Cable operators and publicly owned utilities in Tennessee are battling for control over the prices companies pay to use utility poles, with facts among the early casualties.

The subject of “pole attachment fees” has been of interest to cable companies for decades. In return for permission to hang cable wires on existing electric or telephone poles owned by utility companies, cable operators are asked to contribute towards their upkeep and eventual replacement. Cable operators want the fees to be as low as possible, while utility companies have sought leeway to defray rising utility pole costs and deal with ongoing wear and tear.

Little progress has been made in efforts to compromise, so this year two competing bills have been introduced by Republicans in the state legislature to define “fairness.” One is promoted by a group of municipal utilities and the other by the cable industry and several corporate-backed, conservative front groups claiming to represent the interests of state taxpayers and consumers.

Some background: Tennessee is unique in the pole attachment fee fight, because privately owned power companies bypassed a lot of the state (and much of the rest of the Tennessee Valley and Appalachian region) during the electrification movement of the early 20th century. Much of Tennessee is served by publicly owned power companies, which also own and maintain a large percentage of utility poles in the state.

Some of Tennessee’s largest telecom companies believe they can guarantee themselves low rates by pitching a case of private companies vs. big government utilities, with local municipalities accused of profiteering from artificially high pole attachment rates. Hoping to capitalize on anti-government sentiment, “small government” conservatives and telecom companies want to tie the hands of the pole owners indefinitely by taking away their right to set pole attachment rates.

The battle includes fact-warped editorials that distort the issues, misleading video ads, and an effort to conflate a utility fee with a tax. With millions at stake from pole attachment fees on tens of thousands of power poles throughout the state, the companies involved have launched a full-scale astroturf assault.

Grover Norquist’s Incendiary “Pole Tax”

Conservative Grover Norquist, president of Americans for Tax Reform wrote that the pole attachment fee legislation promoted by public utilities would represent a $20 million dollar “tax increase” from higher cable and phone bills. Even worse, Norquist says, the new tax will delay telecom companies from rushing new investments on rural broadband.

Norquist

In reality, Americans for Tax Reform should be rebranded Special Interests for Tax Reform, because the group is funded by a variety of large tobacco corporations, former clients of disgraced lobbyist Jack Abramoff, and several wealthy conservative activists with their own foundations.

Norquist’s pole “tax increase” does not exist.

The Federal Communications Commission (FCC) provides guidelines and a formula for determining pole attachment rates for privately owned utilities, but permits states to adopt their own regulations. Municipal utilities are exempted for an important reason — their rates and operations are often already well-regulated.

Stop the Cap! found that pole attachment revenue ends up in the hands of the utility companies that own and keep up the poles, not the government. Municipal utilities stand on their own — revenue earned by a utility stays with the utility. Should a municipal utility attempt to gouge other companies that hang wires on those poles, mechanisms kick in that guarantee it cannot profit from doing so.

A 2007 study by the state government in Tennessee effectively undercut the cable industry’s argument that publicly owned utilities are overcharging cable and phone companies that share space on their poles. The report found that “pole attachment revenues do not increase pole owners’ revenue in the long run.”¹

The Tennessee Valley Authority, which supplies electricity across Tennessee, regularly audits the revenues and costs of its municipal utility distributors and sets end-user rates accordingly. The goal is to guarantee that municipal distributors “break even.” Any new revenue sources, like pole attachment fees, are considered when setting wholesale electric rates. If a municipal utility overcharged for access to its poles, it will ultimately gain nothing because the TVA will set prices that take that revenue into account.

Freedom to Distort: The Cable Lobby’s Astroturf Efforts

Freedom to distort

Another “citizens group” jumping into the battle is called “Freedom to Connect,” actually run by the Tennessee Cable Telecommunications Association (TCTA). Most consumers won’t recognize TCTA as the state cable lobby. Almost all will have forgotten TCTA was the same group that filed a lawsuit to shut down EPB’s Fiber division, which today delivers 1,000Mbps broadband service across the city and competes against cable operators like Comcast and Charter Cable.

One TCTA advertisement claims that some utilities are planning “to double the fees broadband providers pay to the state’s government utilities.”

