As the Arizona Republic reported, Cox has responded to the ACC staff’s recommendation that we be fined an unprecedented $2 million for a private easement arrangement proposed by Vistancia real estate developer Shea/Sunbelt and approved by the City of Peoria.

As the story indicates, Cox did not devise or assist in securing this easement from Peoria. Cox did not engage in any anti-competitive behavior and Cox settled with Accipter, the small telecom company that filed a claim with the ACC about the arrangement.

So why this unprecedented fine?

We are not sure, but we think there may be some confusion about so-called “preferred provider agreements” (PPAs), why developers seek them, why we don’t like them, and most importantly how consumers benefit from these common (and lawful) arrangements.

Below is the real story about PPAs.

- Sparked by developer requests, PPAs have been around for years in some shape or form, particularly in apartment complexes, and more recently have increased in single family communities

- Developers historically entered into PPAs just to be assured that services will be available when their homes are ready for occupancy

- Now, no longer content with just securing a service provider for the property, developers often leverage access to their properties for financial reward

- Today, potential service providers, including Cox, must submit competitive bids to serve new developments

- Resident-consumers benefit because services are available at the time they move in. Also, developers often negotiate additional service guarantees, including dedicated community channels, customized community web space, and e-mail support.

As you can see, PPAs are no picnic for service providers like Cox. In fact, we have approached the Arizona Legislature about eliminating their use in certain circumstances. But until something changes, PPAs are a market reality for service providers.

Given the actual history of PPAs, and the particular history of the private easement arrangement in Vistancia, it is ironic that Cox is being painted as the bad guy. We didn’t devise the easement, didn’t seek the easement, didn’t approve the easement, but we alone are being targeted for an unprecedented fine.

Go figure. We certainly can’t.