Under existing state law, city utilities are only allowed to offer telecom services to customers within their power service territories, but Cleveland Utilities hopes the state will reconsider.
(TNS) -- Cleveland Utilities, which has provided electricity, water and sewers in Bradley County for the past 76 years, is studying whether to add high-speed Internet, telephone and cable TV to its portfolio of services.
Ken Webb, president of the Bradley County, Tenn., utility, said he is convinced the public wants better broadband service, especially in the rural portions of the county outside of the city. But rather than have Cleveland Utilities invest the estimated $45 million needed to build a countywide fiber optic broadband network, Webb said CU is considering a partnership with Chattanooga's EPB, which already boasts the fastest Internet in the country.
"We don't want to reinvent the wheel," Webb said Tuesday. "We continue to study our options (for adding telecommunications services), but we would prefer for the state to allow us to have the option of working with EPB."
EPB is one of seven municipal electric utilities in Tennessee which have built their own high-speed broadband networks to serve their customers. Under existing state law, city utilities are only allowed to offer telecom services to customers within their power service territories.
If the law is changed or the court upholds a Federal Communications Commission decision last year that struck down Tennessee's territorial limits on municipal broadband, CU and EPB could partner in an arrangement to offer broadband throughout Bradley County.
"The removal of the barrier (by the Legislature) would, in my opinion, open up a world of opportunity between utilities with the ultimate winners being the community and the region," Webb said. "The cost savings of a partnership could potentially be significant and we could benefit by using the best practices of others."
Webb said municipal utilities "have a long history of working together for the good of the community." Citing the aid Cleveland Utilities got from 12 other public power utilities during the storms of April 2011, Webb said such help and cooperation "is in the DNA of public power utilities."
"Can we make it happen? The outcome of this process is still unknown," Webb told business leaders in Cleveland last month. "This decision must not be based on emotion, but based on facts. And what we do know is that any proposal to provide service must be reliable, reasonably priced, backed by first-class customer service, be available to all customers in our electric footprint and be based on a solid business plan developed on conservative estimates."
The private companies that now provide broadband in Bradley County — the telephone company AT&T and the cable TV company Charter Spectrum — both oppose municipal electric systems expanding into their territories.
Allan Hill, regional director for AT&T, said the phone company already has seven fiber-ready, multi-tenant buildings in Cleveland where fiber is offered to businesses.
"Additionally, mobile broadband with 4G LTE capability is widely accessible in Bradley County," Hill said.
But Webb said many Bradley County residents are eager to gain access to Chattanooga's 10 gigabit-per-second Internet speed — the fastest of any citywide system in America.
"Should the (legal) barrier be removed (preventing EPB from serving Cleveland), some residents stand to get worldclass access to the Internet within a few short months from EPB," Webb said.
Any new plan to expand into municipal broadband by Cleveland Utilities, like those now provided by other city-owned power companies in Tennessee, must be accepted by the Tennessee Comptroller. Any telecom initiative also will have to be self-funded and can't be subsidized by other services.
EPB President Harold DePriest said the Chattanooga utility could expand its fiber optic service to neighboring areas in portions of Hamilton County now served by Volunteer Energy Cooperative and in all of Bradley County served by VEC and Cleveland Utilities, if the Legislature adopts pending legislation to allow municipalities to expand broadband beyond their power footprint.
"My constituents want and need municipal broadband," said state Rep. Kevin Brooks, R-Cleveland, who is sponsoring the legislation to allow municipal electric utilities to offer broadband anywhere in the state.
DePriest, who is also chairman of the Tennessee Fiber Optic Communities, said the Chattanooga utility is eager to expand into the parts of Hamilton County it doesn't currently serve, which includes about 9,000 homes in east Hamilton County, and into all of Bradley County, which has more than 50,000 homes and businesses.
"We have developed some plans and we will develop more," DePriest said. "We've already had more than a thousand people from that area write us, email or call us asking when they can get our (broadband service)."
Depriest estimate it would cost an extra $13 million to $15 million to serve with fiber optic telecom the areas of Hamilton County EPB doesn't currently serve. Expanding service to Bradley County would be much more expensive, but DePriest said he still thought there would be a strong enough demand to make such an expansion financially viable, even competing against other broadband providers.
"We think we have the expertise and the infrastructure already in place so that expanding into these areas would help them and help us," he said. "We would have to work out the arrangement with Cleveland Utilities and Volunteer Electric because this is their territory and we're not going to go anywhere where we are not invited and where it doesn't make good business sense."
©2016 the Chattanooga Times/Free Press (Chattanooga, Tenn. Distributed by Tribune Content Agency, LLC.