by extension, their customers — to help pay for internet expansion.

A bill that recently passed the Georgia House would effectively take money from electric membership corporations and give it to cable companies. The legislation, House Bill 244, would reduce the amount EMCs can charge cable companies to use their power poles.

Supporters of the proposal say cable companies will build internet in rural areas if it costs them less money. Comcast has pledged to expand its network to 20,000 households in rural areas over the next three years if the bill passes.

But there’s no requirement in the bill that cable companies would use their fee savings to expand rural internet service. And EMCs doubt that the legislation is much more than a handout to the cable companies.

“Pole attachment fees are not why they haven’t gone into those areas,” said Chellie Phillips, a spokeswoman for Coweta-Fayette EMC, which has 72,000 members across several counties southwest of Atlanta. “They haven’t gone into those areas because it’s not a profitable business case for them.”

With professionals and children cooped up at home during the coronavirus pandemic, internet is more important than ever for businesses, hospitals, farmers and students.

Georgia politicians often say internet is almost as critical as electricity in small communities, where many EMCs were created as a way to bring power and phone service to far-flung regions.

The General Assembly has passed bills allowing EMCs to offer internet service and to map areas in need of internet, but legislators haven’t spent tax money on internet construction.

Cable companies say reducing the costs of using EMCs’ poles will finally bring funding to help build internet lines.

“Addressing these pole attachments adds a necessary tool to the state’s toolbox that moves the needle on an issue that’s challenging the state,” said Michael Power, a lobbyist and executive director for the Georgia Cable Association. “The clarity provided by this statewide policy and potential savings will fuel this new deployment in rural and unserved areas.”

The Georgia Cable Association represents companies that include Comcast, Charter Communications and Cox Communications, the cable and broadband internet subsidiary of Cox Enterprises, which also owns The Atlanta Journal-Constitution.

EMCs charge more for cable companies to attach equipment to their poles than other utility pole owners, Power said. Pole attachment rates account for 20% of cable companies’ cost of expanding internet service, he said.

EMCs charge about $19.52 per pole on average a year, compared with $6.50 per pole owned by Georgia Power and about $4 per pole owned by AT&T, Power said.

The EMCs say the cost of their pole attachments is justified.

EMCs use 12 to 18 poles per mile in a typical rural county, serving an average of 10 customers per mile, according to the National Rural Electric Cooperative Association. The lower density and greater height of poles in rural areas drives up costs. By comparison, Georgia Power has between 38 and 42 poles per mile in areas where most cable attachments are located.

The legislation calls for the Georgia Public Service Commission to regulate how much EMCs can charge for pole attachments.

If their pole fees were reduced to the same rate that Georgia Power charges, that would save cable companies about $13 per pole each year, adding up to millions of dollars.

Terri Statham, a spokeswoman for Georgia EMC, a trade association for the state’s 41 electric membership corporations, said, “Current pole attachment rates are not a barrier to rural broadband deployment.”

State Rep. Ron Stephens, the sponsor of HB 244, called lower pole attachment fees a “Hail Mary attempt” for rural internet.

State Rep. Ron Stephens, R-Savannah, is the sponsor of House Bill 244. The bill, which aims to encourage the expansion of internet service to rural Georgia, would reduce the amount electric membership corporations can charge cable companies to use their power poles. If the EMCs’ poll fees were the same as those charged by Georgia Power, it would save cable companies about $13 per poll each year, adding up to millions of dollars. Bob Andres / bandres@ajc.com
Photo: The Atlanta Journal-Constitution

Reduced fees could raise $20 million to $26 million a year across Georgia for cable companies to spend on internet construction, Stephens said.

It would likely cost hundreds of millions of dollars to wire the entire state, but Stephens said the savings on pole fees would make some internet expansion possible.

“This fee has got to go if rural Georgia is ever going to succeed financially in an economic market. Internet is as important as power and water,” said Stephens, a Republican from Savannah. “They’re ready to make these investments now.”

State Rep. Don Parsons, a Republican from Marietta and a telecom consultant, said the government shouldn’t undercut EMCs just a year after allowing them to provide internet services themselves.

“It doesn’t make sense to me. We just got them into it, and now we’re saying they have to enter into an agreement with a cable company to charge a lower price than they do now,” Parsons said during the debate in the state House. “This does nothing to promote rural broadband.”

The House then voted 116-44 on March 12 to approve the legislation, which now advances to the state Senate. The legislative session is temporarily suspended because of the coronavirus.

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