CU Fiber Study ‘not overly optimistic’

By RICK NORTON Associate Editor
Posted 6/24/15

Details won’t be released until July, but Cleveland Utilities President and CEO Ken Webb is saying this much about a one-year telecommunications study that has been completed and is now under …

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CU Fiber Study ‘not overly optimistic’

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Details won’t be released until July, but Cleveland Utilities President and CEO Ken Webb is saying this much about a one-year telecommunications study that has been completed and is now under review by utility staff: “... It’s not overly optimistic.”

The chief obstacles CU could be facing in its hoped leap into the telecommunications industry — a myriad of Internet, telephone and cable services — can apparently be summed up in two words: “Money” and “money.”

In a formal monthly session Tuesday of the Cleveland Board of Public Utilities, Webb said the $59,000 study contracted to Uptown Services of Boulder, Colo., will be presented to the group in full at its next formal gathering scheduled for July 23.

“It was about this time last year that we started talking about that [a telecommunications study],” Webb said Tuesday. “The study has been completed. We are in the process of digesting it as a staff, and what our plans are is to have a report for you at the July meeting.”

But it’s not looking good.

“I will go ahead and tell you that it’s not overly optimistic ... about us providing triple-play services,” Webb said of what he described Tuesday as the Fiber Study. “The capital requirements are extensive and the startup costs could present issues.”

For a public utility that remains about $70 million in debt, based on the 2015-16 budget document, that’s not what CU leaders wanted to hear. At the same time, it’s not necessarily a shock.

Over the past several years, CU has commissioned telecommunications studies three times. The most recent came about eight years ago and capital outlay expenses were again a major concern.

Last July, Webb told board members the time had come again for another look; if for no other reason, then because the utility already has a vast network of fiberoptics that could be utilized for telecommunications; and, because Internet is no longer considered a luxury. In most corners, it is a mandate.

During the July 2014 board gathering, Webb recommended the third telecommunications study to board members.

“You all know as well as I do that Internet connection now is the electric connection of the 1930s and 1940s,” Webb said then.

However, the veteran utility man stressed this caveat, one that was apparently based on potential costs. He said, with the board’s approval, that the utility would proceed in the study with caution. He said board members would be kept updated on all stages of the study, and that no official actions would be taken without the group’s approval.

Webb’s update Tuesday may have prepared board members for disappointment. However, it also put the group on notice that a mini-package of services might be available.

“... One thing we’re going to do in our review of that study, and we’ll be getting you copies of it, is that we’ll review the possibilities of offering some services that are not necessarily full-blown services,” Webb said.

He later added, “A lot of decisions are yet to be made and a lot of review is still to take place.”

In speaking to the board, Webb didn’t fully define the phrase “... offering some services that are not necessarily full-blown services,” but it could be a reference to limited provisions such as Internet.

Even during the months that Uptown Services has conducted the telecommunications study, the issue of Internet provision has dominated the electronic headlines; at least, in Tennessee.

The question came up months ago when EPB of Chattanooga filed for permission with the Federal Communications Commission to extend its telecommunications services outside its established service territory in Hamilton County. One of its targets was about 800 Bradley County residents in the southwest corner who do not have access to high-speed broadband.

FCC eventually approved a pre-emption of state laws restricting EPB fiberoptics to the municipal utility’s electric service area; however, at least one telecommunications competitor — AT&T — announced it would file lawsuit against any such action by the government-linked EPB.

The threat of litigation, and heavy lobbying in Nashville against the FCC ruling, tempered the Tennessee Legislature’s momentum to move ahead with the plan, and on April 2 members of the Bradley County delegation acknowledged the bill had been halted; at least, until January.

State Rep. Dan Howell, R-Georgetown representing the 22nd Legislative District, stressed “... The issue is not dead.” He later added, “I am sure this issue will come up again in January.”

State Rep. Kevin Brooks, R-Cleveland representing the 24th Legislative District, served as sponsor of House Bill 1303. In an appearance before the House Business and Utilities Subcommittee, Brooks asked that the bill be rolled into the start of the next legislative session in 2016.

“A lot of great work has gone into this bill,” Brooks said of the House. But, on the Senate side of the hallway, more opposition was being encountered, he suggested.

But that was then. Both legislators hope for better times in the next General Assembly.

“In an attempt to preserve the hard work and hard-fought support we’ve found, we simply pushed the ‘Pause’ button until next Session,” Brooks told the Cleveland Daily Banner in early April.

Howell concurred.

“We did not kill the bill,” the freshman state lawmaker stressed then. “This bill is not dead. The bill is on hold until we return in January. We will work diligently during the offseason to gain even further support in both the House and the Senate.”

In the meantime, the CU telecommunications study continued to progress. But, cost was always a concern. And now, it appears cost could be the stumbling block based on Webb’s brief report to the CU board Tuesday.

The CU board’s session on July 23 will begin at 3 p.m. in the Tom Wheeler Training Center.

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