Chattanooga is becoming a new center of innovation.
John Pless – EPB
Chattanooga’s highly touted gig-speed Internet service was built with heavy government subsidies that are distorting the marketplace, crowding out private investment and threatening higher power rates or tax bills for others, according to a new economic study of municipal broadband systems.
A conservative think tank opposed to city utilities getting into competitive telecommunications – the State Government Leadership Foundation – sought Wednesday to minimize the benefits of Chattanooga’s ultra-high-speed Internet service while raising doubts about its potential costs to city taxpayers and electricity users.
Dr. George Ford, chief economist for the Phoenix Center for Advanced Legal and Public Policy Studies, said EPB got the equivalent of $2,000 per customer in federal subsidies to build its citywide fiber optic network, which claims to be the fastest communitywide Internet service anywhere in the world.
Ford said other government-owned utilities, such as one in Bristol, Va., have gotten $7,000 or more per subscriber to add telecommunications services that compete against private companies such as AT&T, Comcast and Charter Communications.