published Saturday, July 12th, 2014

EPB eyes gigabit expansion beyond Chattanooga

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    Wayne Elrod, an EPB electric dispatcher, works in EPB's all-new, state-of-the-art distribution center designed to complement the citywide Smart Grid and fiber-optic network.
    Photo by Dan Henry.
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Chattanooga utility EPB will consider asking the Federal Communications Commission within weeks to allow it to expand gigabit fiber-optic Internet, TV and phone access to the Tennessee communities surrounding the Gig City.

"Communities should have the right, at the local level, to determine their broadband futures," said Harold DePriest, president and CEO of EPB, on Friday. "At EPB, we believe that Internet access is the critical infrastructure for the 21st century. True broadband infrastructure provides access to information, jobs and education and gives citizens and businesses the opportunity to fully participate in -- and to lead -- our emerging knowledge economy."

If the FCC rules in EPB's favor, the utility will consider expanding to any community that requests access to gigabit Internet, if providing such services is financially feasible.

EPB said the utility is currently focusing on Tennessee but would examine the feasibility of expanding in Georgia and other states.

It's the latest salvo in a legal battle that has ranged between cold war and active hostilities since the city-owned utility in 2008 first won approval to offer fiber services in Chattanooga, much to the chagrin of Comcast, AT&T and other private competitors.

EPB won four lawsuits brought against it by rivals before it began rolling out fiber-optic service in 2009, including a complaint brought in 2007 by the Tennessee Cable and Telecommunications Association.

Opponents pointed out that EPB, as a public entity, would have an edge when competing against private companies, which would be at a disadvantage when facing an entity owned by taxpayers. EPB, for its part, promised to separate its fiber optic business from its role as an electric utility. But the utility still enjoys certain advantages.

Chief among those was a $111.5 million stimulus grant awarded in 2009 by the U.S. Department of Energy to build out the fiber-optic Smart Grid, which opponents have claimed means that taxpayer dollars were used to compete against the very businesses and employees who paid those taxes in the first place. EPB has said that the fiber-optic network was merely a byproduct of the Smart Grid, and that the federal money was specifically earmarked to make the electric system more stable.

In spite of the legal hurdles, EPB within a few years created the fastest and first community-wide Internet network in the western hemisphere, second only to a handful of research universities and cities like Kansas City, which is only partially wired with gigabit fiber.

Yet today, an invisible line runs down through the middle of communities in Georgia and Tennessee. It's the line between the nearly 60,000 consumers who have access to EPB's gigabit service, and those who only have access to private competitors such as Comcast, Charter or AT&T.

There are even neighborhoods in Hamilton County itself, including certain parts of East Brainerd and Ooltewah, that currently can't get EPB's fiber, said EPB spokeswoman Danna Bailey.

That line is mandated by law. EPB is only allowed to offer fiber optic service to customers who also get their electricity from EPB. Officials have said that such a status quo has had little chance of changing, until now.

Recent signals by the FCC have indicated that the federal agency is interested in seeing wider ultra-high speed broadband penetration in communities across the U.S.

Former FCC Chairman Julius Genachowski singled out EPB's network in 2013 as one of the "vital components of our broadband strategy."

Then in June, current FCC Chairman Tom Wheeler specifically criticized Tennessee's municipal broadband laws, saying that Chattanooga was the "poster child" for both "the benefits of community broadband networks, and also a prime example of the efforts to restrict them."

"Tennessee's law is restricting Chattanooga from expanding its network's footprint, inhibiting further growth," Wheeler wrote in a blog post. "The mayor told me how adjoining communities have asked to join the network, but cannot also be served by a simple extension of the broadband network because of the state law. In some of these communities, there is no available broadband service whatsoever."

But the law won't change without a fight. U.S. Senate leaders, including Lamar Alexander, R-Tenn.; Ted Cruz, R-Texas; and Marco Rubio, R-Fla., wrote a letter to Wheeler in June expressing "deep concern" over Wheeler's statements that he will "preempt state laws that ban competition from community broadband."

"The insinuation that the Federal Communications Commission will force taxpayer funded competition against private broadband providers -- against the wishes of the states -- is deeply troubling," the senators wrote.

EPB is prepared for the fight, as it studies the best avenue to take its case to Washington, D.C.

"This is critical infrastructure, and we believe local communities should have the right to chose how they get the critical infrastructure they need," Bailey said. "We certainly don't want to be in a political fight, but we think this is important, and it's important that our neighbors have access to the same gigabit speeds that we enjoy."

The utility said it will not cross subsidize its proposed fiber-optic expansion with the profits of its electric distribution business.

Contact staff writer Ellis Smith at 423-757-6315 or esmith@timesfreepress.com with tips and documents.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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