EPB 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.

Customers 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.

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.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/CBS Chattanooga Fastest Broadband in America 2-28-13.flv[/flv]

Chattanooga’s gigabit fiber network demonstrates local government works. The fiber to the home network has already brought $400 million in investment dollars and more than 6,000 new jobs to the area. At the same time, both Comcast and AT&T are working to lobby state legislatures to ban these kinds of public networks from ever getting off the ground. CBS News profiles EPB Fiber. (6 minutes)

Image: schvdenfreude

Chattanooga Comcast and AT&T U-verse customers will need to open their wallets a bit more in 2013 as both the cable and phone company have announced new rate hikes that are now taking effect. But not everyone will pay more. Customers of EPB Fiber, which offers up to 1,000/1,000Mbps broadband and is a service of the publicly-owned electric utility is keeping prices stable until further notice.

Comcast customers face new increases averaging 4% in 2013 — $5 a month for Triple Play customers, several dollars more for broadband, and around $1 for basic cable service. Customers on promotions are unaffected until the temporary pricing expires.

AT&T U-verse customers will see price increases as much as $9 a month for television and broadband service.

Chattanoogans who ditched both private providers for the public option are sitting pretty with absolutely no rate increases to pay at this time. Although negotiations with programmers are ongoing, and costs are rising, EPB says it won’t raise any rates unless it becomes absolutely necessary. The utility takes rate increases very seriously, bringing them directly to its board of directors for approval.

Comcast and AT&T said the introduction of new services and increased programming costs contributed to their need to increase rates. Comcast says it has kept rates for its Xfinity service stable since 2010, a claim that doesn’t explain away its 4% rate hike in January 2012. AT&T said its supplier and labor costs also contributed to price increases, which also includes a broadband television surcharge.

If this seems like déjà vu, it could be because both AT&T and Comcast raised rates exactly one year ago this month. AT&T was the worst offender last year, boosting TV prices between $2-5 a month, equipment fees by $4-7 a month for broadband, and a $3 rate hike for its unlimited calling landline service. In comparison, EPB said it had no immediate plans to raise TV, broadband, or phone prices last year either.

EPB Fiber is the only Chattanooga telecom provider not raising its prices.

Customers facing rate increases can find an easy way to avoid them: threaten to take your business somewhere else. Retention agents are on the lookout for customers considering moving to another provider, and will usually slash rates to keep your business. Don’t want to argue your way to a lower rate or just want to say goodbye to Comcast and AT&T? Stop the Cap! highly recommends EPB Fiber, the most technologically advanced option in Tennessee, priced fairly with a proven track record of reliability.

A lot of Chattanooga area residents have already considered their options:

“Comcast is complete garbage,” writes one former customer. “Horrible product, even worse customer service. My Internet went out daily. I switched to EPB as fast as I could and have never been happier. I wouldn’t have Comcast again if it was free for the rest of my life.”

Another former cable customer reminds Comcast competition makes all the difference. He switched to EPB as well:

“Keep your Xfinity Comcast, you treated me like dirt when there was no other choice for cable. Now that I have that choice, I’ll never consider you again.”

While cable and phone companies make excuses justifying rate increases and usage caps, Chattanooga’s publicly-owned EPB Fiber network has been blowing the windows out with hurricane-fast gigabit broadband, and now they are cutting prices for some while boosting speeds for others.

At the recent Hackanooga event, EPB customers learned the fiber to the home provider was set to celebrate three years of service by delivering value for speed that Comcast and AT&T can’t touch:

• 30/30Mbps customers will now receive 50/50Mbps service for $57.99 a month;
• 50/50Mbps customers are now getting 100/100Mbps speeds for $69.99;
• 100/100Mbps customers are now seeing 250/250Mbps service for $139.99;
• 1000/1000Mbps service is getting a significant price cut: $299.99 a month, down $50.

In comparison, Comcast customers pay $115 a month for hardly-comparable 105/20Mbps service and they will nail you with a modem rental fee. Don’t call AT&T for 100Mbps speeds, they’ll call you. The U-verse platform can’t even achieve 30Mbps in its current configuration.

“This is the second time EPB has upgraded service to customers for free,” says Lisa Gonzalez from Community Broadband Networks. “In 2010, EPB upgraded 15Mbps service to 30Mbps.”

Gonzalez notes that if customers review their bills from Comcast, Time Warner Cable, AT&T, and others, they will find rate increases outnumber speed boosts. EPB Fiber has not increased broadband prices for three years.

