Speaking Wednesday to a fact-finding panel of the Tennessee Advisory Commission on Intergovernmental Relations, John Farris, attorney for the Tennessee Cable and Telecommunications Association, said "these communities that have gone into this business have done very poorly." He specifically noted a failed venture in Memphis and the levels of debt undertaken by Chattanooga and Jackson to build their high-speed communications networks.
Officials from Chattanooga, known as the “Gig City” for its gigabit per second fiber optic broadband network, which sparked a controversial ruling from the Federal Communications Commission allowing the utility to expand the Internet service outside its electric service area and which is the ultimate reason for the TACIR hearing, were quick to rebut Farris’ insinuations.
Similarly, John Williams, a fiber optic engineer for Erwin Utilities’ own broadband service, said the cable representatives were misrepresenting the facts to advance their clients’ business interests.
“I would argue that every municipal broadband deployment has been successful,” Williams said Thursday. “The biggest thing we like to point out about municipal projects, specifically ours, is the availability to rural customers who may be underserved by existing services. In Unicoi County, only 75 percent is covered by a cable company, so 25 percent of our electric service area doesn’t have access to broadband.”
Erwin Fiber hasn’t borrowed heavily to build its network either, he said, challenging Farris’ debt claims.
Starting in March, Erwin began offering Internet and telephone services to customers within a few blocks of the utilities’ offices using the extra capacity on fiber optic cables installed to manage the electric utility’s smart meter system. With tiered speeds of 25 megabits per second, 100 Mbps and 1 gigabit per second, the rural community is set to become “Little Gig City” or “Gig Town.”
In the first phase, the utility aimed to sign up 300 customers in the immediate area within the first year. Seven months in, Williams said the new service has 200 customers so far, and the utility is set to begin building infrastructure for the second phase this week.
“We have 1,200 electric meters in the phase one area,” Williams said. “The way we calculated it, if we get 15 percent of those to be fiber customers, which is 180, then we’ll have enough for the new service to pay for itself.”
The new service areas of phase two will expand the high-speed services to customers northeast along Main Street and northwest following Tenn. Highway 81 South.
“The biggest benefit is we haven’t borrowed to do it,” Williams said. “We’re leasing capacity from the electric system, so we build out a phase, make a little money, then we start on another phase. The goal is to cover our entire electric service area in five years.”
After that, under current state law, Erwin would be barred from expanding farther, but that law is the target of Chattanooga’s FCC ruling and bills awaiting legislators when they return to Nashville for the upcoming session.
In Washington County, the Johnson City Power Board is testing a broadband service using wireless transmitters and receivers to take advantage of its own existing fiber optic backbone.
Twenty-five customers, including a business, are participating in the test of the technology, which uses high-frequency antennae to transmit information to small receivers installed at each home or business.
In an emailed statement, Power Board CEO Jeff Dykes said the testing is showing promise, but the preliminary phase will likely continue through the coming spring.
“We have seen other systems spend $100 million or more to deploy fiber to the home and offering Internet, phone and cable television programming,” Dykes said in the email. “Our board of directors in years past found such an investment to be too much risk given a rapidly changing marketplace. We are already seeing home phones replaced by cell phones, and some cable programming now offered over the Web. The business case appears much stronger for offering a wireless Internet system at a fraction of the cost of fiber to the home.”