A lawsuit filed Tuesday by competitors won’t delay the EPB’s plans to offer telecommunications services to residential customers starting this winter, an EPB official said.
“I don’t foresee this holding up the cable service,” said Aldous McCrory, EPB vice president of legal services.
On Tuesday, EPB’s board of directors approved issuing $219.8 million in bonds to finance a fiber-optic upgrade to an electric system that’s the backbone for bringing fiber to home telecommunications services.
Also on Tuesday, Comcast of the South filed a lawsuit in Hamilton County Chancery Court to block EPB from bringing fiber optics to the home.
“Our intention is to ensure that EPB complies with the Tennessee Cable Act and that Comcast be allowed to compete in a fair environment,” Valerie Gillespie, Comcast vice president and general manager, said in a statement.
EPB should receive the bond funds in two to three weeks, said EPB President Harold DePriest. The utility plans to borrow money from the electric system to launch fiber to the home and could issue the loan next month, he said.
Comcast’s lawsuit says that EPB’s capital expenses from launching the telecommunications venture should not be funded by electric revenues, nor should electric revenues be used to back fiber-to-the-home’s financial risk. In doing so, EPB is breaking state law, the lawsuit states.
That’s not true, Mr. DePriest said.
“We’re absolutely confident what we’re doing is legal,” he said. “We understand that Comcast doesn’t want competition.”
Comcast’s lawsuit also says EPB has an unfair advantage as a city-owned company with no competition and access to low-cost loans.
On April 14, a Davidson County chancellor threw out a similar lawsuit that had been filed by the Tennessee Cable Telecommunications Association, an industry trade group. The chancellor ruled that Nashville, where the suit was filed, was not the right venue.
The cable association is considering its options and has until May 14 to make a decision, said Stacey B. Briggs, the organization’s president and executive director.
Comcast is a member of the cable association.
The $219.8 million bond primarily will pay for the smart grid, a fiber-optic system that EPB officials say will allow them to better control the electric system, restore power sooner during outages and prevent theft of electric service. Part of the bond also will buy standard electric equipment such as utility poles and transformers.
EPB now is installing fiber-optic lines to each of its substations as part of the smart-grid setup.