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Chattanooga Video Explains Potential Gigabit Expansion Process

Following up on our post last week noting the new video from Tennessee Fiber Optic Communities, another video recently posted explains what needs to change in Tennessee law for Chattanooga to expand Internet access beyond the current footprint. EPB Chief Operating Officer David Wade also explains the process the municipal electric distributor will use to connect nearby communities.

Video: 

Tennessee Fiber Optic Communities - Video on Gig Freedom

In a video calling for "Broadband Equity," the Tennessee Fiber Optic Communities have released a video explaining why communities must have their local Internet choice restored.

We encourage you to Like and Follow their campaign on Facebook.

Video: 

Chattanooga's EPB, Local Cooperative, and Athens Utility Board Collaborate For Better Internet

Athens, Tennessee, has struck a deal with Chattanooga's EPB and the Volunteer Energy Cooperative (VEC) that could facilitate the city's interest in a municipal fiber network. According to the Times Free Press, the Athens Utility Board (AUB) hammered out the final agreement earlier this month.

AUB is leasing fiber from VEC that carries a gigabit signal from EBP to the AUB system.

According to the article, AUB has explored the prospect of developing their own fiber network as early as November 2013 and now offers Internet access to one business in a local business park. AUB General Manager Eric Newberry told the AUB Board that they plan to approach other local businesses to set up additional commercial accounts. They plan a slow buildout and urge local businesses, many of them clamoring for a reliable connection, to be patient as they take next steps.

Athens is part of the Chattanooga-Cleveland-Dalton area in the southeast corner of the state and home to around 13,500 people. In March, the City Council voted unanimously to pass Resolution 2015-11 supporting local authority for telecommunications. [See the PDF of the Minutes p.1]

Thusfar, the investment has cost $58,258.69 for labor, materials, and equipment. The Board had budgeted $100,000 for the project.

EPB Fiber Keeps Electric Rates in Check

For the first time in four years, EPB is asking its board of directors to approve a rate increase for electric power charges, reports the Chattanoogan. According to EPB, revenue from the Fiber Optic division has kept electric power prices in check for the past four years.

Price increases are always a frustration for residents and businesses, but this is actually another example of how the entire community, even those who may not subscribe to EPB's fiber network, have beneifted via reduced energy rates. We wrote about this last in 2012.

According to the article, several years of deadly storms have caused damage that have increased the average cost of cleanup from $2 million per year to $6 million per year. Additionally:

Officials said this rate increase "is driven by a continuing trend over several years of higher-than-normal costs associated with the greater frequency of devastating storms and by large peak energy demand charges that EPB pays to TVA for power generation.  These demand charges are not covered by regular power sales during months with extreme fluctuations in temperature, particularly when there are a few days of extreme temperatures and the rest of the month is much milder."

The article also notes that the fiber optic division has made $13.4 million over the past fiscal year. Debt from the investment made to offer telephone services is expected to be paid off this June.

[EPB CEO Harold] DePriest  said it was "the best investment we ever made."

EPB and Chattanooga Will Lower Price of Internet for Low Income Students

In an effort to extend the benefits of its gigabit network to lower income Chattanooga school kids, Mayor Andy Berke announced that the EPB will soon offer the "Netbridge Student Program." 

WDEF reports that children will qualify for the program if they are enrolled in Hamilton County schools and are currently enrolled in the free or reduced price lunch program. Comcast's Internet Essentials uses the same eligibility criteria. Households that qualify will be able to sign up for 100 Mbps service for $26.99 per month. Details are still being discussed.

Last year, Hamilton County schools replaced a number of textbooks with iPads in an attempt to take advantage of Chattanooga's fiber asset to improve student performance. The move revealed a grim reality - that many students' access to that incredible gigabit network (or any network) stopped when they walked out of the school. Educators found that children with Internet access at home made significant strides while those without fell behind. From a December 2014 article on Internet and Chattanooga students:

In the downtown area, for example, only 7 percent of potential customers subscribe to high-speed broadband Internet. In economically depressed areas such as Alton Park and East Lake, only 15 percent of residents have high-speed Internet, according to EPB.

We spoke with Danna Bailey, Vice President of Corporate Communications from EPB, to get some details on the plan and she confirmed that the program is still in its infancy; officials at EPB plan to have it ready for students by the fall. She told is that the rate of $26.99 is what EPB must pay to bring 100 Mbps to a customer when it is unbundled. The regular rate is $57.99. 

