By Dave Flessner
EPB asked a Nashville chancellor Friday to dismiss a legal challenge to EPB's entry into cable television because the lawsuit wasn't properly filed in Chattanooga and didn't include the city of Chattanooga.
But the head of the industry group suing EPB said such procedural challenges can't obscure what she says is an illegal plan by EPB to compete with private cable TV providers.
"They shouldn't be risking electric ratepayer dollars to fund the biggest municipal bond issue in Chattanooga history," said Stacey Burks Briggs, president of the Tennessee Cable Telecommunications Association. "We would hope that this lawsuit can move beyond procedural arguments and get to the real substance of this issue."
The city-owned EPB wants to extend more than 3,000 miles of fiber optic lines across its service territory to add residential high-speed Internet, cable TV and telephone service in Chattanooga.
On Sept. 21, the Tennessee Cable Telecommunications Association (TCTA) -- the trade group for the cable TV industry -- sued EPB in Nashville to block the utility's proposed new fiber-to-home service. But four days later, the Chattanooga City Council unanimously approved EPB's plan for video, voice and data services to its residential customers. The business plan for the new service also was approved this summer by the Tennessee comptroller.
In a 12-page motion filed late Friday in Davidson County Chancery Court, EPB contends the Davidson County Chancery Court "lacks jurisdiction and the venue is improper" to hear a challenge to the city-owned utility. EPB attorneys Carlos Smith and Robert Littleton said that any suit against a municipal authority must be filed in the local jurisdiction and include all related parties.
"This dispute cannot be wholly settled without the inclusion of the city as a party," the attorneys said in response to the TCTA lawsuit.
Ms. Briggs said her association had not seen EPB's filing as of Friday night, but she cautioned EPB against moving ahead with its plans until the legal dispute is resolved. EPB has asked for proposals from equipment suppliers for its proposed telecom expansion and, pending financing, could award contracts for the work by the end of the year.
EPB has proposed issuing more than $220 million in tax-exempt bonds to fund construction of its telecommunications system, although such an issue must still be approved by EPB directors and the Chattanooga City Council.
"I think the bond market should have a pretty healthy degree of the skepticism before agreeing to any issue while our lawsuit is still pending," Ms. Burks said.
Earlier this week, EPB President Harold DePriest said the utility remains committed to beginning to build a fiber-to-home system next year.
"We're going to build it," Mr. DePriest said. "Our customers made very clear to us that they want this system."
EPB consultants estimate the higher-speed Internet link will generate more than $300 million of additional economic benefits and create more than 2,600 jobs in Chattanooga.
Reporter Jason Reynolds contributed to this report
E-mail Dave Flessner at email@example.com