published Sunday, April 17th, 2011

Lobbyists keep limit on EPB fiber lines

LOBBYING STRENGTH

Contributions to candidates and parties last year from cable and telecommunication PACS:

• $91,000: AT&T

• $75,000: Comcast

• $32,850: Cable industry

Source: Tennessee Bureau of Ethics and Campaign Finance.

NASHVILLE—EPB and its legislative supporters were forced to pull the plug last week on the utility’s latest effort to extend superfast broadband service beyond its service area.

“We took it off notice,” said House Majority Leader Gerald McCormick, R-Chattanooga, the bill’s main sponsor.

The cable TV industry and telecommunications giant AT&T launched a lobbying blitz that would have applied to EPB and five other municipal electric services that have or are developing broadband infrastructure.

EPB President and CEO Harold DePriest seemed resigned.

“Well, we would like to see the bill pass, but I think Gerald was dealing with the reality of the difficulty of moving the bill through the committee at this point in time,” he said Friday. “We will be back. We think it is important.”

EPB offers 1 gigabit-per-second service to residential and business customers, more than 200 times the speed of average Internet service. The bill would have let the municipal utilities extend service up to 30 miles outside their service areas.

In a state where elected officials from Gov. Bill Haslam to the lowliest freshman lawmaker campaigned last year on job creation, bill supporters linked their effort to economic development.

That was evident in the name of the legislation  — the “Broadband Infrastructure for Regional Economic Development Act of 2011.”

Critics lambasted what they characterized as government leaping into risky ventures to compete with private business.

Both sides aired their positions in recent House Commerce Subcommittee meetings and afterward.

“These systems pay really big dividends to the communities that own them,” DePriest told lawmakers, noting that since EPB launched its 1 gigabit service, “we have gained a lot of jobs in our community.”

In a later interview, DePriest credited Amazon.com Inc.’s decision to put a distribution center in Hamilton County at least in part to EPB’s ability to provide world-class broadband relatively cheaply.

Part of the rationale for this year’s bill was to extend EPB’s service to Bradley County, where Amazon is building a second distribution center, he said.

At a recent hearing, Rep. Curry Todd, R-Collierville, said municipal cable providers “are losing tremendous amounts of money” that is “coming out of the taxpayers’ pocket.”

Todd offered a bill to have EPB and the other municipal broadband providers placed under the Tennessee Regulatory Authority.

Tennessee Cable and Telecommunications lobbyist John Farris told lawmakers that the Memphis Light, Gas and Water Division lost $32 million several years ago on a disastrous venture into cable.

“We don’t think there’s enough there to protect taxpayers,” Farris argued.

DePriest, however, later said EPB’s business model is different from the one in Memphis. After 19 months, EPB has 25,500 customers and is well ahead of its financial plan, he said.

AT&T spokesman Chris Walker said government-owned networks should have to follow the same rules as private companies.

“We believe the current level playing-field statutes in Tennessee are inadequate, and we would therefore oppose the broad expansion of municipal footprints that have been proposed,” Walker said.

DePriest conceded that public versus private is a “valid, logical debate.”

He said EPB decided to move ahead with 1 gigabit service because “we made an assessment it’s going to be 10 years before a private company does anything here,” DePriest said.

Comcast’s Chattanooga vice president and general manager, Jim Weigert, said the company can provide 1 gigabit service to its business customers.

“It would be a custom solution to a customer. It would certainly be an option. If a customer needed that, we would do a build-out,” Weigert said. “We don’t have high customer demand for that type of speed.”

DePriest, though, questioned whether a cable company can produce a 1 gigabit system, saying 105 megabits for the coaxial cable used by the cable industry is the fastest speed he knows.

As for AT&T, DePriest said, the company “absolutely can. The question is can you afford it.”

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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