At KUB's May 26, 2021 Broadband Public Forum, members of the public were encouraged provide commentary about KUB's Fiber to the Home business plan to KUB's Board of Commissioners. During and after the forum, some attendees presented questions. Below is a list of those questions with responses from KUB.
Why does KUB find it important to do this now?
KUB recognizes that a fiber system is key to improving the reliability of its electric system. Newer applications that help reduce outages depend on a fast, reliable communication system. A fiber network is the most reliable way to connect these applications to KUB’s infrastructure.
KUB also recognizes its customers’ expectations are changing with the technology that they utilize at home and at work. Electric vehicles, quickly advancing electric storage technologies, and smart home devices require a state-of-the-art system supported by fiber.
Fiber will also help KUB’s electric system to be more efficient, wasting less energy and requiring less energy generation. This can help reduce carbon emissions and have a positive environmental impact.
KUB has monitored internet services in the Knoxville area for several years. Until now, KUB has chosen not to pursue municipal broadband. In 2019, KUB performed a feasibility study to understand what desire existed in the community for these services and received results that highlighted its customers were in favor of KUB entering the broadband space.
KUB has also heard elected officials at all levels of government push for more accessible internet services. They have called for more funding for broadband expansion, especially for rural and traditionally underserved areas, and have identified electric utility providers as being uniquely positioned to help.
The COVID-19 pandemic only exacerbated the already existing issues related to internet accessibility and helped accelerate KUB’s desire to help find a solution. KUB believes that delaying its efforts any further could have negative impacts for its community.
Will broadband fees be on a separate bill from KUB?
KUB is planning to provide a separate bill for its broadband services. This is a practice that has been used by some of KUB’s peers. KUB believes it can be useful for customers to manage their internet and other broadband service costs separately. It will also ensure that nonpayment for broadband services will not impact other services provided by KUB.
Where will the tech support and call center be located?
KUB is planning to hire local technical and customer support staff to ensure that our customers’ issues are fully understood when they arise. This will also add approximately 200 jobs to the Knoxville area and help our local economy remain strong.
Why is KUB in a hurry to get approval to establish a Fiber Division?
KUB is planning essential upgrades to help modernize its electric system and improve reliability. These upgrades require fast and reliable communications and fiber provides that. This system will also allow KUB to provide essential broadband services to individuals in our service territory that may have few service provider options, or none.
The COVID-19 pandemic highlighted the urgency of the need for reliable and affordable internet service. The need in the community exists now and has for a long time and KUB is prepared to help provide a solution to the urgent need as soon as possible.
Delaying any further may hinder the community’s ability to seek federal and state funding to help build the system.
Is the Electric Division subsidizing the Fiber Division through its $35 million loan?
No. The proposed loan from the Electric Division to the Fiber Division is an interest-bearing loan that is expected to be repaid within 10 years. The Tennessee Valley Authority (TVA) approved the loan as KUB’s electric regulator. During the approval process, TVA determined that the plan did not put any unnecessary risk on the Electric Division. TVA will continue to monitor the payment of interest and principal until the loan is fully repaid by the Fiber Division.
How do you expect to get a 35% take rate (market share)?
KUB believes that it is uniquely positioned to be competitive in the internet service industry. After 80 years of serving the people of Knox County and parts seven surrounding counties, KUB understands its customers’ needs. KUB also has 80 of years of experience deploying and maintaining infrastructure like the planned fiber system.
KUB will also be positioned to offer a high-speed service that features symmetrical upload and download speeds to all customers in its electric service territory, something other providers are currently not able to do. KUB will be able to offer this at competitive prices and will have local customer service and service technicians.
KUB plans to provide pricing that is consistent and will not surprise its customers with unexpected increases.
Will the fiber system be installed overhead or underground?
KUB plans to install its fiber optic cables wherever the electric wires are installed. This means that, in most cases, when the electric lines are underground, the fiber will be underground, and where the lines are overhead, the fiber will be overhead, as well.
Will residential customers who work from home be charged residential or commercial rates?
In most cases, KUB plans to charge service to any home or residence at the going residential rate. Businesses and stores will be charged commercial rates.
KUB is still in the approval stage and has not established rules and policies for the proposed Fiber Division. KUB hopes to be able to clarify its position on this topic and others soon.
How did KUB choose the customers polled in its broadband feasibility survey?
The customers questioned in KUB’s feasibility survey were chosen at random and represented various geographic and demographic areas and groups.
