Fiber takes on cable

Fiber takes on cable

September 16th, 2009 in News

After years of battling one another before judges, regulators and elected officials, EPB and Comcast took their fight to the consumer for the first time on Tuesday.

EPB launched the nation's largest municipally owned cable television and high-speed Internet service in parts of Chattanooga, East Ridge and Red Bank. By next July, the city-owned power utility expects to be able to offer its fiber-optic services to more than 100,000 local homes and businesses.

Within three years, EPB plans to offer its TV, Internet and phone connections to all 160,000 of its electric customers. The utility's business plan envisions that within three years at least 35 percent of those customers - or more than 50,000 residential consumers - will sign up for at least one of EPB's new telecom services.

"Because of this 100 percent fiber-optics network - the only one in this area - customers will have access to a whole new experience," said Katie Espeseth, vice president of EPB Fiber Optics.

"As of today, we have service available for about 17,000 customers, and we're excited about signing customers up and beginning to provide our service," said EPB President Harold DePriest.

But officials for Comcast, the nation's biggest cable TV provider and Chattanooga's cable TV provider for more than three decades, insist their improving digital network is capable of meeting consumer demand.

Valerie Gillespie, Comcast's vice president in Chattanooga, said Comcast has invested more than $15 million in Chattanooga this year to upgrade its Internet speed to 50 megabits per second. Comcast also completed its digital conversion of all of its Chattanooga operations this summer and now is making a similar transition in North Georgia.



* All fiber-optic system for Internet connection and speeds up to 50 megabits per second

* Fi TV with more than 320 channels, including 53 high-definition channels, and access to other premium channels and video library

* Quad DVR to allow recording of up to four programs at one time

* Smart search and navigation features for easier selection of TV programs, movies

* Phone service with 10 features such as call waiting and caller ID

* Bundle discounts for multiple services

* On the Web at


* All-digital network with variety of Internet options and speeds up to 50 megabits per second

* Cable TV service to more than 300 channels, including 91 high-definition channels

* Video on demand with access to more than 10,000 movies and TV shows

* Comcast telephone has a variety of services, now the third-largest in America

* Introductory rates for many services

* Upgrades in speed and services since Comcast began laying fiber-optic lines in Chattanooga in 1992

* On the Web at

Sources: EPB, Comcast

"We're going to continue to focus on delivering what our customers want," she said. "They keep asking for more high-definition channels and for higher speeds on the Internet, and that's what we keep doing."

EPB President Harold DePriest said surveys over the past five years consistently show Chattanoogans want an alternative to Comcast. EPB will be able to offer faster Internet speeds for both uploads and downloads, and the new TV service will feature more channels and the ability to record more programs at once, he said.

EPB began laying fiber-optic lines nearly a decade ago to upgrade the communications network for its electric system. Despite objections from Comcast and others, EPB directors and the Chattanooga City Council voted two years ago to authorize the city utility to develop its fiber-optic network.

The move came despite legal challenges by the cable TV industry. In lawsuits filed in both Davidson and Hamilton counties, the Tennessee Cable Telecommunications Association charged that EPB unfairly could subsidize its new competitive video services with revenues collected from its monopolistic electric service.

But Mr. DePriest dismissed such claims.

"We've won four court challenges and there is simply no evidence - and any reason why - we would use electric revenues for this service," he said.

The Tennessee Valley Authority regulates EPB and other distributors to prevent such cross subsidization.

Most of the $220 million expense of building EPB's citywide fiber-optic system will be borne by electric ratepayers. The electric system will pay $160 million of the cost to gain better control of the city's power grid and to be able to offer "smart meters" for consumers to better regulate their individual power usage.

During a new conference Tuesday to announce the launch of the new video services, EPB officials said the services will help both businesses and consumers.

EPB Director Harold Coker said the availability of fiber-optic service should aid the city in its efforts to attract businesses.

"It should help in our industrial recruitment," he said, noting that Volkswagen already has signed up for EPB Telecom services in downtown Chattanooga.

Ms. Espeseth said EPB has priced its new services competitively with Comcast and its quality should be clearer and faster. In most instances, EPB is not undercutting Comcast's current rates and, in some instances, EPB's rates will be higher than Comcast's introductory rates.

"We're entering the market with a consistent and clear price - it is not a temporary, promotional price," Ms. Espeseth said. "Because of our fiber-optic infrastructure, our picture quality is clearer and more consistent and our 'Fi-speed' Internet service is consistent and more reliable."

On Tuesday, EPB workers began mailing brochures and placing door hangers on many of the 17,000 homes where EPB's telecom services now are available.

The utility has hired 70 full-time and 50 temporary installation workers for its telecommunications division. EPB is set up to do installations of the new service in more than 100 homes a day, Ms. Espeseth said.