Skeptics of community-owned broadband network might also take note: EPB Fiber CEO Harold DePriest reports the company has now passed 40,000 customers in the Chattanooga area and has made $4 million, despite original projections of a loss of $8 million in the third year of operation.

What makes the difference? Competitive broadband, phone, and television packages and customer support that easily surpasses what Comcast and AT&T offer in Tennessee. EPB is also Chattanooga’s municipal electric utility, so it understands the importance of keeping service up and running for customers. EPB is also heavily involved in the local community, and its revenue stays in southeastern Tennessee instead of being shipped back to Philadelphia (Comcast) or Dallas (AT&T). Comcast made it to #4 on the American Customer Satisfaction Index’s 15 most disliked companies roster. AT&T scored #3 on 24/7 Wall St.’s Most Hated Companies list.

Comcast is running “welcome back” ads in Chattanooga that still claim they run America’s fastest ISP, when they don’t.

EPB, Chattanooga’s publicly-owned utility that operates the nation’s fastest gigabit broadband network, has already won the speed war, delivering consistently faster broadband service than any of its Tennessee competitors. So when facts are not on their side, competitors like Comcast and a conservative “watchdog” group simply make them up as they go along.

Comcast is running tear-jerker ads in Chattanooga featuring professional actors pretending to be ex-customers looking to own up to their “mistake” of turning their back on Comcast’s 250GB usage cap (now temporarily paroled), high prices, and questionable service.

“It turns out that the speeds I was looking for, Xfinity Internet had all along,” says the actor, before hugging an “Xfinity service technician” in the pouring rain. “But you knew that, didn’t you?”

The ad closes repeating the demonstrably false claim Comcast operates “the nation’s fastest Internet Service Provider.”

“I see those commercials on television and I’m thinking, I wonder how much did they pay you to say that,” says an actual EPB customer in a response ad from the public utility.

It turns out quite a lot. The high-priced campaign is just the latest work from professional advertising agency Goodby Silverstein & Partners of San Francisco, which is quite a distance from Tennessee. Goodby has produced Comcast ads for years. The ad campaign also targets the cable company’s other rival that consistently beats its broadband speeds — Verizon FiOS.

EPB provides municipal power, broadband, television, and telephone service for residents in Chattanooga, Tennessee

Comcast tried to ram their “welcome back” message home further in a newspaper interview with the Times Free Press, claiming “a lot of customers are coming back to Xfinity” because Comcast has a larger OnDemand library, “integrated applications and greater array of choices.”

Comcast does not provide any statistics or evidence to back up its claims, but EPB president and CEO Harold DePriest has already seen enough deception from the cable company to call the latest claims “totally false.”

In fact, DePriest notes, customers come and go from EPB just as they do with Comcast. The real story, in his view, is how many more customers arrive at EPB’s door than leave, and DePriest says they are keeping more customers than they lose.

EPB fully launched in Chattanooga in 2010, and despite Comcast and AT&T’s best customer retention efforts, EPB has signed up 37,000 customers so far, with about 20 new ones arriving every day. (Comcast still has more than 100,000 customers in the area.)

Many come for the EPB’s far superior broadband speeds, made possible on the utility’s fiber to the home network. EPB also does not use Internet Overcharging schemes like usage caps, which Charter, AT&T, and Comcast have all adopted to varying degrees. Although the utility avoids cut-rate promotional offers that its competitors hand out to new customers (EPB needs to responsibly pay off its fiber network’s construction costs), its pricing is lower than what the cable and phone companies offer at their usual prices.

Comcast claims customers really don’t need super high speed Internet service, underlined by the fact they don’t offer it. But some businesses (including home-based entrepreneurs) do care about the fact they can grow their broadband speeds as needed with EPB’s fiber network. Large business clients receiving quotes from EPB are often shocked by how much lower the utility charges for service that AT&T and Comcast price much higher. It costs EPB next to nothing to offer higher speeds on its fiber network, designed to accommodate the speed needs of customers today and tomorrow.

The competition is less able. AT&T cannot compete on its U-verse platform, which tops out shy of 30Mbps. Comcast has to move most of its analog TV channels to digital, inconveniencing customers with extra-cost set top boxes to boost speeds further.

