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EPB Celebrates 4th Anniversary With Free Speed Upgrades And Price Cuts; $69.99 for 1Gbps Service

epbEPB this morning celebrated its fourth anniversary by thanking Chattanooga residents for supporting the utility’s fiber network with a series of price cuts and speed increases.

Beginning today, EPB’s fiber broadband customers are getting the following upgrades and savings:

  • 50/50Mbps customers get a free upgrade to 100/100Mbps service with no change in their current price ($57.99/month);
  • 100/100 and 250/250Mbps customers get a free upgrade to 1,000/1,000Mbps service;
  • 1,000/1,000Mbps customers now paying $349 a month will see their bills slashed to $69.99 a month, a savings of $230 a month;
  • EPB’s business broadband customers will be contacted individually to coordinate the speed upgrades.

gig_speedsCustomers will see the new speeds provisioned within the next two weeks. At least 3,000 residential customers will be upgraded to gigabit service.

EPB also reported this morning it has 55,000 broadband customers.

EPB is one of the nation’s most successful municipal fiber providers and is proving itself a major challenger to Chattanooga’s cable competitor Comcast and incumbent phone company AT&T.

AT&T’s U-verse is the least capable network in Chattanooga, because its fiber-to-the-neighborhood technology currently limits AT&T’s maximum broadband speed in the city to 24/3Mbps. AT&T says it is working on doubling or tripling speeds, but it still leaves U-verse far behind Comcast and EPB.

Comcast has lost at least 47,000 customers in Chattanooga, estimates EPB CEO Harold DePriest. Comcast originally had 122,000 customers on the EPB grid when EPB launched fiber broadband. This year, Comcast has about 75,000 customers and is expected to see numbers decline further in 2014 to about 60,000 customers.

The best Comcast offers is 505/20Mbps service in select cities, with a price tag of $400 a month.

The best Comcast offers is 505/20Mbps service in select cities, with a price tag of $400 a month.

Neither Comcast or AT&T is competing on price for higher speed broadband in Chattanooga. Comcast charges $114.95 a month for 105/20Mbps service and offers 505/100Mbps service in a handful of other cities, for $399.95 a month. Comcast is also currently testing the reintroduction of usage caps and overlimit fees in several markets.

AT&T charges $65 a month for 24/3Mbps service — its fastest — with a 250GB monthly usage cap, currently not enforced. For $5 more, EPB customers get 1,000/1,000Mbps with no usage limits or overlimit fees.

EPB has been criticized by conservative groups, bloggers, and its competitors that argue municipal utilities have no business being in the broadband business. Most of these groups predicted EPB Fiber would deliver a costly failure for Chattanooga utility ratepayers. The utility has also come under repeated fire from the conservative editorial page in the Chattanooga Times-Free Press, often from ex-editorial writer Drew Johnson, who was fired in August.

DePriest can afford to take the criticism all in stride. He has been with the publicly owned utility for 42 years and has seen Chattanooga transformed from its old manufacturing roots into an increasingly high-tech city, thanks in part to EPB’s robust broadband infrastructure that has exceeded even EPB’s expectations.

EPB’s original business plan called for 28,000 customers to break even, with an estimated ceiling of 43,000 customers that would be willing to sign up. EPB has already passed both estimates with additional growth anticipated. DePriest even predicts EPB could surpass Comcast — the city’s biggest broadband and cable TV player — in market share by the end of next year.

Far from being a financial failure, EPB Fiber is now covering the $19 million debt payment incurred by the utility’s electric business, protecting Chattanooga residents from an electricity rate increase.

EPB is also making money offering advice to other cities who want to launch their own publicly owned fiber networks and avoid making costly mistakes. Consulting services will net EPB more than $1 million over the next three years.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/EPB EPB 4th Anniversary Speed Increases Price Cuts for Gigabit 9-17-13.flv[/flv]

EPB CEO Harold DePriest announces speed increases and price cuts for customers to celebrate the utility’s fourth anniversary in the broadband business. (3 minutes)

Correction: The original story misreported Comcast’s upstream speed for its 505Mbps tier as 20Mbps. It is, as corrected above, 100Mbps.

Currently there are 4 comments on this Article:

  1. Ian L says:

    Slight correction: Comcast’s 505 Mbps tier is actually 100M up (delivered over metro fiber). And I believe the price is around $300, not $400. This change was made to compete with Verizon’s latest FiOS tier (500/100 for $300).

    Also, my bet is that Comcast will offer a similar deal to what they’ve done in Provo: https://www.fiercetelecom.com/telecom/google-fiber-now-faces-comcast-s-250-mbps-offering-provo

    Comcast has shown that, if it really wants to compete on both performance and price, it’s making enough money in its less-competitive regions to do so. Particularly since bandwidth on their end, even accounting for the equipment purchases they need to make, is effectively free now (since they charge data centers etc. for paid peering). But they haven’t been cutthroat enough in Chattanooga, it seems…maybe because if they did force EPB Fiber into the red, their pole attachment rates would magically increase.

    The odd man out here is AT&T. Their 45/6 tier still comes in well below the speed of EPB’s entry-level offering, and it’s only available to folks close to a VRAD. So AT&T has no hope of gaining customers willing to pay more than $50/mo for service, unless htey build out their own fiber network, with limited return on investment.

  2. Thanks for the upload speed correction.

    Comcast’s current pricing was reflected on their website: https://www.xfinity.com/error/404?item=%2f505&user=extranet%5cAnonymous&site=shop

  3. GerAng says:

    I like what EPB is doing, and hope that it serves as a blueprint for other communities that want to start their own municipal broadband.

    But I have a problem with two points:

    1. Increasing speeds is good, but they should also be offering a lower speed, lower cost package. Your “grandma” that only use the internet for email and light web browsing. 50/50 service for $58/month is rather steep. They need a sub-$30 plan to pick off the rest of the Comcast and AT&T subscribers.

    2. While both are municipal services, the profits of the broadband service should not be offsetting the debt incurred by the electric services. Electricity prices should be going up and that business needs to be made more efficient. It should not be given a “helping hand” from the profits of the broadband service. Hopefully the debt payment will be re-paid to the broadband service, and that could mean lower broadband prices in the future.

    • Ian L says:

      A few rebuttals here:

      1. Let AT&T and Comcast fight over the low end of the market. EPB should target the market for which fiber offers an advantage over cable and DSL: very high, reliable speeds. Their 100M package basically puts a price ceiling on what competitors can charge for internet-only service. If AT&T wants to offer $25/mo internet service that costs next to nothing for them to provide (less than it costs EPB), let ’em take that part of the market.

      2. EPB uses a fair chunk of smart grid money to build out its fiber network. I have no issue with money flowing in the opposite direction, keeping electricity prices down for everyone. It’s far from the worst case of cross-subsidy that I’ve seen.

      Now, if EPB decides that its installation costs are low enough, maybe they can re-introduce the 15 Mbps tier that they used to sell for $58, except at a lower price. Maybe sub-$30, maybe not…there are significant fixed costs involved in getting someone set up for fiber.

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