In reality, cable companies have gone incognito, hiding their identity by rebranding themselves as “broadband providers.” No utility has announced it plans to “double” pole attachment fees either.

TCTA members came under fire at a recent hearing attended by state lawmakers when Rep. Charles Curtiss (D-Sparta) spoke up about irritating robocalls directed at his constituents making similar claims.

“What was said was false,” Curtiss told the cable representatives at the hearing. “You’ve lost your integrity with me. Whoever made up your mind to do that, you’re in the wrong line of work.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/TCTA Pole Attachment Fees Ad 3-13.flv[/flv]

TCTA — Tennessee’s cable industry lobbying group, released this distorted advertisement opposing pole attachment fee increases.  (1 minute)

The Chattanooga Free-Press’ Drew Johnson: Independent Opinion Page Editor or Well-connected Activist with a Conflict of Interest?

Johnson (Times Free Press)

In its ad campaign, the TCTA gave prominent mention to an article in Chattanooga’s Times-Free Press from Feb. 27: “Bill Harms Consumers, Kills Competition.”

What the advertisement did not say is it originated in an editorial published by Drew Johnson, who serves as the paper’s conservative opinion editor. Johnson has had a bone to pick with Chattanooga’s public utility EPB since it got into the cable television and broadband business.

That may not be surprising, since Johnson is still listed as a “senior fellow” at the “Taxpayers Protection Alliance,” yet another corporate and conservative-backed astroturf group founded by former Texas congressman Dick Armey of FreedomWorks fame.

Johnson’s journalism credentials? He wrote a weekly column for the conservative online screed NewsMax, founded and funded by super-wealthy Richard Mellon Scaife and Christopher Ruddy, both frequent donors to conservative, pro-business causes.

TPA has plenty to hide — particularly the sources of their funding. When asked if private industry backs TPA’s efforts, president David Williams refused to come clean.

“It comes from private sources, and I don’t reveal who my donors are,” he told Environmental Building News in January.

Ironically, Johnson is best known for aggressively using Tennessee’s open records “Sunshine” law to get state employee e-mails and other records looking for conflicts of interest or scandal.

Newspaper readers may want to ask whether Johnson represents the newspaper, an industry-funded sock puppet group, or both.  They also deserve full disclosure if the TPA receives any funding from companies that directly compete with EPB.

The Institute from ALEC: The Institute for Policy Innovation’s Innovative Way to Funnel AT&T and Comcast Money Into the Fight

Provider-backed ALEC advocates for the corporate interests that fund its operations.

Another group fighting on the side of the cable and phone companies against municipal utilities is the Institute for Policy Innovation. Policy counsel Bartlett D. Cleland claimed the government is out to get private companies that want space on utility poles.

“The proposed new system in HB1111 and SB1222 is fervently supported by the electric cooperatives and the government-owned utilities for good reason – they are merely seeking a way to use the force of government against their private sector competitors,” Cleland said. “The proposal would allow them to radically raise their rates for pole attachments to multiples of the national average.”

The facts don’t match Cleland’s rhetoric.

In reality, the state of Tennessee found in their report on the matter in 2007 that Tennessee’s pole attachment fees are “not necessarily out of line with those in other states.”²

In fact, some of the state’s telecom companies seemed to agree:

• EMBARQ (now CenturyLink) provided data on fees received from other service providers in Tennessee, Virginia, South and North Carolina. In these data, Tennessee’s rates ($36.02 – $47.41) are similar to those in North Carolina ($23.12-$52.85) and Virginia ($28.94 – $35.77). Rates were lower in South Carolina.
• Cable operators, who have less infrastructure on poles than telephone and electric utilities, paid even less. Time Warner Cable provided mean rates per state showing Tennessee ($7.70) in the middle of the pack compared to Florida ($9.83) and North Carolina ($4.86 – $13.64).

In addition to his role as policy counsel, Cleland also happens to be co-chair of the Telecommunications and Information Technology Task Force of the American Legislative Exchange Council (ALEC). Members of that committee include Comcast and AT&T — Tennessee’s largest telecom companies, both competing with municipal telecommunications providers like EPB.

