Higher Costs for Cable Companies Could Mean Higher Prices for Consumers

Chelsea Mihelich, WPLN.org – Nashville, TN

2/26/2013

Cable companies say they will have to raise prices if the costs for attaching their equipment to power poles go up.

Legislation introduced at the state capitol proposes a so-called “shared cost rate.” It would allow utilities to charge cable providers based on how much space is available on their poles. Currently, the charge is based on how much space the cable company uses.

Comcast says this bill could double the cost for the some 600,000 poles they use state-wide.

Spokesperson John Gauder says they would be forced to pass this cost along to consumers.

“Yes, cable bills will go up. If this new legislation passes or if we don’t have some means of a reasonable way to negotiate a fair and reasonable rate, cable bills will go up.”

Electric companies say cable providers are exaggerating the effect the bill would have. They argue the legislation doesn’t necessarily raise rates, but instead puts a cap on what the rates could be.

Cable providers say the legislation would encourage utilities to hit that cap.

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According to the Tennessee Cable and Telecommunications Association, the shared cost rate could cost cable companies an additional $20 million dollars in pole attachment costs.

Cable companies in Tennessee say they currently pay on average $17 per pole, per year to attach their cables to utility-owned power poles; and this could reach $33 per pole on average under the shared cost rate. The average accepted rate by the Federal Communications Commission is a little more than $7.

Legislation has been filed in opposition to the shared cost bill which would require an administrative law judge to determine the legality of increasing rates on a case by case basis.