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Chattanooga, Tenn., Gets Pricey 1 Gbps Broadband

Ultra-high speed broadband service costs $350 per month in Chattanooga, Tenn., so it’s targeted at businesses rather than households.

In the competition for faster broadband Internet service in America, it isn’t New York City or a Silicon Valley community, but a mid-sized industrial city in the South that has emerged as an unlikely champ.

In southern Tennessee, Chattanooga unveiled Monday, Sept. 13, its 1 Gbps broadband service, which city officials declare to be the fastest rate available in a U.S. city and tied with the fastest in the world.

More than 100,000 homes and businesses in Chattanooga now have access to the high-speed network, which is more than 200 times faster than the average download speed available in the U.S. EPB Fiber Optics, the city-owned power company, and Alcatel-Lucent plan to complete the build-out by 2011.

“Now, we can say without exaggeration, that Chattanooga is second to none,” said Ron Littlefield, mayor of the city of 170,000.

But the service doesn’t come cheap. If customers want access to the lightning-fast network, they have to fork over $350 per month. With the steep price tag, it’s hard to say exactly who will have a need for this kind of speed. At this point, EPB officials said, nobody has signed up.

The ideal customer, city officials said, would be companies that move massive data files. Littlefield mentioned doctors who will now be able to work from home by having access to this processing power. The University of Tennessee’s simulation center would also benefit.

“It’s not envisioned or intended for the average homeowner,” Littlefield said. “But it gives us some significant new capabilities that we didn’t have before.”

The city sees the network as an investment in the future, which will pay off in time, similar to the early deployment of electricity, said Danna Bailey, vice president of corporate communications for EPB.

“Right now, we don’t know what kind of companies are going to need it,” Bailey said. “But we know that eventually, as people build businesses and develop new applications, there will be a need for more bandwidth.”

How Chattanooga Beat the Search Engine Giant

Chattanooga’s timing couldn’t be better. In March, the FCC delivered its agenda to speed up U.S. Internet connections, which have been lagging behind other countries. On a mission to close the digital divide, the Barack Obama administration has made broadband adoption in America a priority.

Earlier this year, Google announced plans to transform the country’s broadband landscape with an experimental 1 Gbps network, and 1,100 communities and nearly 200,000 individuals responded for a chance to become Google’s test site. The lucky winner should be announced by the year’s end. While other cities waited around, Chattanooga forged ahead on its own.

The city’s announcement might catch those outside of Chattanooga off guard. But the roots of this plan reach back at least 10 years, when the city first started planning its smart grid.

“The whole idea was to operate our electric system more efficiently and effectively,” Littlefield said. “We were already building out the system with funds and financing internally.”

As EPB began upgrading the power system by installing a fiber-optic infrastructure, the company realized that it could use the same infrastructure to offer next-generation communication services. Last summer, Littlefield said, the city received a $111 million stimulus grant, which put the project on the fast track.

“Chattanooga is light-years ahead when it comes to providing ultrafast broadband,” said Tom Edd Wilson, president and CEO of the Chattanooga Area Chamber of Commerce, in a release. “By offering the fastest available speeds to a whole community comprising a diverse population living in both urban and rural areas, Chattanooga has become the living laboratory for today’s innovations and tomorrow’s companies.”

Last spring, while mayors swam with sharks, cities changed their names and spoof videos hit the Web in a reality show-like frenzy to get Google’s attention, Chattanooga was powering forward.

“We didn’t go through those outrageous political stunts that a lot of other cities did,” Littlefield said. “We’re not diminishing what Google plans to do, but we were already well along with this system.”

But if Google wanted to come to Chattanooga to use the city’s infrastructure to test ideas, Littlefield added, the company is welcome to do so.