CU telecommunication talks underway
by RICK NORTON Associate Editor
Aug 29, 2014 | 1840 views | 0 0 comments | 12 12 recommendations | email to a friend | print

Keeping with President and CEO Ken Webb’s pledge to move methodically while “leaving no stone unturned,” Cleveland Utilities is investigating entry into the telecommunications arena by exploring synergies with a neighboring industry giant and interviewing potential broadband consultants.

CU was authorized in late July on a unanimous vote by the Cleveland Board of Public Utilities to pursue a feasibility study that would identify costs, practicality and territorial need for entering — potentially — the worlds of Internet, telephone and cable.

Over the past month, the local public utility has taken a series of baby steps by talking with the Electric Power Board of Chattanooga and by launching a series of interviews with three broadband consultants; a fourth interview was scheduled for today.

Bart Borden, vice president of CU’s Electric Division, gave board members a brief update on the utility’s progress so far during Thursday’s formal session of the CU board.

“[We have] conducted additional conversations with the Electric Power Board of Chattanooga to explore possible services provided through their existing facilities and resources,” Borden reported. “We have interviewed three broadband consultants to date to determine which ones we are going to send a request to for qualifications and proposals to provide a broadband business study.”

Consultants interviewed so far include The Motive Group of Johnson City, JSI Telecommunications Consultants of Greenbelt, Md., and Kersey Consulting of Jackson, Borden explained. Uptown Connections of Phoenix will be interviewed later today, he added.

“The firms will be evaluated on prior projects and their success, staff experience and makeup, ability to provide necessary financial analysis of a potential project with marketing research companies, ability to assist with the implementation of a broadband business and understanding of current Tennessee state law in the telecommunications business arena,” Borden told board members.

And, CU telecommunications team members will be taking their investigation on the road. On Sept. 3, the group will travel to the Jackson Energy Authority in West Tennessee and on Sept. 4 will visit with Pulaski Energize “... to discuss their project experience and knowledge,” Borden said.

CU also is attempting to set up a meeting date with Tullahoma Utilities.

The visits come with purpose.

“We want to go and glean as much information as we can from utilities that have already gone through these projects,” Borden stressed.

Webb stressed it’s all a part of his original commitment; that is, to fully explore all options in detail, and to rely upon contemporary numbers, before making any recommendations to the utility board.

Using its complex system of modern fiberoptics, in conjunction with certain upgrades, CU could conceivably jump into the Internet, telephone and cable arenas; or, the future feasibility study might show that only Internet is best.

This is the third study CU will have conducted on adding telecommunications to its growing portfolio of services that already include electricity, water, wastewater and traffic signal coordination. The last study reportedly came about eight years ago.

At its formal gathering on July 24, the CU board heard a detailed presentation by Webb and his administrative staff regarding the possibilities of expanding the utility into telecommunications. To support his case, he pointed to broadband.

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

He even pointed out in many ways Internet service throughout a community nowadays is mandatory.

Ironically, just a few days after the Cleveland Utilities board gave its blessing to a telecommunications feasibility study, the Bradley County Commission passed a resolution inviting Chattanooga’s EPB to cross county lines in order to provide Internet service to rural areas here that are not currently serviced with Internet access. Such a move would require approval by the Federal Communications Commission.

By last month’s vote of the CU board, the local utility is empowered to take two actions.

One, CU is authorized to launch a feasibility study to determine costs, short- and long-term expenses, potential revenue and project practicality; this is the purpose of Borden’s interviews with the broadband consultants as a first step.

Two, CU is authorized to explore the possibility of synergies with existing telecommunications providers; and this is the purpose of the ongoing talks with EPB.

“We think it’s time to take another look at [entering the telecommunications business],” Webb told board members in July. “Obviously, before we did anything in choosing someone to do the study we would bring it back to the board. But we needed to know today if the board supported this concept.”

On a motion by board vice chairman Eddie Cartwright and second by Cleveland Mayor Tom Rowland, who represents the City Council on the utility board, the group voted 5-0 in July in support of the feasibility study.

True to his word, Webb reported back to the board only a month later with the progress update on Thursday.

Continued reports are expected over the next few months as CU continues its telecommunications investigation.

The board’s next scheduled sessions are set for Thursday, Sept. 25; Thursday, Oct. 23; Tuesday, Dec. 2; Tuesday, Jan. 6, 2015; and Thursday, Jan. 22, 2015. Each board session is set to begin at 3 p.m. and will be held in the Tom Wheeler Training Center.