Knoxville Utilities Board clears final hurdle to provide broadband internet for customers
The Knoxville Utilities Board has the green light to provide a public fiber broadband network to its customers.
It will be a years-long process to provide 1-gigabit, symmetrical fiber internet service to every customer in KUB's electrical footprint. That's approximately 210,000 households in mostly Knox, Grainger and Union counties.
According to KUB's proposal, service would start at about $65 a month and could begin as early as 2022. Service would extend to all of KUB's territory by 2029.
The utility has estimated the seven-year project would cost $702 million over 10 years.
The plan is inspired by Chattanooga's municipal broadband system, touted as one of the fastest and most reliable broadband networks in America.
KUB will increase the cost of monthly electrical bills over the course of three years to pay for broadband and improvements to the existing electrical grid. It estimates at the end of three years that monthly electrical bills will be about $10 more than they are now.
KUB estimates the consumer could save on average $11- $46 a month on internet service.
Knoxville City Council approved the proposal Tuesday night, the final regulatory step required. The vote was 8-0; Councilperson Andrew Roberto abstained.
Broadband would have overall positive impact, study finds
A University of Tennessee analysis found broadband would have overall positive economic effects on the community.
“The cost savings of this plan would be an $18 million-$85 million increase in Tennessee incomes per year,” said Larry Kessler, a professor at the University of Tennessee Boyd Center for Business and Economic Research. “It has a lot of benefits, including increasing regional GDP and reducing time for job search."
It means more revenue for the city as well. City of Knoxville Chief Policy Officer Erin Gill said the payments-in-lieu-of-taxes KUB pays to the city would increase by approximately $4.7 million a year. That added revenue would raise its payments to $26 million a year.
KUB representatives have also said the utility is exploring offering broadband access for lower income homes that might not be able to afford the service. The utility has been authorized to enter into partnership with the City of Knoxville to provide a low-income option.
Broadband service would be weighed separately from other utilities so non-payment for internet would not result in an electricity disconnection.
Comcast, local opponents and national lobbying groups had been advocating a voting delay on the proposed plan. This was most succinctly argued by County Commissioner Justin Biggs in a June 24 letter sent to council members last week.
KUB has already passed the other regulatory steps to approve the broadband process, including receiving approval from Tennessee Valley Authority and the Tennessee Comptroller. KUB's Board of Commissioners approved the plan June 18.
Electricity, water ... and high-speed internet?:KUB wants to add broadband to services
The utility considered offering broadband in 2019, but the topic became more urgent in 2020 when the COVID-19 pandemic shutdown forced adults to work from home and children into virtual schooling.
Major turnout among broadband supporters
Over a dozen speakers signed up to speak on the broadband proposal, the vast majority of which favored the plan. There was a wide coalition of speakers in favor, including social justice advocates, business people, professors and people frustrated with private internet service providers.
"Comcast thanked me for being a customer for 23 years, but it's not because I've had the option to go anywhere else," said local entrepreneur Tyler Roy, who said he had once driven across town during rush hour because that was faster than uploading a file to his home device. "They have had 23 years to fix these problems and they haven't."
Vivian Shipe, a community organizer and head of Voice for the Voiceless, spoke in favor of the proposal. She called on supporters of the broadband proposal to stand. Most of the room joined her.
"Life-changing decisions are being made across this land from the Supreme Court on down,” said Shipe. "Now you are being called on to make a life-changing decision for the people of Knoxville.”
"You’re a tough act to follow,” said Union County Mayor Jason Bailey, who spoke in support of municipal broadband after Shipe. Bailey said Union County had provided all public school students with Chromebooks, which are dependent on internet service. Lots of Union County kids who received one did not have internet access.
"There are many areas of our county that don't have cell phone service, but you know what they do have? KUB running right to their homes," Bailey said.
While some have raised questions about possible rate increases required to fund the plan, support for the expansion has been broad.
Opponents say more time was needed
Comcast Vice President of External Affairs Andy Macke came from Georgia to oppose the proposal. He was not the only out-of-state speaker. James Doyle, founder of Washington non-traditional lobbying group Business Forward, also spoke at the meeting.
Opponents' common argument was that more time was needed to have a conversation about what the best option was for the community.
Macke cited a proposal that Comcast had floated to the mayors of Knox, Union and Grainger counties as a potential alternative to the broadband program.
This proposal had been previously met with a lukewarm reception by Knox County Mayor Glenn Jacobs and Union County Mayor Jason Bailey.
Comcast provided its plan to Knox News, in which it pledged to extend gigabit service to every home and business in the KUB footprint in Knox, Union and Grainger counties, but not the edges of KUB's service in other counties.
Comcast's proposal did not provide a proposed price point for those customers and would require each of the three counties to provide hundreds of thousands of dollars in investment.
"I'm always hesitant to use public money to subsidize the private sector,” Jacobs told Knox News in an emailed statement. “For instance, the county could be in the situation of paying Comcast to use infrastructure county money helped build.”
Jacob's spokesperson Mike Donila told Knox News that Jacobs believed that KUB was a good community partner but that they should not be in broadband.
Union County Mayor Jason Bailey told Knox News that Comcast's proposal was a harder sell for his county given the financial commitment and reliance on state grants.
"I'm not throwing Comcast under the bus here," Bailey told Knox News, "There have been so many areas in the county that have literally begged for internet. ... And all of a sudden here they are."
"My question is, where have you been before?" he continued.
Source: Knoxville News Sentinel, by Vincent Gabrielle
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Published July 8, 2021