Note that the slowest speed anyone can get on the EPB Fiber network is 100 Mbps symmetrical. Unlike other providers, EPB is not offering a much slower tier to low income households. We haven't been able to verify, but we suspect that EPB is limited by state law on its pricing. State laws that prohibit municipalities from offering services below cost may be uniquely hurting low income households -- yet another reason that states should allow communities to make these decisions locally.

We were curious about how EPB plans to contend with the high incidence of mobility among lower income families, which often complicates their ability to qualify for Internet Essentials from Comcast. EPB acknowledges that this may become an issue, but because they are so entrenched in the community and serve so a large segment of housing, Danna does not believe it will be a difficult problem to overcome. 

They are also determined to avoid the enrollment pitfalls of Internet Essentials because, according to Danna, it defeats the purpose when people who need the program cannot enroll. It is also undecided at this point whether or not the program will be extended to other low-income households, such as the elderly or adults without children.

We applaud any community's attempt to provide fast, affordable, reliable Internet access to their less advantaged citizens. The program is new, but we hope that EPB will consider this sort of program for all those that need affordable access, rather than just a small segment. We want to see capable communities address the digital divide with force and conviction.

Local coverage from WDEF:

Morristown FiberNET in the Spotlight

In a recent report, WBIR Knoxville shined the spotlight on Morristown. The article and video discuss how FiberNET has improved its telecommunications landscape by inspiring competition, offered better connectivity to the region, and how state law prevents other towns from reaping similar benefits. We encourage you to watch both of the videos below.

Morristown's utility head describes how it considers high-speed Internet access to be a necessary utility:

"You had railroads, you had interstates, and this is the new infrastructure cities need to have," said Jody Wigington, CEO of Morristown Utility Systems (MUS). "To us, this really is as essential to economic development as having electricity or water."

Morristown began offering gigabit service via its FTTH network in 2012. It began serving residents and businesses in 2006 because the community was fed up with poor service from incumbents. Since then, FiberNET has stimulated economic development, saved public dollars, and boosted competition from private providers. 

Prices for Internet access are considerably lower in Morristown than similar communities. From the article:

Morristown's Internet service is more expensive than Chattanooga, but much faster than the rest of the region at a comparable price. A 100 Mbps synchronous connection is $75 per month. Advertised rates for Comcast in Knoxville show a price of almost $80 per month for a 50 Mbps connection with much slower upload speeds. A 50 Mbps connection in Morristown costs $40 per month. The cable Internet option in Morristown is Charter, with an advertised price of 35 Mbps for $40 a month.

As we have seen time and again, the presence of a municipal network (nay, just the rumor of one!) inspires private providers to improve their services. AT&T offers gigabit service in Morristown and Comcast has announced it plans on offering 2 gigabit service in Chattanooga.

"Without a major disruptor like we've seen in Chattanooga and in Morristown, there's really no reason for these guys [private companies] to go out of their way to make a big spend to make bandwidth faster. It just simply doesn't make good business sense," said [Dan] Thompson, [senior analyst for Claris Networks].

Thompson said he does not believe there should be any concern that municipal Internet would result in a monopoly akin to other utilities.

"If you go to Chattanooga, Comcast advertises like crazy on billboards down there. You don't see that here [in Knoxville] at all. Comcast is still there. AT&T is still there. They're still viable options."

Beyond offering better service to residents, FiberNET also attracts more employers. In 2013, we reported on 228 new jobs in the community, attracted here in part because of FiberNET's reliability. Most recently:

"There is a new call center that is looking at relocating to Morristown. They told us the local provider can get them fiber in the building for around $1,000. The guy from our utility company told him we've already got fiber to your front door and we'll put it in the building for free because you're going to be helping our economy and jobs. Their jaws drop. Businesses really are shocked by what we have here," said [President of the Morristown Chamber of Commerce Marshall] Ramsey. "They looked at Blount County and looked at Knoxville, but the confidence in the networks just isn't there right now."

Even though the FCC struck down state restrictions on municipal networks in Tennessee, local communities are not rushing to deploy their own networks. The state is challenging the federal action, and no local community has announced an expansion due to the uncertainty around the appeal. With this appeal, the state of Tennessee is wasting taxpayer dollars to deliberately slow the deployment of essential infrastructure in rural communities.

As Wigington acknowledges in the story, a municipal fiber network is no small endeavor. Nevertheless, only a local community can know if it has the ability, drive, and need to venture into Internet access as a utility.

