Lenoir City Utilities Board and Lenoir City Council unanimously approved resolutions authorizing broadband services.
The resolutions passed March 14 will allow LCUB to undertake the installation of fiber-optic lines and equipment to offer high-speed internet service to all LCUB electric customers.
Both resolutions noted a detailed business plan has been submitted to the office of the Tennessee Comptroller of the Treasury and referenced the required noticing and holding of a Feb. 22 public hearing at The Venue at Lenoir City.
LCUB General Manager Shannon Littleton told the board before the vote that the utility “is not spending a penny of tax dollars” for installation of the broadband network. The utility will actually compress the planned installation of the network from a 10-year buildout to a two-year buildout.
He said the broadband division is borrowing $22 million from the electric utility to complete the project, which will cost about $130 million. He said the decision was made seven years ago to build a self-healing electric grid using fiber-optic technology. The mainline fiber-optic system was installed to support the self-healing grid about four years ago.
Littleton said the wireless system the utility had been using would not handle the load needed to create the smart electric grid, which would improve customer service by quickly identifying and repairing problems.
“The board has prepared and is moving in that direction regardless of broadband,” he said.
Littleton said supply chain issues related to the buildout had already been addressed. Contractors have already purchased the necessary materials and equipment needed to begin installation.
LCUB Chairman and Lenoir City Mayor Tony Aikens said he had read reports about how the community was already served with as many as 18 internet providers. He said current providers do not offer high-quality internet service at a competitive rate and gave an example of some customers paying as much as $400 a month.
“All they want to do is criticize us for trying to help someone,” he said.
LCUB and Knox County board representative George Bove complimented the utility for “impeccable actions” in modernizing the electric grid. He said stability of the grid during bad weather the previous weekend was a testimony to the wisdom of modernization.
He also praised the utility for a decision decades ago to extend service into Knox County.
Broadband access is now a requirement, Bove said, adding he was compelled to speak for the unserved and underserved who would benefit from access to the service.
Aikens also referenced criticism of the way LCUB leadership is structured. The conflict of interest some have suggested exists between the board and council is a result of a voter-approved decision made decades ago, he said.
Board member Eddie Simpson said he has watched for the more than three years the utility has been working on the smart-grid project. He said he would be honored to make the motion to put the resolution to a vote.
During a public comment period, council heard from Wesley Kirkland, an LCUB customer who works from home as an information technology engineer. He said the reason his company is based in Chattanooga is because of the high-speed broadband infrastructure located there.
“The internet is not just something we can take for granted,” he said. “COVID proved that.”
Kirkland said he was amazed to learn so many people in the community do not have internet service. He said the addition of broadband service will bring more smart people to the area who make better wages and pay more taxes.
The projected 1-gigabit upload and download performance of the service could help the area live up to its label of a “technology corridor,” Kirkland said.
He warned if the resolution did not pass that he would move to Knoxville Utilities Board territory. KUB has also announced plans to provide internet service to customers.
Kirkland said he understood why some current providers might not be in favor of LCUB’s intentions. He said he had negotiated internet service contracts as a part of his previous job. Current providers evaluate competition from utilities as bad for their business, he said.
“Big business doesn’t want it because they will lose business,” he said.
Kirkland said he believed the community overwhelmingly supported the move by LCUB, which will bring cheap, reliable internet service.
Council also voted unanimously to implement a franchise fee for users of the service. LCUB will charge $2.50 a month, which will be collected and distributed to the city, for users who have chosen to receive internet services.
Littleton said the broadband division might credit the franchise fee back to customers.