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Comcast Faces New Competition in Chattanooga

Despite a pending lawsuit challenging the project, a municipal triple-play build has been approved by the Chattanooga City Council.

The council voted unanimously Sept. 25 to allow a plan by the municipal Electric Power Board to deploy 3,000 miles of fiber-optic lines throughout the city. The utility plans to offer phone, Internet and video service to customers within the next five years.

The provider will compete with Comcast Communications in the community.

The vote came in spite of pleas from the Tennessee Cable Telecommunications Association and Comcast officials that the council take more time to examine the viability studies and economic risks of such a proposal.

The TCTA went to court on Monday, after the EPB itself had approved the project but before the council vote, to challenge the build. The trade association, in a suit filed in Chancery Court in Nashville, charges that the project is being promoted with over-optimistic price projections, adding that the build will be subsidized by electric rate-payers. That is a violation of state law, according to the trade association. 

Utility officials counter that their projections are actually conservative and that the business plan was crafted observing a 1999 law that allows state utilities into the video business.

To move forward, next month the council will have to approve an estimated $220 in bonds to fund the project.