Cleveland Utility Executive Director Says It Will Not Get Into TV Business Because Of Shift To Internet-Based Options

  • Monday, July 27, 2015

Cleveland Utility Executive Director Ken Webb told the Cleveland City Council on Monday that the utility will not get into the TV business because the landscape is changing so fast.

Mr. Webb said, "The TV business as we know it is disappearing quickly. It's going to disappear in the next 5-10 years."

Referring to such offerings as Netflix and Amazon Prime, he added, "A video offering is not viable in today's market." He said it is now possible to subscribe directly to ESPN viewing on the Internet.

But he said the utility is pondering a move to the Internet and phone business.

However, he cautioned that it would require a large upfront investment and would not break even until at least the 14th year.

Mr. Webb, nevertheless, the utility is still considering moving gradually into an Internet and phone operation.

CU officials noted that the EPB in Chattanooga has been successful with TV using its broadband network by focusing on service. He said it and other utilities would not be able to offer cheaper rates.

However, Councilman Bill Estes said he believes private firms lure customers with low initial rates, then raise them sharply while the customers are under a long-term contract.

CU officials said to launch the Internet and phone service would require $4 million of upfront capital as well as $40 million to $44 million other spending. He said the utility currently has only $1 million in reserves that it could devote to the venture.

They said they would keep the council appraised of what they decide on a broadband business.

 

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