More Chattanooga 1Gbps Thoughts and Coverage

This is a follow-up to my coverage of Chattanooga's 1Gbps announcement and press around it.

Firstly, I have to admit I was simultaneously frustrated and amused by reactions to the $350/month price tag for the 1Gbps service, like Russell Nicols' "Chattanooga, Tenn,. Gets Pricey 1 Gbps Broadband."

Wow.

I encourage everyone to call their ISP to ask what 1Gbps would cost. If you get a sales person who knows what 1Gbps is, you will probably get a hearty laugh. These services are rarely available in our communities… and when they are, the cost is measured by thousands to tens of thousands. Chattanooga's offering, though clearly out of the league most of us are willing to pay for residential connections, is quite a deal.

The reaction that it is pricey blows my mind… at $350 for 1Gbps, one is paying $.35 for each megabit. I pay Comcast something like $4.5 for each megabit down and $35 for each megabit up (I actually pay more as I rarely get the speeds advertised).

Make no mistake, Chattanooga's 1Gbps is very modestly priced. And I would not expect many communities to duplicate it. Chattanooga has some unique circumstances that allow it to create this deal; the fact that other community fiber networks around the country cannot match it should not be taken as a knock against them. Ultimately, communities must do what is best for them, not merely try to steal the thunder as the best network in the nation.

But for the folks who have the best network in the nation, I get the idea they have enjoyed the vast coverage of their creation. The Chattanooga Times Free Press ran a lengthy story titled "Fastest on the web."

"We can never overestimate the amount of bandwidth that will be needed in the future," said jon Kinsey, a Chattanooga developer and former mayor who is working with local entrepreneurs to study ways to capitalize on the faster broadband service. "What EPB has set up gives us an opportunity as a community to get into a whole new realm of business growth."

One might expect that the president of the "Information Technology and Innovation Federation" would be interested in the most cutting edge broadband network in the country -- and one that is excited to work with innovative countries. But no:

“Chattanooga definitely is ahead of the curve,” Atkinson said. “It’s like they are building a 16-lane highway when there is a demand for only four at this point. The private companies probably can’t afford to get that far ahead of the market.”

ITIF has long been suspected of being too friendly with big carriers who do not appreciate it when communities build far better networks than they offer. But I have to agree with Atkinson and even go a bit further -- big private companies have proven unable to even offer what communities need today, let alone worrying about being ahead of the market.

This is due to the massive imbalance of private interests versus community needs. A Herald Tribune article on Chattanooga talks with a local business owner who subscribes to Comcast's highest tier of service:

Swier said he pays $200 a month for Comcast service rated at 50 megabits per second download and five megabits upload speed.

"It is the best service they provide in my location," said Swier, whose offices are a few blocks north of Fruitville Road off Central Avenue.

Swier said the day-to-day speed of the broadband service is even slower.

"What kills us is the up," Swier said, meaning the ability to move large amount of data from his business to another site or entity. "At best, we get three megabits up and we send a lot of data out. And that is just, like, slow."

This is exactly why Comcast and other private companies tied EPB up in the courts for years to prevent or at least slow down their deployment (something missed in most of the stories).

They quote me in the story:

Mitchell said with EPB’s announcement, entrepreneurs in rural Tennessee “will pay far less for far greater speeds than even those in Silicon Valley.”

And they also note that the network is already responsible for bringing in new jobs:

Last week, HomeServe USA announced plans to locate a 140-employee call center in Chattanooga, in part due to Chattanooga’s faster broadband service.

“They told us we probably have more Internet fire power in a home in Chattanooga than they have in their whole operation in Miami,” Hamilton County Mayor Claude Ramsey said.

Chattanooga's strategy is multi-pronged - EPB offers excellent electrical reliability (which will only improve with this fiber network enabling smart-grid improvements. Chattanooga is turning into an excellent example of what communities can do when they take responsibility for themselves.

In a different story, Carol Wilson offered a unique perspective:

Fiber to the home has a new rock star. His name is David Wade [Senior VP of the Public Power Utility], he has a charming Tennessee drawl, and his company is the first in the US to deliver a symmetrical 1 Gbit/s to residential customers.

For people looking for more numbers, Wilson provides them:

EBP, which is using Alcatel-Lucent (NYSE: ALU) GPON technology, has had its plan widely vetted in a series of public meetings, since it is a municipally owned utility company. It's projecting a strong payback on its FTTH network, even given the expense of building in areas that are not densely populated. That plan was based on an installation rate of 50 homes a day and a 30 percent take rate on voice, data, and video services within five years.

EBP is actually installing 130 to 140 homes a day and has hit the 15 percent penetration point in its first year, Wade says.
Perhaps more importantly, EBP expects to save $300 million over 10 years on wholesale electricity purchases by using the smart meters deployed on its fiber optic network to reduce consumption.

And as a final benefit to the community, Wade noted that for the first time he can remember, they made it through a January where Comcast did not raise prices. Ah the benefits of community fiber networks….

Coverage from Fox Business News:

Coverage from CNET's Loaded: