Kentucky Cable Telecommunications Association

January 3, 2011

Fair and Reasonable Pole Attachment Rates for Unregulated Utilities Would Benefit Kentucky

Kentucky would benefit from fair and reasonable pole attachment rates for all the Commonwealth’s utilities. Fair and reasonable rates would protect the public from artificially high cable bills. Dependable and reliable rates would also give cable companies certainty about pole attachment expenses that would help them justify investing their own capital to deploy new telecommunications services needed for rural economic development. Using one fair method to determine all pole attachment rates would contribute to a business environment of fair competition which would benefit businesses and consumers.

Some Unregulated Utilities Charge Excessive Rates

At present the pole attachment rates determined by the Kentucky Public Service Commission’s fair and efficient rate methodology average $4.87 for each pole annually. In contrast the average pole attachment rate for an unregulated utility is $13.86. In some cases the rates of unregulated utilities can be as much as $21.64 per pole.

Artificially High Rates of Unregulated Poles Cause Serious Problems

• Consumers suffer the costs of higher cable bills.

• The expense of further deploying broadband and other new services is not feasible for attaching cable companies. The hardest hit areas are the Commonwealth’s rural areas which fall further behind in their access to the world through digital technology like cable TV, high speed broadband Internet and digital VoIP telephone service.

• Some unregulated utilities, which also currently offer TV, Internet and telephone service, engage in unfair competition by pricing competing companies out of the market. They practice predatory pricing – charging competitors unreasonable rates for the delivery of their alternative services.