Internet rivals Comcast, EPB slug it out in Chattanooga market

  photo  Internet rivals Comcast, EPB are slugging it out in the Chattanooga market, with each touting its services and its growth. Staff photo illustration by Tracey Trumbull

A distraught-looking man stands in the rain, his hair and clothes soaked by the downpour.

"It turns out that the speeds I was looking for, Xfinity Internet had all along," he says, before embracing a nearby red-jacketed Comcast employee. "But you knew that, didn't you?"

A moment passes between them. It's very emotional.

"Look, I get it. I was young once," the employees responds. All is forgiven.

The words "welcome back" flash across the screen, and the commercial ends.

A lot of customers are coming back to Xfinity, Comcast claims, because of the larger OnDemand library, integrated applications and greater array of choices.

Billboards on I-24 and Broad Street drive the message home, mentioning EPB by name.

The only problem with Comcast's claims is that they're totally false, said Harold DePriest, president and CEO of Chattanooga-area competitor EPB.

A few customers may be switching back to Comcast, which boasts a top download speed of 105 megabits per second, but even more are still coming over to EPB, which offers 1,000 megabits, or one gigabit, per second.

"The TV commercials don't tell the whole story," DePriest said. "Yes, we are losing customers, but we are gaining more than we lose. We have more customers, the revenue is higher and the margin is higher."

Billboard brawl

Launched in 2009 and available throughout Chattanooga in 2010,

EPB's fiber-to-the-home has grown to almost 37,000 customers this year, and is projected to reach 42,000 customers by the end of the utility's fiscal year 2013, according to EPB's recently approved budget.

That's about 20 new customers per day, an increase of about 13 percent from the current level.

"Don't believe the commercials, we're doing quite well," DePriest told his board of directors during budget discussions.

EPB's own commercials feature customers at Chattanooga's Home Show, some of whom cast doubt on the validity of Comcast's claims.

"I feel sorry for the people who feel, having tried EPB, they went back to whatever," said a man identified only as John. "I see those commercials on television and I'm thinking, how much do they pay you to say that?"

EPB's billboards claim the utility offers more HD channels and doesn't require a contract, and criticize Comcast for the volume of direct mail it stuffs in local mailboxes.

Fiber fight

There's little love lost between the two local Internet service providers.

EPB's entrance to the market was held up by a number of lawsuits, including a Comcast suit that was thrown out as recently as 2008. It took an act of the state legislature to authorize the utility to offer Internet service to local electric customers. And recently, EPB challenged Comcast's right to call itself "the nation's fastest Internet provider" in its ads.

Calling Comcast's speed claims "confusing" and "inaccurate," EPB spokeswoman Deborah Dwyer said that EPB, not Comcast, is responsible for Chattanooga's various accolades as the city with the Western Hemisphere's fastest Internet.

"That's the truth, and Chattanoogans know it and are proud of it," Dwyer said.

The city-owned utility also is seeing growth in new business users, who are switching to a bandwidth-based solution instead of traditional telecom, officials said. Rather than pay for regular phone lines, customers are buying an upgraded digital suite that routes phone data through the Internet, officials said.

High-speed hurdles

However, there still are hurdles to overcome.

The rush to match the number of movies and services offered by Xfinity and AT&T's U-Verse will drive up costs, and could result in a 5 percent price increase if costs are not offset, according to the utility's budget.

Comcast, which is required to provide subscriber information to the city to calculate its local franchise fee, still claimed more than 100,000 subscribers as of the end of 2011.

The cable giant arguably offers more features including home security and automation, the largest video library and integration with handheld and living-room devices, said Jim Weigert, vice president and general manager of Comcast's Chattanooga division.

"Chattanooga likes to talk about the Smart Grid, but we allow you to control power in your home already," he said. "People are only getting one side of the story -- you can't take the Smart Grid and manage your own energy."

Cable's criticism

Weigert said EPB's vaunted gigabit Internet doesn't seem too popular in reality.

EPB's own figures show that fewer than a dozen customers are actually signed up for its $350 per month gigabit service.

That's because there isn't a need for such speed, Weigert argued.

"There are packages and options that are good for virtually every situation and provide more value both initially, and in the long run, than other choices customers have in this area," Weigert said. "That's why our latest ads resonate, I think."

Comcast also offers several tiers of service that are cheaper than what EPB offers, including $10 Internet for low-income families.

"We see customers come back every day, from all providers we compete with, including EPB," Weigert reiterated.

And even if EPB is growing subscribers as it claims, that doesn't mean Comcast's own claims are incorrect.

"People go back and forth, to some extent," he said. "They may say I'm gonna try U-Verse, I'm gonna try Comcast, I'm gonna try EPB, I'm gonna try DirectTV, and that's how things work in the real world."

Still, EPB's not taking the criticism lying down, DePriest said.

Megabit for megabit, EPB still is cheaper when Comcast's short-term discounts are removed, he said Friday. And though the utility doesn't have as many options as Comcast, it plans to roll out four new services this year.

"This was supposed to be a difficult year, but we're still growing at a fast rate," DePriest said. "What we've been able to do has been very transformational for the entire community."

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