Council approves EPB loan

The Chattanooga City Council on Tuesday night approved the authorization of a $60 million EPB loan for the city-owned utility to provide customers with Internet, cable and telephone service.

Meanwhile, EPB is delaying a $230 million telecommunications bond purchase for about two weeks because of a cable industry lawsuit, EPB spokeswoman Lacie Newton said. Utility officials said they are updating legal information to provide to bond investors because of a court hearing scheduled for March 7.

The Tennessee Cable Telecommunications Agency is suing EPB to stop the utility from offering residential video, telephone and Internet service. Both parties filed new legal motions Friday.

The utility filed a motion asking the Davidson County Chancery Court to dismiss the cable association’s lawsuit. The trade group, meanwhile, filed a motion asking the lawsuit be speeded up and held within three months of the March 7 hearing. The hearing will deal with EPB’s request to dismiss the case.

EPB officials also believe they can obtain better financing terms by waiting two weeks, Ms. Newton said.

While the City Council approved the resolution authorizing the $60 million loan 8-0 Tuesday night, Councilwoman Carol Berz abstained.

She said during Tuesday’s Legal and Legislative Committee meeting that she did not want to act on the measure because of the lawsuit.

“I am very much for competition,” Dr. Berz said. “I have problems ethically voting for something on which the legality hasn’t been determined.”

But Harold DePriest, president of EPB, said the lawsuit and the $60 million loan are two separate issues.

“We’re comfortable that there is no legal issue,” he said.

Last week, the City Council approved the issuance of the $230 million bond for EPB’s fiber-to-home initiative.

Mayor Ron Littlefield said during the Legal and Legislative Committee meeting that the fiber-optic infrastructure investment is the “real issue,” and the city is fortunate to have a utility that can expand its service.

“We have a very conservative and very capable board that manages that power board, and they have been convinced that it is in their best interest to extend fiber” to customer homes.