Hamilton Herald Masthead


Front Page - Friday, February 3, 2017

View from the Hill: EPB internet model shut out of Haslam plan

Advocates of increased high-speed internet competition say Gov. Bill Haslam’s rural broadband proposal lacks an important part of the equation: the ability of municipal electric utilities to reach out to people.

Their other concern is that major private companies could have too much voice.

“The other pieces of it we had questions and comments on, it seemed to us that the proposal was, let’s say AT&T fingerprints were all over it,” says Tom Matthews, a member of Southeast Tennessee Citizens for Fiber internet.

Previously called Citizens Striving to Be Part of the 21st Century, the group has advocated for a pocket of southwest Bradley County with weak or no connectivity just outside Chattanooga and the service area of EPB, which offers one of the fastest internet services in the world and has been seeking to expand outside its border.

“The bottom line is that that proposal is a good start and is well intended, but it has some major problems, the biggest problem being it still blocks the municipal electric utilities from expanding broadband outside their service areas,” Matthews says.

For instance, some language in the proposal mentions terms such as DSL, technologies not even considered broadband by its new definition, Matthews says. DSL stands for digital subscriber line, a type of technology capable of transmitting digital data over telephone lines.

EPB is saying it hopes municipal utilities will be given a chance to play a greater role in broadband expansion, while AT&T simply says it’s happy to see the talk turn toward a “comprehensive approach.”

The three main points of Haslam’s broadband initiative call for allowing electric cooperatives to enter the broadband retail market, providing $45 million in grants and tax incentives over three years to companies willing to expand into unserved and underserved areas and increasing use of local libraries for wider use and understanding of broadband.

About 11 percent of the state’s residents don’t have access to high-speed internet, defined as 25 megabits per second upload/3 megabits per second download. But while only 2 percent of urban residents are out in the cold, some 34 percent or rural residents have little or no connectivity, more than 800,000 people, state studies show.

Haslam, who addressed electric cooperatives at a Tuesday breakfast, says he wants broadband, or high-speed internet, to be available for all Tennesseans, mainly for economic and education opportunities. He has no timetable for the plan and says it could take two or more years

EPB and Volunteer Energy Cooperative have been in limbo to a degree with regard to service to southwest Bradley. Both have wanted the backing of state law, since it restricts expansion outside service areas for municipal electric utilities and prohibits electric cooperatives from offering broadband.

State officials say EPB might be able to sell internet service to a cooperative such as Volunteer Energy, under Haslam’s proposal, but the co-op would have to put in the hardware.

“The main thing is we all know competition is a good thing, and as proven by the situation in Chattanooga, competition keeps a cap on the prices,” Matthew says.

For instance, before EPB started providing fiber optic in the Chattanooga city limits, Comcast could get away with raising rates every year, he says, but once EPB turned on its internet service, “miraculously, those rate increases stopped.”

For rural residents, those with little or no ability to connect because they live behind a hill or in a hollow and can’t get wireless service either, this is the time to act, he says.

“We want some choice in who we get our internet from,” Matthews says.

State Sen. Bo Watson, still trying to flesh out the governor’s broadband expansion proposal, contends municipal utility expansion is not as easy as allowing EPB to widen its service area. Other municipal internet offerings would have to be given the same leeway and they might not be run as well as the Chattanooga utility, he points out.

“It’s gonna be a good step toward trying to increase access,” Watson says. “Again, the critical issue here is access versus adoption. People confuse those.”

A study by the Tennessee Advisory Commission on Intergovernmental Relations found less than half of Tennesseans with access to broadband service subscribe to it.

Watson says one of the “challenges” of allowing municipal utilities to expand outside service areas has to do with whether they are simply providing access to broadband internet service or trying to market their product to a wider audience. In other words, are they simply selling television content?

In fact, he says he sponsored legislation to allow EPB and others to expand their footprint for broadband access but not offer cable TV content if another provider was offering the same content in that area.

“Frequently, the argument is made this is for business, economic and educational development. If that’s true, then what economic development and education want is access to the internet. They’re not interested in your program content,” Watson says. “But internet providers don’t market their access, they market their content.”

EPB touts its super-fast internet service and Chattanooga as “Gig City” because of the relatively new service. Watson points out it allows people to download movies faster, and he notes one study he saw showing 85 percent of broadband use is for entertainment, including playing video games.

Besides EPB and large communications companies, though, Watson says about 20 smaller companies across the state need to play a role in broadband expansion, along with electric cooperatives. Those companies have made large capital investments, he notes.

Emerging technologies also will be a key part of broadband access statewide, Watson says, pointing out one wireless group believes hard-wire systems will disappear soon.

“Do you really get into a lot of investment in a hard-wired system, only to find out in five years nobody (will use it)?” he asks.

But as groups statewide start weighing in on Haslam’s proposal, Matthews’ group is concerned about who has a voice. He wonders if municipal utilities could be a “political casualty” of the governor’s plan.

Haslam’s proposal, he says, “seems like a big slap at the municipal electrics, not just EPB, but the other municipal utilities in Tennessee that are capable of providing broadband to other areas but are precluded from doing so.”

Sam Stockard is a Nashville-based reporter covering the Legislature for the Hamilton County Herald. He can be reached at sstockard44@gmail.com.