Chattanooga officials hope to use about $5.4 million in federal money to help EPB bring Internet, cable and telephone service to inner-city neighborhoods faster than EPB had planned.
“We’re going to use Uncle Sam’s money if we can get it,” said Harold DePriest, EPB president. “That’s absolute.”
The city is asking the U.S. Department of Housing and Urban Development for permission to take part of a loan intended to build infrastructure in Alton Park to provide fiber to the Alton Park, Clifton Hills, Park City, Piney Woods and South Chattanooga neighborhoods.
One critic of EPB’s fiber to the home proposal questioned the city’s plans to use a federal loan.
“It’s curious to me that EPB could ask a federal agency for money to go toward a project that has not been approved,” said Stacey Burks Briggs, president of the Tennessee Cable Telecommunications Association. “We’ll be taking a close look at that.”
EPB is installing fiber-optic lines to its substations to enhance the electric system, which is called a “smart grid.” After that is finished, EPB hopes to start running fiber to neighborhoods, although the timing is uncertain because the utility has not issued bonds to pay for the project and because a lawsuit is pending, officials said.
The federal loan would allow EPB to install fiber to the inner-city neighborhoods sooner than it had planned, Mr. DePriest said. EPB could use more line crews at once and accelerate its neighborhood installation, he said.
“The whole idea is to get the services and savings of fiber to homeowners well ahead of schedule,” said Dan Johnson, chief of staff for Chattanooga Mayor Ron Littlefield. “EPB will pay it back.”
EPB’s loan would come from a $10 million request the city is making to HUD to pay for brownfield development and community development programs, Mr. Johnson said. The HUD loan also would repay a Fannie Mae loan the city took out in 2005 to build infrastructure for the Villages at Alton Park, which replaced the Spencer J. McCallie Homes, said Juliette Thornton, assistant manager for Chattanooga community development.
The city originally asked HUD for $7 million in 2005, she said, but is amending its request to add the fiber project.
Even as EPB seeks federal funding, a cable industry lawsuit trying to block the fiber to the home plan is dragging out.
Davidson County Chancellor Ellen Hobbs Lyle on Thursday evening granted a stay against a motion that would have required EPB to turn over its telecommunications business plan to the court, Ms. Briggs said. A Friday hearing on several motions was postponed. A future hearing date has not been set.
“We feel this is a positive development but are being cautiously optimistic at this time,” said Aldous McCrory, EPB vice president of legal services.
The stay on discovery will last only until the judge rules on the case’s other motions, Ms. Briggs said.
The judge is considering EPB’s requests to dismiss or appeal the case, whether the cable industry has the right to sue and a request by the cable industry to speed up the hearing.