Has KUB already created a Fiber Division?
KUB has not yet been approved to create a Fiber Division and has not yet created one. A small group of KUB employees have been working on planning and assisting in work related to the required approval process.
Will KUB offer utility bill assistance for broadband customers struggling to pay their broadband bills?
At the core of KUB’s broadband effort is a desire to make internet accessible to everyone in its service territory. That includes finding ways to provide services to those unable to afford quality internet. KUB is currently working with partners in the Knoxville area to design programs that would make these services accessible to low income customers.
Is KUB planning to host any additional public forums on the issue?
KUB hosted a public forum May 26, 2021 for members of the public to express their opinions about KUB’s plan to its Board of Commissioners. Information about that meeting and KUB’s business plan can be found here. A second community meeting is being planned for June 14.
KUB will continue to accept feedback about the plan throughout the approval process via the channels outlined on the page. KUB staff are also available for community meetings as requested.
What is the cost of residential broadband services?
KUB is aiming to offer a standard residential package that provides symmetrical 1 gigabit per second download and upload speeds for $65 a month. KUB will provide packages at different speeds and prices for both residential and commercial customers.
KUB will also offer telephone and television package options. Customers can also choose to add a managed router service option to ensure optimal performance at an additional cost.
What is the process for this plan to be approved?
KUB’s Board of Commissioners need to approve KUB providing broadband. If approved by the KUB Board, Knoxville City Council will need to
authorize KUB to provide broadband services.
Both bodies are expected to vote on the plan during the summer of 2021.
What do you say to someone who doesn’t want KUB broadband service but still has to pay higher electric rates to fund the fiber network?
The higher electric rates are to improve the electric grid, including traditional infrastructure like poles, wires, and transformers as well as the broadband related infrastructure. For KUB electric customers, this means more reliable power, better efficiencies in operating the electric grid, safer operations, and environmental benefits, all of which are good for electric customers. In addition, revenue from the broadband service will ultimately reduce the burden to electric ratepayers by offsetting some of these costs. KUB’s current rates forecast shows no electric rate increases for at least seven years after the three proposed rate increases in years 1-3 of the plan.
KUB also believes that everyone in the Knoxville area can benefit from municipal broadband. Increased access to reliable internet creates new opportunities for education and can create new streams of income. It can also help drive new businesses to our region, creating more jobs and growth.
Reliable internet has been recognized by all levels of government as being a vital utility, and by making this investment, KUB believes it can improve the lives of everyone in its community.
Will KUB share its construction plan for the fiber system?
KUB is working on a plan for construction and will share it with customers once it is complete. Once the plan is approved, we hope to share a map on our website that allows customers to view an estimated timeframe for KUB broadband service availability in their area.
Will KUB charge customers to connect broadband services to their home?
KUB does not expect there to be a cost associated with running fiber to a customer’s home.
Will KUB offer a static IP address option for residential customers?
Yes, KUB will make static IP addresses available for residential customers. There will be a monthly fee associated with this. The number of static IP addresses will be limited to two per residential household.
Could KUB conduct a customer interest survey to help determine where we install fiber first?
There are many factors that will help determine where KUB would begin offering broadband services. Those factors include, among other things, which areas already have a fiber backbone in place, which areas have the most need for reliable internet, and where could the electric system benefit most from having fiber.
KUB’s goal is to strategically deploy the system in a way that builds on our existing assets and addresses some of the most immediate needs in the community.
How can customers help KUB access federal or state grant dollars?
Customers can contact their local, state, and federal representatives to ask about the availability of this funding. KUB is also monitoring the availability of these funds and plans to apply for any funding that becomes available. Once KUB is approved to provide broadband services it will be in a better position to qualify for any available funding.
In its research, KUB has found that much of the proposed funding is for rural areas and KUB has engaged government officials in rural portions of its service territory to assist in seeking out the funding.
Will KUB continue to assist customers who need it?
At the core of KUB’s mission is its desire to improve the lives of its customers. That includes finding ways to assist its customers who need it most. KUB will continue to support programs that help customers who have difficulty paying or who cannot afford services.
Would you upgrade your electric system without the broadband offerings?
KUB is planning to install fiber on its electric system regardless of the outcome of the approval process related to broadband.
Installing the fiber backbone on the electric system will improve reliability, efficiency, and prepare KUB for the evolving uses of electricity at homes and in businesses. This same fiber would also position KUB to provide broadband services if the plan is approved.