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Chattanooga fiber optic network attracts Knoxville business expansion

8:16 PM, Dec 27, 2011   |    comments
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While many consider high-speed internet a luxury, several local governments in East Tennessee view the networking infrastructure as critical for attracting new business and overall economic development.

Multiple municipalities have taken it upon themselves to construct high-speed networks rather than depending on private companies.  The biggest example is currently Chattanooga, where the city-owned utility company pulled fiber optic cable to the doorsteps of its entire residential service area.

"In a lot of places, you can get the same kind of high speed service as Chattanooga.  The difference is the price," said Dan Thompson with Knoxville-based IT company Claris Networks.  "Connectivity there for us is about eight to ten times cheaper in Chattanooga than it is versus Knoxville or other cities.  That's a huge deal when you're comparing $100 a month or $800 a month."

Claris is rapidly expanding its business in Chattanooga due to the city's infrastructure.  The fast connections allow small and mid-sized companies to move towards a computing-cloud setup with Claris.

"The cloud lets companies move a lot of this I.T. stuff they have to deal with to somebody else and let them take of it," said Thompson.  "For us to provide this service you need a fast connection.  When you have a market where the city has basically done all of the legwork it makes it easier for our business to go to businesses all over town and offer our services.  Internet speed is an afterthought because we know there won't have to be any upgrades to get the connection to the business location.  Here in Knoxville and other cities, you may have to pay a premium to get speeds fast enough to support that [cloud]."

Garrett Wagley, Vice President of Policy and Public Relations for the Knoxville Chamber, acknowledged the importance of infrastructure of all types for commerce.

"Infrastructure is important for any community as it looks to recruit new industry and grow existing businesses. Whether it is interstate highways or information networks the Chamber supports responsible upgrades that can help our community grow," said Wagner.

A contentious element in the discussion centers on whether internet infrastructure should be provided by public dollars and compete with private companies that provide internet services.  Chattanooga's network offers high-speed internet, digital television, and digital telephone services and directly competes with Comcast and AT&T.

Other cities such as Johnson City have moved forward with plans to build network infrastructure that focuses economic development with service to companies rather than residential households.

The City of Knoxville's chief policy officer, Bill Lyons, told 10News there has been some discussion about constructing network infrastructure in the past.

"We did discuss this general topic very briefly early in the last administration and did not pursue it," wrote Lyons.  "There was no systematic assessment, but rather a sense that the associated investment in infrastructure was not needed given the service that was already available."

A KUB spokesperson told 10News the utility has no current plans to expand its services to include high-speed internet or television such as those found in Chattanooga.

While citywide network infrastructure undoubtedly benefits information technology companies such as Claris Networks, Thompson said he personally believes there are a lot of factors to consider before a municipality jumps into the ISP business.

"The question we as citizens need to ask is this something we'd be willing to spend money on," said Thompson.  "I think you'd have to ask if you built this kind of network would more businesses come here.  And if they would, do the tax dollars [gained by attracting news business] offset the cost that we as citizens would have to pay."

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