Gigabit broadband plan draws fire from Tennessee governors

(TNS) – A $72 million proposal from Cleveland Utilities and the municipal government of Cleveland, Tenn. , to provide 1-gigabit broadband and phone service—with the ability to provide up to 10-gigabit speeds to businesses—is drawn from three conservative groups in Bradley County.

According to a proposal submitted in the fall for review by the Tennessee Comptroller’s Office, the goal of the proposal is to build an advanced fiber network for all of Cleveland Utilities’ service areas. The proposed system would also allow utilities to design and install a smart grid infrastructure that provides automatic fault location for power recovery during an outage, and better power recovery response times and phone service.

According to the plan, the full utility fiber network will be better than its competitors, and will deliver more value at competitive prices and consistently higher speeds. The plan states that the utilities have a reputation for responsive customer service and that all revenue generated by the project will remain in Cleveland to provide a direct financial benefit.

But opponents say the proposal pits the government against private companies, could harm customer privacy and could cost taxpayers more in the end.

Dan Rawls, a former Bradley County commissioner, joined conservative advocates Glenda Pabo and Ted Gleeson to send a letter Nov. 21 to Cleveland City Council and Mayor Kevin Brooks opposing the proposal they call a Trojan horse and see as a government overrun of taxpayer spending.

Rawls said the move is an example of leadership not taking an honest look at the implications. The endeavor is reckless and could leave taxpayers holding the bag if it fails, he said in a phone interview, and the private sector is already providing the service and has for years.

“Whether it’s the initial tab or the long-term tab, it doesn’t matter,” he said.

Brooks and the City Council haven’t seen the proposal yet, but the mayor said he’s behind the idea.

“I’ve been a supporter of broadband expansion since I was in the legislature,” Brooks said in a phone interview. “Equal access to broadband is no longer a luxury, but now a necessity in the world we live in. Kids still struggle to do homework, businesses still struggle to do business even within the Cleveland city limits, and I’m for more and better broadband in Anytime we can get it.”

electric to broadband

Cleveland Utilities, founded in 1939, serves more than 32,400 customers throughout its service area, and derives more than 81% of its electric revenue from within the city limits, with the remainder coming from outside the city in Bradley County.

The utility has a limited fiber backbone network connecting 17 electrical substations to monitor equipment and operations and uses the fiber backbone to return electricity and water meter readings for billing purposes, the plan states.

According to the plan, the utility’s electrical division, which will own and operate the fiber network, will lease capacity on its network to a newly created indoor broadband division that will use the network to provide high-speed service to the utility’s customers.

Bradley activists oppose Cleveland’s proposed $72 million government-run broadband network

To fund the project, the broadband division will receive an $8 million loan from the Electric System for start-up expenses. Cleveland Utilities executive vice president Walt Vineyard said the plan was created with input from a customer survey and a feasibility study through the state and Tennessee Valley authority.

Cleveland Utilities President and CEO Tim Henderson said in the plan that adding high-speed internet and related services will provide customers with a better product and generate additional money for utilities in growing their utility fiber expansion project.

The tool hired a market research firm to conduct a broadband interest survey which indicated overall satisfaction for internet service providers as rated at 5.6 on a 10-point scale and 6.4 for phone service providers.

The survey, which collected information from 2,143 customers, found that 97% of respondents expressed interest in facilities that provide internet service, with 46.4% indicating they would “definitely” and 50.6% saying they would “most likely” switch to a utility service. . Also, 79.1% of the survey respondents expressed interest in switching to telephone service provided through utilities.

The proposal includes plans to collaborate with Chattanooga’s EPB, the first in the country to offer a gig service that will lead to the city being named Gig City.

Competitor Show

A longtime local cable and internet charter service all of the city and parts of the county.

“Charter believes that every family in Tennessee should have access to high-quality, high-speed Internet,” company spokeswoman Patty Brasky-Michelle said by email. “That’s why we’ve deployed gigabit-speed service—delivered over a fiber-backed network—to nearly the entire city of Cleveland.”

In addition, Charter announced in December a potential 100-gigabit acquisition of broadband service companies, Michel said, adding that Cleveland Utilities should focus its attention elsewhere.

