Chattanooga Times Free Press

EPB reaches milestone

Local utility tops 100,000 fiber optic users

- BY DAVE FLESSNER STAFF WRITER

When EPB launched its Internet, video and phone services nearly a decade ago in conjunctio­n with its efforts to build a smarter electric grid, the city-owned utility projected it should attract more than 30,000 customers of its telecom services within five years to cover its costs and break even.

But the fiber optic network exceeded those expectatio­ns in less than 18 months, and on Thursday EPB Fiber topped 100,000 paying subscriber­s.

The municipal power utility now provides telecom connection­s to more than 60 percent of all homes and businesses in its service territory, allowing EPB to repay its initial telecom investment years ahead of its original forecast and helping to provide an extra $42 million a year back into its electric system.

“Contrary to the fears some had about us spending power funds to pay for this service, our power rates are actually 7 percent lower than they otherwise would be because of our Fiber Optic network and the business it has generated for us,” EPB President David Wade said.

City leaders claim an even bigger advantage is the economic gains for the community from

having EPB’s communityw­ide high-speed internet connection­s to every home and business in the utility’s 600-squaremile region. With its fiber optic links, EPB helped Chattanoog­a become the first U.S. city to have 1-gigabit-per-second internet speeds available throughout the entire city.

EPB, which boosted its internet speed to 10 gigabits per second in 2015, is more than 200 times faster than most broadband services and offers lower cost Gig service than even Silicon Valley. In an online connected world of e-commerce, what EPB has billed as “Gig City” has proven to be a major advantage in attracting attention, talent and startups trying to take their web-based businesses around the globe.

High-speed connection­s from EPB helped attract and grow such online startups as the moving service Bellhops, the code builder and developmen­t platform Skuid, the online counseling service known as Wecounsel and the global ship security startup known as Internatio­nal Maritime Security Associates in Chattanoog­a.

“Being a tech company handling the volume of calls and online traffic that we do, having access to high-speed internet is vital for our business,” said Kyle Miller, head of brand and communicat­ions for Bellhops, which employs up to 110 full- and parttime employees in Chattanoog­a during its peak season and dispatches more than 1,500 workers in cities across the country with its Gig internet service. “For us, the faster the communicat­ions, the better.”

Miller said EPB has allowed Bellhops to succeed outside of Silicon Valley, where costs would be much higher. The gig internet service that Bellhops gets for $2,500 a month in Chattanoog­a likely would cost the company around $10,000 a month in San Francisco.

ENGINE FOR GROWTH, LEARNING

“Our fiber optic network is today’s locomotive that is driving Chattanoog­a’s success and positionin­g us as a model for other communitie­s,” Chattanoog­a Mayor Andy Berke said. “It is a powerful recruiting tool to attract new businesses that need reliable, high-quality power and communicat­ions, as well as a catalyst for launching startups and expanding our existing businesses.”

In 2015, University of Tennessee at Chattanoog­a Economist Bento Lobo estimated EPB’s fiber optic network already had generated as many as 5,200 extra jobs and as much as $1.3 billion in benefits for the community, and such benefits were projected to grow.

Hamilton County Mayor Jim Coppinger said gigabit-speed connectivi­ty also has unlocked the possibilit­ies of online education and allowed more students to connect via the internet with high-tech equipment at remote locations. On Thursday, for instance, students in an advanced placement biology class at Red Bank High School were able to use the 4K streaming capability provided by EPB to remotely connect to the DX63 Darkfied microscope at the STEM school at Chattanoog­a State Community College.

Additional­ly, “we are on the forefront of advancing telemedici­ne so that more of our neighbors have access to health care services,” Coppinger said.

COMPETITIO­N FOR GIG SERVICES

EPB’s competitor­s have matched the municipal utility for Gig service, although few have yet built out an entire service territory like what EPB did within the first couple of years of its getting into the business.

Two years ago, Chattanoog­a became one of the first cities in the nation to get gigabit internet speeds from Comcast, and on Thursday the cable giant announced it is now the nation’s largest provider of gigabit broadband service.

Comcast’s XFinity gigabit internet and Comcast Business Gigabit are now available to nearly all of Comcast’s 58 million homes and businesses in 39 states. The national deployment represents the fastest rollout of gigabit speeds to the most homes and businesses in the country.

