Nearly 15 years ago, EPB became one of the first providers to bring fiber broadband to their community.
“We needed to be able to explain to our local community whom this $2.7 billion capital investment would benefit,” EPB Vice President Jim Ingraham said during Fiber Broadband Association’s Fiber For Breakfast webinar.
EPB provides electric power and telecommunications services to Hamilton County, Tenn., including the city of Chattanooga. Thanks to EPB’s efforts to expand and implement high-speed broadband and smart grid infrastructures, Chattanooga was an early adopter as one of the first Gigabit cities and is now a 10G city.
In 2006, there wasn’t much literature available about Fiber to the Home (FTTH) deployments, Ingraham explained. And prior to starting on this gigabit journey, EPB had no debt.
“The decision to take on this project was not made lightly,” Ingraham said. “It ended up being a $350 million investment over time but investing in FTTH was well worth it.”
Dr. Bento Lobo is a professor at the University of Tennessee Chattanooga, specializing in finance. Lobo and his team were among the first to produce reports on how to successfully deploy FTTH and smart grid infrastructures, utilizing the experiences of EPB in its first 5 years of FTTH deployments. Ten years later, Ingraham and Lobo teamed up to provide the Chattanooga community context as to how this change in infrastructure positively impacted the local economy.
“Over the past 10 years (dating back to when deployments were finalized in 2011), this infrastructure is responsible for about $2.7 billion of value,” Lobo explained. Using a formula, Lobo and his team determined that EPB’s project brought significant monetary value to the community through economic development in the form of business investments, startup funding, real estate developments and more. Significant positive effects were also reported in business, household and community categories like healthcare, telecommuting and education. The smart grid itself--which allows for more reliable connections to electricity even through natural disasters and severe weather events while also reducing carbon emissions--was valued at $750 million, or about 20% of the total value of the project.
“Economic development is a big deal in terms of how this kind of infrastructure can impact a community,” Lobo said. “The idea of being a ‘Gig City’ has really stuck in Chattanooga. This study shows that the economic story is a deciding factor in whether or not people and businesses come to an area. Fiber optic infrastructure impacted local economic development to the extent of $1.41 billion in business investments, new startups, real estate development and taxes.”
The study also identifies additional realized benefits like the addition of more than 9,500 local jobs and a value-to-cost ratio of 4.42x--both benefits exceeding projected net benefits and at a quicker pace.
But it’s not just those face value economics that count.
“Bandwidth matters for more than latency frustrations,” Lobo explained. “The time savings from using 25/3--the current FCC benchmark--versus 1G is over 1 minute when downloading a 12MB file.”
Picture that time savings on a large scale. Chattanooga is home to a lot of radiologists. According to Lobo, a 1G connection saves radiologists 1,000 hours a year, merely in upload and download time.
“There are so many ways in which the internet adds to our lives,” Lobo reflected on learning, working and shopping to name a few.
Looking back, Ingraham has no doubts that embarking on this FTTH journey was the right decision for the community.
“We went to the people and told them what we want to do and why we wanted to do it. For as long as people could remember cable, phone and internet costs were increasing year over year while the service quality was getting worse and worse,” Ingraham said. “We offered a quality alternative, and it’s paid off.”