Wigington said the decision of whether to compete with private industry should ultimately be made by the cities, not made for them by the legislature or the cable companies.

"Cities need to be able to make this decision."

Tennessee Bill to Strike Anti-Muni Laws Tabled Until Next Session

Senator Janice Bowling and Representative Kevin Brooks have decided to table their legislative efforts to remove state restrictions in Tennessee. While backing for SB 1134 and HB 1303 was growing beyond the walls of the state Capitol, the sponsors decided to shore up stronger legislative support rather than risk derailing the bill entirely. 

Brooks told the Tennessean:

"We have had a lot of good progress, and we don't want to throw it all away," Brooks said. The votes were not there in the Senate, and he and co-sponsor state Sen. Janice Bowling, R-Tullahoma, have asked to roll the bill to the beginning of the 2016 calendar, giving them more time to garner support from their colleagues.

"We have pressed the pause button to keep it alive," Brooks said.

Communities around the state, including Bristol, went on record in support of the bill. The Tennessee Farm Bureau, representing 600,000 members, also backed the legislation

Energized by the recent FCC decision nullifying state laws restricting Chattanooga from expanding, Bowling, Brooks, and other local leaders thought the time was right to once again try to eliminate state barriers. The FCC decision has already been formerly challenged by Tennessee's Attorney General with the support of the Governor. Rather than depend on federal intervention to establish an environment that will encourage connectivity, SB 1134 and/or its companion HB 1303 would have solved the problem on the home front.

Economic development has been stifled by state barriers preventing municipal network expansions in the state but many constituents are plagued by lack of personal access. Incumbents who have spent millions lobbying to keep these restrictions in place during past legislative sessions, do not serve a number of rural areas. Those areas could benefit from municipal network expansions. From a March 6th Tennessean article:

"My district said we need help. We have some folks with little service, some folks with no service," Brooks said. "This is not about government intrusion; this is a bill about service exclusion."

Even though the legislation will not change state law this session, the FCC decision still stands for now. It may take years for the issue to be finally determined but hopefully the momentum will continue and more Tennessee voters will let their elected officials know they want to strike anti-muni laws from state books.

From an EPB Press Release:

“Thanks to a growing number of Tennesseans, who are contacting their representatives to communicate their critical need for broadband services, we made more progress this legislative session than ever before,” Senator Bowling said. “Next year, I hope the needs of the hundreds of thousands of Tennesseans with little or no broadband service will override the vested interests of the legacy carriers who refuse to serve them while lobbying to prevent community-based providers from meeting the needs of the people in our state.” 

WDEF News 12 covered the story:

We simply find it stunning that a majority of legislators in Nashville believe that their state is better off with slower Internet access. That is exactly what this is about - AT&T and Comcast have purchased another year of not having to worry about competition from the Tennessee General Assembly.

Chanute and Chattanooga Added to List of Rural Broadband Experiment Funds

A year ago, the FCC accepted applications from entities seeking Connect America funds for rural broadband experiments. After provisional awards and some eliminations, Chanute's FTTH project, Chattanooga's EPB, and a number of additional cooperatives are now on the list of provisional winners reports Telecompetitor.

According to the article, $27 million became available when 16 entities were eliminated for various reasons.

A recent Chanute Tribune article reports that the city's expected award will be approximately $508,000 if it passes the FCC's post-selection process. Mikel Kline, a consultant working closely with the city on its FTTH project told the Tribune:

It is Kline’s understanding that this $508,467 would be cost support for the city’s Fiber to the Home network over the next six years. It requires the city to become an eligible telecommunications carrier, and to finance and construct the fiber network.

This money can be used to pay operational costs or offset a portion of the debt on the city’s investment in the local infrastructure over the next six years.

Remember that Chanute has developed its fiber infrastructure incrementally over more than two decades. The community is moving ahead with its FTTH project to share the benefits of fiber with residents and more businesses after bringing better connectivity to schools, municipal facilities, and a growing number of businesses. 

Recently, the city applied for and received state approval to bond for deployment costs. A 1947 state law required the application be filed with the Kansas Corporation Commission, the state entity concerned with utility regulations. According to Kline, the city has also applied for eligible telecommunications carrier (ETC) status. This designation will allow the city, as a common telecommunications carrier, to obtain Kansas Universal Services Funds.

