Comcast Continues Legal Battle Against EPB Cable Expansion

Comcast is continuing the legal fight to stop EPB from expanding into the cable TV business in the Chattanooga area.

Comcast of the South today filed a lawsuit in the Hamilton County Chancery Court challenging plans by the Chattanooga Electric Power Board (EPB) to finance a proposed cable TV and Internet venture with bonds backed by electric system revenue.

The Tennessee Cable Telecommunications Association (TCTA) filed one lawsuit in Nashville, however that suit was recently dismissed when a judge there ruled that court did not have jurisdiction. Comcast has simply refiled the same lawsuit in Hamilton County, substituting its name for TCTA.

Valerie Gillespie, vice president and general manager Comcast of Chattanooga said, "The company believes this constitutes a cross subsidy which is prohibited by Tennessee state law. Our intention is to ensure that EPB complies with the Tennessee Cable Act and that Comcast be allowed to compete in a fair environment. Due to this pending litigation, we cannot comment further."

In a news release the TCTA said EPB's plan is "appealing on the surface." However the release went on to say the plan, "violates Tennessee state law. EPB's plan relies heavily on cross-subsidy support of the venture by ratepayer dollars - a violation of Tennessee Code Annotated 7-52-603. Comcast, by filing this action, seeks to remove doubt relative to the court's procedural concerns and to have the legality of EPB's plan decided on the merits. TCTA supports Comcast in their effort."

Comcast and TCTA say EPB's plan puts taxpayers at risk.

In spite of the lawsuit, EPB officials voted on Tuesday to move ahead on a $219,830,000 bond issue. Later in the afternoon, the City Council approved the bond issue.

Stacey Briggs, executive director of the TCTA, said, "Illegality is only one of the major concerns Chattanoogans should have with this plan. EPB's course, based on a highly flawed business plan, puts public, taxpayers' and ratepayers' dollars at great risk. It's also an example of the inappropriate position of government competing with the private sector. TCTA again urges EPB to call time out to re-evaluate and remedy the illegal cross-subsidy issues in its business plan."

But EPB President Harold DePriest says, "These businesses will pay rent to the electric systems for the use of any electric system services. And those rents will be sufficient to insure that nobody who uses us just for electric services pays to help someone else have internet, or cable, or television services."

DePreist went on to say, "We're a little disappointed frankly that comcast is going to the lengths that they are to try to keep us out of the business."

People we talked to in the community on Wednesday said they support EPB and would like to see competition in cable services.

EPB says it hopes to be providing cable TV service to its first customers by the end of the year. They say it will take as long as 5 years to completely expand service throughout the planned delivery area.