¹ Analysis of Pole Attachment Rate Issues in Tennessee, State of Tennessee. 2007. p.23

² Analysis of Pole Attachment Rate Issues in Tennessee, State of Tennessee. 2007. p.12

Your electric company is Frontier Communications?

That scenario could come true for customers in New York, Ohio and Indiana. Frontier last week unveiled FTR Energy Services, an energy reseller planning to supply 100% green electricity in selected markets in New York and Ohio and natural gas in Indiana.

FTR Energy Services is a wholly-owned subsidiary of Crius Energy, launching service Nov. 19 with a business plan that claims there is convergence in the broadband and energy sector.

Frontier is likely to combine its marketing efforts with Crius Energy’s products — selling electric and telecommunications services together. Some expect Frontier will even extend bundling discounts to customers who sign up for both.

Third party energy suppliers were supposed to spur lower prices for consumers and businesses by encouraging innovation in the power generation industry. But significant savings, especially for residential customers, have proved elusive. Complicated pricing and contract terms have led to confusion and high customer turnover. Many customers eventually gave up shopping around and returned to the original utilities that have supplied power for generations. For today’s energy competitors, finding a marketing edge can be the key to growth when customers are skeptical and resistant to change.

Crius is hoping its green energy angle will attract environmentally-sensitive customers and Frontier hopes the bundled marketing offers it can blanket across its service area might deliver higher average revenue from customers — a key demand from Wall Street.

Most third party resellers enjoy modest wholesale pricing discounts, so any profits earned from reselling energy to customers are expected to be modest as well. But Frontier hopes the more services it can bundle for customers, the more “sticky” their products become. With bundled discounts and term contracts, it can become an expensive and complicated process to sign up with another provider. So many customers simply don’t.

The Charleston Gazette

While the eastern seaboard begins to assess the damage of several feet of water invading New Jersey and New York, West Virginia continues to contend with several feet of heavy snow left by Hurricane Sandy. More than 8,400 customers and climbing have reported service outages to the state’s largest phone company — Frontier Communications, which has crews contending with storm-damaged infrastructure ranging from widespread power outages to downed trees and utility lines.

Although parts of the state anticipated heavy snows from Sandy, cities further south including Charleston were unprepared for the wallop of wet, heavy snow that was expected to remain further to the north. Sandy’s heaviest precipitation bands were on the west side of the storm — bad news as far west as central Ohio and Kentucky. While temperatures remained in the 50’s further north, the cold core of Sandy resulted in precipitation falling largely as snow in the Appalachians.

As of noon, more than 200,000 homes in the state remain without power, which also impacts Frontier Communications’ operations.

Sandy knocked out power to at least 32 of the company’s 230 central offices in West Virginia, but the company reports all but three are still running with the assistance of backup generators — some acquired after last summer’s derecho, which knocked out power at half of Frontier’s switching offices.

Frontier says it is trying to get the remaining three switches back in operation, but some remote locations remain inaccessible because of poor roads and downed trees. Tucker County is reportedly among the most difficult to reach.

West Virginia’s Panhandle region has an estimated 1,000 customers without Internet service as of yesterday, particularly in hard-hit Jefferson, Berkeley, and Morgan counties.

Although customers may find their landline phone service working, broadband service could be more intermittent because of power outages affecting remote terminals that help extend service into rural locations. Those are vulnerable to electricity interruptions which Frontier’s Dan Page reports are widespread across the state, with the exception of the Wheeling area.

Frontier won’t say how many customers in West Virginia are currently without service, but noted many will have to wait until power restoration efforts are complete. Frontier’s crews have secondary priority and will repair services after electric service crews move on.

The storm impacted Frontier customers all the way west to Indiana, where fewer than 1,000 customers were without service in the Terre Haute area.

Any customer experiencing trouble with their phone or Internet should call Frontier at 1-877-462-8188, option 2 to request repair (or 1-800-921-8101). Repair technicians are available 24 hours a day, 7 days a week.