Read more about their accomplishments in our 2013 case study. We also interviewed Larry Gates and J.D. Lester from Chanute about the network in episode 16 of the Community Broadband Bits podcast.

Tennessee Files Appeal to FCC Order Scaling Back State Barriers

The State of Tennessee has filed the first appeal to the recent FCC Opinion and Order [PDF] reducing state barriers to municipal broadband. Governor Bill Haslam appears determined to keep his constituents in the Internet slow lane.

The state filed the short petition on March 20th arguing [view the petition on Scribd.]:

The State of Tennessee, as a sovereign and a party to the proceeding below, is aggrieved and seeks relief on the grounds that the Order: (1) is contrary to the United States Constitution; (2) is in excess of the Commission’s authority; (3) is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act; and (4) is otherwise contrary to law.

Haslam expressed his intention to explore the possibility of filing the appeal earlier this month reported the Times Free Press. In February, the Governor and Tennessee Attorney General Herbert Slatery signed a letter from a number of state officials to the FCC urging them not to change state law. U.S. Rep from Tennessee Marsha Blackburn and her Senate counterpart Thom Tillis introduced legislation to fight the Order just days after the FCC decision.

State Senator Janice Bowling, a long time advocate for local choice, and Rep. Kevin Brooks have taken the opposite perspective, introducing state legislation to remove restrictions to achieve the same result as the FCC Order with no federal intervention. Their bill has been publicly supported by the state Farm Bureau and local municipalities such as the City of Bristol.

Hopefully, at the next election Tennessee voters will remember how their state elected officials and their Governor stand on improving connectivity in the Volunteer State. The good folks at Tech Dirt expressed a similar sentiment

But here's the larger question: if you're a resident of Tennessee who likes having fast, affordable, competitive broadband, are you happy about your tax dollars being used to sue the FCC in an effort to uphold a law written by the big broadband players, focused on blocking such competition? It seems like the current Tennessee Attorney General, Herbert Slatery, has painted a giant target on his back for a challenger who actually wants to support the public in Tennessee.

FCC Opinion and Order Striking Down Local Authority Limits in TN and NC: Highlights

The FCC has found that it has the authority to remove aspects of Tennessee and North Carolina law that limit local authority to build or expand Internet networks. In short, states seem to retain the authority to restrict municipalities from offering service at all. However, if states allow local governments to offer services, then the FCC has the power to determine whether any limitations on how they do it are a barrier to the deployment of advanced telecommunications services per its authority in section 706 of the Telecommunications Act.

The FCC has removed a restriction in Tennessee law that prevented municipalities with fiber networks from expanding to serve their neighbors, per a petition from Chattanooga.

In North Carolina, the FCC has removed multiple aspects of a 2011 law, HB 129, that effectively outlawed municipal networks by presenting local governments with a thicket of red tape, including territorial restrictions on existing networks. The city of Wilson had petitioned the FCC for this intervention. 

Listen to our podcast with Jim Baller about this decision.

See the Institute for Local Self-Reliance Press Release on the Opinion and Order for more. If you don't want to read the full order, we pulled out some key paragraphs and sorted them for your benefit!

 

Key Paragraphs in the FCC Decision

We selected some of the most important passages with references to the original Memorandum Opinion and Order. Look for these passages as you read the original FCC doc [PDF].

Communities Around Chattanooga and Wilson Need Better Connectivity:

43. Numerous commenters favor preemption because they wish to obtain service from EPB or Wilson but are unable to do so, and the maps and data discussed above illustrate that communities surrounding EPB’s and Wilson’s current areas of broadband service have far fewer choices for advanced telecommunications capability than the national average. This suggests that further expansion could generate improved levels of investment and competition in these locations. (pp 23-24)

See charts on pages 15 and 16, 21 and 22 showing areas around Wilson and Chattanooga lag national average on Internet access for both basic and advanced services.

 

Characterizing the North Carolina Barriers to Municipal Networks:

3. In North Carolina, the restriction takes the form of a series of costly hoops through which a service provider must jump.  Although characterized as intended to “level the playing field” with private providers when passed, it is clear that the combination of requirements effectively raises the cost of market entry so high as to effectively block entry and protect the private providers that advocated for such legislation from competition.  (p. 4)

14. We also find that North Carolina’s H.B. 129 falls within our authority to preempt under section 706.  H.B. 129 does not prohibit service by municipal entities — indeed it explicitly permits service. (p. 6)

113. Taken together, these purported “level playing field” provisions single out communications services for asymmetric regulatory burdens that function as barriers to and have the effect of increasing the expense of and causing delay in broadband deployment and infrastructure investment. (p. 51)

62. However, even if we focus on taxpayer protection, as some request, the evidence before us suggests that the Tennessee and North Carolina laws before us actually increase the likelihood of failure because of the barriers that they erect to the successful deployment of broadband infrastructure (p.31)

98. … Indeed, the North Carolina Department of State Treasurer Local Government Commission recognized this in the legislative history of H.B. 129 when it noted that “the boundaries set forth in the PCS weaken the financial viability of [the Greenlight and Fibrant] broadband systems.” (p.45)

103. We therefore find that the exemption for “unserved” areas contained in 160A-340.2(b), is not consistent with our analysis of marketplace realities–both with respect to when H.B.129 was enacted, and especially with respect to our recent findings in the 2015 Broadband Progress Report reflecting evolving technology and consumer expectations. Under H.B.129, an area qualifies as “unserved” if at least 50 percent of the households do not have access to service at download speeds of at least 768 kbps while, in sharp contrast, under the Commission’s current benchmark companies receiving Connect America funding for fixed broadband must serve consumers with speeds of at least 10 Mbps for downloads and 1 Mbps for uploads;and areas are “unserved” by advanced telecommunications capability if they do not have access to service with speeds of at least 25 Mbps / 3 Mbps. As a result of the significantly lower speed thresholds adopted in H.B.129 compared to any of the above standards, very few areas in North Carolina will qualify as “unserved” despite the fact that many areas do not meet the standards articulated above. Given that Congress has directed us to carefully evaluate broadband deployment in our role as the regulator of interstate communications by wire, we find that our speed thresholds are the appropriate metric by which to evaluate whether an area is “unserved,” not the standard contained in H.B.129. (p.47)

 

Characterizing the Tennessee Barrier to Municipal Networks

13. The territorial restriction in Tennessee Code Section 601 serves only to restrict municipal electric providers from providing broadband service on fiber networks that they are already authorized to build statewide…  It serves only to effectuate state communications policy preferences by enforcing inefficiency and protecting incumbents from competition. (p.6)

62. However, even if we focus on taxpayer protection, as some request, the evidence before us suggests that the Tennessee and North Carolina laws before us actually increase the likelihood of failure because of the barriers that they erect to the successful deployment of broadband infrastructure. (p.31)

 

Municipal Networks Improve Internet Access Services and Competition

Footnote 139: We note that EPB vastly increased the broadband speeds available to those within its service territory while generating revenue from its broadband service without cross-subsidization from its electrical service, indicating that there was substantial unmet demand.  (p.25)

47. … In other cases, even in the absence of market failure, communities may find that meeting additional unmet demand for broadband serves important policy priorities.  For instance, the municipal provider may have both the incentive and means to serve those broadband needs that are so widely dispersed in the community they would not show up on the balance sheet of any private firm. (p.25)

 

Relevant to Barriers in Other States

16. While the present Memorandum Opinion and Order (Order) only addresses the EPB and Wilson Petitions, the Commission will not hesitate to preempt similar statutory provisions in factual situations where they function as barriers to broadband investment and competition. (p.6)

60. Some commenters argue that municipal entry distorts the marketplace because the municipality functions as both regulator and competitor and could use its authority anti-competitively. This argument fails because these commenters are unable to identify any compelling evidence that this is an actual problem in Tennessee or North Carolina (or elsewhere). (p.31)

62. However, even if we focus on taxpayer protection, as some request, the evidence before us suggests that the Tennessee and North Carolina laws before us actually increase the likelihood of failure because of the barriers that they erect to the successful deployment of broadband infrastructure (p.31)

79.[Regarding potential barriers to telecom-related services that may not solely be Internet access] -  … that “a provider’s ability to offer video service and to deploy broadband networks are linked intrinsically… We recognize that providers may not always have a business case for building a network unless they can optimize revenue by bundling multiple services. (p.39)

Footnote 329: As discussed above with reference to EPB and Tennessee, the restrictions on the provision of bundled services undermines a provider’s ability to provide broadband successfully due to the strong customer preference for bundled offerings (p.53)

 

Regarding FCC Authority to Preempt State Laws:

146. To put it plainly, section 706 authorizes the Commission to displace state laws that effectuate choices about the substance of communications policy that conflict with federal communications policy designed to ensure “reasonable and timely” deployment of broadband. (p.62)