“By making these investment­s, we’ve set a foundation for delivering the next-generation of broadband and Wi-Fibased services that will define the modern digital home,” Comcast Senior Vice President Doug Guthrie said in a statement Thursday.

For the past 20 years, Comcast has invested an average of $120 million per year in Tennessee, enabling Comcast to deploy gigabit internet to nearly all internet-serviceabl­e households in its footprint, increase speeds 17 times in 17 years and double the capacity of its broadband network every 18-24 months.

In Chattanoog­a, Comcast has expanded its multigigab­it network for the business community, launched Gigabit Pro, a 2-gigabit-per-second residentia­l internet service, and deployed a 1-gigabit-per-second internet service.

But EPB still has managed to capture the biggest share of internet users in its service territory. EPB Chairman Joe Ferguson said the city-owned utility has worked to ensure it provides reliable, local service and has avoided short-term price discounts or hidden fees. EPB workers installing fiber connection­s have even made sure they wear plastic blue booties to cover their shoes so they don’t track dirt into customers’ homes or businesses.

“We make sure we treat people they way we want to be treated and do what we say, ” Ferguson said, noting that EPB has been rated as a top internet provider by J.D. Power and Associates surveys.

Wade said EPB is able to leverage its workforce, equipment and fiber network built for its electric system to realize benefits for both the power grid and telecom systems. But state law bans EPB from crosssubsi­dizing its services.

EPB got a $111.6 million federal stimulus grant in 2010 to help build out its fiber optic network for its smart grid, but Wade said those funds were to benefit the electric system, not the telecom division.

CRITICS OBJECT TO GOVERNMENT COMPETING WITH BUSINESS

Despite EPB’s claims, some critics still express concerns about municipal power utilities competing with privatesec­tor telecom companies, especially since municipal utilities don’t pay federal income taxes and generate profits for shareholde­rs.

“Regardless of the numbers of subscriber­s EPB brings in, it is not the government’s job to compete with the private sector — or crowd it out entirely — when it comes to high-speed internet,” said Justin Owen, president of the Beacon Center, a free-enterprise advocacy group in Nashville. “EPB has already taken hundreds of millions of our tax dollars to get to this point. The issue is that the government can afford to lose money while private businesses do not have that luxury, and that is not a balanced playing field.”

Owen said government should focus on services like public safety, roads, and education and not try to compete with private businesses like Comcast, AT&T and Charter by providing broadband internet.

Ferguson heard such concerns when the EPB board initially decided a decade ago, at the invitation of then Mayor Bob Corker, to see if the cityowned utility could use the fiber network it was building for its power grid to help promote better internet service. The city has created the Metronet system, which Ferguson said “helped EPB see the potential for these citywide services.”

At the time, EPB was virtually debt free, but EPB’s board decided to borrow more than $220 million to begin building a fiber network throughout its 600-mile service territory.

“We thought the fiber optics network would help boost entreprene­urial activity, but we did not know it would be one of the major drivers in positionin­g Chattanoog­a nationally as a hotspot for technology start-ups, and there was no way we could have foreseen how Chattanoog­a’s Smart Grid would make us a hub for national research by the U.S. Department of Energy, Oakridge National Laboratory, and so many others.”

Contact Dave Flessner at dflessner@timesfreep­ress.com or at 423-757-6340.

“Our fiber optic network is today’s locomotive that is driving Chattanoog­a’s success and positionin­g us as a model for other communitie­s.” – ANDY BERKE, CHATTANOOG­A MAYOR

 ?? STAFF PHOTO BY ERIN O. SMITH ?? Amal Abazid, left, a Red Bank High senior; Cameron Huss, center, a Project Inspire resident; and Dani Morris, a biology teacher at Red Bank High School, look at organisms on a television screen streamed Thursday. Students in an advanced placement biology class at Red Bank are able to use the 4K streaming capability provided by EPB’s high-speed fiber optic network to remotely connect to the DX63 Darkfield microscope at the STEM school at Chattanoog­a State Community College.
STAFF PHOTO BY ERIN O. SMITH Amal Abazid, left, a Red Bank High senior; Cameron Huss, center, a Project Inspire resident; and Dani Morris, a biology teacher at Red Bank High School, look at organisms on a television screen streamed Thursday. Students in an advanced placement biology class at Red Bank are able to use the 4K streaming capability provided by EPB’s high-speed fiber optic network to remotely connect to the DX63 Darkfield microscope at the STEM school at Chattanoog­a State Community College.

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