Knoxville Power Poll: KUB Municipal Broadband Service

March 22, 2021 6:00am
Photo of Scott Barker
Knoxville, TN Correspondent

Community leaders support offering municipal broadband through the Knoxville Utilities Board.

Home internet use is up during the pandemic — way up — and the respondents to this month’s Power Poll think the Knoxville Utilities Board should offer broadband service to its customers.

Last week, KUB’s Board of Commissioners took the first step toward starting a municipal broadband service by voting to send a business plan to the state Comptroller’s Office.

The business plan calls for a seven-year rollout of fiber optic cable, which is being installed throughout the utility’s electricity service area to upgrade the power grid. KUB plans to offer speedy service — 1 gigabyte per second, with equally fast upload and download speeds — at a lower cost than current providers.

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Because of the pandemic, three-quarters of this month’s Power Poll respondents have increased their home internet use. One in four said their use was about the same.

Existing competition doesn’t seem to be a problem for the respondents, though large swaths of KUB’s service area currently have only one provider. Two-thirds of Power Poll respondents said they can choose between more than one company.

Nearly seven in 10 respondents to this month’s Power Poll said KUB should get into the municipal broadband business, with fewer than one in 10 objecting to the idea.

The Power Poll is not a scientific poll but a survey of views and attitudes among community leaders from government, business and nonprofit arenas. For this survey, 462 people were invited to participate and 146 returned responses — a rate of 31 percent. Here are the questions and results:

 

Should KUB enter the broadband market?

Yes: 102 (69.9 percent)

No: 13 (8.9 percent)

Unsure: 31 (21.2 percent)

 

How many providers currently serve your area of residence?

One: 30 (20.7 percent)

More than one: 98 (67.6 percent)

Unsure: 17 (11.7 percent) 

 

Has the pandemic affected your home internet use?

Yes, it's increased: 108 (74 percent)

Yes, it's decreased: 3 (2.1 percent)

No: 35 (24 percent)

 

KUB conducted its own survey of its customers and found that fully half would consider switching to municipal broadband. The utility estimates it would be able to snag 35 percent of the market in its service area, though other municipal broadband services in the state have much larger market shares.

KUB estimates it would have to spend roughly $500 million over 10 years to get the fiber system fully functional, with $400 million of that in capital expenditures. KUB projects that adding the service would result in 200 new jobs.

By law, each utility service must be self-sustaining, which means that only revenues from broadband customers would go toward funding the broadband service. KUB projects broadband revenues will grow from $4.4 million in the first year to $96.3 million by the end of the buildout.

Tennessee Gov. Bill Lee is emphasizing rural internet access by proposing a one-time investment of $200 million statewide. Much of KUB’s electricity service area, which includes seven counties, is rural, and officials say they will apply for state funding where appropriate.

KUB, the Knoxville Chamber and city officials are touting a potential boost to economic development if municipal broadband becomes available. 

Chattanooga, which established a high-speed broadband service more than a decade ago, has seen such a boost. A University of Tennessee-Chattanooga study found the economic impact of Chattanooga’s Electric Power Board system exceeded $2.69 billion and created 9,516 jobs over the 10-year period ending in March 2020. About 40 percent of all jobs created in Hamilton County during that decade could be attributed to the fiber infrastructure, according to the study.

Going through the entire authorization process would take months and must include a public hearing focused only on the broadband proposal. Final approval, if it comes, most likely would not arrive until the fall.

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