Time Warner Cable has mass-emailed their customers in the northeastern U.S. about anticipated service outages expected from Hurricane Sandy, which is expected to move onshore between the Delmarva Peninsula to the south and Long Island to the north. The storm is expected to track west into central Pennsylvania and slowly move north between Rochester and Syracuse, N.Y., and then into Ontario and Quebec. Sandy will likely cause significant wind and rain until Thursday.

Forecasters are concerned about extensive regional utility outages caused by northeasterly winds ranging from 40-70 mph, atypical for a region that usually endures wind events from the west or southwest. Trees as far west as Erie, Pennsylvania are particularly vulnerable to northeastern wind gusts of this magnitude. The result could be extensive damage to overhead wiring and utility poles throughout the northeast, particularly in the highest wind areas along Lakes Ontario and Erie, across higher terrain areas, and in valleys that are oriented north to south.

The storm is expected to equal or exceed damage caused by 2011’s Hurricane Irene in some areas.

Dear Valued Customer,

Time Warner Cable prepares well in advance when severe weather threatens our area. We have deployed a variety of technical resources: generators, fuel, fiber-optic cable and specialized tools to strategic locations near the potential path of the storm, so we can respond immediately to any damage. We have also deployed specialized business recovery vehicles with food, water, supplies and tents for our technicians in strategic locations along the East Coast. The safety of our employees and customers is our primary concern as we prepare for this storm.

If you lose your Time Warner Cable services

If you call Time Warner Cable, our automated phone system will be able to tell you if we are aware of service interruptions in your area. If you call and hear that message, no further action is necessary. If your service is out and you don’t hear a message, you can report it through the system or by speaking with a representative at 1-800-TWC-HELP.

In severe weather situations, the first priority is to restore electric power. Time Warner Cable crews may not be able to access a repair site because of downed electrical wires or other unsafe conditions. As a result, customers’ electricity is often restored before their Time Warner Cable services.

Stay informed on breaking news by listening to your local radio station, watching TV bulletins and visiting our website regularly. You can also access our mobile site at m.timewarnercable.com in the event of a power outage. If you need assistance with your Time Warner Cable account during the storm visit us online at www.twc.com/help.

We encourage you to follow us on Twitter (@TWCable_Neast) where will be tweeting live updates about the storm and related outages.

Thank you,
Time Warner Cable

Some 30,000 Shaw customers, mostly in Calgary, spent much of yesterday without phone service, and many more western Canadians experienced Internet problems as a result of a small electrical fire at a Shaw Communications facility in downtown Calgary.

Described by a news report as “chaos,” the fire also brought down at least three Calgary radio stations, an area bank’s ATM network, hospital communications, government offices, and Calgary’s 311 government information service.

A transformer fire on the 13th floor at Shaw’s Calgary headquarters, combined with the sprinkler system that put the fire out, proved the old adage that water and electricity don’t mix. Calgary’s power company disconnected electrical service to the building, creating additional outages for corporate customers who use Shaw’s data center, also inside the building.

As a result of the fire and its impact, Calgary officials decided to activate the city’s municipal emergency plan.

Shaw’s Internet service problems were felt as far away as Vancouver, according to news reports. As of late this afternoon, Shaw’s website is still offline.

While phone service has largely been restored, everything is not back to normal at Shaw’s headquarters, where many workers were turned away as late as this afternoon. Several streets around the building remained closed as of this morning.

Calgary Emergency Management Agency director Bruce Burrell called the incident “a major telecommunications failure,” and noted it was felt across the province and beyond.

Shaw joined local and provincial officials to assess the incident and the fire department response, as well as reviewing its impact.

It has been a difficult week for Calgary and Alberta generally. On Monday, just as the Calgary Stampede Rodeo fired into high gear, Alberta’s electricity companies began rolling blackouts after six power generators went down.

Questions are being raised about the impact of both events.

[flv width=”616″ height=”380″]http://www.phillipdampier.com/video/CTV Shaw Service Disrupted 7-12-12.flv[/flv]

CTV Calgary covers the impact of the fire at Shaw Communications’ headquarters in Calgary, Alb. and the cleanup still ongoing.  (6 minutes)