“In communities like Cleveland that are already served by many telecommunications service providers, limited government funding should focus on real connectivity needs, such as adoption and digital literacy,” Michel said. “By leveraging existing networks and partnering with many broadband providers who have already invested in Cleveland, we can ensure that every resident receives the educational, social and economic benefits that broadband provides. We welcome competition and are proud of our record in building, maintaining and modernizing our networks, including investing Over $123 Million in Tennessee.”

There are problematic elements in the government-owned systems, said Chris Richardson, president of the Tennessee Cable and Broadband Association, which represents cable broadband operators in the state.

“Country-owned smart meter and broadband projects, such as the Cleveland Utilities proposal, are under intense scrutiny,” Richardson said via email. For example, the State Comptroller and TVA’s Office of Inspector General recently released the findings of their joint investigation into Newport Utilities, which launched a smart meter/broadband project in 2017. Their findings included nearly $5 million in wrong-rate payer money. .”

Municipal broadband projects are struggling, especially those launched in the past five years, Richardson said, marking a trend happening in Tennessee and across the country.

“Municipal utilities that have built broadband projects grossly underestimate expenses while grossly overestimating the amount of revenue they can bring in,” Richardson said, citing Johnson City, Tennessee, and Traverse City, Michigan. “These projects put great pressure on local finances.”

Richardson said studies have shown that similar projects end up increasing electricity rates for customers in a competitive climate like Cleveland’s. He said competition among service providers has never been stronger, and the Cleveland market is no exception.

“Cleveland Utilities already has the third highest electrification rates in the state,” he said. “This project will definitely increase them even more.”

Richardson pointed to data from independent broadband watchdog BroadbandNow, which lists at least nine internet services available in the Cleveland market.

“Now, T-Mobile has entered the home internet business, providing service to more than 60% of the city,” he said. “These kinds of competitive pressures are a big part of the reason municipal utility broadband projects are struggling.”

He said Cleveland officials should be wary of services that threaten taxpayer privacy and pocketbooks.

“The bottom line is, Cleveland Utilities’ smart meter and internet plan is a bad deal for local rate-payers and families concerned about their personal privacy,” Richardson said. “Local policymakers in Cleveland must consider all of these issues as they deliberate on the best path forward.”

Rawls and fellow opponents of government-owned broadband expressed concerns about the extent to which smart meter technology could interfere with people’s lives in a message to the city.

The letter stated: “We oppose this project based on a set of clear and indisputable facts.” “Cleveland Utilities will continue to implement smart meter technology in our county through this (government-owned network), responsible for intrusive government thermostat manipulation and California power outages. 99% of Cleveland residents already have access to broadband internet through nine different private providers.

Opponents said the project would see the city government spend tax dollars and taxpayer money to compete with the private sector, according to the opponents’ letter, which asserts that government-owned broadband networks have a long history of failure both nationally and in Tennessee.

next steps

Vineyard, the utility company’s executive vice president, said the Cleveland City Council and Utilities Board have not seen a formal presentation of the proposal, so the idea is in its infancy. These committees have a letter from the Comptroller’s Office, so they know it’s there and considered possible.

“The next steps are to file our utility board and, if they so choose, they will vote to convene, announce and hold a public hearing,” Vineyard said. “And two weeks after that, it will be back to the board for approval to be submitted to the city council for consideration.”

Vineyard said approval requires a two-thirds majority vote by the council under state law.

Currently, he said, there is no timeline or specific dates for the broadband proposal to be introduced.

If placed, Cleveland Utilities will launch aggressive marketing efforts to promote its services, features, and describe the utility’s relationship with EPB of Chattanooga as a strategic partner in developing services and supporting the utility’s startup efforts and ongoing operations, the proposal states. EPB’s national reputation for high-speed fiber services will be leveraged in marketing campaigns to generate demand for the service.

Vineyard said the proposed network does not include plans to certify the ability to control smart appliances, thermostats and other smart home systems. In 2012, municipal utilities began installing smart meters—then called Advanced Metering Infrastructure—that allow the utility to talk to its meters.

“We can communicate with the counters we have now. All of them,” he said. “It’s done by radio on our existing fiber network. They don’t have the capability — the protocol — in them to work on a smart home network.”

If the proposal is eventually implemented, the utility plan would allocate approximately $2.1 million to sales and marketing in the first four years, when administrators believe the majority of customers will be acquired.

©2023 Chattanooga Times / Free Press, Distributed by Tribune Content Agency, LLC.