EPB And The Gig - And Response (5)

Thursday, September 26, 2013

With much fanfare, EPB recently announced the reduction of the monthly rate for their Gig service from $300 per month to $69.99 per month. I suppose I should give credit where credit is due. Finally – with speed that any sloth would envy – EPB reacted to the market and reduced the price on one of their products.

 After four years of $300-plus per month rates for Gig service that very few people ordered, EPB finally lowers the price of the product. Of course, EPB isn’t a business in the normal sense of the word, so perhaps we shouldn’t hold them to the same standards as free market, for profit private businesses. In fact, Harold DePriest admitted that EPB didn’t know how to price a Gig.

So what prompted this much-touted reduction in price? Honestly, I think we should all send a thank you note to Google instead of EPB. About eight months ago, Google announced their Gig service in Kansas City and offered it at a rate of $70 per month. At the time, that was 80 percent less than what EPB was charging Chattanoogans ($350/month).

But again, EPB isn’t a business, it is a public entity, and government bureaucracies aren’t models of efficiency.

So, thank you Google, for forcing EPB, Chattanooga’s very own government bureaucracy that until yesterday provided overpriced internet, to finally lower the cost of the Gig and for educating Harold DePriest on how to price a Gig.

Let us also note that, as part of this new rate change, those customers who were already paying $69.99 per month for their EPB internet service are now considered “Gig” customers. Congratulations to our new Gig customers. EPB’s news releases will soon tout you as evidence of the growing popularity of their Gig service.

What is truly interesting is that EPB has made certain to note that the new rate for a Gig is one penny less than that charged by Google in Kansas City. A key component of EPB’s marketing is that they offer lower rates. Please, when you see these too-cute references to lower costs, remember that we are still paying for this network to the tune of half a billion dollars in public monies that will be sunk into our city-run internet service.

That’s right Chattanooga, we’re still on the hook for more than $500 million in final costs for the Gig network. You would think with us already ponying-up $500 million to fund this network, that we would get a better discount than a penny per month.

For me, $0.12 per year really doesn’t make $500 million in debt more appealing, especially when faced with a lack of customer interest in the product, or when the realization hits that businesses are not relocating to Chattanooga in order to take advantage of the Gig network.

The Gig is not creating jobs. It is not fueling our city’s economic engine. It is, however, continuing to place an unbelievable burden of debt on our city.

So our takeaways here are that EPB offers us a penny discount after we spend $500 million. They also argue to Chattanoogans that there are no tax dollars in the network – even though they used $111 million in stimulus funds (federal tax dollars) to help build the network. And they tout the many new Gig customers who are only “new” customers because the name of their service changed.

Unfortunately for us, EPB’s Internet game is no different than a three-card monte table on some big city side street. The only difference is that the folks behind the table trying to dupe us are public officials who should be working to secure our trust rather than taking our money.

Mark D. West

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Sorry, but I'm proud of EPB's progressive vision and how it's helped put my beloved Chattanooga on the map.

Darned proud.

Dale Deason 

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I read the EPB and the Gig opinion with great interest since three of my grown children live in Chattanooga. I, too, am an EPB customer.  The $500,000,000 in debt for the Chattanooga city government on such a low return investment as the EPB Gig is mind blowing. How does a city the size of Chattanooga get talked into such a low return deal? It will take forever and a day to even begin to repay so much money.  

Yes, Chattanooga is on the map now, the massive, ill advised, government picking the winners and losers, debt map. Some elected officials that get drawn into this type of debt, including TIF's and PILOT programs, must just be over whelmed by all of the attention, power and back slapping and just lose all sense of responsibility to the tax payers. It creates a burden, for generations, that actually cripples the future and decreases our standard of leaving.  

Any type of unnecessary debt, whether it be at our home or by the government, hinders our ability to deal with any unforeseen occurrences that may present themselves as threats, or real needs, in the future. I encourage everyone to try and stay off of the debt map for as long as they can, hopefully forever. 

Joe Blevins 

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My wife and I own a very small business which requires an ongoing need to send and receive large files. We could live and work anywhere in the country, as long as there's a low cost of living rate, and reliable, high-speed internet.  

EPB Fiber and Chattanooga are the perfect combination.  

Dan Landrum 

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It seems like Mr. West is almost ungrateful to be in one of the first cities in the U.S. to have a Gig service and might feel more at home in a location that serves only dial-up, DSL or Satellite internet. I know what it’s like to still have dial-up; whenever I visit my parents up in Michigan, it’s all they got. And after first-hand experience with Comcast’s spotty service and lackadaisical customer service, I too am glad to be a part of Chattanooga and a part of EPB. 

I know that we are “on the hook” for the $500 million, but at least fiber Internet is tangible and useful to all of us; more appealing than a bridge to nowhere. And this was simply a byproduct of EPB’s smart grid system. 

Comparing speed and price, for Comcast’s Blast service (50MB down, 10MB up) the cost ranges from $58.95 to $72.95, after their promotional rate. EPB was charging $57.99 for 50MB (down and up), even before they boosted speeds to 100MB for the same price. EPB’s 1GB at $349 was reasonable, even if a bunch of people didn't use it. 

The end user’s want for faster and faster speeds will never subside. Ask Mr. West if he would like to stream a movie over 56kB or download a video game on demand. Or if Mr. West would rather move to Kansas City, Austin or Provo, he’s more than welcome to. Maybe there he can find his own city pride. 

This Yankee transplant came for the scenery, stayed for the Internet. 

Thomas Helms 

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Mr. West's diatribe is hilarious.  Chattanooga is one of two cities in the United States to offer gig service.  Does he realize how many cities there are in this country?  Does he realize that the other city's service is backed by Google, an enormous company that does business globally?  So he wants to complain that EPB, a tiny, local company didn't offer a gig, something basically no one else has, at a lower price sooner? 

As for the claim that 'the Gig is not creating jobs. It is not fueling our city’s economic engine,' that is pure hogwash. Mr. West must have his head stuck in the sand to not notice the economic benefit that the gig has brought Chattanooga.  Companies of all sizes have flocked to Chattanooga. 

Lastly, Mr. West's comment about the $500 million worth of debt misses the mark.  The number is not correct for one.  Secondly, fiber optics were piggy backed onto the smart grid, another improvement for our city.  Sewers, roads and electrical systems need updating from time to time.  Does he not like when pot holes are filled?  EPB decided to update Chattanooga's electrical system to something that is state of the art and saves customers from outages entirely or reduces outage time.  It saved money by installing fiber optics at the same time. 

If Mr. West does not like what Chattanooga has done, there are thousands upon thousands of other cities where he can get unreliable tv/phone/internet service, have his power go out for extended periods of time, and languish in the nationwide recession without a key bargaining chip to lure new businesses. 

Frank Shepard



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