After a feasibility study on the possibility of a municipal triple-play fiber network left Cleveland Utilities feeling "…not overly optimistic…" community leaders have decided to rethink their strategy. The utility board recently voted 5-0 to look deeper at a network that would offer only Internet and voice services.
Rather than study the feasibility of serving the entire community, CU wants to first try their hand at working on a limited area with a pilot project. The next step is to work with a consultant that will conduct a more focused feasibility study and develop a business plan.
In June, CU CEO Ken Webb told the board:
"I will go ahead and tell you that it's not overly optimistic about us being able to provide 'triple play' [Internet, television and phone] services," Webb said. "The capital requirements are extensive, and the startup cost could present issues."
"There is a possibility of offering services that are not full-blown services," Webb said. "There are a lot of decisions yet to be made, and a lot of review has yet to take place."
After more review of the study, Webb asked the board at the July meeting to consider further consideration for the pilot project, much like the process in Erwin, Tennessee. The Times Free Press covered the meeting where Webb reported that Erwin expected to break even on its pilot project once it took on 180 customers. After recently commencing the project, it quickly signed up 150 subscribers.
As municipalities are considering how to improve their local connectivity, subscriber interest in video services continues to drop. The associated expenses such as head end equipment and the rising cost of content lead a number of them to offer only Internet access and voice. Longmont, Colorado, and Sandy, Oregon, are two recent networks that have decided not to directly offer video, though Sandy is negotiating with a vendor to include a video package in their service.
Cleveland, home to approximately 41,000 people, is considered part of the Chattanooga statistical metro but is not served by the Chattanooga EPB, in part due to state restrictions. Even though the FCC scaled back those state laws in February, the issue is under appeal. Chattanooga border communities such as Cleveland are in limbo as they debate whether or not to wait for the possibility that EPB may one day extend out to them or to take action on their own.
"We owe it to the community to determine whether or not this is a viable project or not," said Webb.