published Saturday, December 15th, 2012

EPB gets lump of coal for high-speed fiber network

EPB's newest high-tech venture got an old-fashioned sign of scorn on Friday.

The Beacon Center, a Nashville-based watchdog group that advocates free-market approaches to public policy, gave its annual "Lump of Coal" award to the Chattanooga utility for its federally funded investment in a fiber-optic network.

EPB now boasts the fastest citywide Internet service of any Web service in America.

But the Beacon group claims the service was built on the backs of taxpayers and ratepayers. Beacon CEO Justin Owen said EPB is Tennessee's biggest Grinch in 2012 for using taxpayer grants and electricity-backed bonds to pay for telecom services that compete with Comcast, AT&T and other private companies.

"The public utility has squandered millions competing with the private sector in its quest to rule the Internet market throughout Southeast Tennessee," Owen said.

The Beacon Group claims EPB built its system using $111.2 million of federal stimulus grants, plus $160 million in subsidies from its electricity customers.

But EPB insists that the fiber-optic network it has built over the past three years has improved electrical service, reduced meter reading and power outage expenses and brought in new revenues from telecom services. That has combined to cut local power rates by 5 percent below what they would otherwise be without the fiber-optic network.

The new gigabit-per-second Internet speeds also have made Chattanooga the first "Gig City" in the United States and should help attract more computer programmers, app developers and other high-tech companies, EPB Vice President Danna Bailey said.

"Not only is the smart grid consistently reducing the impact of power outages on local homes and businesses by 50 percent or more, EPB fiber-optic products are serving over 46,000 homes and businesses with ultra-high-speed Internet, TV and phone services," Bailey said.

"The continued success of the network and our community is the only award that matters," she said.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340

about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

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