Utility pole regulations hurt broadband growth in North Carolina, report warns

By Johnny Kampis

Raleigh, NC – A new study commissioned by the N.C. Cable Telecommunications Association warns that red tape regarding utility pole access could cost the state $3.5 billion in consumer value due to the resulting delays in broadband deployment.

Photo by Logan Weaver

After examining broadband expansion programs underway in North Carolina, the report found that if changes aren’t made to address unreasonable pole attachment rates — and other conditions imposed on providers — households and businesses could lose $15 million a month in economic gain.

Several state legislatures in recent years have worked to cut regulations to help broadband growth. This includes requiring pole owners to charge reasonable rates for the installation of the equipment needed to expand high-speed internet, as well as ensuring that providers don’t have to bear the brunt of costs for pole replacements.

But North Carolina lawmakers haven’t really tackled those issues, and NCCTA thinks they should. The report, by Western Carolina University economics professor Edward Lopez and pole attachment expert Patricia Kravtin, examines how pole owners exert their monopoly power to coerce providers into paying higher fees, which stalls efforts to close the digital divide.

The study also shows other obstacles include onerous timetables, pre- and post-construction requirements, and paying the full cost of pole replacement as part of the “make-ready” process to prepare poles for attachments.

“These inefficient charges and practices raise broadband deployment costs, causing delayed or foregone expansion to consumers,” the report states.

NCCTA counsel Marcus Trathen said it’s integral that all communities in North Carolina gain access to high-speed internet, but such red tape hampers the effort.

“This report makes clear the urgency needed to break down existing barriers — especially those faced by broadband providers seeking access to rural utility poles — that hinder and stall deployment to businesses, farmers, families, and schools,” he said.

The General Assembly has made some efforts, even if they have been meager to this point. For example, Senate Bill 689 — filed this year — would have stipulated that in an unserved area a municipality or electric cooperative shall replace a utility pole as needed and on request from a broadband provider using the pole. It would also have established reasonable costs to providers based on their usage of the poles. That legislation, however, never got traction.  

These are the types of changes touted by Jon Sanders, John Locke Foundation research editor and senior fellow, Regulatory Studies. Sanders authored a report discussing ways state leaders can help expand broadband to more rural areas of the state.

Closing the digital divide in North Carolina is critical, considering an estimated 1.1 million North Carolina households lack broadband access.

“I believe it’s imperative for North Carolina to get ahead of the game in getting these unserved areas taken care of,” Sanders said.