Georgia Aims to Lure Private ISPs to Expand Rural Broadband

As the nation’s eyes are riveted on the political divide in Georgia and the implications it has for the balance of power in the U.S. Senate, many state residents are also keeping an eye on the digital divide in the Peach State with an aim to expand broadband service to rural residents.

Georgia’s not-for-profit, member-owned electric membership cooperatives (EMCs) are promoting a new “Georgia Solution” to bring more broadband connectivity to the state’s rural regions.

That’s what the statewide trade association representing Georgia’s 41 electric cooperatives is calling its unique “roll out the red carpet” initiative as they hope to lure private Internet Service Providers (ISPs) to expand broadband service now that state lawmakers passed the Georgia Broadband Opportunity Act during the 2020 Georgia General Assembly.

The law, signed by Governor Brian Kemp in August, authorizes the Georgia Public Service Commission (PSC) to set “rates, terms, and conditions for pole attachments between communications service providers and electric membership corporations and their broadband affiliates.”

Filed on October 23 with the state’s PSC to consider for approval, the “Georgia Solution,” aims to entice private ISPs with two “generous and unprecedented offers” -- the “One Buck Deal” and the “Georgia One-Touch-Make-Ready Program.”

Two-Part “Georgia Solution”

The “One Buck Deal” is a financial incentive in which the EMCs will “forego recovering a fair share of their costs to own and maintain … EMC utility poles, and instead charge these broadband providers just one dollar, per pole, per year to attach their wires and cables to the pole.” The offer would be available to any qualified broadband providers that will deliver new high-speed Internet service in unserved EMC regions, which covers 73% of the state’s land area, providing electricity to 4.4 million residents, or nearly half of Georgia’s population.

That one dollar, per pole, per year “introductory rate” would last for five years for each attachment “as long as the new attachments are made to bring broadband service to unserved rural EMC members and are made on a pole to which the cable provider is not already attached.”

Georgia EMCs are currently charging ISPs $20 per pole, per year on average for broadband attachments. 

The other half of the “Georgia Solution” is meant to address something cable companies have complained about for years as being a major barrier to deploying broadband in rural areas, namely, the length of time it takes for local officials to approve pole attachments. The “One-Touch-Make-Ready” program will empower ISPs to prepare poles for their attachments without first needing EMC approvals.

It’s a program that relies on taking ISPs at their word that less red-tape and wait time will lead to more efficiency and lower costs for broadband providers to invest in rural regions.

The super low offer for pole-attachments is being made even as Georgia EMC acknowledges on its website “the for-profit national cable companies claim that if the rates they pay to attach their cable to EMC utility poles are lowered, the savings will enable them to offer broadband service in rural areas that do not have Internet service” has “proven untrue both here in Georgia and in other states.”

“Pole attachment rates are not the problem. The real deterrents to rural broadband are: low population densities in rural areas, the low ‘take rate’ resulting from consumers’ inability to afford cable’s high monthly fees, high capital investment for infrastructure, and the need to maintain profits to satisfy stockholders,” Georgia EMCs website notes. Recently, the state's Broadband Deployment Initiative launched a new availability map (left) which shows just how inaccurate FCC data is in the state, serving as a welcoming step forward in bringing service to those households which have been struggling with access for years.

Nevertheless, Dennis Chastain, president and CEO of Georgia EMC, touts the “Georgia Solution” as “one solution to connect all of Georgia, and a true win-win-win.”

“EMCs are deeply committed to doing our part to solve the digital divide. The Georgia Solution is one of many ways we are working to bring together the many parties that are needed to solve this critical issue for our state,” Chastain said in a press release announcing the initiative. “The brave and bold solution offered by the EMCs creates real savings for broadband providers, ensures broadband expansion for those who desperately need it, and ensures consumers’ investment in broadband expansion does not leave this state.”

Pushback from Georgia Cable Association

While Chastain describes the “Georgia Solution” as a “true win-win-win,” the Georgia Cable Association is calling the EMC initiative a “gimmick.”

Cable Association officials argue that the one dollar, per pole, per year offer is not enough of an incentive because it only lasts for five years. For it to make financial sense, the Association claims, the EMCs needs to offer a “just and reasonable” rate for pole attachments on a long-term basis.

Michael Power, CEO of the Georgia Cable Association, told the Athens Banner-Herald that if EMCs lowered the pole attachment rates to $7 per pole, the EMCs could make up the difference from what they are now charging by adding a mere 50 cents to their average customer’s monthly bill.

Chastain counters that implementing the rate change Powers suggest is not as simple as it sounds, noting that to establish $7 per pole rate would mean widely varying customer bills among the 41 different EMCs in the state, each of which are in different economic circumstances.

Those differing views will be taken up in mid-December by the state’s Public Service Commission when they are set to meet and decide on the pole attachment rates. 

The Mississippi Example

The approach Georgia’s EMCs are taking contrasts with what Mississippi electric co-ops are pursuing to bridge the digital divide in that state. There, instead of trying to entice private ISPs to do something the industry has been reluctant to do, Mississippi’s electric co-ops banded together with the Mississippi Public Services Commission to pressure the state legislature to pass the Mississippi Broadband Enabling Act so they could build their own broadband networks. The new law allows electric co-ops to create broadband subsidiaries, provided that they were not subsidized by the electric portion of the co-op.

By the end of 2019, a number of Mississippi co-ops — including Tallahatchie Valley EPA, Tombigbee EPA, and North East Mississippi EPA — had jumped on the opportunity to provide Internet access to the residents and businesses they serve. Now, at least 15 of the 25 electric co-ops in Mississippi have announced broadband projects, while others continue to explore the possibility.

When the Covid-19 pandemic arrived, the co-ops and the Mississippi Public Services Commission once again pushed the state legislature to pass new legislation to speed up the process. This past July, Mississippi state lawmakers passed the Mississippi Electric Cooperatives Broadband COVID-19 Act. The bill allocated $65 million of CARES Act relief funds that the state received from the federal government to provide grants of up to $6 million to electric co-ops to build fiber networks in unserved areas. It also stipulated that these projects deploy networks with minimum speeds of 100 Megabits per second (Mbps) download and 100 Mbps upload in unserved or underserved areas.

“Why build a two-lane highway when we are going to need six lanes in the future? The demand for the speed is going to increase ... and right now, fiber is the way to go,” Mississippi State Representative Scott Bounds explained to the Neshoba Democrat.