By Andy Sher and Jason Reynolds
A Davidson County judge said she will not dismiss the Tennessee Cable Telecommunications Association's lawsuit challenging Chattanooga-based EPB's planned entry into the cable television business.
In a memorandum and order issued Tuesday afternoon, Chancellor Ellen Hobbs Lyle rejected arguments by EPB that the lawsuit should have been filed in Chattanooga and improperly did not include the city of Chattanooga.
State law requires public power providers entering the cable business to file business plans with the state Comptroller's office for review. Chancellor Lyle said because the Comptroller's office is in Nashville, the case was filed properly in Davidson County.
She also concluded that because EPB is "merely an arm" of Chattanooga government, the suit did not have to include the city specifically.
The cable association is seeking a declaratory judgment that EPB's business plan for a new fiber-to-home cable service violates state law, maintaining EPB illegally is cross-subsidizing the proposed service through rates paid by electricity customers. The association's members include Comcast.
"We're disappointed," EPB Executive Vice President Ron Fugatt said of the ruling. "Our attorneys are busy determining what the alternatives and options are going forward."
Tennessee Cable Telecommunications Association Executive Director Stacey B. Briggs said association members are pleased and agree with the judge's decision.
"The case will stay in Davidson County, and we'll get to the real issue involved here, which is that this plan clearly violates the statute for not using ratepayer money to fund these ventures," she said.
Mr. Fugatt said he does not believe the pending lawsuit will affect EPB officials' plans to finance the $219 million fiber-to-home system. EPB's board of directors is expected to select a bond underwriter during its Jan. 18 meeting.
"We still have to look at all the options," Mr. Fugatt said. "Moving forward with the electric system bond issue is what the board will be looking at this month."
The chancellor also ruled the Comptroller's action is regulatory in nature and capable of being heard and determined by the court.
E-mail Andy Sher at firstname.lastname@example.org
E-mail Jason Reynolds at email@example.com