The fact EPB built Chattanooga’s best network, designed for the present and future, seems to bother some conservative “watchdog” groups. The Beacon Center of Tennesee, a group partially funded by conservative activists like Richard Mellon Scaife through a network of umbrella organizations, considers the entire fiber project a giant waste of money. They agree with Comcast, suggesting nobody needs fast broadband speeds:

EPB also offers something called ultra high-speed Internet. Consumers have to pay more than seven times what they would pay for the traditional service — $350 a month. Right now, only residents of a select few cities worldwide (such as Hong Kong) even use this technology, and that is because most consumers will likely not demand it for another 10 years.

Actually, residents in Hong Kong, Japan, and Korea do expect the faster broadband speeds they receive from their broadband providers. Americans have settled for what they can get (and afford). DePriest openly admits he does not expect a lot of his customers to pay $350 a month for any kind of broadband, but the gigabit-capable network proves a point — the faster speeds are available today on EPB at a fraction of price other providers would charge, if they could supply the service at all. Most EPB customers choose lower speed packages that still deliver better performance at a lower price than either Comcast or AT&T offer.

The Beacon Center doesn’t have a lot of facts to help them make their case. But that does not stop them:

• They claim EPB’s network is paid for at taxpayer expense. It is not.
• They quote an “academic study” that claims 75 percent of “government-run” broadband networks lose money, without disclosing the fact the study was bought and paid for by the same industry that wants to keep communities from running broadband networks. Its author, Ron Rizzuto, was inducted into the Cable TV Pioneers in 2004 for service to the cable industry. The study threw in failed Wi-Fi networks built years ago with modern fiber broadband networks to help sour readers on the concept of community broadband.
• Beacon bizarrely claims the fiber network cannot operate without a $300 million Smart Grid. (Did someone inform Verizon of this before they wasted all that money on FiOS? Who knew fiber broadband providers were also in the electricity business?)

The “watchdog” group even claims big, bad EPB is going to drive AT&T, Comcast, and Charter Cable out of business in Chattanooga (apparently they missed those Comcast/Xfinity ads with customers returning to Kabletown in droves):

Fewer and fewer private companies wish to compete against EPB, which will soon have a monopoly in the Chattanooga market, according to private Internet Service Provider David Snyder. “They have built a solution looking for a problem. It makes for great marketing, but there is no demand for this service. By the time service is needed, the private sector will have established this for pennies on the dollar.”

Ironically, Snyder’s claim there is no demand for EPB’s service fall flat when one considers his company, VolState, has been trying to do business with EPB for two years. He needs EPB because he is having trouble affording the “pennies on the dollar” his suppliers are (not) charging.

Snyder tells “Nooganomics” his company wants an interconnection agreement with EPB, because the private companies he is forced to buy service from — including presumably AT&T, want to charge him a wholesale rate twice as much as EPB currently bills consumers. Snyder calls EPB’s competition “disruptive.”

Nooganomics calls EPB’s low priced service a “charity” in comparison to what AT&T and Comcast charge local residents, and the free market can do no wrong-website seems upset consumers are enjoying the benefits of lower priced service, now that the local phone company and cable operator can’t get away with charging their usual high prices any longer.

Deborah Dwyer, an EPB spokeswoman, told the website the company got into the business with state and city approval, followed the rules for obtaining capital and pays the taxes or payments-in-lieu of taxes as the same rate as corporate players. “We believe that public utilities like EPB exist to help improve the quality of life in our community, and the fiber optic network was built to do just that. One of government’s key responsibilities is to provide communities with infrastructure, and fiber to the home is a key infrastructure much like roads, sewer systems and the electric system.”

Snyder can’t dispute EPB delivers great service. He also walks away from the competition-is-good-for-the-free-market rhetoric that should allow the best company with the lowest rates to win, instead declaring customers should only do business with his company to support free market economics (?):

“If you are a free market capitalist and you believe in free markets, you need to do business with VolState,” Mr. Snyder says. “And if you’re highly principled, every time you buy from a government competitor, what you’re voting for with your dollars is, you’re saying, ‘It’s OK for the government come in to private enterprise and start to take over a vast part of what we used to operate in as a free market.’”

Perhaps Snyder and his friends at the Beacon Center have a future in the vinegar business. They certainly have experience with sour grapes.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Comcast Ad Welcome Back.flv[/flv]

Comcast’s emotionally charged ad, using paid actors, was produced by advertising firm Goodby Silverstein & Partners. The commercial running in Chattanooga is a slight variation on this one, which targets Verizon FiOS. (1 minute)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/EPB Ad.flv[/flv]

EPB uses actual customers, not paid actors, in its own advertising that calls out Comcast’s false advertising.  (1 minute)