Summary
EPB Fiber Optics has been working on its project for four years. It has put up with the usual delays for munis in fighting off lawsuits. EPB is going the Cadillac route with its network.
Analysis
First the Tennessee Cable TV Association gave EPB a hard time and then, Comcast tried to get in the way. EPB plans to spend $200 million over the next three years (including $10 million just for a headend). It is going after $100 million stimulus money on a smart grid and linking it back to the electric utility for optical equipment. The city has been only doing a manual meter read, which costs about 50 cents a month per subscriber. Many utilities in the US use wireless. They can pick up the meter data just by driving down the street. In effect, Chattanooga will gain a significant savings if it can integrate this task with its fiber system. People who do not sign up for fiber will be getting wireless capability for their meter systems. Of course, it remains to be seen whether EPB gets that government money. One may be skeptical about any entity getting such a huge chunk of dollars from the bureaucrats in Washington. Regardless, the city is going to complete the project.
EPB has a good-looking configurator on its web site to bundle services that are pretty competitively priced. All of the broadband is completely symmetrical. As with other cities, the pricing is straightforward without all of the convoluted discounts. However, one may think twice before picking the 50 MB because that price is really jacked up.
Alcatel-Lucent is the full-system vendor for EPB. The vendor uses a fairly good middleware solution – Microsoft’s Media Manager, albeit expensive to run. Still, even small independent telcos are looking at the product because Microsoft has downscaled and re-priced it for the lower end of the market. Media Manager may be the only offering that provides a fully integrated video headend with the whole program guide and all of the other bells and whistles to move forward.
Motorola appears to have won the bid twice, but ultimately lost to AlcaLu, despite charging a higher amount of money. The former apparently had some IP issues. Motorola undoubtedly pushed its integration story, at least on the video side. It seems that with such a large build, EPB was more attracted to AlcaLu’s overall capabilities. Combined with Microsoft’s suite of services, the supplier was evidently the most appealing to the utility. In addition, Atlantic Engineering provided the specs, which called for more of a system integrator. It was almost a self-fulfilling prophecy that AlcaLu got selected. But make no mistake about it – it was a situation in which a large utility, which pretty much knew little about telecom, wanted to go with a vendor that could provide a complete solution. Other municipalities are willing to consider a stand-alone FTTH player including Calix, Occam, and Enablence.
Samuel Greenholtz consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
