Wired for competition

Wired for competition

Utilities fight for viewers of new video services.

June 28th, 2009 in Trends2009products

The digital age will bring new options for Chattanoogans this year in how they buy home entertainment and communication services.

In the next year, Chattanooga's primary power utility and phone providers will begin offering video services to compete with Comcast, which is itself in the midst of a major digital upgrade.

"Competition provides many more choices, which we think is a good thing for consumers," AT&T Tennessee spokesman Bob Corney said.

AT&T and its corporate predecessor, South Central Bell, were the exclusive providers of telephone service in Chattanooga for nearly a century before Ma Bell was broken up in 1984. In the past five decades, local cable and Internet providers have begun offering alternative land-line phone services in Chattanooga to compete with AT&T.

In 2009, it is Comcast that will face new competition for video services to the home. EPB is launching its cable television service this summer as part of a three-year effort to bring new video and Internet services to most homes served by EPB's electric service. AT&T plans to bring its U-verse video services to the Chattanooga market by next summer, according to the phone company's business plans filed with the state.

EPB, the city-owned utility, is following the lead of Dalton Utilities to the south. Dalton Utilities' Optilink service turned a profit by 2007 after signing up more than 10,000 customers to one of its cable, Internet or phone services. Competing against Charter cable TV in Dalton, Optilink has continued to add more customers, Dalton Utilities' President Don Cope said.

In the fiscal year that begins July 1, EPB projects it will generate $7.5 million in revenues from its residential cable television and high-speed Internet service. The city-owned utility projects it will take at least three years to turn a profit from its new video, Internet and phone services. EPB is spending nearly $220 million on a fiber-to-home initiative that also will allow for smart electric meters for its 160,000 electric customers.

"We are behind our schedule in getting our electronics up (for the new cable and residential high-speed Internet)," EPB President Harold DePriest said. "But we are way ahead of schedule in putting in fiber, and we're willing to wait a bit to make sure we have the best video option we can offer."

EPB now has 800 miles of fiber-optic lines laid throughout Chattanooga, Mr. DePriest said.

For its part, Comcast is also upgrading its Chattanooga service this year as part of a $16 million digital upgrade. Billing it as the "World of More," Comcast is offering more high-definition TV channels, digital-quality picture and music channels, and expanded on-demand and premium services.

"We're improving both the quality and quantity of what we offer our customers," said Valerie Gillespie, vice president of the Comcast Chattanooga office.

Video variety

* EPB launches its residential high-speed Internet and cable TV services this year as part of its $220 million fiber-to-home initiative

* AT&T will expand its Internet-based video service, U-verse, to Chattanooga in the next year

* Comcast is expanding its digital service as part of a $16 million "World of More" initiative this year