The town of Cleveland, TN is currently considering a proposal to partner with Cleveland Utilities to install a broadband grid for all its residents. As the Chattanooga Times Free Press reports, the plan has garnered both enthusiasts and detractors.
The plan’s stated goal is to build a state-of-the-art fiber network for all of Cleveland Utilities’ service area. Cleveland Utilities claims that their all-fiber network will deliver higher speed and better rates for all participants. By involving a public utility, the plan also points to the retention of revenue by the town as a selling point.
A market research firm was hired by Cleveland Utilities to gauge the interest in the potential partnership between the town and the utility company. Of the 2,143 responses collected, 97 percent of the surveys indicated that respondents were interested in the plan. However, only 46.4 percent of the respondents said that they “definitely” would switch to this service if it became available. A slightly more lukewarm 50.6 percent marked “probably would switch” on their surveys.
Lining up against the proposal are Tennesseans who say that they favor a competitive business environment over a one-stop government run operation. Opponents claim that multiple broadband providers in Cleveland help keep the service affordable. They also pointed to municipal projects in other cities that proved to be more expensive than predicted, creating a hardship for the local economies.
“Municipal utilities that have set up broadband projects have drastically underestimated expenses while significantly overestimating the amount of revenue they are able to bring in,” said Chris Richardson, President of the Tennessee Cable and Broadband Association. He pointed to Johnson City, TN and Traverse City, MI as examples. “These projects are putting significant stress on local finances. Cleveland Utilities already has the third-highest electric rates in the state,” he added. “This project will assuredly increase them even more.”
At this point, the proposal by Cleveland Utilities has yet to be officially presented to the City Council. To be approved, it would need a two-thirds majority vote. “The next steps are to present to our utility board,” said Cleveland Utilities Executive Vice President, Walt Vineyard. “If they so choose, they will vote to hold a public hearing, advertise it and hold it. And then two weeks after that, it would come back to our board for approval to submit to City Council for their consideration.”
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