141. … Before addressing whether section 706 authorizes preemptions of laws regulating municipalities as broadband providers, we first address whether it authorizes preemption under any circumstances; for example, whether it would reach state laws that regulate broadband provision by purely private entities.  Take, as an illustration, a hypothetical state law that prohibited cable-based broadband providers from offering broadband capacity greater than that offered by wireless broadband providers.  We think that the answer in that instance would be clear. Such a law would prevent cable-based broadband providers from competing based on superior bandwidth, which in turn could cause such providers to conclude that they could not make an economic case for increasing the capacity of their network in certain communities. (p.59)

143. … And section 706(b) uses at least equally urgent language, requiring us to continually reappraise deployment, and mandating that we “shall take immediate action” when necessary by “removing barriers to infrastructure investment and by promoting competition in the telecommunications market. (p.60)

11. We find that section 706 authorizes the Commission to preempt state laws that specifically regulate the provision of broadband by the state’s political subdivision, where those laws stand as barriers to broadband investment and competition.  A different question would be presented were we asked to preempt state laws that withhold authority to provide broadband altogether.  But where a state has authorized municipalities to provide broadband, and then chooses to impose regulations on that municipal provider in order to effectuate the state’s preferred communications policy objectives, such as the protection of incumbent ISPs, such laws fall within our authority to preempt.  (p. 5)

147. But where a state has authorized municipalities to provide broadband, and then chooses to impose regulations on that municipal provider in order to effectuate the state’s preferred communications policy objectives, we find that such laws fall within our authority to preempt.  To take an example, where a state allows political subdivisions to provide broadband, but then imposes regulations to “level the playing field” by creating obligations apparently intended to mirror those borne by private providers, it does so in order to further its own policy goals about optimal competitive and investment conditions in the broadband marketplace.  The states here are deciding that incumbent broadband providers require protection from what they regard as unfair competition and regulating to restrict that competition.  This steps into the federal role in regulating interstate communications.  Where those laws conflict with federal communications policy and regulation, they may be preempted.  We thus interpret sections 706(a) and 706(b) to give us authority to preempt state laws that regulate the provision of broadband by political subdivisions, provided that the law in question serves to effect communications policy and would frustrate broadband deployment “on a reasonable and timely basis . . . to all Americans.” (p.62)

148. Such a law is focused solely on policy preferences, and not core state control of political subdivisions.  In short, a state law that effectuates a policy preference regarding the provision of broadband is not shielded from all scrutiny simply because it is cast in terms that affect only municipal providers. (p.63)

12. And unlike Nixon v. Missouri Municipal League, the question here is not whether the municipal systems can provide broadband at all, but rather whether the states may dictate the manner in which interstate commerce is conducted and the nature of competition that should exist for interstate communications. (p.5)

167. Once the state has granted that power, however, we do not believe a state is free to advance its own policy objectives when they run counter to federal policy regarding interstate communications. (p.70)

Within North Carolina, the John Locke Foundation has been a persistent critic of local government efforts to encourage competition against the cable and telephone company incumbent providers. It has made many claims in its effort to ensure communities have no power to build their own networks or to use their assets to partner with independent entities for superior Internet access. The FCC saw fit to directly respond to some of these claims.

 

John Locke Foundation Has Misrepresented How Municipal Networks are Funded

69. Morganton and Salisbury, North Carolina.  The John Locke Foundation (JLF) describes the cities of Morganton and Salisbury as examples of municipal broadband that “delivers harm, not help, to the competitive environment” in North Carolina. With respect to the “CoMPAS” (City of Morganton Public Antenna System) system in Morganton, JLF asserts that such harm to the community is evident in two actions by the city council.  The first harmful action, JLF claims, was the council’s decision to allow CoMPAS to borrow funds from two municipal funds. The same report on which JLF relies also states, however, that CoMPAS no longer operates at a loss and its loan repayments to those two funds will be complete in fiscal year 2014. Based on all the information in the report, there does not appear to be any evidence of harm to the community from the municipality’s decision to temporarily borrow money from two of its own reserve funds.  JLF’s second example of purported harm is the alleged cross-subsidization of CoMPAS cable rates by increases in taxes and electricity rates.  Significantly, the news report cited by JLF does not claim that any cross-subsidization actually occurred.  On the contrary, it reports that Morganton’s City Manager (a certified public accountant) said it had not occurred. (p.35)