By Andy Sher
NASHVILLE -- A Davidson County judge said Friday she will decide in the next few weeks whether she has jurisdiction to hear a cable-television industry lawsuit challenging plans by public power distributor EPB of Chattanooga to provide cable services.
"I'm going to take the matter under consideration," Chancellor Ellen Hobbs Lyle said, noting she hopes to render a decision in two to three weeks.
Earlier, EPB attorney Robert Littleton told the chancellor that the lawsuit filed by the Tennessee Cable Telecommunications Association should be dismissed on procedural grounds.
He said the EPB, a municipal electric service formerly called the Electric Power Board, is based in Chattanooga, not Nashville. The decisions to get into cable ultimately will be made by the city of Chattanooga and EPB, therefore any challenge should be heard in Hamilton County, Mr. Littleton said.
Chancellor Lyle is not considering for now the cable industry's central claim. The suit contends EPB's business plan calls for illegally cross-subsidizing EPB's entry into the cable business from customer electricity rates.
Cable association attorney Michael G. Stewart countered that the suit was properly filed in Nashville because it is the state's capital. He said a 1999 state law contains a "significant requirement" directing that municipal electric services file their business plans on would-be cable ventures with the Nashville-based state Comptroller for a feasibility review.
Mr. Littleton said the comptroller does "not really approve" the plan because the review is provided to a city's governing body, which makes the decision about the venture.
Following the hearing, Mr. Stewart said Chancellor Lyle "is going to make her determination about venue, and either way the suit will then proceed."
The electric service has proposed issuing $119 million in tax-exempt bonds for a fiber-optics system with the financing split between electric system revenue and video system revenue. EPB officials argue there is no cross-subsidization because the agency's telecommunication's division would pay rent for the fiber-optic line.
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